Realism vs. Optimism: The Stockdale Paradox

Recently, I was meeting with the leadership team of one of my favorite startups. Like many startups, this company is tackling a big, hairy problem that other companies haven’t yet been able to solve. For some folks on the team, it feels like trying to solve this problem is futile. The end-goal is daunting and it’s easy to get pessimistic about the ability to affect a positive outcome. Yet, for other folks on the team, there’s little doubt that the end-goal will be achieved. Their approach is that of unbridled optimism: don’t sweat the day-to-day small stuff, because of course we will persevere. The realists feel like the optimists don’t acknowledge the gritty, tough day-to-day work. And the optimists feel that the realists are downers and not embracing the vision and potential of the company. The team went back and forth on the “right” approach: for the good of the company as we scale, should we be Pollyannas or should we be realists?

And, more broadly, as a manager in a start-up or rapidly changing organization, how do we motivate our employees and stay positive while being realistic about the day-to-day grind that is inevitably part of building a company?

Well, this, my friends, is a classic case of the Stockdale Paradox.

Who's Stockdale and what's his paradox might you ask?

Here's Stockdale:

Two things to note about this silver fox*: 1) he shares the same birthday as me (Dec 23); and 2) He was a POW in Vietnam. In his time as a prisoner, he experienced this paradox (which was subsequently named after him)...

And here's his paradox:

The Stockdale Paradox is that you should approach change or adversity with a combination of optimism plus brutal honesty and a willingness to take action. Put another way, the paradox is:

"You must retain faith that you will prevail in the end, regardless of the difficulties.

AND at the same time…

You must confront the most brutal facts of your current reality, whatever they might be."

When Admiral Stockdale was imprisoned, he had optimism that he would get released, but unlike fellow prisoners who only focused on optimism (and then had hopes dashed when a release didn't happen when exactly they expected), he tempered his optimism with an acceptance of the reality at hand and a gritty mindset to do everything he could to improve his current situation - no matter how small those actions are.

Well, what does that mean for you as a manager? Well, according to folks like Jim Collins, author of Good to Great, outstanding companies are those that live the Stockdale Paradox everyday. And, that means as a manager, you need to create a culture that fosters this paradox in your teams. As Stockdale saw, we need to let optimism drive us, while maintaining a firm footing in reality, a bias for action, and a focus on each of the little day-to-day steps that will help get us to where we’re going.

Make sense? So the next obvious question is how: how can you instill this paradox in your teams?

1. Embrace the Paradox: Often we try to “solve” everything. We try to fix situations that are conflicting or create dissonance. But, what about just admitting that the Paradox exists and managing expectations that it won’t be resolved? Discuss the Paradox with your employees, understand how they experience it, and then manage expectations around it. The dissonance is something to be embraced, not something to be changed!

2. Celebrate both sides of the Paradox: start-ups need both types of employees – the realists and the Pollyannas. But, often we create a culture where only one “type” of employee is revered. Do you celebrate the optimistic visionary? Or do you celebrate the gritty pessimist?

3. Build Vision and Innovation Into the Day-to-Day: Americans love big ideas and product innovation. But, we don’t pay as much attention to process innovation, or tweaking and redesigning the way of doing things in order to get better. (Germans are great at process innovation and lead the world on patents that focus on this!) Encourage employees to constantly be looking for ways to improve and innovate on the day-to-day grind and grittiness, as a way to build vision into the hard reality. And then celebrate the guy that jerry-rigs a bungee cord so that the fridge door stays shut!

4. And, Back to Goals: Lastly, be careful of goal-setting, so as not to create a set of expectations or hopes that cause more harm than good. Goals often ignore the day-to-day reality, and thus go counter to the Paradox.

The Stockdale Paradox is just one of the many paradoxes of culture, values and operating models that exist in an organization (this is termed ‘institutional plurality’ by the powers to be). We tell our teams “we’re a family”, yet we end up firing under-performers. We stand-by our mission orientation, but we pursue aggressive growth. We celebrate teamwork, but evaluate individual performance. As managers, we are often caught flat-footed when we need to reconcile these competing ideals for our team members. And, instead of attempting to reconcile these differences, communicate with your teams and your organizations that these paradoxes may always exist, and that's ok!

TL;DR

• In fast-growing organizations, we often get stuck in the day-to-day toughness of the work or get too caught up in optimism and the future.

• This situation is called The Stockdale Paradox, which states that you should approach change or adversity with a combination of optimism plus brutal honesty and a willingness to take action.

• Your role as a manager is to help your teams not resolve this paradox, but rather navigate it in their work.

• Strategies to help your teams navigate this paradox include first, just communicating that the paradox exists; celebrating both those who have vision and those who are realists; and building innovation into all parts of your work.

*Actually there is a third thing to note about Stockdale (as pointed out by a kind reader): He was Ross Perot's running mate in the 1992 presidential election!

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