Optimists experience better financial health than pessimists
Purposeful optimism is not easy, especially in a time of pervasive negativity. But there are innumerable positive developments to celebrate. Tech and human-centric advancements mean there’s never been a better time to invest in opportunity – especially opportunities to make a real positive impact on the world.
From a business perspective, purposeful optimism can evoke positive ripples in broader communities. It’s a way for leaders to maximise ‘leadership moments’. And it can have sustained bottom-line benefits.
Nersan Naidoo, Chief Executive of Sanlam Investments, believes purposeful optimism is a practical philosophy and process that opens minds and helps create healthy dialogue around innovation, possibilities and opportunity.
Importantly, this catalyses resilience, alongside other sustainable benefits:
A 2019 article in Harvard Business Review (HBR) shows a link between optimism and financial health. Author Michelle Gielan conducted studies showing that optimism was found to ‘propel positive action’ by promoting a solution-focused mindset.
Gielan also did a study with Frost that showed optimists experience better financial health than pessimists.
Several studies – including one by the University of Oklahoma – equate entrepreneurial optimism with successful business start-ups and growth. Importantly, this optimism is shown to be contagious.
Nature journal published a study that shows optimists tend to think more creatively as they’re not limited by negative constraints.
Another study in Sage Journal shows optimists tend to persevere despite setbacks. This makes them less cautious of failure, which allows for iterative innovation.
Naidoo elaborates, “Optimism becomes a self-fulfilling prophecy because if you look hard enough, use enough innovation, and refuse to give up, you’ll ultimately yield the fruit of that positive thinking: in our case, new sources of alpha for our clients and the industry itself. We believe that amid all the uncertainty in the markets lie some of the greatest opportunities. It’s only through purposeful optimism that you can unlock these opportunities. Ultimately, this equates to prosperity for all.”
Optimism with purpose
Optimism becomes extra powerful when paired with high conscientiousness and a social conscience. Business leaders and investors have the chance to shape the narrative. They can be purposeful about being optimistic, and, in turn, use this optimism to act with purpose, for the greater good.
Sydney Mbhele, CEO of Sanlam Brand, says there’s a rallying cry for businesses to be bastions of social good and enforcers of positive change. “We need to do what we can to re-anchor ourselves; to appreciate what we have while coming up with real solves to the challenges South Africans face. In 1994, we negotiated a new South Africa. Since then, there are many times we’ve come together to move this country to the next level of growth.” We need the collective will to do so again. And much of that stems from an optimistic outlook.
Mbhele adds, “As leaders, we need to use our positions of influence for good. Every interaction is a leadership moment; an opportunity to inspire others – and oneself – to do something that makes a difference. We all need to contribute. We need to do something – and do it well.” He walks the talk. He’s the founder of the Mentor a Boy Child NGO, which upskills carefully vetted volunteers to help young men reach their full potential through mentorship, skills development and role modelling.
As found in the HBR study, optimism instils a solution-focused mindset and propels positive action. For Mbhele, this takes the form of mentorship. For others, it could be using alternative investing to invest in the real economy. For example, investing in Climate Fund Managers’ Climate Investor One debut investment vehicle means you help serve electricity to 13 million people, avoid 2-million tons of carbon dioxide and create 10 000 jobs, while making good financial returns. The rise of this kind of impact investing reflects a global optimism.
How can leaders cultivate purposeful optimism?
Behavioural economist Erik Vermeulen says an ‘optimism bias’ empowers leaders to be biased towards expecting an optimistic future. Of course, to be so, a leader needs to feel optimistic. Vermeulen suggests that there are techniques to mindfully cultivate this state of mind. He believes the mind moves the body to follow the direction of dominant thoughts – so, if these are optimistic and resourceful, your leadership style will follow suit.
The power in this can be immense. Vermeulen cites the examples of Churchill and Mandela – both pivotal figures when their countries were on a knife’s edge. Purposeful optimism can have a strong impact on the collective mood in an organisation or country.
Naidoo says we need to work on creating a culture of optimism, “Within Sanlam Investments, we actively cultivate a dynamic culture of seeking out new opportunity, even in the face of adverse market conditions, fuelled by a focused ‘can-do’ optimism that makes us open to exploring the possibilities. Now is the time to jump on these. Now is the time to change the narrative. Now is the time to be a force for good.”