Even though we live in a technology-driven data-saturated world, emotion still plays a huge role in how businesses are managed and how economies function. When business leaders feel buoyant about the future, they are more likely to launch new products or expand into new markets. When they are hopeful about the outlook for business, they are more likely to hire staff, make capital expenditures to replace outdated equipment and invest in new technology. And most economists agree that the degree of optimism that consumers feel in regards to the economy and their personal financial situations is practically a self-fulfilling prophecy. When people feel strong, positive, secure and sure – whether those feelings are based on facts and concrete data or not – they are more likely to spend, hire and take calculated risks. The result of all that confidence is that it usually fuels innovation and economic growth which then fuels more optimism. It is a virtuous cycle.
If all those good feelings serve as fuel for expansion and progress which in turn generates more confidence, then what causes recessions and contractions? What causes the pendulum to swing from optimism to pessimism, breaking the virtuous cycle? One big contributor is fear. It is the curse word of the business world. Fear plays a big role in causing stock markets to fluctuate wildly. Fear often makes employers hold back on hiring even when they know they are short-staffed. Fear causes business owners hold on to old equipment and antiquated systems rather than invest in the tools needed to maximize productivity and increase efficiency. Fear often works as a paralyzing agent undermining businesses and economies. So how should leaders and execs deal with fear in business? What do we even know about how fear affects business? Continue reading