It’s human nature. More specifically, it’s the leader’s nature… to be upbeat, to see the positive, to look forward and into the future with optimism. This is not a universal truth, but in my experience people tend to gravitate toward those leaders who see the good and who exhibit strong virtues… and so when times are bad, many leaders exhibit optimism. It’s to be expected.

But… such optimism can give way to a strong desire to avoid or at least deflect worry or panic among board members, colleagues, and employees. Unfortunately, that desire can result in what I like to describe as “happy denial speak”. If financial performance is declining, a topic I discuss in my book quite a bit, some executives will seek to not only avoid panic, but also to squelch tough and probing questions from those who are bold enough to wonder. Sadly, this instinct can even go too far as some will begin to “color” the truth and essentially feign optimism. This is where things can go sideways fast, though it isn’t always intentional. It can happen as a natural extension of what began simply enough: the desire to be upbeat.

The worst part of this denial phenomenon is that it can lull people to sleep, making them unaware of oncoming dangers, and thus more poorly equipped to bob and weave when needed. The most denial oriented cultures become the least nimble and most stiff.

I work with a number of organizations experiencing some type of challenge and it’s very common that the warning signs were there… right there… in plain sight all along.

The absolute most important thing for board members and leaders to know is that this can happen. In other words, simply understanding that innocent optimism can lead to a denial oriented culture if left unchecked typically prevents it from actually becoming so. And for board members, who are the ones most accountable for the enduring preservation of the organization’s mission, they must pay close attention and should not be lulled into slumber; they must be keen, vigilant, and observant enough to look through the shiny, happy veneer to what lies behind it. If performance is starting to deteriorate, be wary of any and all forms of happy denial speak.