Why Do Smart Leaders Ignore Serious Risks in a Post-COVID World (and What to Do About It)

Posted on by Dr Gleb Tsipursky

When a threat seems clear to you, it’s hard to believe others will deny it. Yet intelligent people deny serious risks surprisingly often.

A case in point example comes from my experience helping a mid-size regional insurance company conduct a strategic pivot to thrive in the post-COVID world in January 2021. While doing a pivoting audit, I observed the underwriting department failing to address severe long-term risks for a number of industries resulting from the shifts in habits and norms due to the pandemic.

For example, many companies committed to having many employees work from home permanently, ranging from innovative tech companies like Dropbox to traditional ones such as the insurance giant Nationwide. This growing trend makes it riskier to insure providers of commercial real estate and office-based products and services. Likewise, the rise of virtual fitness spells trouble for the future prospects of everything from yoga studios to gyms. Similar dynamics pose trouble for restaurants and other industries.

Unfortunately, the company’s underwriting department proved resistant to clear evidence of such trends. With the department’s performance evaluation based on how many policies they approved, the Chief Underwriting Officer (CUO) did not want to adjust the company’s underwriting strategy according to wh0at he termed “theoretical problems.”

Research shows that professionals at all levels suffer from the tendency to deny uncomfortable facts. Scholars term this thinking error the ostrich effect after the (mythical) notion that ostriches stick their heads into the sand when encountering threats.

The ostrich effect is one of over 100 dangerous judgment errors that result from how our brains are wired, what scholars in cognitive neuroscience and behavioral economics call cognitive biases. These mental blindspots impact all areas of our life, from relationships and health to politics and even shopping. Fortunately, recent research has shown effective strategies to defeat these dangerous judgment errors.  

To Deal With Risk Denial, Use EGRIP (Emotions, Goals, Rapport, Information, Positive Reinforcement)

Our intuitive action to overcome risk denial involves confronting people with the facts and arguing with them, but research suggests that’s usually exactly the wrong thing to do. Instead, when we talk to someone who believes something we are confident is false, we need to suspect some emotional block is at play. 

Rather than leading with facts or arguing, you can use a much more effective, research-based, and easy-to-remember strategy called EGRIP. This acronym stands for Emotions, Goals, Rapport, Information, and Positive Reinforcement.

Step 1: Model Their Emotions

Your goal should be to show emotionally intelligent leadership and figure out the emotional blocks inhibiting others from seeing risks clearly. Then, focus on deploying the skill of empathetic listening to determine what emotional blocks might cause them to deny reality.

A key clue for helping me understand the emotional factors for the CUO stemmed from the CUO’s skepticism toward altering underwriting policy based on climate change risks. He’s not alone among insurance leaders. Less than half of all insurance firms in a 2018 National Association of Insurance Commissioners (NAIC) survey reported having a climate change risk plan. 

For this company, it was only in late 2019 that its claims department, especially its Chief Claims Officer (CCO), successfully led the charge to overcome the CUO’s reluctance to integrate climate change risks into underwriting policy and develop a climate change risk plan. 

Such tensions between claims and underwriting occur frequently. The performance evaluation of the claims department stems from its ability to minimize claims payouts; the less risk, the fewer payouts. Thus, claims departments show strong and sometimes excessive risk aversion.

In discussions around the COVID strategic pivot audit, the CUO kept stressing how bad it would be for a business to adjust underwriting policy based on risks he felt overblown. He even brought up the recent changes in the company’s climate change risk underwriting policy, about which he still felt bitter. By contrast, the CCO firmly pushed for more heavily weighing the risks of industries negatively impacted in the long term by the pandemic. So, we can safely assume that worries about the performance of his department played a decisive role in the CUO’s risk denial.

Step 2: Figure Out Their Goals 

Next, you’ll want to figure out the goals motivating their emotions. As part of doing so, try to understand your broader shared goals that the false beliefs might block.

While talking to the CUO about his goals and aspirations, he expressed a strong desire to grow the company as a whole and his department in particular. He resented what he felt like the unnecessary increases in threat assessment for climate change and saw the COVID-related industry trends in a similar light.

Step 3: Put Yourself on the Same Side By Building Rapport

Next, you’ll want to communicate that you have shared goals and are on the same side. Build rapport without necessarily agreeing with the accuracy of their assessment of the situation by mirroring, or echoing in your own words, the points made by the other person, which helps build trust. 

With the CUO, I empathized with his desire to grow the company and especially the underwriting department as a praiseworthy aspiration. I echoed, without saying he was correct, his frustration with the claims department, which led the charge on reducing underwriting risks for climate change and COVID-related trends alike.

Step 4: Lead Them Away From False Beliefs Through Sharing Information

After placing yourself on the same side, move to the problem at hand — their emotional block. Without arousing a defensive response, show them how their risk denialism will lead to them undermining their own long-term goals.

I pointed to the positive flip side of addressing the threat of long-term industry adjustments after COVID. Indeed, permanent remote work for many employees threatened commercial real estate and products and services for the office. Yet, it promised a brighter future for private real estate construction and products and services targeted at work and entertainment at home. The pandemic spurred trends that had as many long-term winners as losers.

The CUO told me he didn’t think of it from this perspective before. He focused on the loss to underwriting from incorporating pandemic-related future developments, not the gains. In doing so, he fell for a cognitive bias called loss aversion, our brain’s tendency to weigh losses much more heavily than gains. Loss aversion poses a particular challenge for risk-oriented industries such as insurance.

I also reminded him that celebrating the winners also meant acknowledging the losers as part of a broader shift in underwriting. Doing so would strengthen his department in the future by building up its competency to adjust its underwriting flexibly as various forces created new winners and losers. After much discussion, he agreed this was the way to go and even felt excited about applying the same approach to looking for climate change risk winners.

Step 5: Help Them Associate Good Feelings With Changing Their Minds Via Positive Reinforcement

Conclude your conversations with positive reinforcement for those accepting the facts about risks, an effective research-based tactic. The more positive emotions the person associates with the ability to accept hard truths as an invaluable skill, the less likely anyone will need to have the same conversation with them in the future.

In the case of the CUO, I applauded him for changing his mind. But then, I told him how research shows that strong leaders welcome learning negative information and updating their beliefs toward reality to fix the problem effectively; in turn, failing to identify negative facts is a sign of a weak leader.

Conclusion

When dealing with smart people who deny risks, focus on their emotions above all. Use the 5-step research-based strategy called EGRIP to:

  1. Discover their emotions.
  2. Then their goals.
  3. Build up a rapport.
  4. Provide information to change their mind.
  5. Finally, offer positive reinforcement for them updating their beliefs to match reality.  

This is What Your Employees Want When They Return to the Office

Posted on by Dr Gleb Tsipursky

What do employees want when returning to the office?  It’s easy to assume we know what they want due to a dangerous judgment error termed the false consensus effect.

