Entrepreneurs' Organization's purpose is to help entrepreneurs achieve their full potential by enabling life-enhancing connections, designing shared experiences, and providing collaborative learning. Dr. Gleb Tsipursky, CEO of Disaster Avoidance Experts, author, and EO 360° podcast guest, empowers leaders to avoid business disasters. As a cognitive neuroscientist and expert on how cognitive biases impact human behavior, we asked Dr. Tsipursky how business leaders could best prepare for the possibility of an election disaster. Here's what he shared:
How can entrepreneurs prepare for the US presidential election resulting in a disaster?
That question may sound unreal. However, it's not as impossible as it seems to the political pundits keeping a close eye on recent events. Significantly more mail-in ballots are expected during this election, which could lead to legal challenges. This may well translate to the counting dragging on for weeks, leaving the country at risk of widespread civil disturbances, domestic financial chaos, and even a constitutional crisis.
Is your gut telling you not to worry about it? Perhaps it's that voice whispering--quite convincingly--that since an election disaster has never happened before, odds are that it won't happen now?
Be on your guard. Earlier this year, didn't that same voice dismiss the possibility of a global pandemic and the need to prepare?
This tendency stems from mental blindspots that experts in cognitive neuroscience and behavioral economics call cognitive biases. These dangerous judgment errors can have a tremendous effect on all areas of life, from the way we look after our health, to how we perceive and engage in politics, and even on the way we do our shopping.
Cognitive Biases and Election Risk
Fundamentally, three cognitive biases are to blame for our tendency to avoid the truth that an election disaster is actually possible:
- Normalcy bias pushes our brain into thinking things will keep going as they always have, in turn driving us to assess the near-term future based on short-term past experience. This propels us to greatly underestimate both the likelihood and effect of a severe disruption, such as a constitutional crisis.
- Confirmation bias is responsible for our tendency to strongly prefer data that supports our pre-existing beliefs and what our gut tells us, while ignoring information that doesn't. This bias would have us dismiss even the chance of an election disaster.
- Last but not least, there's the planning fallacy. Have you ever made plans under the assumption that the future will go according to plan, only for things to go awry because you were unprepared for unforeseen events? Well, this cognitive bias is responsible. It is particularly applicable to black swan-type low-probability, high-impact events like a US election disaster.
To defend against these cognitive biases, use probabilistic thinking and assign a probability to different election disaster scenarios.
Ask yourself: What's the probability that mail-in ballot counting will extend for several weeks because of legal issues and civil disturbances, say dragging on at least until the Electoral College meets on December 14? Considering the meticulous and unprecedented preparations for the post-election vote counting by leaders from both parties, I'd peg it at no less than 30 percent (but feel free to assign your own number).
Next, think of the likelihood that the Electoral College vote will be inconclusive because of legal issues. I'd say it will probably be half of that, so let's assign 15 percent.
At that point, the House of Representatives will need to pick a winner. However, both parties have ways of causing a stalemate, which could ultimately result in a constitutional crisis without a definite resolution. I'd say the probability of this happening is at two-thirds of 15 percent, so that makes it 10 percent.
5 Ways to Mitigate Election Disaster Risk
Next, imagine a future where civil disturbance and legal challenges persist only until the Electoral College vote. Then, think of the problems you might encounter as a business leader, as well as the possible solutions.
- Revisit your business continuity plan. A large majority of companies were seriously underprepared for the pandemic. If you're not working 100 percent virtually now, prepare if at all possible to go to all-virtual work. If you can't, get extra security for your office ahead of potential civil strife.
- Prepare employees. Discuss with employees the significant possibility of an election disaster, and encourage them to prepare. Remind them of any mental health resources they can access, such as through an Employee Assistance Program. Prepare your office for the possibility that a number of employees may suffer a serious disruption. Cross-train back-ups for the company's critical roles, just in case.
- Protect your supply chain. If you manufacture products, examine where you might need to take steps to protect your supply chain. If you provide services, reassure clients about the steps you will take to protect your services from interruptions.
- Identify and deploy resources. Single out which and how many resources you would need to address the problem, then add them up and multiply the sum by 30 percent. Use those resources to get ready for the possible disruption.
- Troubleshoot potential problems. Identify the problems you might encounter, and what resources you should have at your disposal if the Electoral College vote is inconclusive and disruption carries over until early January. Multiply these resources by 15 percent. Lastly, gauge the problems and resources you'll need if the House vote leads to a stalemate and a constitutional crisis, then multiply these by 10 percent.
This approach will allow you to distribute problem-solving and resources across various scenarios based on your chosen evaluations. By taking this opportunity-maximizing path, you're essentially buying insurance to safeguard yourself and your business from disruptions that may be caused by the election.