Pessimism is a trait with an image problem. Pessimists can be seen as poking holes in every idea, damaging morale, or even undermining business success. Martin Seligman defines the difference between optimists and pessimists using the P's:
Pessimists regard negative events as Permanent (it's not just for now, it'll always be bad), Pervasive (it's not just this, everything is bad) and Personal (it's all my fault). Optimists, however, will spin the same event the other way, thinking "It's not all bad, this is isolated, it won't last forever, and besides, it's not my fault". Optimists tend to apply these three P's to positive events, which is to say, really, that optimists tend to treat the positive as significant, learn from it, and expect more of it, whilst pessimists do the opposite.
The case for optimism is easy to make, therefore; optimists will tend to be happier, because they see the future as being likely to hold good things. This makes them opportunity takers, as they expect good results, and they bask in a generally positive worldview. In the 1950s, Friedman and Rosenman linked Type A personalities (those with greater urgency, anxiety and similar traits) with a greater risk of heart attacks. All in all, pessimism looks rather like the poor relation here; pessimists are more likely to be unhappy and unhealthy, and less likely to take opportunities to improve things.
There are some real risks, however, to optimism. Many optimists tend not to prepare thoroughly, because they feel confident of success, leading them to fall into holes which they have decided are definitely not there. Likewise, optimists may not be terribly realistic, clinging to a Mr Micawber like expectation that "something will turn up". The stock market is, in essence, a measure of investor confidence and optimism, and the bubble which pertained in it during the early years of the last decade is a salutary warning. In a mindset which has been termed "Aggressive complacency", investors clung to the idea (espoused by one Gordon Brown), that the bull market would continue permanently, unlike every other bull market in the recorded history of markets, all of which have ended in a peak, and a crash. This ungrounded optimism spread to banks, consumers and Government, and was at the root of the crisis in which we now find ourselves. Admiral James Stockdale, the highest ranking naval officer to be held prisoner during the Vietnam war, felt that optimists were the least likely to survive such an experience, as the repeated dashing of their hopes destroyed their ability to cope. He talked of the importance of being able to face the brutal facts of your situation, whilst still holding keeping faith that in the end, you will prevail.
In one business with whom I work two of the directors are tremendous optimists. They are visionary and inspiring, full of energy to move forward, and full of ideas of how to make that happen. They make it a great place to work, and their vision and direction has been at the root of the success of the business. The third director, however, is very much more pessimistic and cautious. In many teams, this is a difficult balance to deal with, but in this case, it works, because each has learned to recognise the value of the other's approach. Our more pessimistic director will say "These are great ideas, but what will we do in month 5 and 6, when our revenues are always down?". The other directors will tend to say "We'll try really hard, and bring in the money", but, being who he is, he will insist that we plan for the downturn, even if that means scaling back some of our plans for the year. Given that we have several times sailed very close to the wind financially at those times of year, to the extent that without his caution, we would have gone under, it's not hard to see why he is taken seriously.
Ultimately, it's hard for a business to thrive without a good sprinkling of optimists in the boardroom, and elsewhere as well, but for that optimism to go unchecked is a huge risk. What is needed is a balance, but for that balance to work, each personality type must respect the other. It's helpful if pessimists can learn to talk in terms of "What we need to do to make this work", rather than "All the things which could go wrong", and optimists could do worse than to realise that, however positive they feel, there will be risks which need to be addressed. Can't we all just get along?
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