This problematic mental blindspot causes us to perceive others who we feel to be in our team as sharing our beliefs. Unfortunately, that’s often not the case.

The false consensus effect is one of over 100 misleading mental patterns that researchers in behavioral economics and cognitive neuroscience call cognitive biases. 

These mental blindspots impact all areas of our life, from health to politics and even shopping. Fortunately, by learning about how to defeat the harmful impact of these dangerous judgment errors, we can make the wisest and most profitable decisions.

Survey Says… 

To address the false consensus effect, we need to turn to objective data that doesn’t rely on our gut feelings and assumptions. An excellent way to do so is to examine the insights gleaned from several in-depth surveys of employees on post-pandemic remote work published recently (1, 2, 3, 4, 5, 6, 7, 8). Here are the key conclusions of a meta-analysis comparing all of these studies:

  1. Over two-thirds of all employees who worked remotely in the pandemic want and expect to work from home half the time or more permanently, while over a fifth want to work remotely full-time
  2. Over two-fifths would leave their current job if they didn’t have the option of remote work of two to three days per week.
  3. Over a quarter plan to leave their job after the pandemic, especially those who rate their company cultures as “C” or lower
  4. Over two-fifths of all employees, especially younger ones, would feel concerned over career progress if they worked from home while other employees like them did not.
  5. Most employees see telework and the flexibility it provides as a key benefit and are willing to sacrifice substantial earnings for it.
  6. Employees are significantly more productive on average when working from home.
  7. Over three-quarters of all employees will feel happier and more engaged, be willing to go the extra mile, feel less stressed, and have more work-life balance with permanent opportunity for two to three days of telework 
  8. Over half of all employees feel overworked and burned out, and over three-quarters experience “Zoom fatigue” and want fewer meetings.
  9. Employees need funding for home offices and equipment, but no more than 25% of companies have provided such funding so far.
  10. Over three-fifths of all employees report poor virtual communication and collaboration as their biggest challenge with remote work, and many want more training in these areas.

What Does Other Research Say?

Other research backs up this information. Consider a survey comparing productivity of in-person vs. remote workers during the first six months of stay-at-home orders, March through August 2020, to the same March through August period in 2019. Employees showed a more than 5% increase in productivity over this period. Another study surveying 800 employers reported that 94% found that remote workers showed higher or equal productivity than before the pandemic. Non-survey research similarly shows significant productivity gains for remote workers during the pandemic.  

Some might feel worried that these productivity gains are limited to the context of the pandemic. Fortunately, research shows that after a forced period of work from home, if workers are given the option to keep working from home, those who choose to do so experience even greater productivity gains than in the initial forced period.

An important academic paper from the University of Chicago provides further evidence of why working at home will stick. First, the researchers found that working at home proved a much more positive experience for employers and employees than anticipated. That led employers to report a willingness to continue work-from-home after the pandemic. 

Second, an average worker spent over 14 hours and $600 to support their work-from-home. In turn, companies made large-scale investments in back-end IT facilitating remote work—some paid-for home office/equipment for employees. Furthermore, remote work technology has improved over this time. Therefore, both workers and companies will be more invested in telework after the pandemic. 

Third, the stigma around telework has dramatically decreased. Such normalization of work from home makes it a much more viable choice for employees.

The paper shows that employees perceive telework as an essential perk. On average, they value it as 8% of their salary. The authors also find that most employers plan to move to a hybrid model after the pandemic, having employees come in about half the time. Given the higher productivity that the paper’s authors find results from remote work, they conclude that the post-pandemic economy will see about a six percent productivity boost.

Conclusion

Don’t assume that you know what your employees want when they return to the office. Cognitive biases such as the false consensus effect mislead us into thinking others in our group share our beliefs when it is often not the case. Surveys and research have shown that new habits, norms, and values picked up during the pandemic will continue to impact the post-COVID workplace significantly. A combination of mainly hybrid and some remote work is our future. Defend yourself from mental blindspots so you can make the best strategic decisions after the pandemic.  

This is What Your Employees Want When They Return to the Office

Posted on by Dr Gleb Tsipursky

What do employees want when returning to the office?  It’s easy to assume we know what they want due to a dangerous judgment error termed the false consensus effect.

This problematic mental blindspot causes us to perceive others who we feel to be in our team as sharing our beliefs. Unfortunately, that’s often not the case.

The false consensus effect is one of over 100 misleading mental patterns that researchers in behavioral economics and cognitive neuroscience call cognitive biases. 

These mental blindspots impact all areas of our life, from health to politics and even shopping. Fortunately, by learning about how to defeat the harmful impact of these dangerous judgment errors, we can make the wisest and most profitable decisions.

Survey Says… 

To address the false consensus effect, we need to turn to objective data that doesn’t rely on our gut feelings and assumptions. An excellent way to do so is to examine the insights gleaned from several in-depth surveys of employees on post-pandemic remote work published recently (1, 2, 3, 4, 5, 6, 7, 8). Here are the key conclusions of a meta-analysis comparing all of these studies:

  1. Over two-thirds of all employees who worked remotely in the pandemic want and expect to work from home half the time or more permanently, while over a fifth want to work remotely full-time
  2. Over two-fifths would leave their current job if they didn’t have the option of remote work of two to three days per week.
  3. Over a quarter plan to leave their job after the pandemic, especially those who rate their company cultures as “C” or lower
  4. Over two-fifths of all employees, especially younger ones, would feel concerned over career progress if they worked from home while other employees like them did not.
  5. Most employees see telework and the flexibility it provides as a key benefit and are willing to sacrifice substantial earnings for it.
  6. Employees are significantly more productive on average when working from home.
  7. Over three-quarters of all employees will feel happier and more engaged, be willing to go the extra mile, feel less stressed, and have more work-life balance with permanent opportunity for two to three days of telework 
  8. Over half of all employees feel overworked and burned out, and over three-quarters experience “Zoom fatigue” and want fewer meetings.
  9. Employees need funding for home offices and equipment, but no more than 25% of companies have provided such funding so far.
  10. Over three-fifths of all employees report poor virtual communication and collaboration as their biggest challenge with remote work, and many want more training in these areas.

What Does Other Research Say?

Other research backs up this information. Consider a survey comparing productivity of in-person vs. remote workers during the first six months of stay-at-home orders, March through August 2020, to the same March through August period in 2019. Employees showed a more than 5% increase in productivity over this period. Another study surveying 800 employers reported that 94% found that remote workers showed higher or equal productivity than before the pandemic. Non-survey research similarly shows significant productivity gains for remote workers during the pandemic.  

Some might feel worried that these productivity gains are limited to the context of the pandemic. Fortunately, research shows that after a forced period of work from home, if workers are given the option to keep working from home, those who choose to do so experience even greater productivity gains than in the initial forced period.

An important academic paper from the University of Chicago provides further evidence of why working at home will stick. First, the researchers found that working at home proved a much more positive experience for employers and employees than anticipated. That led employers to report a willingness to continue work-from-home after the pandemic. 

