OPTIMISM: BIASES. DELUSION. SOLUTION

ENTREPRENEURS' FOOTPRINTS

(Part 1 of 3 series)

OPTIMISM is a conviction that the future is positive and that we will get through this pandemic experience.  It is more than posi-tivity – which simply labels things as good.  Optimism is a doctrine and a philosophical standpoint that this world is the best possi-ble world. The American Psychological Association (APA) Dictionary of Psychology defines optimism as hopefulness – the atti-tude that good things will happen and that people’s wishes or aims will ultimately be fulfilled. Optimists are people who anticipate positive outcomes, whether serendipitously or through passionate perseverance and relentless effort.  Optimists are those who are confident of attaining desired goals. Webster puts it as an inclination to put the most favorable construction upon actions and events or to anticipate the best possible outcome. To the optimist, the glass is not half full.  It is half empty.

In the recently concluded Franchise Asia Philippines – Virtual Conference conducted by the Philippine Franchise Association (PFA), surveys were conducted before and after the event which reflected the optimism of the participants.  The PFA’s Virtual Con-ference happened on September 21 to 25, 2020 and was attended by 730 participants, mostly from the franchise sector.

The survey data indicated that before the conference, the 72 percent had high to very high optimism and by end of the confer-ence, the high to very high level of optimism shifted to 85 percent.  The mean score of optimism was 3.902, or almost high, in the beginning and shifted to 4.202, or above high, after the conference.  The NET optimism, the difference between the optimists and the pessimists, in the beginning was + 64 and ended up to +81 in the end.  Using t-test, it can be concluded that there is a significant dif-ference between two sets of data to prove an increased in optimism after the conference.  By this difference, it can be deduced that the conference contributed to this difference.

PFA President Sherill Quintana opines that the collaborative and symbiotic nature of the franchisor-franchisee relationship may have mitigated the impact of the pandemic towards a more optimistic view at the onset.  The “big-brother” support of a franchisor who is committed to helping every franchisee to survive and thrive.   Quintana also notes the heightened optimism after the confer-ence.  This may be attributed to their learning, which the participants indicated strongly in the post-conference evaluation.  Quintana quips that the optimism shared by CEO’s and other luminaries of the franchising sector must have created that bandwagon of opti-mism.  It is also in that conference when the Father of Philippine Franchising Samie Lim launched his vision of the Golden Age of Franchising in 2021 to 2025.  Such vision of the PFA Founder may have ignited a collective optimism of a sector which had long history and evidence of resilience through past crises.

Filipino’s Pandemic Roller Coaster Ride

In December 2019, the Pulse Asia Survey reflected the optimism of the Filipinos for 2020 with 93 % welcoming the year with hope, which was higher than the 91 percent registered in December 2018.

Filipinos were optimistic.  In a study conducted by the Global Web Index in March 16 to 20, Philippines ranked highest, number 1, in terms of concern about coronavirus at 91 percent but has the second highest in optimism at 75 percent, next to China which registered 93 percent.  The Filipino respondents thought that COVID-19 global outbreak will last for 6.2 months, and thought that in the Philippines it will last only for 3.7 months. Note that the respondents had better optimism of the Philippines than for the world.  Because that is how personal optimism works.

Majority of Filipinos are optimistic that the country can overcome the coronavirus disease pandemic.  A quantitative study pre-pared by the Philippine Survey Research Center (PSRC), from April 7 to 12, showed that around 88 percent of Filipinos are optimistic that the country can overcome the pandemic, with only 3 percent were pessimistic while 9 percent were uncertain.  Optimism was high as the study also showed that around 35 percent of Filipinos believed that the health crisis would last for one month, while 46 percent believed it would last for two to three months.  Around 12 percent of Filipinos think it will last for four to six months and 7 percent think the pandemic will be solved in over six months.  This survey was in April.

Towards the latter part of the experience, the level of optimism changed. The Social Weather Station (SWS) Survey, in May 2020, indicated that 43 percent of Filipinos expect their quality of life to worsen in the next twelve months with only 24 percent remaining optimistic.  This survey registers the historical record low Net Optimism (optimists less pessimists) at -18.

Similarly, based on Consumer Expectations Survey in 2020, The consumer confidence index in the Philippines turned pessimis-tic for the third quarter 2020, as the overall confidence index declined to a record low of -54.5. The central bank explained that the survey was conducted during the period 1-14 July 2020, when the country still struggling to combat the pandemic. Consumer senti-ment on the three indicators turned pessimistic compared with Q1 2020 survey. The consumer confidence on the family’s financial situation and family income registered all-time lows since Q1 2007.

For Q4, consumer sentiment across indicators weakened compared with the outturn in the previous survey round. The consumer confidence for the next 12 months across component indicators was more favorable compared with the first quarter 2020, due to expectations of an end in the COVID-19 pandemic.

Optimism as a Positive Resource

 Researches have confirmed the findings that optimism is related to psychological well-being. Chang simply puts that optimists emerge from difficult circumstances with less distress than do pessimists.

Positive psychological resources, capabilities, and strengths such as optimism and psychological flexibility are key ingredients in contributing to positive mental health during a health crisis.

Yildirim Arslan et al. conducted a study on Coronavirus Stress, Optimism-Pessimism, Psychological Inflexibility, and Psycholog-ical Health: Psychometric Properties of the Coronavirus Stress Measure, in 2020, and concluded that, consistent with previous stud-ies, stress was found to correlate positively with pessimism, psychological inflexibility, and psychological problems, and correlate negatively with optimism.  The results of their study showed that optimism and pessimism significantly mediated the relationship of psychological inflexibility with psychological problems, suggesting that higher optimism and lower pessimism can reduce the negative impact of psychological inflexibility on the experience of psychological problems.

Importantly, optimism, pessimism, and psychological inflexibility together significantly mediated the relationship between coro-navirus stress and psychological problems. These results suggest that the reason people with high levels of coronavirus stress report greater psychological problems and have high levels of psychological inflexibility and pessimism and lower levels of optimism. High levels of optimism and low levels of psychological inflexibility and pessimism may help people to cope with coronavirus stress and foster lower levels of psychological problems.

Optimism as an Entrepreneurial Character

Jason Feifer, the editor-in-chief of Entrepreneur Magazine, was quoted in saying that “Entrepreneurs make me optimistic. They already have many of the mental tools required to get through this. They already know that change is inevitable, and that old plans have to be scrapped, and that today’s successes do not guarantee tomorrow’s survival. That’s why, as soon as this crisis started, they began focusing on solutions—and I believe they’ll build a better world as a result.”

The footprints of the entrepreneurs leave the mark of visionary opportunism and calculated risk-taking, which are anchored on optimism.  Such may cross the border of gambling behavior, faulty planning and tendency to under-estimate reality.  There is such a thing as optimistic bias, which sounds negative until one appreciates its value to life success and entrepreneurial achievement.  (to be continued next week)

For feedback, please send email to drcarlbalita@yahoo.com .

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