Have you changed your views about COVID-19 months into this pandemic? Or are you still anchored to the same beliefs you had in March?  

For example, many people still believe the false claim spread by many prominent leaders in March that COVID is no worse than the common flu. They protest against public health measures such as wearing masks, despite high-quality peer-reviewed studies showing that masks save lines.

They also ignore new developments, such as the recent urgent requests by governors to stay home and telecommute to tamp down the explosive third wave of COVID. Likewise, they ignore just-published research showing that restaurants, gyms, hotels, and other crowded indoor spaces with prolonged exposure – including workplaces that fit such criteria – significantly increase COVID risk.  

We tend to continue treading the same path based on information we initially received. That’s regardless of strong new evidence that our path leads off a cliff. The name cognitive neuroscientists and behavioral economists give to this dangerous judgment error is anchoring.

Anchoring is one of the many cognitive biases that lead us to make poor decisions. Recognizing its danger and impact helps us make much better decisions to manage risks wisely and survive and thrive in this pandemic. 

Anchoring in Financial Services: A Case Study   

Let’s consider the case of Lauren, CEO of a 130-people regional financial services company based in Texas that had a lot of difficulty with remote work at the start of the pandemic. 

The company’s leadership team didn’t think they needed to prepare for disruption of more than a week or two. They followed early guidelines from the CDC to prepare for nothing more than a brief interruption due to a short-term outbreak. As a result, the leadership team asked all of its workforce to come back to the office as states reopened, despite news reports of an increase in Texas cases. 

However, because of the company leadership’s perception that COVID-19 isn’t a big deal, neither the leaders nor employees took appropriate precautions when returning to the office. Most did not follow guidelines on social distancing or wear masks. Unfortunately, there was an outbreak of COVID-19 in the office traced to an all-hands meeting. Over two dozen employees caught COVID-19, including three C-suite leaders. 

Several employees, including the COO, ended up in the hospital, and two older employees died. This led to a plunge in productivity, attrition, and low morale within the company, which led to some key employees’ resignations. 

Lauren decided to contact me for a consultation in late April after learning about my work through a webinar I conducted about how business leaders can adapt to the changes brought by the pandemic.  

Adapting to the New Abnormal 

When I met with Lauren and the company’s COO and HR head over Zoom, I told them upfront that they have to start acknowledging the disruptions brought about by COVID-19. Continuing as they did will endanger their company’s bottom line and even survival during this pandemic.

At the start of the pandemic, most companies activated their business continuity plans and followed along as the months rolled by.

However, I wouldn’t advise continuing with these emergency measures throughout the pandemic’s minimal two years. 

Companies need to go beyond emergency measures to survive and thrive in the next few years. You need to adapt to the pandemic and accept the current reality of ongoing waves of restrictions as the new abnormal. 

This essentially means transforming your internal and external business model if you want your organization to chart a productive and rewarding course during these troubled years.

Doing so will include taking a long, hard look at the elements that drive your business. It will also entail revising or, in some cases, even totally revamping your daily operations and business continuity plan.  

Moving Forward From Anchoring

When I last spoke with Lauren a few months ago, she told me that after serious deliberation, she called for a leadership meeting to reexamine the facts on COVID-19. Fortunately, after being presented with overwhelming evidence that COVID-19 was a serious matter and needed to take immediate steps, the executives eventually acknowledged the gravity of the situation. The leadership team then decided to take the following steps:

1. Lauren held a company-wide virtual town hall to debunk the erroneous information on COVID-19 on which the majority of the company had anchored.
2. The leadership team rolled out a comprehensive remote work program, where employees were provided with tech and equipment support. Employees can also report to the office, but it was strictly optional. The leadership team ensured that the office had all the necessary visual and physical cues to encourage social distancing. Reminders on wearing masks were placed strategically. 
3. The marketing team updated its external and internal collateral to include what the company was doing to make its virtual and physical spaces safe for its employees.  
4. The COO worked with the HR head on numerous retention efforts to prevent more employees from jumping ship. 
5. The sales team built on the marketing team’s actions. They also reached out to clients who had been previously irked by the company’s slow response to inquiries and complaints. The sales team presented all the changes being made to get the company up to speed operationally and assured clients of better service. 