Second, an average worker spent over 14 hours and $600 to support their work-from-home. In turn, companies made large-scale investments in back-end IT facilitating remote work—some paid-for home office/equipment for employees. Furthermore, remote work technology has improved over this time. Therefore, both workers and companies will be more invested in telework after the pandemic. 

Third, the stigma around telework has dramatically decreased. Such normalization of work from home makes it a much more viable choice for employees.

The paper shows that employees perceive telework as an essential perk. On average, they value it as 8% of their salary. The authors also find that most employers plan to move to a hybrid model after the pandemic, having employees come in about half the time. Given the higher productivity that the paper’s authors find results from remote work, they conclude that the post-pandemic economy will see about a six percent productivity boost.

Conclusion

Don’t assume that you know what your employees want when they return to the office. Cognitive biases such as the false consensus effect mislead us into thinking others in our group share our beliefs when it is often not the case. Surveys and research have shown that new habits, norms, and values picked up during the pandemic will continue to impact the post-COVID workplace significantly. A combination of mainly hybrid and some remote work is our future. Defend yourself from mental blindspots so you can make the best strategic decisions after the pandemic.  

8 Powerful Questions You Need to Ask Before Stakeholder Engagement

Posted on by Dr Gleb Tsipursky

Stakeholder engagement is one of the more critical aspects of leadership. Stakeholders can be anyone from your frontline employees to suppliers to business partners, and your organization’s relationship with them is dynamic and can change over time.

There are many advantages to identifying and getting to know your stakeholders, and even more disadvantages to not engaging with them. A failure to understand their needs can lead to blind spots for managers and executives, which can have disastrous effects, such as low employee morale or a dismal bottom line.

On the other hand, effective engagement can result in increased productivity and more robust financials. We can also use research-based strategies to notice such blind spots so we can overcome them.

Identifying Your Key Influencers

While you might be inclined to start engaging with all the stakeholders in your organization immediately, it would be more practical to focus on the relationships that matter the most. This means sitting down with your team, coming up with a list of all stakeholders, and then whittling down this list to the people who have the most impact on your organization – these are your key influencers. Even though it might be tempting to address the concerns of all your stakeholders, limited time and resources mean that you will accomplish more by addressing a targeted list.

When determining who your key influencers are, look for these three attributes:

  1. The stakeholder has a significant impact on your company’s growth. This means that the long-term success of your company hinges in large part on a continued relationship with this individual or group.
  2. The stakeholder cannot easily be replaced: from a top-performing department or a time-tested supplier, you can identify who this stakeholder is by assessing past performance.
  3. The relationship is mutual: you can clearly identify what you need from the stakeholder and vice versa. Your organization’s goals and desired results align with those of this individual/organization.

Just recently, I sat down with Bill, my coaching client and healthcare entrepreneur leader. He and his senior management team had been trying to get support from patient groups to encourage the widespread adoption of their innovative medical equipment.

However, it had been a year since they launched this initiative, and they had not gained sufficient traction. Bill suspected that it might be due to the higher cost of their medical equipment. His first instinct was to do one-on-one outreach to key influencers in patient groups to explain that while his organization’s products had a higher price tag, they used a more advanced technology that yielded better results. It also came with a more comprehensive and more extended warranty period compared with competing products.

Bill approached me after preparing a list of more than 40 key influencers. He was having difficulty making a strategy on how to address them and was feeling pressured because he needed to present his findings and results in an upcoming meeting with investors.

When I checked Bill’s list, I noticed that he had included a wide variety of influencers, including many who did not have a key decision-making role in shaping the advocacy efforts of patient groups. We pared his list to just eight key leaders of patient’s groups, and because they had many similar concerns and priorities, Bill was much better able to come up with a plan to engage with them.

Be Prepared by Doing a Pre-Engagement Assessment Using These 8 Questions

Regardless of the urgency, do a pre-engagement check before you engage with your key influencers directly. This will prepare you for the meetings and lead to productive discourse.

Otherwise, you might fall into the dangerous judgment error known as the false consensus effect, where you assume other people are more similar to you and more inclined to do what you want them to do than is really the case. The false consensus effect is just one out of over 100 mental blindspots that scholars in cognitive neuroscience and behavioral economics call cognitive biases.

The questions below are informed by cutting-edge neuroscience research on addressing these cognitive biases, along with my own experience of over two decades coaching and training leaders on stakeholder engagement.

1. What are their feelings, values, goals, and incentives around this issue?

Bill’s key influencers — the eight leaders of patient groups — were willing to try a better product. However, they were wary of endorsing more expensive equipment without being able to justify the higher price point to their respective patient groups.

2. What is their story around this issue?

The key influencers wanted to find the best equipment to endorse to their patient’s groups but were cautious due to several substandard products they have tried in the past.

3. What is their identity and sense of self as tied to the issue?

The leaders of the patient’s groups take their responsibilities very seriously by keeping up to date with the latest research and equipment available.

4. How are they the hero in their own story?

Bill’s key influencers know that they are in the frontlines when pushing for a better quality of life for the patients. Most of them have been directly or indirectly affected by the medical condition the equipment seeks to address and want to be part of the solution.

5. Why should they want to listen to your message and do what you want?

The leaders of the patient’s groups will benefit from hearing Bill’s take on the product’s efficiency. As the head of his organization, his message comes with a high degree of credibility, and the key influencers can share his message with confidence.

6. What obstacles would prevent them from listening to your message and doing what you want?

If Bill confirms that the medical equipment’s higher cost is the main point of contention, he needs to address this issue. Otherwise, the key influencers will not listen to anything else he has to say.

7. How can you remove the obstacles and increase the rewards for them listening to you and doing what you want?

Bill decided that he will immediately address the price issue in his meeting with the key influencers. He planned to discuss how his organization’s innovative medical equipment was the best choice in terms of quality and warranty.

8. Who do you know that can give you useful feedback on your answers to the previous pre-engagement assessment questions?

I connected Bill with Jolinda, the leader of a well-organized patient’s group, for over a decade. Although her group represented the interests of patients with a different medical condition not relevant to the equipment made by Bill, she was willing to share her perspective as a key influencer.

Conclusion

Your organization’s relationship with your stakeholders will change over time, and you will face different issues at varying difficulty levels. However, by learning how to identify your key influencers and doing pre-assessment checks before engaging with them, you will be able to have productive discussions and grow deeper relationships.

8 Powerful Questions You Need to Ask Before Stakeholder Engagement

Posted on by Dr Gleb Tsipursky

Stakeholder engagement is one of the more critical aspects of leadership. Stakeholders can be anyone from your frontline employees to suppliers to business partners, and your organization’s relationship with them is dynamic and can change over time.

