Miguel Pina e Cunha and Arménio Rego launch new book in October. As a pre-publication, we make available to our readers some extracts from this new work, "Paradoxes of Leadership", where the authors address and dwell on how to manage contradictions, dilemmas and tensions of organizational life.

To reserve your copy just send an e-mail to sílabo@silabo.pt with the following data: Subject - book reservation for the book"Paradoxes of Leadership" | Name | Address | Contact email (if different from the sending one) | Body of the email - I want to reserve and receive a copy of the book "Paradoxes of Leadership", soon after its publication.

Should we be pessimistic about optimism?

Optimism and positive energy are essential to the work of leaders. These attributes create heliotropic effects on the followers and other stakeholders. The heliotropic effects are so called because of the attraction that living systems show for positive energy (the sunlight that gives them life) and the repulsion for negative energy (what impoverishes their life). Therefore, a good leader mobilises his team through positive energy and optimism. In this way, he promotes vitality, dedication and the spirit of mission towards worthy and sustainable objectives.

However, spending too much energy can have destructive effects. Overwork can lead to the exhaustion of oneself and the team. This is what Única magazine, published by Expresso (12th November 2011), wrote about António Horta Osório, as CEO of Lloyds:

"Sources at the bank quoted by the Financial Times say he continued to work the 12-hour day, play tennis twice a week and fulfil the gruelling schedule of engagements. It's just that his speech began to slow, his weight dropped and his gaze lost its characteristic gleam of enthusiasm. In themeantime, Horta Osório himself revealed in an interview with an English newspaper in July that he goes into the bank at six in the morning, schedules work meetings on Sundays and his family complains that they hardly ever see him.

Consequence? Internment in a clinic for months, without access to email or telephone. In the same issue of Única, other examples of leaders (e.g. Pedro Norton de Matos - Oni; Masataka Shimizu - Tepco; Jeff Kindler - Pfizer) that succumbed to overwork were discussed. It is possible that optimism led them to downplay the risks of collapse.

Over-optimism can also lead the team to neglect risks and problems, and to persist in really unfeasible paths and decisions. It can lead the leader to overestimate his strengths and those of the team, and to underestimate the combative potential of competitors and opponents, pushing them into dangerous wars. Over-optimism promotes artificial happiness and discourages critical reflection - leading to a Prozac style of leadership.

One possible effect of Prozac leadership is the tendency of the leader to engage in less prudent acquisitions. The acquisition of the Dutch bank ABN Amro by the Royal Bank of Scotland (RBS) in 2007 is instructive. The $62 billion deal was the largest bank takeover in history and occurred just as the global recession was emerging. Risks were underestimated, due diligence was not taken, warning signs were ignored.

A paradoxical combination

The solution to meet the challenge may be the paradoxical combination of optimism with reasonable levels of pessimism. The best leader is simultaneously optimistic and pessimistic - depending on the circumstances. Pessimism helps the optimist to be realistic. And optimism prevents pessimism from turning into inaction or an inability to vigorously face challenges. The combination of optimism and pessimism breeds flexibility and realism. Aung San Suu Kyi, mentioned earlier, who was for years detained and mistreated, described herself as "cautiously optimistic". Her paradox is also represented in a piece of advice she herself received from a Buddhist monk: "To achieve happiness, one must be prepared to suffer."

Note what José Tolentino Mendonça similarly wrote in Expresso E:

"To access joy (...), life must gain porosity. Even if its price includes pain. Often, a suffering must first excavate in us the depth that joy will then fill."

In short: joy requires readiness to suffer pain. Paradoxically, "he who fears suffering already suffers what he fears". Optimism requires being prepared for adversity - that is, it needs some pessimism. The wisdom associated with paradox had already been enunciated by Tolentino in an interview in December 2013:

"I remember that oriental story: A disciple went to his meditation teacher, full of sadness, almost giving up, and confesses to him: 'My meditation practice is a failure! Either I get completely distracted, or my legs hurt, or I give in to sleep'. 'That will pass,' said the master softly. A week later, the same student returned to the master's presence, but now euphoric: 'My meditation practice has become wonderful! I feel so vigilant and so peaceful. It is simply extraordinary'. The master replied to him with the same reassurance: 'This too shall pass'."

Lesson: when we are pessimistic, we should think that there are reasons to be optimistic; when we are optimistic, we should reflect on the possible arrival of less good news. Managing this tension is crucial for leadership. Optimism without pessimism leads to underestimation of risks and to dangerous or unrealistic decisions - but pessimism without optimism can lead to inaction and an inability to face risks. To be successful, in the long run, one must be prepared for defeat - but without being overwhelmed by the possibility. And victory taken for granted can be a good ticket to defeat.

Pessimistic optimism, optimistic pessimism:

Key Ideas

A good leader mobilises himself and his team through positive energy and optimism. However, excessive energy and optimism can have destructive effects on the leader and the people led. Do not destroy yourself or others. Don't be over-optimistic to the point of devaluing the risks.

Three implications for action

  • Be optimistic, but also pessimistic. Believe in the possibility of victory, but be aware of the risks, problems and adversities.
  • Promote optimism and pessimism in your team and organisation.
  • Encourage good expectations, but keep people focused on risks, adversity and possible obstacles.
  • If you want to be happy, be prepared to suffer. If you want to remain optimistic, also be pessimistic.
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