As a result of these efforts, the company corrected its course and finally got back to a productive path. 

The strict policies on working onsite also minimized health risk, thereby lessening the company’s risk of accountability in case of an outbreak in the office. This was a heavy load off the C-suite’s back. They were finally able to focus on product development and saving client relationships. 

Lauren informed me how relieved she was that they made the changes once the numbers of COVID-19 cases began to increase, prompting a pause of the reopening process that eventually led to a cycle of reopening and restrictions. 

So many companies are shifting their employees to working from home to address the coronavirus pandemic. Yet they’re not considering the potential disasters that might occur as a result of this transition.

An example of this is what one of my coaching clients experienced a few months ago, before the pandemic hit. Pete is a mid-level manager in the software engineering unit of a startup that quickly grew to 400 office-based employees doing Electronic Health Records (EHRs). He was one of the leaders tasked by his company’s senior management team with shifting employees to a work-from-home setup, due to rising rents on their office building.

Specifically, Pete led the team that managed the transition of all 400 employees toward teleworking, as he had previously helped small teams of 3 to 6 people transition to a work-from-home situation in the past. However, the significantly bigger number of people they now had to assist was proving a challenge. So too, was the short amount of time available for this project — only four weeks.

When Pete approached me for advice, I recommended the “Failure-Proofing” strategy; a practical and easy-to-use technique to defend against planning and project disasters.  

Step 1: Imagine that the decision, project, or process failed, and brainstorm reasons for why it failed.

Meet with key stakeholders and discuss your plan. Make sure to provide all the details. Next, ask participants to imagine a future where the plan failed. Doing so empowers everyone, even those who are confident that the plan will succeed, to tap into their creativity and come up with reasons why it failed. 

Each participant should anonymously write out three possible reasons why the plan failed. The reasons should include internal decisions, such as manpower or budget restrictions and external factors, such as new policies set by government agencies. 

Next, the facilitator gathers the statements and discusses the central themes around why the plan failed. The facilitator should highlight reasons that would not usually be raised, had the discussion not been anonymous. If you do this technique yourself, list down separate reasons for the plan’s failure from the perspective of different viewpoints. 

Going back to Pete, he decided to gather a group of six stakeholders — one manager from each of the four departments needing to shift to work-from-home, and one team leader from the two teams that would provide auxiliary support to Pete’s team during the process. He also recruited Ann, a member of the firm’s Advisory Board, to be an independent facilitator.

Ann discussed the current plan, which was to shift all 400 employees to a remote work setup within four weeks. Everything, including business meetings, would be done online after the four-week period. Pete’s team would migrate the employees in batches of 100 employees per week and the records division would be last, giving ample time to convert documents and processes to digital platforms. 

After outlining this plan, everyone submitted their anonymous reasons for failure. Ann read out the responses, which highlighted a key issue: The plan would fail because it wasn’t communicated in a clear and timely manner. Most of the participants raised doubts that management could communicate the idea properly, due to a history of miscommunication within the company. Knowing this fact in advance, prepared everyone to make it a success.

Step 2: Brainstorm ways to fix problems and integrate your ideas into the plan.

Pick several failure scenarios from the exercise above and think of ways to solve them. This should include how to tackle mental blind spots and cognitive biases. Also, present any evidence that indicates that the potential failure is happening, or could happen. For this step, it’s critical to have people with authority in the room. 

The facilitator should write down potential solutions. If you’re going through this step yourself, ask for outside input at this point. 

Circling back to Pete’s discussion group: Mary, an HR manager, took on the task of addressing the communication problem that was identified earlier. She discussed the communication issue around senior management and proposed that they immediately send out a company-wide announcement on the migration to telecommuting and the steps to be taken. 

Then, each senior manager had an in-person meetings with their direct reports in middle management, to get buy-in and ensure that the message passed effectively down the chain of command. In turn, the middle managers met with frontline staff and worked out the next steps for each team.

Step 3: Imagine that the decision, project, or process succeeded spectacularly, brainstorm ways of achieving this outcome, and integrate your ideas into the plan.

We’ve tackled failure, so now, let’s imagine that your plan succeeded superbly! This way, your company can maximize its success. 

