As the vast majority of companies rush to reopen, they’re falling into the trap of “getting back to normal.” They’re not realizing we’re heading into a period of restriction once again, due to many states reopening too soon. To survive and thrive in this new abnormal, and avoid the trap of normalcy, leaders need to understand the parallels between what’s going on now, and what happened at the start of the pandemic.
Reality Check in a Tech Company
Consider Tim, the CFO of a 90-person tech start-up based in Texas that provides HR and Payroll software and other business back-end software. Unfortunately, the company’s leadership team, including Tim, believed Elon Musk’s statements when he downplayed the coronavirus in March.
Since the C-suite thought the pandemic wasn’t a big deal and would blow over soon, they didn’t take the necessary precautions and preparations and ended up in a bad place when the shutdowns occurred. They had to turn to a very basic business continuity plan that did not factor in something as significant as a pandemic. Thinking that things would “normalize” soon, they held off making major decisions, such as moving their operations to a virtual setup.
Tim decided to contact me for a consultation after learning about my work through a recent webinar I conducted for CEOs about how companies can adapt to the changes brought about by the pandemic. When he called me, his company was already embroiled in internal team conflicts and service interruptions, which resulted in several clients having problems with the software and a couple of major clients threatening to cancel. It was evident that the company needed help getting out of the murky waters — and soon.
Facing This New Abnormal
When I met with Tim as well as the company’s CEO and COO over Zoom (by this time I had already moved my previously hybrid in-person and virtual consultations to all virtual) I told them that there were some essential points they needed to understand for their company to survive in the new COVID-19 reality.
First and foremost, we won’t get anywhere if we don’t face the facts. We need to acknowledge that COVID-19 has fundamentally disrupted our world, and turned it upside down. Regrettably, it will not disappear soon.
However, you might be wondering why Elon Musk – and even some political leaders – downplayed the COVID-19 pandemic? It’s not like doing so had personal benefits for these leaders. They wound up humiliated when proven wrong, hurting their credibility.
Like Tim and the other leaders of these companies, these globally-renowned leaders fell into what cognitive neuroscientists call, the normalcy bias. This dangerous error of judgment refers to the fact that our gut reactions drive us to feel that the future, at least in the short and medium-term, will function in roughly the same way as in the past. As a result, we tend to vastly underestimate both the possibility and impact of a disaster striking us.
Normalcy bias is one of more than 100 mental blindspots that cognitive neuroscientists and behavioral economists like myself call cognitive biases. Fortunately, recent research has shown us how we can effectively deal with such dangerous judgment errors.
For normalcy bias, it’s critical to understand the dangers of falling into it and acknowledge the pain you may cause yourself and the company by doing so. Then, you need to consider the long-term outcomes realistically and plan for a realistic scenario that addresses the likelihood of significant disruption.
It was pretty clear from my first Zoom call with Tim, the CEO and COO of the company, that their leadership team had suffered from normalcy bias. However, it took until the second consultation for them to admit (more than a bit grudgingly) that they had succumbed to this mental blind spot. This refusal to admit to reality had less to do with the veracity of the facts I presented, but rather with their initial unwillingness to let go of their “gut feel.”
After discussing the above points with them, they admitted that it was time to face what lies ahead. It was time to prepare their company for a much more significant disruption than they had anticipated. We used the “Defend Your Future” technique to help them plan for a variety of potential futures. We decided that while they would hope for the best, they would plan for the worst, a wise strategy for addressing normalcy bias.
No Longer Struggling, But Thriving
When I last spoke with Tim at the end of June 2020, he told me that he had decided to share their findings and the points we discussed during the coaching sessions with the rest of the leadership team. It was an awkward conversation, due to the growing conflicts in the company and mutual recriminations.
However, after realizing that there wasn’t much sense playing the blame game given the urgency of the situation, the C-suite decided to buckle down and address the problems head-on. After outlining the problems and potential solutions, they eventually got widespread buy-in to do what needed to be done to propel their company to recovery.
The leadership team swiftly addressed internal conflict — a necessary first step to addressing all the other issues.
They focused more effort on a long-term transition to virtual. The COO led the effort to minimize their physical footprint, having only a couple of people in the office to take care of necessary paperwork. Tim, the CEO, and the VP of IT made quick, practical changes to the company’s policies and processes so that operations would be in line with their virtual transition.
After the internal conflicts and systems had been addressed, the leadership team focused on reaching out to clients who were threatening to cancel due to the service interruptions. From these efforts, most of the cancellations were avoided, although two smaller clients did cancel.
Tim told me that he and the leadership team were pleased with the results of the changes. They were especially pleased when they realized how prepared they were when COVID-19 cases began rising again, prompting a pause of the reopening process, that led to shutdowns again.
During these disruptive times, it’s essential to be agile and resilient. Keep in mind that even if your company was not able to make the best decisions at the onset of the pandemic, you can still steer it back to the right path by fighting and protecting against the trap of normalcy bias.