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As a manager, you’re required to display some level of positive thinking. You serve as the ‘cheerleader’ for your team, assigning work while at the same time making sure that your employees are engaged and satisfied with the company.

Optimists are popular people because, generally speaking, they are pleasant to be around and their enthusiasm can be contagious. In fact, according to research from the Master of Applied Positive Psychology program at the University of Pennsylvania, optimistic managers may do a better job of helping employees reach goals and be more productive.

In a cross-sectional study of 86 employees and 17 managers at an Information Technology (IT) organization, researchers Margaret Greenberg and Dana Arakawa found that positive leadership correlated with employee optimism, engagement and project performance.

“When we looked at a subset of this data prospectively, with 39 employees and 14 managers, manager optimism predicted project performance,” they wrote. “Our data support the claim that positive leadership is correlated with employee engagement and performance, and further extends the importance of optimism in the workplace.”

So it appears that optimism is actually a valuable business asset for managers. But just like with any kind of behavior, it can be taken too far. If you never take off your rose-colored glasses, you could unknowingly place additional stress on your team.

For example, let’s say your team is already working on a high profile, high-stakes project when upper management decides that more work is required from your team. If you optimistically believe it can be achieved and don’t consider the difficult challenge that lies ahead, you have put your team in a bad spot. Since you’re not seeing the realistic downside of this added work, your team members are forced to worry about the risks.

At the same token, there are some studies that support a pessimism attitude. In fact, a German study stated that optimistic people actually face a greater risk of disability or death within 10 years than pessimists who underestimate their future life satisfaction. The reasoning behind this is that the pessimists might actually be a bit more careful about their future than the optimists.

Okay, clearly, there are many different studies supporting either an optimism or pessimism attitude. Perhaps the solution is to have a mix of both, or in other words, strive for realism.

An article in Psychology Today addressed this topic and said,  “It’s simply not the case that optimism is “good” and pessimism is “bad”—although that’s how we’ve been encouraged to think about them. Rather, both are functional. And both have value.”

Here are some of our tips to becoming a more realistic manager:

  • Discuss problem situations with all parties before determining the best course of action. Seek feedback from someone else on the proposed solution before instituting it. Look for win-win solutions.
  • When you make a decision, get into the habit of considering the impact it will have on the people affected by it. Sometimes you may determine that a decision has a higher cost than it is worth, in terms of its impact on people. Other times, you may make the same decision, but you will know you need to reduce its negative impact.
  • Reflect on your successes and failures, and think about how you would manage your failures if they happened today. Everyone makes mistakes; what exemplary leaders do is to learn from their mistakes and incorporate the learning into making changes in the future.
  • Acknowledge that you are not really in control of much that happens, as much as you would like to be, and you do not need to be in control of all situations. Consider a past change that you effectively managed and identify steps you took in that situation that you can try here. Realize that maintaining control in an environment of rapid change is different from maintaining control in a static situation.

Do you believe you’re an optimist, pessimist, or a mix of both?