The ‘ostrich effect’ is keeping leaders from accepting the reality of remote work

As the Omicron variant spreads, some leaders need to “defeat cognitive biases, avoid denying reality,” and allow for remote work, an expert said. 

Gleb Tsipursky, Ph.D., is the CEO of the consultancy Disaster Avoidance Experts. A UNC-Chapel Hill and Harvard grad, Tsipursky spent 15 years in academia studying behavioral economics and cognitive neuroscience, including cognitive bias risk management strategy in business. “Unfortunately, most companies are not pivoting effectively to meet Omicron,” he wrote in a new Coins2Day opinion piece. “In response to Omicron, companies like Google, Uber, and Ford have been bringing out the same old ‘delay the office reopening’ play that they used with Delta.” 

This type of leadership behavior is not only “puzzling” and counterproductive, but a cognitive bias called the ostrich effect, according to Tsipursky. What exactly is that?

“Named after the myth that ostriches stick their heads in the sand when they fear danger, the ostrich effect refers to people denying or ignoring risks,” he wrote. “Delta illustrated the high likelihood of additional dangerous variants, yet the leadership at many of our biggest companies denied the reality of this risk. Now they are reaping the whirlwind.” Some major Wall Street banks brought workers back to the office following vaccine availability in the spring. But at the beginning of this month, made a temporary return back to remote work because of Omicron.

Tsipursky did note that we all have cognitive biases, not just leaders. He explained: Our minds naturally prioritize the present. We want what we want now, and we downplay the long-term consequences of our current desires. That fallacious mental pattern is called hyperbolic discounting, where we minimize the benefits of orienting toward the future and instead focus excessively on the present. A clear example is focusing on the short-term perceived gains of returning to the office over the competitive advantage of preparing for the long-term hybrid and remote future of work.

The solution? Companies must stop dictating a top-down approach and instead build a decentralized, team-led approach, according to Tsipursky. “Each individual team leader of a rank-and-file employee team should determine what works best for his or her team,” he wrote.  

Some CFOs understand there’s no one-size-fits-all solution to the issue of remote work. Emphasis on the numbers shouldn’t overrule the need to hire talented employees, Accenture’s CFO KC McClure said at a recent Coins2Day event. “There’s so much that a CFO can do to really look at how to think about talent differently because it can save costs. And the ability to access talent in a different way post-pandemic is even more important,” McClure said. Toyota North America CFO Tracey Doi said at the event the company is moving to a hybrid model for remote work in early 2022, with local managers able to make their own adjustments to best serve Toyota’s customers.

What’s your company’s approach to remote work? Drop me a line about your own experiences—and whether plans have changed due to Omicron.

See you tomorrow.

Sheryl Estrada
[email protected]

Big deal

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Going deeper

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Leaderboard

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Overheard

"Something I hope to accomplish with Daring is to teach the Atlanta community and others the power of plant-based eating. Forming a healthy diet doesn’t need to be expensive."

—NFL star and Carolina Panthers quarterback Cam Newton on why he is investing in Daring Foods, a startup creating a plant-based replacement for chicken, as told to Coins2Day. The startup reached $65 million in Series C funding in October 2021 and has over $120 million in total funding.