There are many advantages to identifying and getting to know your stakeholders, and even more disadvantages to not engaging with them. A failure to understand their needs can lead to blind spots for managers and executives, which can have disastrous effects, such as low employee morale or a dismal bottom line.

On the other hand, effective engagement can result in increased productivity and more robust financials. We can also use research-based strategies to notice such blind spots so we can overcome them.

Identifying Your Key Influencers

While you might be inclined to start engaging with all the stakeholders in your organization immediately, it would be more practical to focus on the relationships that matter the most. This means sitting down with your team, coming up with a list of all stakeholders, and then whittling down this list to the people who have the most impact on your organization – these are your key influencers. Even though it might be tempting to address the concerns of all your stakeholders, limited time and resources mean that you will accomplish more by addressing a targeted list.

When determining who your key influencers are, look for these three attributes:

  1. The stakeholder has a significant impact on your company’s growth. This means that the long-term success of your company hinges in large part on a continued relationship with this individual or group.
  2. The stakeholder cannot easily be replaced: from a top-performing department or a time-tested supplier, you can identify who this stakeholder is by assessing past performance.
  3. The relationship is mutual: you can clearly identify what you need from the stakeholder and vice versa. Your organization’s goals and desired results align with those of this individual/organization.

Just recently, I sat down with Bill, my coaching client and healthcare entrepreneur leader. He and his senior management team had been trying to get support from patient groups to encourage the widespread adoption of their innovative medical equipment.

However, it had been a year since they launched this initiative, and they had not gained sufficient traction. Bill suspected that it might be due to the higher cost of their medical equipment. His first instinct was to do one-on-one outreach to key influencers in patient groups to explain that while his organization’s products had a higher price tag, they used a more advanced technology that yielded better results. It also came with a more comprehensive and more extended warranty period compared with competing products.

Bill approached me after preparing a list of more than 40 key influencers. He was having difficulty making a strategy on how to address them and was feeling pressured because he needed to present his findings and results in an upcoming meeting with investors.

When I checked Bill’s list, I noticed that he had included a wide variety of influencers, including many who did not have a key decision-making role in shaping the advocacy efforts of patient groups. We pared his list to just eight key leaders of patient’s groups, and because they had many similar concerns and priorities, Bill was much better able to come up with a plan to engage with them.

Be Prepared by Doing a Pre-Engagement Assessment Using These 8 Questions

Regardless of the urgency, do a pre-engagement check before you engage with your key influencers directly. This will prepare you for the meetings and lead to productive discourse.

Otherwise, you might fall into the dangerous judgment error known as the false consensus effect, where you assume other people are more similar to you and more inclined to do what you want them to do than is really the case. The false consensus effect is just one out of over 100 mental blindspots that scholars in cognitive neuroscience and behavioral economics call cognitive biases.

The questions below are informed by cutting-edge neuroscience research on addressing these cognitive biases, along with my own experience of over two decades coaching and training leaders on stakeholder engagement.

1. What are their feelings, values, goals, and incentives around this issue?

Bill’s key influencers — the eight leaders of patient groups — were willing to try a better product. However, they were wary of endorsing more expensive equipment without being able to justify the higher price point to their respective patient groups.

2. What is their story around this issue?

The key influencers wanted to find the best equipment to endorse to their patient’s groups but were cautious due to several substandard products they have tried in the past.

3. What is their identity and sense of self as tied to the issue?

The leaders of the patient’s groups take their responsibilities very seriously by keeping up to date with the latest research and equipment available.

4. How are they the hero in their own story?

Bill’s key influencers know that they are in the frontlines when pushing for a better quality of life for the patients. Most of them have been directly or indirectly affected by the medical condition the equipment seeks to address and want to be part of the solution.

5. Why should they want to listen to your message and do what you want?

The leaders of the patient’s groups will benefit from hearing Bill’s take on the product’s efficiency. As the head of his organization, his message comes with a high degree of credibility, and the key influencers can share his message with confidence.

6. What obstacles would prevent them from listening to your message and doing what you want?

If Bill confirms that the medical equipment’s higher cost is the main point of contention, he needs to address this issue. Otherwise, the key influencers will not listen to anything else he has to say.

7. How can you remove the obstacles and increase the rewards for them listening to you and doing what you want?

Bill decided that he will immediately address the price issue in his meeting with the key influencers. He planned to discuss how his organization’s innovative medical equipment was the best choice in terms of quality and warranty.

8. Who do you know that can give you useful feedback on your answers to the previous pre-engagement assessment questions?

I connected Bill with Jolinda, the leader of a well-organized patient’s group, for over a decade. Although her group represented the interests of patients with a different medical condition not relevant to the equipment made by Bill, she was willing to share her perspective as a key influencer.

Conclusion

Your organization’s relationship with your stakeholders will change over time, and you will face different issues at varying difficulty levels. However, by learning how to identify your key influencers and doing pre-assessment checks before engaging with them, you will be able to have productive discussions and grow deeper relationships.

Leadership 2021: “It’s Not Going Away, and We Have to Face That Reality.”

Posted on by Dr Gleb Tsipursky

“It’s not going away, and we have to face that reality.” That’s what the CEO and founder of a high-tech manufacturing startup with 180 employees told the leadership team in early July to convince them of the need to do a strategic pivot to address COVID.

Previously, the startup’s executives took things one step at a time, putting out the various COVID related fires that flared up more and more often: supply chain disruptions; cancelled orders; employees having difficulties with work-from-home setups or needing flex-time to manage kids or elderly relatives.

Seeing more of the broad picture, the CEO realized the company was going in the wrong direction. One of the members of the Board recommended my recently-published book on strategic pivoting to adapt to COVID and plan for the post-pandemic recovery.

After a quick read, the CEO convinced the other leadership team members that the company needed to do a strategic pivot to address COVID. He then had his executive assistant contact me and arrange for a facilitated strategic retreat dedicated to addressing COVID, which became my sixth of nine such engagements thus far. This article summarizes my experiences helping a range of companies — five startups, three established middle-market ones, and a Fortune 300 company business unit — pivot for our new abnormal reality.

Challenging Business Model Assumptions

Invariably, the first step involved reassessing assumptions about the organization’s business model. That meant an initial couple of brief meetings with the leadership team where we discussed the kind of fires they faced recently.

For example, the manufacturing startup faced a new challenge in selling its high-tech products. Known for their high quality, the products were flying off the shelf previously; the company had trouble keeping up with demand.

Now, the startup’s salespeople reported that the decision-making process changed. Accounting put much more pressure on operations managers to prove that the products’ quality brought sufficient ROI. Couldn’t they get by with lower-cost options?

While the manufacturing startup invested in innovation to ensure the quality of its high-tech products, it didn’t have a clear measurement of ROI for the innovation. After all, operations people focused on quality, not ROI. As a result, some of its customers, with apologies, chose to buy lower-cost alternatives.

Other companies faced a range of similar problems in sales and other areas. Often, the news came as a surprise to other leadership team members, even the CEO; all were busy fighting fires in their own areas.

