Lawyers always think of worst case scenarios. It’s what we’re paid to do. But regular folks, especially business people, are optimistic--always believing that the best will work out.

Neither side is wrong, but both have their pros and cons and can lead to missed opportunities for all. What is needed is a healthy balance between those two concepts. An optimistic realism. Optimistic realism occurs when you are convinced that there is a better way, while remaining fully aware of the steps required to obtain that better way.

Many business owners approach entering into agreements with other people very casually because of their overwhelming optimism. This is especially common when people are making hiring choices. They ignore red flags and assume that the details will just take care of themselves.

Friends, that rarely happens.

Issues come up regarding how work is to be done, when it is to be done, how success is measured, and how people are compensated. Unfortunately, most people focus only on compensation and ignore the other factors that impact success.

Choose to be different.

When entering into agreements, bring your optimism, but don’t be blinded by it. Ask the hard questions. Get into the details. Pay attention to the red flags.

And do this in every area of your business. It’s essential for achieving any meaningful change or improvement in business and in life. As a lawyer, I’ve seen too many “gentlemen’s agreements” end up in chaos because the parties refused to be real about what it would take to get the desired results and whether they were ready to do the work. Everybody is walking on eggshells and falling into pits.

Here are some practical tips for arming yourself with optimistic realism:

1. Investigate potential parties to an agreement.

Do your research. If you wouldn’t marry someone you don’t know, you shouldn’t enter into complex arrangements with them either because the financial implications have the potential to be the same. In partnerships, you can be held financially responsible for someone else’s mistakes.

2. Get clear about what is expected.

I’ve probably said it a hundred times and will continue to say it because it matters that much. Many of the cases that are being fought in courts are there because people were not clear about what they wanted and got upset when they didn’t receive it. Speak up.

3. Don't be manipulated when it comes to entering into agreements. 

People who harness optimistic realism don’t think that strong-arming folks into contracts will actually get them what they want. They know that providing something of value to people gets them to do what they desire. A good contract just makes the exchange clear. Be straight up with folks. You’ll get results and respect.

Are there other ways you can see optimistic realism helping you in business? Share your thoughts, questions, and comments section below or shoot me an email at blog@toslegal.com.