The old adage suggests that we should always under promise and over deliver, yet history is littered with examples of people being over optimistic about the chances of their latest project or venture. It’s something uber investor Warren Buffett is all too aware of. In his book exploring the habits that make The Sage of Omaha so successful, Nic Liberman reveals how Buffett is cautious, even conservative, with his optimism.
“Both our operating and investment experience cause us to conclude that ‘turnarounds’ seldom turn, and that the same energies and talent are much better employed in a good business purchased at a fair price than in a poor business purchased at a bargain price,” Buffett is quoted as saying.
Alas, it seems that we are commonly too optimistic about optimism, with whole industries revolving around the belief that the right attitude can conquer all manner of obstacles. A recent study highlights how we often place far too much faith in the power of positive thinking.
The study saw participants required to complete a task, with their relative levels of optimism about the task a strong factor in their overall success. The authors wanted to compare how people performed when they were confident of success versus not confident.
For instance, in one task participants were given feedback that boosted their confidence. Another group were then asked to predict how this group would perform on a subsequent task versus another group of equal ability that had not received the confidence boost.
By and large, the predictor group believed that those who had gone in to the task in an optimistic frame of mind would outperform the group who had not received such a confidence boost, but alas, the results showed no real difference at all.
How important is optimism?
This finding was then replicated in a second experiment using a Where’s Wally style task. Participants were told they could take as long as they wanted to try and find the hidden figure, with again, half of the group primed to feel optimistic and the other half not. It emerged that the optimistic group stuck at the task for around 20 percent longer than their peers, but this barely made them any more successful, despite people expecting such a group to outperform their peers by 33 percent.
As if more evidence were needed, a third experiment then provided just that. This time it was shown that optimism still carried too much weight in our minds, even when we weren’t prodded to focus on optimism. Participants were asked to estimate how people would do on a task with some basic information about that person as a guide. How optimistic people were was part of the profile, but there was no attempt to draw attention to that specific trait.
They were however given information relating to their performance on the task, such as whether they enjoyed the task or not. Interestingly, people were able to match up the cues with the subsequent performance with near total accuracy, except for optimism, which again was given excessive importance.
All of which suggests that Warren Buffett may very well have a point in his grounded perspective on optimism. The study suggests that positive thinking is far from sufficient to help us succeed, and it’s foolhardy to think it is.