The power and limits of positive thinking

Learn how to use negative thinking, especially when you have a problem to solve

By Kol Birke, CFP�

Jun 2, 2014 @ 12:01 am EST

It's easy to fall into the trap of believing that achieving success will automatically make us happy. You might think, “I'll be psyched if I can grow my business 20 percent or get a 10% raise.” Yet the satisfaction success brings is rarely lasting. Instead, the “success begets happiness” axiom becomes more accurate if we flip it on its head: positive thinking helps us succeed.

According to Shawn Achor, author of The Happiness Advantage:

“Positive emotions flood our brains with dopamine and serotonin, chemicals that not only make us feel good, but dial up the learning centers of our brains to higher levels. They help us organize new information, keep that information in the brain longer, and retrieve it faster later on. And they enable us to make and sustain more neural connections, which allows us to think more quickly and creatively, become more skilled at complex analysis and problem solving, and see and invent new ways of doing things.”

Does this mean that if we just use positive thinking, success will follow? Although it's not quite that simple, a growing body of research shows that having a positive outlook plays a bigger role in success than you might think.

Positive Psychology: An Introduction

In 1998, Martin Seligman, one of the world's leading psychology researchers, turned his focus to a brand-new field of study: positive psychology. In short, positive psychology looks at what allows individuals, families, and communities to flourish. Over the past decade, it has emerged as a valuable complement to traditional psychology, giving us concrete ways to overcome stress and challenges by adjusting our outlook and behavior.

While positive psychology focuses on positive emotions, it doesn't hold that optimism and pessimism are mutually exclusive. In fact, Mr. Seligman advocates “flexible optimism”—in other words, we should employ optimism (or other positive thinking approaches) when that's the best tool, and pessimism (or other more negative approaches) whenever it serves us better. But when should we use one over the other?

The Power of Positive (and Less Positive) Thinking

Psychologists have long understood the purpose of negative emotions, such as fear, anger, and disgust. Fear alerts us to danger, anger lets us know that someone is trespassing in our territory, and disgust evolved—quite literally—to make us throw up any toxins we've ingested. All of these negative emotions do two things: they focus our attention on the problem at hand, and they push us toward an action (in an attempt to remove the negative emotion).

What about positive emotions, such as happiness and joy? Researcher and author Barbara Fredrickson has found that they're another beast altogether. While negative emotions narrow our perspective, positive emotions broaden it. While negative emotions drive us toward a single, instinctive action, positive emotions allow us to examine all of the options that our broadened perspective has provided and then select the best one for that moment. Additional research suggests that, while negative emotions cause us to isolate ourselves, positive emotions actually encourage people to work cooperatively.

The Candle Problem
The Candle Problem

These findings support the idea that most 21st-century challenges are better solved by giving ourselves a dose of positive emotions. To demonstrate this point, Dan Pink, author of A Whole New Mind and Drive, likes to point to an experiment called the Candle Problem. In it, participants are given a box of thumbtacks, a matchbook, and a candle and asked to figure out a way to attach the candle to the wall so that wax won't drip on the table once the candle is lit. When participants are offered rewards to solve the problem more quickly, they actually end up solving it more slowly.

Why would that be? It turns out that the anxiety of earning or not earning the rewards inhibits creative thought. (Remember: negative emotions such as anxiety narrow our perspective.) To be fair, the rewards did speed people up in one situation—when they were told the solution ahead of time and, thus, no creativity or high-level thinking was needed.

Applying the Research

One might conclude that a “nose to the grindstone” attitude may be effective with certain well-defined tasks—ones where you know every step involved and can just punch through them. For nearly all other tasks, however, a positive mindset helps us succeed.

To determine which approach to take with a particular job, ask yourself: Is this task mechanical in nature? That is, could I write down all the steps so that almost anyone could perform them? If so, pressure and incentives are likely to improve efficiency. If not, the research suggests finding a way to infuse the task with positive emotions. In these cases, going for a bike ride or listening to some good music may help improve your efficiency.

Here are two areas in which positive thinking can make a big difference:

  • Higher-level thinking tasks

  • -Working through investment, planning, and management challenges

  • -Optimizing staff talents and energy

  • Client relationships

  • -Improving loyalty

  • -Increasing the odds that clients will act on your recommendations

  • -Smoothing the roller coaster of investor behavior (Dig deeper into the genetics behind financial decision making in our Nature Vs. Nurture white paper.)

When Happiness Is Its Own Reward

Of course, there are plenty of tangible benefits to looking on the bright side, including increased efficiency and profitability in the workplace. But you may discover that using positive psychology to find deeper satisfaction in your work and life is reward enough.

Kol Birke is vice president, business systems strategies, and a financial behavior specialist at Commonwealth Financial Network, member FINRA/SIPC, the nation's largest privately held independent broker/dealer-RIA. Based in Waltham, Massachusetts, and San Diego, California, the firm supports more than 1,487 independent advisors nationwide in serving their clients as registered representatives, investment adviser representatives, and registered investment advisers, as well as through hybrid service models. For more information, please visit

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