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

January 10, 2022, 11:23 AM UTC

Good morning,

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 Fortune 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 Fortune 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
sheryl.estrada@fortune.com

Big deal

Employers in the U.S. increased their search for additional tech workers in December with an estimated 332,564 job postings for open positions, according to an analysis by CompTIA released on Jan. 7. The tech association's analysis is based on the U.S. Bureau of Labor Statistics' latest report. That amount is 22,500 more than in November and the highest monthly amount since March 2020, the analysis found. Among the industries with the largest number of open positions last month include professional scientific and technical services with 53,603 openings and finance and insurance with 35,039. "Adaptation remains a driving force for organizations expanding their tech workforces in areas such as cloud infrastructure, remote support, data science and cybersecurity," Tim Herbert, EVP for research and market intelligence at CompTIA, said in a statement.

Going deeper

World Review 2021: 10 Stories That Will Matter in 2022, a new report by Gallup, takes a look at the analytics and advisory company's findings last year and what's in store for this year. For example, in 2021, about 68% of adults surveyed worldwide by Gallup said if a COVID-19 vaccine were available to them at no cost, they would agree to be vaccinated. "However, like the global number, in most countries, the percentages fell short of the numbers needed for herd immunity," according to the report. This year, Gallup intends to show where adults around the world stand on vaccines and where access is still needed.

Leaderboard

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Shaun Williams was named CFO at Allen Media Studios, a division of Byron Allen's Media Group (AMG). Williams will oversee financial planning for Allen Media Studios, which includes all AMG television, motion picture, digital, and streaming content production and distribution. Williams brings more than 25 years of experience, most recently as CFO at Solstice Studios. He was also previously head of finance at the London-based ALL3Media. Before that, Williams was CFO for the film and television production company Studio 8, and he also served as the SVP of finance for GK Films/Film District. In addition, Williams was also VP of business operations for BET Networks and VP of finance for Twentieth Century Fox.

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 Fortune. The startup reached $65 million in Series C funding in October 2021 and has over $120 million in total funding.

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