Gathering Internal Information

With more awareness of the business model assumptions challenged by the pandemic, the next step involved gathering internal information for a revised strategy and business model.

Each of the top leaders who led a department and would be present at the strategic retreat gathered feedback from their direct reports on how to revise each department’s goals, structure, and relationship to customers (external or internal) in light of the challenged assumptions in either of three scenarios.

  • In the first scenario, a vaccine with over 90% effectiveness would be found by Spring of 2021, and the pandemic mostly over by Spring of 2022
  • In the second, this vaccine would be found by Spring of 2022, and the pandemic mostly over by Spring of 2023
  • In the third, we would never find a vaccine more effective than 50%, just like we haven’t found a vaccine more effective than that for the flu

Strategy Day

Next, go on to the strategic retreat, which should be a two-day event, with one day for broad strategy and another for operationalizing the strategy.

The high-tech manufacturing startup’s team had to struggle extensively with accepting the reality of changing marketplace demands. Its operations team established a sense of identity and team spirit around innovation as a core value; its marketing and sales made innovation a fundamental element of their pitches. They kept veering away from the reality of the need to shift from innovation to ROI measurement.

The CEO and I kept steering them back. I had to use the full range of my facilitation skills to keep the conversation on the right track, an especially challenging task since this was a virtual retreat.

The leadership team of a late-stage SaaS startup with over 500 employees was surprised that the large majority of their direct reports reported feelings of work-from-home burnout and “Zoom fatigue” among employees as one of the most serious problems.

It’s key to realize that the issues stemmed not simply from burnout but from much more. These include dealing with:

  • Pandemic-related mental health challenges such as anxiety/depression/trauma/grief
  • COVID-related pragmatic challenges, such as kids staying home
  • Social isolation from friends, family, and community events, as well as our previous outside hobbies and entertainment
  • Poor work-from-home environments with inadequate home office setups
  • Lack of skills in effective virtual communication and collaboration
  • Being deprived of the fulfillment of those basic human needs — sense of connection, tribe, meaning and purpose – that we naturally get from work

Even worse, the vast majority of us don’t realize we aren’t simply experiencing work-from-home burnout, and don’t recognize what we’re missing. To address this requires not simply financial support for home office setups or flex time to address pragmatic pandemic challenges. It also requires professional development in effective virtual communication and teamwork. Moreover, it requires professional development in emotional and social intelligence, to enable employees to recognize and address the emotional and social gaps left by the pandemic.

Operations Day

The next day should be focused on operationalizing the strategic changes in the business model. You need to address potential threats and opportunities in a variety of future scenarios and revise the previous day’s strategy if needed. These scenarios need to include at least the three different COVID futures described above, and several different potential economic recovery scenarios (K, U, W, V, L).

An enterprise data analytics startup with over 120 staff recognized an unexpected opportunity. It had long been trying to get some lucrative client accounts held by several competitors. The startup’s CEO knew that most of the competitors’ leaders had a dismissive attitude toward COVID.

The startup decided to adjust its marketing and sales to demonstrate the steps it took to be pandemic-proof. It would then have its salespeople call on the competitors’ client accounts and tell them about these steps. It would then offer to provide support if the pandemic lasted longer than the most optimistic predictions and the competitors couldn’t uphold their previous high standards.

Next Steps and Follow-Up

After the operations day, determine specific next steps for each new initiative that you discussed. Decide on resources required and the metrics of success. Choose one member of the leadership team accountable for implementing the initiative, with others potentially involved in the effort. Finally, prepare a report for the Board of Directors on the retreat, highlighting how the strategic pivot will help the company adapt to various scenarios of COVID and the economic recovery.

Follow up on all the next steps in the weekly leadership team meeting or whatever other leadership team forum your company already uses. Then, in a month, have a half-day event where you assess the strategy shift and make any corrections to strategy or implementation as needed. Do the same in three months.

Here are the key take-aways: remember, the first step, always, is challenging assumptions. Second, gather internal information; don’t skip this step, assuming your leadership team knows what’s truly going on. Third, spend at least a day revising your external and internal strategy. Fourth, operationalize your strategy, addressing threats and seizing opportunities in a variety of potential future scenarios. Fifth, commit to next steps, determining resources required, metrics of success, and who will be responsible for implementing each step, with a report to the Board on the event. Sixth, follow up regularly on all steps once a week, with one-month and three-month half-day follow-ups revising both strategy and implementation as needed.

While nothing can guarantee success, I can guarantee that taking these steps will maximize your chances of not only surviving but thriving in these troubled times.

How Leaders Can Balance Work and Life to Survive and Thrive During This Pandemic

Posted on by Dr Gleb Tsipursky

The COVID-19 coronavirus pandemic has changed life as we know it, as well as how we manage our households.

While being shut mostly in our homes or observing infection prevention guidelines when leaving our house, it can be pretty hard to grapple with the reality of the world in which we now live. And yet, this is what you as a leader must do to survive and thrive in this new abnormal.

Same Home, Different House Rules?

Susan, an entrepreneur and former coaching client of mine, reached out for help because her household was having difficulty adjusting to the long-term impact of our new pandemic reality. As the founder of a quickly-growing startup in the medical devices industry, she was used to a routine and thrived by keeping her work life separate from her personal life.

However, as the months of staying at home went by, her relationship with her husband, who was the primary caretaker of their nine-year-old child pre-pandemic, started to erode. She found it difficult to concentrate on her startup due to frequent interruptions from her husband and child, and she found herself becoming more and more curt with them.

It was hard enough when school was canceled in the early months of the pandemic, as well as summer camp. And it became increasingly impossible when her son’s school transitioned to online only for the Fall. When I met with Susan over Zoom, I told her that there were some essential steps that she needed to take to adjust to the new COVID-19 reality.

How Your Household Can Survive and Thrive in the Pandemic

First and foremost, we won’t get anywhere if we don’t face the facts. We need to acknowledge that COVID-19 fundamentally disrupted our world, turning it upside down in a few short weeks in February and March 2020. We have to move past the normalcy bias‘s discomfort and our intuitive feeling that the world should go back to normal.

The normalcy bias is one of over a hundred dangerous judgment errors that scholars in cognitive neuroscience, psychology, and behavioral economics like myself call cognitive biases. They result from a combination of our evolutionary background and specific structural features in how our brains are wired.

So how can your household effectively overcome the normalcy bias to adapt to the uncertainty and dislocation that accompanies this new abnormal?

While you’re in a new abnormal, your underlying needs and wants remain the same. You just need to figure out different ways toward satisfying them.

You might have heard of Abraham Maslow’s theory of human motivation and the pyramid of needs based on his work. More recent research, summarized in Scott Barry Kaufman’s excellent book Transcend: The New Science of Self-Actualization, revises this model. Kaufman shows that our fundamental needs consist of safety, connection, and self-esteem, and we will feel deprived without them. We also have needs that help us achieve our full potential through personal growth. This is what Maslow called “self actualization” and what Kaufman more clearly defined as exploration, love, and purpose. A good approach to adapting to the new abnormal is evaluating your life through the lens of these needs and ensuring that you can still satisfy them.

