The field of positive psychology, with leaders like Dr. Martin Seligman, has demonstrated that an optimistic attitude can lead to higher levels of success for people in a wide variety of activities.  In fact, Seligman and others have developed training programs that can actually help people become more optimistic and successful.

But can optimism go too far?

Yes. And this is where “flexible optimism” – a term Seligman invented – comes in.

Essentially, the most successful optimists understand they need to be careful when they are pursuing a big goal with a lot of risks.  They talk with others – especially natural pessimists – to see what risks others see in the potential course of action.  Then, either they decide not to pursue that course of action or they go into it well informed – and prepared to handle possible setbacks.

Once upon a time, I had a friend who was pursuing a risky goal.  Things were not looking good as he got very close to the deadline and I asked him, “What are your back-up plans if this does not work out?”  His response: “Failure is not an option.”

On one hand, I appreciate that attitude.  But, in this case, he did fail.  And then he and his team needed to scramble to figure out what to do while they were very stressed out.  Their response to the setback would have been much more effective if they had time to calmly think through their options before the panic of the failure was upon them.

Once we take the time to carefully assess the risk of a goal we may dial back our ambition.  Or we may go for it – fully informed and prepared to live with the consequences of not making it all the way.

Acrobats who perform death defying high wire acts without a net may provide more thrills for audiences, but the ones who use nets live longer.  The same is true for leaders who want to make a Mission Impact.

The great Samuel Johnson, a chronic worrier, labeled worry a “disease of the imagination.” We are capable of imagining the worst, allowing a stream of dark thoughts to crowd our mind. Is it worth it? Is worry its own reward? If we fret about an upcoming presentation in front of a large, forbidding audience and it turns out well, do we attribute it to all that effort we invested in imagining the worst?

Great leaders and strategists use worry to imagine potential implications and consequences of their decisions. By doing so, they are able to anticipate what can go wrong and design better plans. Successful entrepreneurs masterfully use worry to sense, respond, anticipate and effectively deal with uncertainty and risk. Other executives see worry as a catalyst to prevent obsolescence or stagnation.

However, when worry escalates and becomes omnipresent, it can lead to postponement, paralysis, fear, distress, all forms of dysfunction, and even medical problems.

How can we manage our worries? Recoding our apprehensions each day is a good way to start. Keep an inventory of worries and become mindful of the things that we can influence and the ones beyond our control. Revisiting our journal will help us assess the actual danger from the imagined peril. We may find that it was never as bad as we imagined it to be. Get the facts and look for evidence since worry is often rooted in misinformation. Avoid the paralysis of perfectionism and learn from failure. Stay socially engaged and share your worries with your executive coach or a trusted colleague. Doing so, can help us see our worries within a new context and help us calm down.

Can we worry less but worry better? Yes, but first we must acknowledge that worry is a type of thinking that is self-imposed. Since worry results from our own mental creations, we must shift our thinking in a serious way, even turn it upside down, and instead imagine positive outcomes, and believe in them. It is our choice: We can be immobilized by fear of failure or motivated by a vision of success, even if success doesn’t actually pan out as we wished. At least we can sleep at night.

Making Strategic Choices is risky.

Often when I give strategy examples to clients or executives I am teaching I will hear the comment “That sounds risky.”  This response does not consider the risk of continuing to do things the same way.

In his books and teaching, Dr. Russ Ackoff would often make the distinction between errors of “commission” – doing something that should not have been done, and errors of “omission” – not doing something that should have been done.  Unfortunately, the only errors that show up in an audit or accounting system are errors of “commission.”  However, errors of “omission” can be quite costly and often go undetected – the US auto industry should have switched to more fuel efficient cars earlier, Kodak failed to leverage its invention of digital photography, and Circuit City’s failure to innovate led to its demise despite being featured in the book Good to Great just a few years earlier.

Ackoff elaborates:

“Therefore in organizations that, like in schools, treat mistakes as bad and punishable, the best way to maximize job security is to do nothing.  This is the major contributor to the reluctance of employees at all levels to initiate change.  Unfortunately, in an environment that is increasing unpredictable and turbulent, doing little or nothing is a sure path to death.”*

Or, I will suggest, it may lead to something even worse – a sure path to irrelevance.  It would be better off for an ineffective nonprofit to simply close its doors and stop draining resources from others.

Yes – Strategic Choices will always involve some risk.  But thoughtful, calculated risks are usually far better than the risk of becoming irrelevant.

*Ackoff, R. L., Magidson, J, Addison, H. J., Idealized Design, 2006, p. 204.

In recent months,  The Chronicle of Philanthropy carried a cover story on innovation.  In that article, Amelia Franck Meyer, CEO of Anu Family Services in Hudson, WI was quoted as saying “We’re in an environment where it’s innovate or die.”  Wow.

Here are some recent thought-leadership sources for you to check out to learn more about innovation:

*A great TED Talk by Dan Pallota on how we need to rethink “charity.”

*Experts explain how leaders can spur innovation in The Wall Street Journal

*Fast Company’s annual listing of the 50 Most Innovation Companies

*Ten year anniversary articles on social innovation in Stanford Social Innovation Review

*Dr. Gary Hamel’s bi-weekly Management Innovation e-newsletter

The Smith School of Business at Maryland sponsored our annual Business Summit recently and the theme was “Innovation in an Uncertain Economy.”  I had the pleasure of moderating a rock star panel made of up Terri Freeman, President of the Community Foundation of the National Capital Region; Allison Fansler, CEO of KIPP DC Schools; Mike Curtin, CEO, DC Central Kitchen; Jatrice Martel Gaiter, EVP of External Affairs, Volunteers of America; and Greg Cantori, President of the Maryland Association of Nonprofit Organizations.

Each panelist had great examples of innovations in their organizations and the nonprofit world.  One of the main themes from the panel was the need for both funders and nonprofits to take more risks, to experiment, and to try new models of services.

Risk and experimentation are not new in the nonprofit world.  But in today’s environment, we need to do these things far more often if we are going to be truly innovative.  Here’s an example of the mindset at Nike, listed as this year’s Most Innovation Company by Fast Company:

“‘Really cool stuff can come from the opportunity to test without constraints.’  And that, in sum, is innovation, Nike-style: a messy, exhausting process culled from myriad options and countless failures.”

Risk, experimentation, and a tolerance for failure – they all lead to innovation and enhanced Mission Impact.  What’s your latest experiment?