Thursday, June 21, 2012

Optimism persists in the face of experience

Optimism and hope often go together.  When people who start successful companies are interviewed later, they often say that they really believed that they could succeed.  Most new companies fail, so you have to have a really optimistic outlook in order to believe that you will beat the odds. 

This kind of optimism can be helpful, of course.  It is hard to get motivated to work hard if you think there is a good chance you are going to fail.  That kind of fear might get you to work hard for a while, but people are generally happiest with their work environment when they are achieving good outcomes rather than just trying to avoid bad ones.

An interesting question, though, is whether people can continue to be optimistic even after they experience failure.  Can someone get optimistic again after starting a business that fails?

A paper in the February, 2011 issue of Psychological Science by Cade Massey, Joseph Simmons, and David Armor examined how optimism was affected by experience. 

It is hard to answer a question like this with businesses, because it takes so long for a business to succeed or fail, so they looked at predictions made by football fans over the course of a single National Football League season.

These researchers performed an on-line survey in which people were invited to make predictions about NFL games each week of the season.  At the start of the season, people were asked to name their favorite team.  Then, each week, they predicted the winner of each game and the number of points they expected that team would win by.  By the end of the season, nearly 400 people had made predictions for at least 14 weeks of the 17 week season.  Their data were included in the analyses.

The people in this study were real fans.  They generally watched about 4 games a week.  Many of them had a fantasy football team.  On average, they owned 2 football jerseys with their team on them.

So, what happened?

Looking first across the whole season, on average the favorite teams of all of the people in the sample won about 50% of the time.  That is, there was no bias here for people to root only for winning teams.  Even though the teams won only half their games, people predicted their favorite team would win 69% of the time.  So, people made predictions that were consistent with what they wanted.

This difference was just as strong at the end of the season as it was at the beginning of the season.  That means that even after your team has lost a large number of games, you are still optimistic about their chances the following week.  People did learn something about their favorite team.  Their predictions about the number of points that would separate their team from the opponent got a little more accurate over the course of the season.  However, people were still overly optimistic at the end of the season.

So, what does this mean?

Clearly, your optimism is not dimmed much by experience.  In general, even after you experience some setbacks, you are still likely to believe that you can succeed. 

It might seem strange that your beliefs about the chances of success would be inaccurate.  However, most things in life are not like football games.  The fan of a team watching the game on TV has no influence on the outcome of a game.  But in most things in life the harder you work toward them the more chance you have of success.  The more that you believe that you can succeed, the harder you will work.  So, optimism helps to create the conditions for a self-fulfilling prophecy. 

Even when you fail at something, the best way to help yourself succeed in the future is to work hard.  So, that dose of optimism is still useful, even if you have failed in the past.