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Think Optimistically, Plan Realistically

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Think Optimistically,
Plan Realistically
Bruce Palmer, Managing Director OMA Insurance
A popular expression in the risk management community is “hope for the best and plan for the worst.” The problem for me is I do not really believe it. I’m not sure I should admit this disbelief: as a CRM (Canadian Risk Manager), I took courses to get this designation and I continue to read and study the topic as part of my professional commitment and personal desire to continue learning. I consider myself part of the “risk management community” and I think of myself as being, at least partially, a professional risk manager. I feel bad not believing in one of the more fundamental sayings. Maybe I should explain why I do not believe…

​First, I almost never plan for the worst. About the worst thing I can think of when bike riding, for example, is to be struck by a falling meteorite, being rendered brain damaged and physically shattered but not dead (in this scenario, even my precious bike would be damaged). I freely admit I have no plan for this possibility. In fact, the time it has taken me to type this paragraph is the longest I have ever spent thinking about this possibility. I do try to plan for realistic scenarios that I might have some control over: flat tires, stones kicked up by passing vehicles, getting lost. I think about traffic and how to avoid the sort of bad things that happen when cars, trucks, and bike share the same physical space; but planning for the "worst"? Not really.

Second, I think of "hoping for the best" to be somewhat akin to hoping to win the lottery: worth a few seconds of time but not exactly a brilliant strategy upon which to build a future.

I am really much more of a "plan for the future you want to create, be aware of the risks, and make appropriate back-up plans" kind of person. It may not be quite as catchy a phrase, but it is much more useful as a guiding principle. In my opinion, it is also just good sense. Going through life, however, I am always a bit surprised how many people do not follow my approach. (In full disclosure, even I do not fully follow my approach.)

Some people, of course, are content to let life take them wherever it leads. These romantic, "que sera, sera" types are popular movie and book characters. As much as I occasionally envy their carefree ways, it is not a lifestyle I have seriously thought about pursuing. I am far more interested in exploring a world I help create than in observing the world created solely by others. (And I have noticed that even in movies and books, the actual stories tend to revolve around these types of people changing and actually starting to take control of their future.)

Among those who do take some sort of planning approach to the future, many people are quite good at the "plan for the future you want to create" part of my strategy. It is fun, creative, forward-looking thinking. It identifies challenges and lets you imagine the rewards. It is the kind of work you can do sitting on the back deck with a cold drink, or on the tennis court, or lying in bed at night.


It's not you, it's us​

Being aware of the risks and making those annoying back-up plans is where most people fall down. Intriguingly, some recent research suggests we fall down not because we are lazy or uninterested – these traits may be true for some but certainly are not for most of us – but because we are programmed that way. Research shows not only that people expect the future to be better than the past, but that our brains might actually be hardwired to make us think this way.1 "Optimism bias" is the name that has been given to the seemingly innate belief that the future will be better than what the present and past suggests it really will be. Optimism bias can affect both positive outcomes (for example, believing our investing will be more successful than the market) or negative outcomes (for example, believing the chance of developing a drug or alcohol-dependency is less likely than it is). Also known as unrealistic optimism or comparative optimism, optimism bias, "is a cognitive bias that causes a person to believe that they are less at risk of experiencing a negative event compared to others. There are four factors that cause a person to be optimistically biased: their desired end state, their cognitive mechanisms, the information they have about themselves versus others, and overall mood."2

There is a great video, produced by the Prudential Insurance Company of America, on YouTube that very well illustrates how Optimism Bias affects all of us. Although we do not represent the Prudential here at OMA Insurance they deserve credit for this insightful series of articles, videos, and television ads. Featuring psychology professor Daniel Gilbert of Harvard University, the video features a very public experiment aimed at visually demonstrating the difference between our belief about the past and the future. In the video entitled, "Behind the Scenes - The Prudential Magnets Experiment", we see how our expectations of the future​ and our memories of the past are not consistent: no matter what we remember in terms of good and bad events in the past, we consistently think that only good will happen in the future: we imagine the best and overlook the possibility that is might not happen. I encourage you to look at the two-minute video at

Be happy​

Optimism bias is not necessarily a bad thing.  Some research suggests that we do actually have better lives by being a bit more optimistic than by being pessimistic1 and, on a basic emotional level, most of us would prefer to be with someone who expects the good in life. There are good reasons why it is often helpful to expect the future to be better than the past. Speaking from personal experience, there are many personal and professional actions – ranging from initiating new relationships to undertaking new projects – which I might shy away from if I was convinced that past failure predetermined future outcomes. An optimistic outlook can be a useful trait in my "planning for the future" strategy, and to some degree the optimism bias helps create the feelings of well-being and self-esteem​​2 that support my commitment to my overall risk management strategy. 