Imagine that you are in a future where your plan succeeded beyond your wildest expectations. Ask each participant to anonymously write the possible reasons for the plan’s success. Then, ask the facilitator to focus on the key themes. 

Next, the facilitator gathers everyone’s statements and leads the group in discussing the results. Assess each reason for success and decide which ones need attention. Check for cognitive biases as well. After that, come up with ways of maximizing these reasons for success. 

The facilitator should write down the ideas to maximize the plan’s success. If you’re going through this step yourself, ask for outside input at this point. 

Once again, when Ann read out the statements, there was a key theme: They imagined the plan succeeded because management was responsive to the anxieties and concerns of employees during the transition. To address that, Pete’s team set up a telephone number that staff could text or call, that was always staffed by a member of the group. This gave quick answers to questions from staff.

In short, to prevent work-from-home disasters in this time of transitioning to telework, make sure you imagine failure (and avoid it) and imagine success, too (and maximize it). 

Negotiators, even professional ones, make surprisingly many wrong decisions that doom negotiations that should have succeeded. Many of these mistakes relate to overestimating how well they can read the feelings and thoughts of other parties in the negotiation, as well as the extent to which the other party can read their feelings and thoughts. 

For instance, research shows that negotiators who sought to conceal their desires did a better job than they thought they did. In turn, those who tried to convey information to those they negotiated with about their preferences overestimated their abilities to communicate such knowledge. Other scholarship shows that negotiators with less power are more prone to such mistakes than those with more power.

Scholars call this erroneous mental pattern the illusion of transparency, referring to us overestimating the extent to which others understand us and how well we grasp others. This mental blindspot is one of many dangerous judgment errors – what scholars in cognitive neuroscience and behavioral economics call cognitive biases – that we make due to how our brains are wired. We make these mistakes not only in work but also in other life areas, for example, in our shopping choices, as revealed by a series of studies done by a shopping comparison website.

Fortunately, recent research in these fields shows how you can use pragmatic strategies to address these dangerous judgment errors effectively.

I observed a clear instance of an illusion of transparency when an electric company brought me in as a consultant to mediate in failing contract negotiations between the management and the union. Both sides believed the other party to be unwilling to negotiate in good faith, asking too much and giving too little. The union demanded substantial wage hikes, strong job protections, and better retirement benefits, and management pushed back firmly on each request.

Quickly, I noticed that the illusion of transparency gravely inhibited progress. My private conversations with representatives from both sides showed that all felt they communicated their positions effectively, both the areas where they wanted to stand firm and where they felt willing to compromise. Yet these same conversations showed many areas of agreement and flexibility that neither side recognized.

Why didn’t both sides explicitly outline their positions thoroughly and clearly, so that the other side understood precisely where they stood? Because they were afraid that the other party would take advantage of them if they explicitly stated their actual positions, including the minimum they’d be willing to accept. 

So both sides tried to convey what was most important to them by arguing more strongly for specific points and less strongly for others. They believed that the other side would “get the hint.” Unfortunately, neither side “got the hint” of the real priorities of the other side.

What I asked each side to do was use the decision-making strategy of weighing their priorities. After deploying this strategy, the union negotiators assigned priority to increased job protection, second to better retirement benefits, and third to a substantial wage increase. The management negotiators used the same strategy and attributed priority to no wage increase, second to decreased retirement benefits, and last to weaker job protection. 

By clarifying these priorities, the parties were able to find room for negotiation. The final contract included much-strengthened job protection, a moderate boost to retirement, and a small wage hike at just below inflation. 

The management appreciated the outcome since it didn’t have to spend as much money on labor; the union membership liked the peace of mind that came with job protection, even if they didn’t get the wage hike they would have wanted.

The key takeaway is that in any negotiation situation, you’re very likely to be overestimating the extent to which you explained your position to the other party. You’re also probably too confident about how well you understand the other party’s perspective. The other party is most likely making the same mistakes regarding you.

An easy way to address these problems is to use the decision-making strategy of weighing your priorities and having the other party do the same. Then, trade off your lowest preferences against their highest ones and vice versa. You can come to a win-win agreement where both parties realized the most significant gains and experience the least losses. Such strategic approaches to addressing cognitive biases will help you in all areas of your professional life.

