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(originally published by Booz & Company)


The Weakness of Positive Thinking

Likewise, a 2011 study of a U.K. truck manufacturer owned by a U.S. multinational firm explored the effects of an overtly upbeat corporate culture pushed by the new U.S. executive team. In a monthly in-house magazine — which was sprinkled with positive progress reports, photographs of smiling figures, jokes, and features on employees’ leisure time — the managing director said his door was always open and that he’d be available to talk on the assembly line at 7:30 each morning.

But workers complained to the researchers that managers didn’t want to hear their suggestions, and many remarked that the managing director had never been glimpsed on the shop floor at any time, let alone at 7:30 a.m. Regarding the U.S. managers as disingenuous and manipulative, the employees developed a counterculture that emphasized their own “honesty,” “masculinity,” and “common sense,” the author writes. Management was oblivious to the unintended effects of its sunny approach, he notes, citing the weakening of trust and communication caused by the gap between leaders’ Prozac statements and the workers’ actual experience.

Of course, customers can also react negatively to hollow corporate promises, the author says, citing the case of a musician whose guitar was severely damaged in transit by a major airline that touted its customer service. After failing for nine months to convince the airline of its responsibility, the musician recorded a song about the incident that went viral on YouTube and became a public relations nightmare for the carrier.

Shareholders, too, can express resistance to Prozac leadership. A 2011 study found that executives’ use of overly optimistic statements (especially in relation to corporate earnings) increased the firm’s risk of being sued by shareholders. In analyzing 165 lawsuits from 2003 to 2008, the study found that the statements of sued companies were markedly more optimistic than those of similar firms that weren’t sued. In 91 percent of the cases, plaintiffs targeted optimistic language when bringing actions against a firm.

“Regardless of whether Prozac leadership is fuelled by wishful thinking, naivety, hubris or more deliberately manipulative motives (or a combination of these),” the author writes, “subordinates can perceive Prozac leaders to be contradictory, remote and unwilling to consult, and may dismiss their excessive optimism as insincere and manipulative.”

Bottom Line:
Leaders can become excessively positive, making them reluctant to listen to alternative viewpoints and leaving their firms unprepared to deal with unexpected problems. This so-called Prozac leadership ultimately results in resistance from employees, customers, and shareholders.

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