Psychologists say the worst time to make a long-term decision is in the middle of a dramatic crisis like the pandemic because a powerful mental bias called the availability bias makes it very difficult to step outside of the moment.
As a leader, understanding the availability bias is the key to minimizing its potentially damaging impact.
Daniel Kahneman, the Nobel Prize-winning psychologist and his research partner, Amos Tversky, identified what they called the “availability heuristic.” It simply means that we form a picture of the world based on examples, events and experiences that come readily to our mind.
If everything you see, read and hear is bad, then you’re more likely to expect the future will be bad, too. The problem, according to Kahneman in his book, Thinking, Fast and Slow, is that events we experience vividly today do not provide the most useful information to make wise decisions about your future.
The way investors react to the ups and downs of the stock market provides a good example of how the availability bias works in our lives. Many investors bailed out of the market during the 2008 recession after stocks had fallen 50 percent. It’s too bad, as stocks began the longest bull market of all time, rising 256 percent over the next decade.
Beyond the stock market, a crisis is the worst time to make sudden decisions that might impact you for years to come, but people do it all the time. The coronavirus pandemic is no different. One recent study found that half of young people have already changed their long-range plans for college, work, and career paths as a result of the crisis.
Based on my 20 years of experience studying cognitive psychology — and professionally surviving four major economic collapses–here are three ways to reduce the damage availability bias might play in your life.
1. Find the right advisors.
Seek advice from mentors who have survived–and even thrived–in past recessions.
In 2001, I was working as a television host for a television network that covered technology. Advertising plummeted after the dot-com crash and the network pulled the plug on programming. Tech stocks plummeted and the future seemed bleak.
Thankfully, I had built a network of contacts and mentors who I leaned on for advice. One CEO, who had successfully navigated his company through several recessions, told me: “Control what you can today, but focus on where you want to be in the future.”
To me, it was the best advice ever. I controlled what I could and found a short-term position in public relations to pay the bills and add some valuable skills to my talent stack. While I worked in PR, however, I began researching and writing a book (my long-term goal). That book was The Presentation Secrets of Steve Jobs that became a global bestseller.
If you’re too young to have experienced severe economic downturns, turn to people who have and follow their long-term guidance, rather than making assumptions based on what’s immediately in front of you.
2. Limit ‘doomscrolling.’
According to Webster’s dictionary, doomscrolling refers to scrolling through bad news, even though the news is saddening, disheartening, or depressing.
Doomscrolling can lead to anxiety and depression, according to health experts interviewed for The New York Times. Doing so puts you in a frame of mind that diminishes your ability to make sound decisions.
If you’re going to mindlessly scroll for news, put a time limit on it. I give myself 20 minutes a day to watch the news or scroll for information on social media. But I read about two hours a day, focused on economic reports, medical journals, and books.
Spend your time on content that will empower you for the long run. Focus on information that you choose to feed to your mind.
3. Follow Warren Buffett’s advice.
In Berkshire Hathaway’s shareholder meeting in 2018, Buffett held up a copy of the New York Times from March 12, 1942, when America appeared to be losing World War II.
“The newspaper headlines were filled with bad news,” Buffett said. But he bought his first stock anyway because he believed the future would be brighter.
Buffett said that $10,000 invested in the market at that time would be worth $51 million today–despite the wars, recessions, unrest, pandemics and other catastrophes he’s experienced.
The march of progress may be unstoppable, but it sure doesn’t feel like it when you’re in the middle of a crisis.
My heart sinks when I see rising unemployment, businesses shutting their doors permanently, rising hospitalizations for Covid-19 infections. It’s awful. But as a student of behavioral psychology, I’ve learned that the ‘availability’ of bad news can also derail people from pursuing their long-term dreams.
Before you make any decision today, ask yourself: Where do I see myself five, ten years from now? What skills do I need to build today to reach that goal?
The constant bombardment of bad news becomes a problem when it has an outsized influence on your career or business decisions. Just because it’s ‘available,’ doesn’t mean you have to act on it.