Oh my, Omicron! Here we go again? Unfortunately, Omicron isn’t the latest addition to the Transformers, robots in disguise lineup. It is another COVID variant surfacing which nixes any hopes of near-term normalcy while whipping up worry like a windstorm does dust. Within hours of making the news, Omicron had worldwide impact. The price of oil swung wildly to the downside, the biggest drop since early days of COVID. The volatility (or fear) index spiked and drove decisions resulting in other financial markets diving down reflecting investor desire to scurry to the sidelines and scramble to safety. The market turmoil, thankfully, was smaller than that which roiled the markets back in March of 2020 where the price of oil dropped by 50% over the course of a couple of weeks and major stock indices fell more than 30% in just over a month. Canadian Fund Manager, Eric Nuttall told an audience earlier this week that, “When the panic and fear become palpable, the goal of an investor is to put emotions aside.” Sound advice, I’m sure, but easier said than done. During the original angst, market panic poured into shops as shelves were depleted of essential items. People were scared and their purchases reflected a desire to protect themselves, even if irrational. Plenty of smart people make dumb decisions when driven by fear. The Pandemic panic clouds cognition. We’re dumber where we feel in danger or desperate. Fear constricts. It narrows our vision.
Maslow’s “Hierarchy of Needs” may help us explain what has and continues to occur which, in turn, may allow us to help manage better. Perhaps you recall seeing a graphic of a pyramid of needs from a high school or university textbook? Maslow’s hierarchy of needs consists of five levels. The five levels are grouped into three types of needs.
The two lowest levels consist of base type of needs. These are our survival needs. First and foremost, we need water, food, shelter, and sleep. Without these we can’t survive. Without these we are preoccupied with nothing other than fulfilling these. The second level of our base needs include security and safety. Once we have food in our bellies and a roof over our head, we then seek psychological and physical safety. Once our basic needs are met, our motivations shift to the next two levels which represent psychological needs. The third level of Maslow’s hierarchy includes relationships which fulfil our need to be loved and to belong. If we’re able to achieve these, we can progress and aspire to esteem needs. These include those of achievement, prestige, and accomplishment. Should we meet with success on this level we can strive towards the highest, fifth level which represent our third type of needs which are those of self-fulfillment. Maslow considers striving to fulfil our highest potential as being self-actualization which is the peak of the hierarchy pyramid.
Maslow’s hierarchy offers a great framework with respect to determining what types of things will drive behavior. We are motivated to pursue levels in order. We start at the bottom and work upwards. Only once the preceding level needs have been met are we able to enjoy the luxury of pursuing the benefits of the level above. We don’t necessarily move through each level linearly. We’re not all at the same stage of the game. Our movement within the pyramid isn’t always a one way, upwards trajectory. Our progression can be static. Alternately, it can be a yo-yo. We can move up, we can move down. We may transition from satisfying our base needs and psychological safety needs to pursuing achievement and prestige. However, something may go sideways and we find ourselves back at a lower level. Just like the game Chutes and Ladders, Maslow’s needs hierarchy offers a steady shift up and down the pyramid. Where we are represents a point in time. It’s not fixed. We move up and down as the conditions in our lives change. There’s no consistent arc on our path. Where we are and our journey along the needs hierarchy is individualized. We may spend decades or much of our life at a given level or we can transition from level to level in short order.
Our reactions to COVID continue to conspire to create uncertainty in our lives. Negative news raises fear levels which likely sends us down the chute clamoring for Maslow’s lower level needs. The reason we seek out a job in the first place is to put food on the table. We need to be able to provide for ourselves and our families. Food and shelter are the initial driver. If we don’t have these, we aren’t thinking of much else. In March 2020 where did our hearts go? Each time a new variant comes up or the media inflames our angst over rising case counts, where do our minds go? For many of us as we fell into the uncertainty of COVID, our first fears focused on whether we would be able to meet our most basic requirements. What if I lose my job? What if my spouse loses theirs? How will we manage? What protection do we have in place to give us some breathing room? Our thoughts went inwards exploring what negative problems we may face. This may continue to be the case now with each new revolution on the merry-go-round of misery.
If our hearts are preoccupied with fears of basic survival, then our minds won’t be capable of being fully focused on the initiatives of our employer. When we’re worried about making ends meet such that we can’t afford essentials like our mortgage or rent, utilities, or food, our minds become consumed with worry about these obligations. If we’re in this position, we’re not able to apply deep thought to the problems and tasks at hand. Even if we’re able to pay our bills, yet we fear that our job may disappear and we have little financial buffer, the same burdens occupy our mind. Our brain bandwidth is focused on the bare necessities as opposed to uncovering and exploiting creative opportunities for our employer. As our base level needs burden us, all of our energies follow. We pay a mental tax when worried about our immediate survival needs. We can’t do creative work. We aren’t as empathetic as we could be. Our ability to absorb and digest complex issues becomes weaker. In the movie, Defending Your Life, humans are referred to as “Little Brains.” The suggestion is that “earthlings” only use 5% of their brains and even this small amount is consumed by fear. Characters in the movie reflect that where we’re consumed with fear, we’re less intelligent than we could be. Defending Your Life helps us see that we’re wasting our lives when controlled by fear. A character notes, “Fear is like a giant fog. It sits on your brain and blocks everything—real feelings, true happiness, real joy.”