Unfortunately, there are also negative outcomes associated with the optimism bias, and these negatives tend to be lead to consequences involving us undertaking more risk than we realize, such as engaging in risky behaviours and not taking precautionary measures for safety.5 Failing to understand that bad things really can happen – that there is no inherent reason for my outcomes to be different than statistical averages of similar populations, and that me wanting something to happen or not happen is not sufficient cause for it to actually occur or not occur – can lead me to taking unimagined risks and not being ready for them when their inevitable consequences become manifest. As I said more simply earlier on, I will not be aware of the risks and will not have made those annoying – and necessary – back-up plans.

Let's look quickly at how the optimism bias can fit into the overall planning strategy of "plan for the future you want to create, be aware of the risks, and make appropriate back-up plans"

The future you want to create – I think most of us would agree that some optimism in thinking about the future we want to create is a good thing:  nobody really sets out to create a pessimistic future.  Outside of comic strip villains, nobody really sets out to make a worse world for the future.  The optimism bias does not do much harm here, other than perhaps setting too high a standard that makes the following steps difficult. But, assuming you really do follow through the next step, any over-exuberance of this phase can be handled effectively.

Be aware of the risks and make appropriate back-up plans – this stage is where the optimism bias can hurt.  Being aware of risks means you need to be able to contemplate failure and the factors that might contribute to it; you need to examine alternative outcomes and both their probability and their consequences; you need to be able to step back and look at the larger picture of what is happening around you (in the relevant and impactful parts of the world) and understand the larger forces at play. Being overly optimistic can contribute to failing to consider possibilities, missing root causes.  

Optimism bias can simply stop you from understanding the risks inherent in activities you undertake, thereby preventing you from taking appropriate action to safeguard yourself.


Something to talk about​

The dangers of optimism bias are real enough that governments and other organizations have created methodologies for explicitly addressing this bias in budgeting and planning, and healthcare communities address optimism bias in patient behaviour and treatment.​6 

It is difficult to completely avoid optimism bias, but techniques have been created to help address its affects.  Some of these techniques, particularly around areas like government tendering, infrastructure building, and so on, can be quite complex. The good news is that the fundamentals are straightforward enough for us to apply in everyday life. 

Weinstein's original research on optimism bias in 1980​​7 supported the conclusion that stereotype salience is strongly correlated for negative events.  As reported by Klein, "optimistic biases are more likely to emerge for events that are controllable (Klein & Helweg-Larsen, 2002) and … when people compare themselves with aggregated comparison targets such as 'the average person' than with more individualized comparison targets such as a friend or even a randomly chosen person (Alicke, Klotz, Breitenbecher, Yurak, & Vredenburg, 1995)." 8

​More recent research suggests that self affirmation, in which individuals consider their most important value(s), helps suppress optimism bias. “In one study, for example, individuals were asked to write about their most important value (Sherman, Nelson, Bunyan, Cohen, Nussbaum, & Garcia, 2009). Subsequently, they were instructed to evaluate whether or not they are more or less susceptible to heart disease, skin cancer, and other hazards than an average student. Generally, after participants wrote ​about their most important value, which instills a sense of personal integrity, they conceded they were as susceptible to these hazards as other students. Their optimism bias diminished. That is, self-affirmation seems to curb defensive responses." 9 

Overall, this suggests some simple approaches to ensuring that our planning strategy stays connected to a realistic view of the future.  A good insurance advisor can help.  

Part of a good Planning and Needs Analysis process starts with identifying your goals and values:  what is important to you now and what you expect will be important to you in the future. This step is, most fundamentally, a process of self affirmation: by knowing what we value – by reminding ourselves of what is important – we ground ourselves in a framework of reality.

