The entrepreneurship organization aims to help entrepreneurs reach their full potential by enabling life-enhancing connections, designing shared experiences, and enabling collaborative learning. Dr. Gleb Tsipursky, CEO of Disaster Avoidance Experts, author, and EO 360 podcast guest, empowers executives to avoid business disasters. As a cognitive neuroscientist and expert on the effects of cognitive prejudice on human behavior, we have Dr. Tsipursky asked how business leaders can best prepare for the possibility of an election disaster. He announced the following:
How can entrepreneurs prepare for the US presidential election that leads to disaster?
That question may sound unreal. However, keeping a close eye on recent events is not as impossible as it seems to political experts. Significantly more postal ballot papers are expected in these elections, which could lead to legal challenges. This may well drag on the counting for weeks and threaten the country with widespread civil unrest, domestic financial chaos, and even a constitutional crisis.
Is your gut telling you not to worry about this? Perhaps it is that voice that whispers, quite convincingly, that since an election disaster has never happened before, the likelihood is good that it will not happen now?
Be careful. Didn’t that same voice earlier this year rule out the possibility of a global pandemic and the need to prepare?
Because of this, the vast majority of companies were not prepared for the challenges posed by the virus. Our brains tend to underestimate low probability, high impact disruptors known as “black swans”.
This tendency stems from mental blind spots, which experts in cognitive neuroscience and behavioral economics call cognitive prejudice. These dangerous errors of judgment can have a huge impact on all walks of life, from the way we take care of our health, to our perception and engagement in politics, to the way we shop.
Cognitive Prejudice and Choice Risk
Basically, three cognitive prejudices are responsible for our tendency to avoid the truth that an electoral disaster is indeed possible:
- Tendencies towards normalcy cause our brains to think that things are going on as they always have, which in turn prompts us to judge the short-term future based on short-term experiences from the past. This leads us to grossly underestimate both the likelihood and impact of a major disruption such as a constitutional crisis.
- Affirmative bias is responsible for our tendency to strongly favor data that supports our pre-existing beliefs and what our gut tells us, while ignoring information that doesn’t. This tendency would even exclude us from the possibility of an electoral disaster.
- Last but not least, there is the planning error. Have you ever made plans on the assumption that the future will go according to plan, only for things to go wrong because you weren’t prepared for unforeseen events? Well, that cognitive tendency is responsible. This is especially true for low probability, high impact black swan-type events such as a US election disaster.
To defend yourself against these cognitive biases, use probabilistic thinking and assign a probability to different election catastrophe scenarios.
Ask yourself: What is the likelihood that the counting of postal ballot papers will be extended by several weeks due to legal problems and civil unrest, for example until the electoral college meeting on December 14th? Given the meticulous and unprecedented preparation for the post-election voting, counted by the leaders of both parties, I would rate no less than 30 percent (but you are welcome to give your own number).
Next, think about the likelihood that the electoral college vote will be inconclusive for legal reasons. I would say it’ll probably be half of that, so let’s assign 15 percent.
At this point the House of Representatives must select a winner. However, both parties have ways of creating a stalemate that could ultimately lead to a constitutional crisis with no definitive solution. I would say the probability of this is two-thirds of 15 percent, so that’s 10 percent.
5 ways to reduce the risk of electoral disaster
Next, imagine a future where civil unrest and legal challenges only last until a vote in the electoral college. Then think about the problems you, as a business leader, might encounter and the possible solutions.
- Review your business continuity plan again. A large majority of companies were seriously inadequately prepared for the pandemic. If you are not working 100 percent virtual now, prepare yourself for the purely virtual work if possible. If you can’t, you can have extra security for your office before civil war breaks out.
- Prepare employees. Discuss the significant possibility of an electoral disaster with staff and encourage them to prepare. Remind them of any mental health resources they can access, such as: B. through an employee assistance program. Prepare your office for the possibility of a number of employees being seriously disrupted. Cross-train backups for the company’s critical roles, just in case.
- Protect your supply chain. When you manufacture products, consider where you might need to take steps to protect your supply chain. When you provide services, you are reassuring customers of the steps you will take to protect your services from disruption.
- Identify and provide resources. Select which and how many resources you need to fix the problem, add them up and multiply the sum by 30 percent. Use these resources to prepare for the potential disruption.
- Correct possible problems. Identify the issues you may encounter and the resources you should have available if the electoral college vote is inconclusive and the disruption continues through early January. Multiply these resources by 15 percent. Lastly, measure the problems and resources you will need if the House vote leads to a stalemate and constitutional crisis and multiply that by 10 percent.
This approach allows you to distribute troubleshooting and resources across different scenarios based on your selected ratings. When you take this opportunity-maximizing route, you are essentially buying insurance to protect yourself and your business from the disruption that choice may cause.
The opinions expressed by Inc.com columnists here are their own, not those of Inc.com.
Comments are closed.