All of us have likely been touched through COVID from an economic perspective. Maybe we know people whom have lost their jobs? Perhaps, even someone within our own household? We likely even worried about our own ability to sustain our employment. If we’re out of work, we wonder for how long. Where we are working, we wonder for how long can our employer’s business manage through these difficult times. Maybe we’re worried about our meagre savings being impacted by the twists and turns of the markets? All of this is a distraction which presents a threat to our survival needs. Even where we feel ourselves on solid ground, we may be concerned with the state of employment of some of our loved ones. The position of spouses, family, and friends can all influence our own state of mind. COVID has put the FUD in found and we’ve found ourselves floundering in fear, uncertainty, and doubt. These continue to hang around as we muck our way forward. In fact, as the news seems all too happy to regularly remind us, things seem to be regressing as opposed to progressing. Case rates are rising and news coverage is getting louder again. We don’t have clarity on how this ends or what the next few months will look like. This continues to wear on our hearts and tears at our attention. Our base level fears fostered in March of 2020 are festering yet again.
A Bloomberg article from 2013 details some science related to impoverished thinking. “Put another way, the condition of poverty imposed a mental burden akin to losing 13 IQ points, or comparable to the cognitive difference that’s been observed between chronic alcoholics and normal adults. I’m sure we can all agree that our businesses aren’t bettered when staffed with a frontline full of chronic alcoholics. Eldar Shafir and Sendhil Mullainathan in their book, Scarcity: Why having too little means so much, observe that being poor involves, “coping with not just a shortfall of money, but also with a concurrent shortfall of cognitive resources.” The limited bandwidth created by poverty directly impacts the cognitive control and fluid intelligence that we need for all kinds of everyday tasks. Our ability to think ahead or focus on strategy is reduced where we’re consumed with our immediate needs. Amidst all of the time on Zoom, we’re surrounded with news of continued doom and gloom. Anxiety over bills, food, or other family logistics reduces our ability to pay attention to our job or employer’s needs. As the Snickers commercials from a few years back remind us we’re not our best when we’re hungry. When we’re worrying about our base level needs, our empathy is compromised. When we’re taxed, we’re more prone to mistakes, we’re forgetful, and we have less patience. Our ability to serve customers well, for example, is less. This is only worsened when the distractions in our work from home environment are even more pronounced. Our ability to look out and focus on others is less as our focus is directed internally on the immediacy of our problems.
This seems to apply to businesses as well as individuals. We see those that fear for their survival retreating. When fearful, we step back, doors close, windows shut, we’re painting ourselves into a corner. Our options are less. We don’t see opportunity. We see what we lack. Our ability to creatively contribute is compromised. The Roman historian, Tacitus, gives us “The desire for safety stands against every great and noble enterprise.” Businesses batten down the hatches in the face of the unknown storm. Capital spending stops, investment in training and education dries up, advertising is absent, and expense control becomes a priority focus. Customer service initiatives evaporate as corners are cut in order to save money. The sentiment of scarcity trickles in to all areas of the business leaving its mark on those working within. Creative ideas crumble. New initiatives implode. The future becomes about survival in the present, not planning for improvements. Our prospects are viewed as limited. The time horizon of our conversations shrink from five years, to three years, to the current month.
Wherever we were on Maslow’s hierarchy at the start of 2020 is likely to be different than where we landed once we learned of COVID and we’ve probably bounced up and down several times since. If in a position of leadership, reassurance remains a goal. We can’t overcommunicate. Maslow’s levels can serve to structure our communication. We can go back to the beginning and build our message around base level needs. Recognize that staff may be struggling with the weight of worry, carrying concerns to work and even projecting these on staff or customers. We can help by providing assurance and confidence in our joint financial futures. Help staff know their position is secure. Perhaps, we can consider sharing a bit more financial information about our business than we otherwise might in order to help staff see the stability of our operation even in the current context. Compile your own news to share which paints a more optimistic view of the future. Even with our continued new normal, there are opportunities and areas succeeding. This is absolutely the case within our own industry of insurance. Communicate some wins that have arisen in the past six months. Errors of co-mission are better than errors of omission with respect to communicating. Err on the side of telling too much or repeating yourself to the point of irritating the ears of staff. Help them see that both their role and the organization are on track. Do this only if this is, in fact, the case. We’re looking for honesty and transparency opposed to a distorted view from rose colored glasses. Communicating that both the business and staff are operating from a stable platform will remove a roadblock from their mental capabilities. Moreover, it will help develop confidence satisfying both their base level physical and psychological needs. Communication can then extend from Maslow’s base level to the next by cultivating a sense of belonging. We’re on the same team, working in a common direction. Expressing confidence that your organization has the right people on board and is moving in a positive direction fuels a sense of belonging which speaks to this level of our needs.
Managing our messaging around Maslow’s hierarchy beginning with the base level helps us help others reduce the uncertainty of fear. Doing so allows us to meet people where they are and helps create comfort. They can then focus on constructive actions guided by clearer thinking.