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An overly optimistic view of the future can be a precursor to negative outcomes, according to a recent study in Psychological Science. The authors found that during the 2007 to 2009 financial crisis positive statements about the future on the economy page of USA Today correlated with declines in the Dow Jones Industrial average in the subsequent week and month. They found similar results when comparing the tone of US presidents’ inaugural addresses to GDP and employment performance during the following term of office. The authors contend, “These counterintuitive findings may help reveal the psychological processes that contribute to an economic crisis.”
A recent New York Times article describing these results points out that while a correlation between optimistic talk and negative results doesn’t prove a cause and effect relationship, there is a body of additional evidence that points in the same direction. What might be the mechanism of such an effect? According to the Times, the research paper “speculates that widespread optimism could cause people to discount the risk of trouble ahead, make unwise investments, be less entrepreneurial and thus exacerbate or even create economic weakness.”
As futurists we firmly believe that a realistic assessment of a wide variety of plausible futures is an essential precursor to any planning effort. Often clients are less than eager to consider possible negative outcomes. But sad experience (now backed up by data) says that ignoring the possibility of negative futures can only leave an organization unprepared when disaster threatens. Some of my biggest regrets as a consultant have come from failing to insist that clients (who explicitly asked us not to address some important issues) consider the possibility of a downturn or even a disaster and think through what they need to do now to be prepared to respond. The recent results are a reminder to all of us — futurists as well as clients — to diligently address a broad range of possible futures, be they pleasant or unpleasant to contemplate. Only that way can we help our organizations be prepared to meet whatever may come.
p.s. When I was a graduate student preparing for my qualifying exams lots of people told me, “Don’t worry — you’ll do just fine.” But one of the postdocs in our lab warned me that I had better be well-prepared or I’d be facing a rough exam and a bad result. I’ve always said that, in that moment, he was the only one who did me any good.
Image: marc falardeau (Flickr)
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