Weinstein also attributed “stereotype salience” to refer to the prominence or applicability of a stereotype to oneself: the more our personal characteristics align with the “typical” person who encounters a risk or event, the more likely we are to believe it might happen to us also, lessening the impact of optimism bias. Again, the work of Alicke, Klotz, Breitenbecher, Yurak, & Vredenburg in 1995 supports this belief, concluding that understanding outcomes in terms of family and friends – essentially “people like us” – rather than in terms of unknown “averages” helps reduce bias. A good insurance advisor who focuses on a specific community of clients will be able to reduce the chances of optimism bias ruining the integrity of your planning by being able to help identify the risks that people like you have encountered in the past and are encountering today.


Plan for the future you want to create, be aware of the risks, and make appropriate back-up plans…

I am not really one to sit back and just let things happen. And my experience with most physicians is that they are, at least in this respect, much like me:  better to control and create the future than to just let it happen.​

The goal of creating the future does not mean that I do not believe there is no such thing as luck in the world:  good things and bad things, far out of our control, do happen … and we tend to call these things luck. Although we cannot control everything that happens to us, we can control how we choose to respond to these uncontrollable events. And the more options we have when these unexpected and uncontrollable things happen, the more control we have over our own future. And that is why I believe in planning, why I so passionately believe in proper risk management: realistically identifying and assessing risk and then transferring, mitigating, pre-funding, avoiding, or ignoring it.  

The optimism bias – or unrealistic expectations of the future, if you prefer the original academic title – can disrupt the quality of our planning. It can take away your choices.

We care about whether you have options in life. We know that OMA members working through scenarios with advisors who work exclusively with physicians like you makes a difference to the quality of the outcome. We know that being able to help you understand what other physicians do in similar circumstances is of greater value to you than in simply telling you what average Canadians or Ontarians might do.  

Psychology professor Daniel Gilbert of Harvard University says, "Let's be clear, optimism is a good thing. But when optimism gets in the way of planning for the future, it's your enemy not your friend … It is natural to think optimistically but it is not hard to think realistically."

At OMA Insurance, our team understands you and physicians like you, and we can help you create a real understanding of the risks you will encounter. We can help make some of those back-up plans become reality in a trusting and meaningful way, focused on you, your concerns, and your needs … while taking into account the types of issues that physicians who came before you ran into during their careers and lifetimes. By helping you take care of these risks, we can free you up to build that optimistic future we all want to create.


OMA Insurance.  Not for Profit. All for Doctors. ​


Bruce Palmer_8x10.jpg
Bruce has a Bachelor’s degree in Science from University of Western Ontario and a Masters of Business Administration from Queen’s University. He is a Fellow of the Chartered Insurance Professionals (FCIP) Society, a Canadian Risk Manager (CRM), and is currently Vice President, Professional’s Division of the CIP Society of Ontario. Bruce is also the proud father of two daughters, both Civil Engineers. 



1"The Optimism Bias", Time magazine, May 28, 2011.,8599,2074067,00.html viewed on October 1, 2015., viewed on September 18 2015

3 "The optimism bias", Current Biology Volume 21, Issue 23, pp R941–R945, 6 December 2011; Tali Sharot

Department of Cognitive, Perceptual and Brain Sciences, Division of Psychology and Language Sciences, University College London,

4 Shepperd, James A.; Patrick Carroll; Jodi Grace; Meredith Terry (2002). "Exploring the Causes of Comparative Optimism" (PDF). Psychologica Belgica 42: 65–98, as quoted in, viewed on September 18 2015

5 Ibid.

6 For example, see Northern Ireland Department of Finance and Personnel, National Cancer Institute , and page 68 of Immersed Tunnels by Richard Lunniss, Jonathan Baber, CRC Press, 2013.

7 Unrealistic Optimism About Future Events, Neil D. Weinstein,  Department of Human Ecology and Social Sciences, Cook College, Rutgers—The State University, Journal of Personality and Social Psychology, 1980, Vol. 39, No. 5, 806-820 seen online at

8 Optimistic Bias, William M. P. Klein, University of Pittsburgh

9 Optimism bias, Psychlopedia (online) at