It's been known for decades that optimists are happier and more resilient than pessimists. However, optimism and positive thinking aren't panaceas and can be downright toxic when they're harnessed to deny reality or used to bludgeon other people.

Toxic optimism takes two forms: 1) denialism and 2) "happy horsesh*t."

Denialism consists of pretending that the world is as you wish it were and then behaving as if your wished-for world is actually real. Another way to say this is "fake it until you make it." The ultimate archetype of denialism is this famous meme:

The business world is rife with denialism. Its most visible manifestation today is how the huge high tech firms seemingly don't "get" that the population is turning against them and that it's only a matter of time before governments force them to break into smaller firms.

I personally experienced a similar form of denialism early in my career at DEC, which was the time was the world's second largest computer company. Executives there were convinced that PCs were a fad. By the time they woke up, it was too late.

The second type of toxic optimism is "happy horsesh*t," which is when optimists foist their positivity (valid or otherwise) on people who just aren't feeling it.

For example, I know a woman who shared with a friend she'd just had miscarriage. The friend's response was: "Well, you can always try again!" Needless to say, this response, while realistically optimistic, was hamhanded and hurtful.

In business, "happy horsesh*t" manifests in demands that employees smile and exhibit a positive attitude. This not only makes them more miserable but also results in messenger-shooting, which essentially ensures the dog (i.e. the manager) never figures out that the house is burning.

The cure for toxic optimism isn't pessimism, which tends to make things worse. The true cure is healthy optimism, which is best expressed as a three step process:

  1. See things as they really are (A).
  2. Envision something better (B).
  3. Do what you can to move from A to B.

Looking at the world through these three steps is incredibly optimistic but never devolves into denialism or happy horsesh*t because healthy optimism both starts and ends with a reality check and it focuses on what you can actually change to make things better.