Humans have difficulty recognizing and reacting to experiences that are new to them. This mental state is technically called our “Normalcy Bias” but can other times be referred to as the Ostrich Effect.
A normalcy bias causes smart people to underestimate the possibility of a disaster and its effects. In this state, people deny what is happening to them and occurs most often under threat or experiencing some form of economic turmoil and can have severe consequences.
When people don’t face the facts of an imminent disaster the negative effects that the disaster has on them are much greater.
Consider the Jews living in pre-WWII Germany. As Hitler rose to power there were over 450,000 Jews living in Germany. As Antisemitism spread through Germany only 100,000 German Jews left the country, while 350,000 Jews, affected by the normalcy bias, refused to recognize or accept the mounting evidence of danger in front of them.
In contrast, people who face the situation early and start taking measures to alleviate the impact that the disaster are more likely to survive the disaster and even, in some cases, benefit from it. With respect to business, you should periodically conduct a risk assessment.
Many business owners suffer from a normalcy bias with respect to their business. Even though events that will affect their business are unfolding before their eyes, they have a bias that blinds them to these events.
How is your normalcy bias affecting your view of your business?