Connection to Others

The most challenging element for Susan stemmed from the fundamental need for connection to others. It’s a topic I describe in more depth in my best-seller, The Blindspots Between Us: How to Overcome Unconscious Cognitive Bias and Build Better Relationships.

First, consider your immediate connections with members of the household.

If you have a romantic partner in your household, you’ll have to figure out how to interact healthily, given that you’re together 24/7. You’ll likely get into each other’s spaces and on each other’s nerves. It’s much wiser to anticipate and work out these problems in advance than have them blow up down the road. The same principle applies to other members of your family. If you have older children who moved home after university closed, or younger children who aren’t going to school after it closed, you’ll need to figure out how to deal with them cooped up inside. This includes staying in touch with their schools to get updates on online school work.

You’ll have to put more thought into dealing with older adults over 60 or anyone with underlying health conditions in your household (including yourself if you fit either category). Given their much greater vulnerability to COVID-19, you and other members of your household need to take serious measures to prevent them from getting ill. That means being more careful yourself than you might otherwise be since over half of all those with COVID-19 have no or light symptoms.

Second, what about your connection to those you care about who aren’t part of your household? Your romantic partner might not be part of your household. Depending on how vulnerable to COVID-19 you and other members of your household might be, you might choose to take the risk of physical intimacy with your romantic partner. But you have to make this decision consciously rather than casually. Or you might decide to have a social-distance relationship, meeting at a distance of 10 feet or by videoconference.

During one of our coaching sessions, Susan said she hadn’t realized how strained her relationship with her husband was until I had pointed out the need for healthy interaction while being together 24/7. After our talk, she sat down with her husband to have a serious conversation about the situation. Together, they decided to stick to their separate routines, have their own spaces apart. Susan would spend time at her home office and her husband and child would spend days accomplishing school work in the living area. They would come together as a family after the workday was done — as they would have before the pandemic — so that they wouldn’t get on each other’s nerves.

Soon after, they also sat down and conversed with their young child regarding COVID-19, remaining calm and simply discussing what they, as a family, needed to do to stay healthy. Due to their reassuring manner, their child expressed more willingness to open up to them about any worries he might have regarding the pandemic.

Conclusion

Towards the end of our coaching sessions, Susan informed me that she had finally established a balanced work-life routine that suits her and protects her relationships with her loved ones.

While the new abnormal ushered in by COVID-19 has brought unprecedented changes to our lives, there’s no reason you can’t survive and thrive in the new abnormal while we wait a few more months for a vaccine. You need to identify, anticipate, and take care of your fundamental needs.

How Leaders Can Balance Work and Life to Survive and Thrive During This Pandemic

Posted on by Dr Gleb Tsipursky

The COVID-19 coronavirus pandemic has changed life as we know it, as well as how we manage our households.

While being shut mostly in our homes or observing infection prevention guidelines when leaving our house, it can be pretty hard to grapple with the reality of the world in which we now live. And yet, this is what you as a leader must do to survive and thrive in this new abnormal.

Same Home, Different House Rules?

Susan, an entrepreneur and former coaching client of mine, reached out for help because her household was having difficulty adjusting to the long-term impact of our new pandemic reality. As the founder of a quickly-growing startup in the medical devices industry, she was used to a routine and thrived by keeping her work life separate from her personal life.

However, as the months of staying at home went by, her relationship with her husband, who was the primary caretaker of their nine-year-old child pre-pandemic, started to erode. She found it difficult to concentrate on her startup due to frequent interruptions from her husband and child, and she found herself becoming more and more curt with them.

It was hard enough when school was canceled in the early months of the pandemic, as well as summer camp. And it became increasingly impossible when her son’s school transitioned to online only for the Fall. When I met with Susan over Zoom, I told her that there were some essential steps that she needed to take to adjust to the new COVID-19 reality.

How Your Household Can Survive and Thrive in the Pandemic

First and foremost, we won’t get anywhere if we don’t face the facts. We need to acknowledge that COVID-19 fundamentally disrupted our world, turning it upside down in a few short weeks in February and March 2020. We have to move past the normalcy bias‘s discomfort and our intuitive feeling that the world should go back to normal.

The normalcy bias is one of over a hundred dangerous judgment errors that scholars in cognitive neuroscience, psychology, and behavioral economics like myself call cognitive biases. They result from a combination of our evolutionary background and specific structural features in how our brains are wired.

So how can your household effectively overcome the normalcy bias to adapt to the uncertainty and dislocation that accompanies this new abnormal?

While you’re in a new abnormal, your underlying needs and wants remain the same. You just need to figure out different ways toward satisfying them.

You might have heard of Abraham Maslow’s theory of human motivation and the pyramid of needs based on his work. More recent research, summarized in Scott Barry Kaufman’s excellent book Transcend: The New Science of Self-Actualization, revises this model. Kaufman shows that our fundamental needs consist of safety, connection, and self-esteem, and we will feel deprived without them. We also have needs that help us achieve our full potential through personal growth. This is what Maslow called “self actualization” and what Kaufman more clearly defined as exploration, love, and purpose. A good approach to adapting to the new abnormal is evaluating your life through the lens of these needs and ensuring that you can still satisfy them.

Connection to Others

The most challenging element for Susan stemmed from the fundamental need for connection to others. It’s a topic I describe in more depth in my best-seller, The Blindspots Between Us: How to Overcome Unconscious Cognitive Bias and Build Better Relationships.

First, consider your immediate connections with members of the household.

If you have a romantic partner in your household, you’ll have to figure out how to interact healthily, given that you’re together 24/7. You’ll likely get into each other’s spaces and on each other’s nerves. It’s much wiser to anticipate and work out these problems in advance than have them blow up down the road. The same principle applies to other members of your family. If you have older children who moved home after university closed, or younger children who aren’t going to school after it closed, you’ll need to figure out how to deal with them cooped up inside. This includes staying in touch with their schools to get updates on online school work.

You’ll have to put more thought into dealing with older adults over 60 or anyone with underlying health conditions in your household (including yourself if you fit either category). Given their much greater vulnerability to COVID-19, you and other members of your household need to take serious measures to prevent them from getting ill. That means being more careful yourself than you might otherwise be since over half of all those with COVID-19 have no or light symptoms.

Second, what about your connection to those you care about who aren’t part of your household? Your romantic partner might not be part of your household. Depending on how vulnerable to COVID-19 you and other members of your household might be, you might choose to take the risk of physical intimacy with your romantic partner. But you have to make this decision consciously rather than casually. Or you might decide to have a social-distance relationship, meeting at a distance of 10 feet or by videoconference.

