The strength of a visionary entrepreneur is their ability to see something in their mind and bring it to life in the real world. The problem is that sometimes, they can become excessively overoptimistic that it could lead to their business’s failure.

Before I launch into my opinions on that, let me first state that I’m definitely not against optimism per se. In fact, if you’ve been following my posts, I’ve often written about the importance of optimism when it comes to running your own business or working in a sales career, as it takes optimism to build resilience in the face of multiple obstacles. It takes optimism to build self-discipline and charge forward even when you don’t feel like it.

In fact, according to research conducted by psychologist Martin Seligman, optimistic people tend to see negative events as temporary, limited in scope, and caused by external factors, which is the exact mindset you need to beat the odds of succeeding at building a great business. Optimism has also been shown to be a great stimulant for creativity as optimistic individuals feel that the environment is safe so they are more likely to seek novelty and experiment with ideas.

However, too much of it can be your kryptonite.

Why?

Being excessively overoptimistic makes you continuously underestimate risk. For example, you might underestimate the amount of time and money a project would take, and thus fail to sufficiently plan for it.

Being overly optimistic can also give your employees the impression you’re walking around with blinders on, as you excitedly exaggerate growth metrics, while hiding other elements of the truth that show there might be a problem within the company. Without admitting the company’s problems, you’re denying yourself and your team the opportunity to solve them.

Also, you cannot just visualize your way to success in business.

Rhonda Byrne’s book The Secret brought with it people who’ve become obsessed with the ‘law of attraction’. They spend a lot of time visualizing, and visualizing some more, without actually doing anything to achieve what they’re trying to achieve.

The entrepreneur’s version of this is going from one conference to another telling the company’s story rather than doing the work.

“You must change reality, not just wish it away.” — Shawn Achor

Shawn Achor, known for his books on positive psychology, distinguishes between an irrational optimist and a rational one. While the former has a warped vision of reality that is grounded in desire, the latter believes that mindset does matter, but they also recognize that reality is part of the formula.

So what can you do to make sure you’re optimistic enough to run your company, without being too optimistic to run it into the ground?

Use Metrics. Numbers don’t lie. Though it is encouraged to be enthusiastic and passionate about your business, you have to use a set of consistent measurements tracked over time to gauge how the company is performing, and make decisions based off of that. The numbers will tell you whether you need to put in place strategies for growth, pivoting or failing.

Have an executive board that keeps you in check. Surround yourself with people who challenge you rather than agree with everything you say. Such people will help you stay accountable and grounded in reality.

In summary, while it is important to be optimistic as an entrepreneur, it’s also important to know when you’re becoming overoptimistic, leading your business towards derailment — and possible demise.

Last but not least, Jim Collins summarizes it best in Good to Great, “You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”