Let’s say you’re interviewing a new applicant for a job, and you feel something is off. You can’t quite put your finger on it, but you’re a bit uncomfortable with this person. She says all the right things, her resume is great, she’d be a perfect hire for this job — except your gut tells you otherwise. Should you go with your gut?

In such situations, your default reaction should be to be suspicious of your gut. Research shows that job candidate interviews are poor indicators of future job performance.

Unfortunately, most leaders tend to trust their gut over their head and give jobs to people they like and perceive as part of their in-group, rather than merely the most qualified applicant. 

In other situations, however, it does make sense to rely on gut instinct to make a decision. Yet research on decision-making shows that most people don’t know when to rely on their gut and when not to do so. 

The reactions of our gut are rooted in the more primitive, emotional, and intuitive parts of our brains that ensured survival in our ancestral environment. Tribal loyalty and immediate recognition of friends or foes were especially useful for thriving in that environment.

In modern society, however, our survival is much less at risk. Our gut is more likely to compel us to focus on the wrong information to make decisions in the workplace and other areas.

For example, is the job candidate mentioned above similar to you in race, gender, socioeconomic background? Even seemingly minor things like clothing choices, speaking style, and gesturing can make a big difference in determining how you evaluate another person. 

Our brains tend to fall for the dangerous judgment error known as the “halo effect,” which causes some characteristics we like and identify with to cast a positive “halo” on the rest of the person. It’s opposite to the “horns effect,” in which one or two negative traits change how we view the whole. The halo effect and horns effect are two of many dangerous judgment errors, which are mental blind spots resulting from how our brain is wired that scholars in cognitive neuroscience and behavioral economics call cognitive biases. We make these mistakes not only in work but also in other life areas, for example, in our shopping choices, as revealed by a series of studies done by a shopping comparison website.

Fortunately, recent research in these fields shows how you can use pragmatic strategies to address these dangerous judgment errors, whether in your professional life, your relationships, or other life areas. 

You need to evaluate where cognitive biases are hurting you and others in your team and organization. Then, you can use structured decision-making methods to make “good enough” daily decisions quickly, more thorough ones for moderately essential choices, and an in-depth one for preeminent choices.

Such techniques will also help you implement your decisions well, and formulate truly effective long-term strategic plans. Besides, you can develop mental habits and skills to notice cognitive biases and prevent yourself from slipping into them.

For example, you need to remember that just because a person is similar to you does not mean she will be the best employee. The research is clear that our intuitions often don’t serve us well in making the best hiring decisions. Such reliance on intuition is especially harmful to workplace diversity and paves the path to bias in hiring, including in terms of race, disability, gender, and sex.

Despite the numerous studies showing that structured interventions are needed to overcome bias in hiring, unfortunately, business leaders and HR personnel tend to over-rely on unstructured interviews and other intuitive decision-making practices. Due to our overconfidence bias, a tendency to evaluate our decision-making abilities as better than they are, leaders often go with their guts on hires and other business decisions rather than use analytical decision-making tools that have demonstrably better outcomes.

A proper fix is to note how the applicant is different from you, and give them “positive points” for it. Alternatively, create structured interviews with a set of standardized questions asked in the same order to every applicant.

Let’s take a different situation. Say you’ve known a business colleague for many years, collaborated with her on a wide variety of projects and have an established relationship. 

Imagine yourself having a conversation with her about a potential collaboration. For some reason, you feel less comfortable than usual. Most likely, your intuitions are picking up subtle cues about something being off.

Maybe it’s nothing. Perhaps that person is having a bad day or didn’t get enough sleep the night before.

However, that person may also be trying to pull the wool over your eyes. When people lie, they behave in ways that are similar to other indicators of discomfort, anxiety, and rejection, and it’s tough to tell what’s causing these signals.

Overall, this is an excellent time to take your gut reaction into account and be more suspicious than usual.

The gut is vital in our decision-making to help us notice when something might be amiss in well-established relationships. Yet, in most situations, when we face significant decisions about workplace relationships, we need to trust our heads more than our gut to make the best decisions.