During one of our coaching sessions, Susan said she hadn’t realized how strained her relationship with her husband was until I had pointed out the need for healthy interaction while being together 24/7. After our talk, she sat down with her husband to have a serious conversation about the situation. Together, they decided to stick to their separate routines, have their own spaces apart. Susan would spend time at her home office and her husband and child would spend days accomplishing school work in the living area. They would come together as a family after the workday was done — as they would have before the pandemic — so that they wouldn’t get on each other’s nerves.

Soon after, they also sat down and conversed with their young child regarding COVID-19, remaining calm and simply discussing what they, as a family, needed to do to stay healthy. Due to their reassuring manner, their child expressed more willingness to open up to them about any worries he might have regarding the pandemic.

Conclusion

Towards the end of our coaching sessions, Susan informed me that she had finally established a balanced work-life routine that suits her and protects her relationships with her loved ones.

While the new abnormal ushered in by COVID-19 has brought unprecedented changes to our lives, there’s no reason you can’t survive and thrive in the new abnormal while we wait a few more months for a vaccine. You need to identify, anticipate, and take care of your fundamental needs.

Repetition Makes it True. Repetition Makes It True. Do You Believe me Now?

Posted on by Dr Gleb Tsipursky

Whenever you hear something repeated, it feels more real when you hear it repeated. In other words, repetition makes any statement seem more trustworthy. So anything you hear will feel more accurate each time you hear it again.

Do you see what I did there? Each of the three sentences above conveyed the same message. Yet each time you read the next sentence, it felt more and more trustworthy. Cognitive neuroscientists like myself call this the “illusory truth effect.”

Go back and recall your experience reading the first sentence. It probably felt strange and disconcerting, perhaps with a tone of outrage, as in “I don’t believe things more if they’re repeated!” 

Reading the second sentence did not inspire such a strong reaction. Your reaction to the third sentence was tame by comparison.

Why? Because of a phenomenon called “cognitive fluency,” meaning how easily we process information. Much of our vulnerability to deception in all areas of life – including misinformation – revolves around cognitive fluency in one way or another. 

Now think about how rumors spread in your organization’s grapevine. It works on the same principle. Employees hear a rumor – say about a proposed headquarters move, just like Elon Musk’s move of Tesla’s HQ to Texas. It feeds into their fears, which is a very cognitively fluid part of our minds. 

They repeat the rumor, and it goes around, and then they keep hearing it from others. It begins to seem more and more authentic, regardless of reality. Before you know it, those who want to stay where they are looking for another job, even though you might never have intended to move your headquarters! 

Fortunately, we can learn about these mental errors, which helps us address misinformation and make our workplaces more truthful.

The Lazy Brain

Our brains are lazy. The more effort it takes to process information, the more uncomfortable we feel about it, and the more we dislike and distrust it. 

By contrast, the more we like specific data and are comfortable with it, the more we feel that it’s accurate. This intuitive feeling in our gut is what we use to judge what’s true and false. 

Yet no matter how often you heard that you should trust your gut and follow your intuition, that advice is wrong. You should not trust your gut when evaluating information where you don’t have expert-level knowledge, at least when you don’t want to screw up. Structured information gathering and decision-making processes help us avoid the numerous errors we make when we follow our intuition. And even experts can make serious errors when they don’t rely on such decision aids.

These mistakes happen due to mental errors that scholars call “cognitive biases.” The illusory truth effect is one of these mental blindspots; there are over 100 altogether. These mental blindspots impact all areas of our life, from health and politics to relationships.

Other Important Cognitive Biases

Besides illusory truth, what are some other cognitive biases you need to beware of to protect your organization from misinformation? If you’ve heard of any cognitive biases, you’ve likely heard of the “confirmation bias.” That refers to our tendency to look for and interpret information in ways that conform to our prior beliefs, intuitions, feelings, desires, and preferences, as opposed to the facts. 

Again, cognitive fluency deserves blame. It’s much easier to build neural pathways to information that we already possess, especially when we have strong emotions; it’s much more challenging to break well-established neural pathways if we need to change our minds based on new information. Consequently, we instead look for information that’s easy to accept, which fits our prior beliefs. In turn, we ignore and even actively reject information that doesn’t match our beliefs. 

Moreover, the more educated we are, the more likely we are to engage in such active rejection. After all, our smarts give us more ways of arguing against new information that counters our beliefs. That’s why research demonstrates that the more educated you are, the more polarized your beliefs will be around scientific issues that have religious or political value overtones, such as stem cell research, human evolution, and climate change. Where might you and your team be letting your smarts get in the way of the facts?

Our minds like to interpret the world through stories, meaning explanatory narratives that clearly and straightforwardly link cause and effect. Such stories are a balm to our cognitive fluency, as our mind continually looks for patterns that explain the world around us in an easy-to-process manner. That leads to the “narrative fallacy,” where we fall for convincing-sounding narratives regardless of the facts, especially if the story fits our predispositions and our emotions. 

Do you ever wonder why politicians tell so many stories? How about the advertisements you see on TV or video advertisements on websites, which tell rapid visual stories? How about salespeople or fundraisers? Sure, sometimes they cite statistics and scientific reports, but they spend much, much more time telling stories: simple, straightforward, compelling narratives that seem to make sense and tug at our heartstrings. 

Now, here’s something that’s actually true: the world doesn’t make sense. The world is not simple, clear, and compelling. The world is complex, confusing, and contradictory. Beware of simple stories! Look for complex, confusing, and contradictory scientific reports and high-quality statistics: they’re much more likely to contain the truth than the easy-to-process stories.

Fixing Our Brains

Unfortunately, knowledge only weakly protects us from cognitive biases; it’s essential but far from sufficient.

What can we do? You can use decision aid strategies to address cognitive biases to defend your organization from misinformation.

One of the most effective strategies is to help your employees and yourself build up a habit of automatically considering alternative possibilities to any claim you hear, especially claims that feel comfortable. Since our lazy brain’s default setting is to avoid questioning claims, which requires hard thinking, it helps to develop a mental practice of going against this default. Be especially suspicious of repeated claims that make you feel comfortable without any additional evidence, which play on the illusory truth effect and the confirmation bias combined.

Another effective strategy involves cultivating a mental habit of questioning stories in particular. Whenever you hear a story, the brain goes into listening and accepting mode. Remember that it’s very easy to cherry-pick stories to support whatever position the narrator wants to advance. Instead, look for specific hard numbers, statistical evidence, and peer-reviewed research to support claims.

More broadly, you can encourage employees to make a personal commitment to the twelve truth-oriented behaviors of the Pro-Truth Pledge by signing the pledge at ProTruthPledge.org. These behaviors stem from cognitive neuroscience and behavioral economics research in the field called debiasing, which refers to counterintuitive, uncomfortable, but effective strategies to protect yourself from cognitive biases. Peer-reviewed research has shown that taking the Pro-Truth Pledge effectively changes people’s behavior to be more truthful, both in their statements and in interactions with others.

