Microsoft’s founder Bill Gates has long been the poster boy for success because the billionaire tech entrepreneur-turned-philanthropist got to where he is today based on his brilliant mind.
But, according to a well-known psychology expert, rational optimism also played a huge part in the 68-year-old’s long-term success.
With the weight of the workforce, the bottom line, and the company's future on their shoulders, leaders are generally told to err on the side of caution. As a result, optimism often gets overlooked.
However, psychologist and author Morgan Housel thinks being able to balance the two is an underrated ability that Gates’ has mastered—and so could you.
“Plan like a pessimist and dream like an optimist,” Housel recommended in an essay he wrote for CNBC.
How to be a rational optimist like Gates
By Gates’ own admission, optimism is his "superpower." But don’t confuse that with blind optimism.
During Microsoft's earliest days, Gates insisted on always having enough cash in the bank to keep the business alive for 12 months with no revenue coming in.
When asked by Charlie Rose in 1995 why exactly he kept so much cash lying around, he admitted that things change so quickly in technology that next year's business wasn't guaranteed.
"I was always worried because people who worked for me were older than me and had kids, and I always thought, 'What if we don't get paid? Will I be able to meet the payroll?'" he later explained.
And according to Housel, Gates's story demonstrates that you can only be optimistic in the long run if you're pessimistic enough to survive the short run.
Leaders who are “pure optimists” are “so confident in themselves they can't fathom anything going wrong," Housel highlights. Meanwhile, those who tip too far on the scale of pessimism have “so little confidence in themselves they can’t fathom anything going right."
Gates, instead, is a rational optimist according to Housel—someone who acknowledges that “history is a constant chain of problems and disappointments and setbacks”, but remains “optimistic because they know that setbacks don’t prevent eventual progress.”
And that’s the sweet spot to long-term success, Housel adds, because it means you can see the forest for the trees.
“The trick in any field—from finance to careers to relationships—is being able to survive the short-run problems so you can stick around long enough to enjoy long-term growth,” he concludes.
