Changing Sentiments and the Economy

Tuesday, March 17th, 2009

Interesting piece in Business Week (3/16/09) on the power of sentiment in moving markets. George Akerlof and Robert Shiller suggest that investors “need to be offered a new story. . . Budding optimism reverses the vicious cycle of losses.”

This has application to organizational change. Too often leaders try to sell a plan for something new without first giving people a story they can believe in. This may seem like a waste of time, but when sentiment shifts in your favor, you can have hundreds (maybe thousands) working to make the change a success.