These quick mental habits will address the most fundamentally flawed aspects of our mind’s tendency to accept misinformation. 

Good News on a COVID-19 Vaccine, But Business Leaders Need to Keep a Balanced Outlook

Posted on by Dr Gleb Tsipursky

What are you paying attention to during this pandemic? What you’re focusing on can make a big difference to your business, career, and health.

Many people are very excited by the prospect of effective vaccines from Pfizer and Moderna. This fantastic news has deservedly lifted the stock market, and many companies are moving to eliminate planned budget and staff cuts. 

Yet too many business leaders and stock investors are showing excessive enthusiasm over the attention to vaccine news. The vaccine rollout to the general public is slated for early Spring of 2021.

They’re not facing the reality of today’s third wave of COVID, which is flooding many hospitals and leaving patients stranded. The urgent requests by governors to stay at home and telecommute to tamp down the pandemic’s danger in early November have turned into renewed shutdowns by late November across the US to decrease the strain on the medical system. As a result, the economic situation will not improve, realistically speaking, until late Spring 2021.

It might seem hard to contemplate that the next few months will be even worse than the last few months, but that’s the reality we’re facing. If you’re not paying attention to the reality of the third wave, then your attention is misdirected, as it is for so many people.

Consider what catches and holds your attention whenever you read or watch the news. Most of us tend to be optimistic and focus on the bright side of life. Sure, we might acknowledge that it’s much wiser to balance optimism and pessimism about the future of the pandemic, given the combination of both good and bad news: good news in the long term of Summer 2021 onward, bad news in the short and medium-term of this Winter and Spring. 

Yet it’s hard for us to pay attention to contradictory ideas. Holding such opposing perspectives in our mind causes cognitive dissonance unless we train ourselves to accept complexity and nuance. Thus, most people prefer to let go of the negative information and focus on the positive, despite the danger to their business, career, and health.

Manufacturing Attention: A Case Study

Let’s consider James, the COO of a mid-size manufacturing company, founded in 2012 and growing quickly, whose senior leadership was determined to push through with its product expansion plans even during the onset of the pandemic. When COVID-19 made the news in December, James and the company’s CEO and CFO dismissed any thoughts that it could turn into anything serious. 

However, as COVID-19 numbers started to climb in the US in early March, James grew concerned and discussed with the other leaders the possibility of postponing their expansion plans. He suggested rerouting their resources towards boosting tech and security to prepare for a possible work from home migration. Then, there was the looming threat of loss of productivity in case of an outbreak and perhaps even a shutdown. 

The company had already been testing some equipment to automate more tasks with good results for the past few months, a technology that many of their competitors had already secured and implemented in the last couple of years. James urged the CEO to greenlight the purchase of this equipment and its wide-scale implementation, instead of waiting another 12 months, as initially planned. Using this equipment, many fewer workers with a more general skill set would be needed to produce the company’s products.

Unfortunately, the CEO was unconvinced and decided to push through with the expansion plans. Of course, you can already imagine what happened next, given the boom in COVID-19 cases and the wave of restrictions that were soon imposed on the country. James’ company, along with many other companies in the manufacturing industry, was heavily disrupted.

James decided to contact me for a consultation in late May after learning about my work through a webinar I conducted about how organizations can adapt to the changes brought by the pandemic. When he called me, his company was already embroiled in internal team conflicts, and its operations had already been severely disrupted. Even after the state allowed reopenings for businesses, many employees either refused or were unable to go to work due to quarantines, considerably slowing production. 

Even those who had desk jobs had many difficulties working remotely due to the company’s overall lack of preparation for a work from home setup. The company’s business continuity plan was entirely inadequate for such a significant disruption.  

COVID-19 and the Attentional Bias 

When I met with James and the company’s CEO and CFO over Zoom, I told them that we need to acknowledge that COVID-19 severely disrupted our world and will not disappear anytime soon. Believing otherwise helped drive many companies deep into chaos because business leaders failed to take the right action at the right time.

The refusal to recognize the gravity of the pandemic and even the act of downplaying it stems from a combination of three factors: 

● The nature of the virus itself

● The preexisting beliefs and plans of the business leaders

● The dangerous judgment errors we all tend to make that cognitive neuroscientists and behavioral economists call cognitive biases

The latter mental blindspots stem, in large part, from our evolutionary background. Our gut reactions evolved for the ancestral savanna environment, not the modern world. Yet gurus and business leaders alike overwhelmingly advocate going with our gut and following our intuition in making decisions instead of using effective decision-making processes.

One of these cognitive biases is the attentional bias, which caused James’ colleagues to decide erroneously at the onset, and amidst, this pandemic. 

Attentional bias refers to our tendency to pay attention to information that we find most emotionally engaging and ignore information that we don’t. Given the intense, in-the-moment nature of threats and opportunities in the ancestral savanna, this bias is understandable. Yet, in the modern environment, sometimes information that doesn’t feel emotionally salient is the most important data.

You need to pay attention to and accept the current reality of ongoing waves of restrictions as the new abnormal, instead of a temporary emergency. That means fundamentally changing your internal and external business model if you want your organization to survive and thrive during these troubled months.

Steering Back to Efficiency

When I last spoke with James at the end of June 2020, he told me that he, along with the CEO and CFO, decided to meet with all the senior and line managers to assess the most pressing issues in each department and come up with short- and long-term ways to address the pain points.

Next, the CEO held a company-wide virtual town hall meeting to update everyone about what was happening and present how senior management planned to solve its crisis.  

Due to the CEO’s efficient and engaging way of handling the town hall, much pent-up resentment was significantly reduced across the company. This paved the way for better cooperation, which was crucial for the significant steps that James, the CEO, and CFO took — starting with stopping all projects related to the product expansion and shelving it for the next two fiscal years. 

Fortunately, only about 30% of the budget resources had been released for the expansion-related projects when they first consulted me. As a result, the CEO, CFO, and James were able to make a timely and strategic plan on how they can reallocate the remaining 70%, including:

● Purchasing and installing the automation equipment

● Investing in necessary social distancing and hygiene measures at their manufacturing facilities to comply with CDC guidelines

● Boosting tech, security, and funding for home offices for an efficient work from home transition for all employees who could be moved to telecommuting

● Providing professional development for their workers, both in working from home collaboration and communication for those who worked from home and in using the new equipment and CDC guidelines compliance for those who needed to come to work

James told me that he and the leadership team were pleased with the results of the changes they made, especially once the numbers of COVID-19 cases began to increase in mid-June, prompting a pause of the reopening process that eventually led to a cycle of reopening and restrictions.

Conclusion

During these disruptive times of the pandemic, it’s essential to keep biases in check and pay attention to critical information. Remember that even if your company had trouble making the best decisions at the onset of the pandemic and fell into cognitive biases, you can still steer it back to the right path.  

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