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We suffer from many dangerous judgment errors that researchers in cognitive neuroscience and behavioral economics like myself call them cognitive biases. These mental blindspots result from a combination of our evolutionary background and specific structural features in how our brains are wired.
Our brain’s primary way of dealing with threats is the fight-or-flight response. An excellent fit for the kind of intense short-term risks we faced as hunter-gatherers, the fight-or-flight response is terrible at defending us from significant disruptions caused by the slow-moving train wrecks we face in the modern environment, such as the COVID-19 pandemic.
More specifically, you need to watch out for three cognitive biases.
- The normalcy bias causes our brains to assume things will keep going as they have been – normally – and evaluate the near-term future based on our short-term experience. As a result, we underestimate drastically both the likelihood of a severe disruption occurring and the impact of one if it does happen.
- When we make plans, we naturally believe that the future will go according to plan. That wrong-headed mental blindspot, the planning fallacy, results in us not preparing for contingencies and problems, both predictable ones and unknown unknowns.
- Last but not least, we suffer from the tendency to prioritize the short term and undercount the importance of medium and long-term outcomes. Known as hyperbolic discounting, this cognitive bias is especially bad for evaluating the potential long-term impacts of the COVID-19 pandemic.
It’s inherently uncomfortable to prepare for the realistic pessimist scenario. That feeling of discomfort is you going against your gut reactions, which is what research shows is needed for you to defeat these mental blind spots in your business and career. Envision a future where COVID-19 isn’t eradicated, but keeps on going and plan accordingly.
Right now, you need to sit down and revise your strategic plans in a way that accounts for the cognitive biases associated with COVID-19. Do the same revision with major project plans.
By taking these steps, you’ll protect your business from the way-too-optimistic preparation guidelines of official health organizations and from our deeply inadequate gut reactions in the face of slow-moving train wrecks.
