Even though we live in a technology-driven data-saturated world, emotion still plays a huge role in how businesses are managed and how economies function. When business leaders feel buoyant about the future, they are more likely to launch new products or expand into new markets. When they are hopeful about the outlook for business, they are more likely to hire staff, make capital expenditures to replace outdated equipment and invest in new technology. And most economists agree that the degree of optimism that consumers feel in regards to the economy and their personal financial situations is practically a self-fulfilling prophecy. When people feel strong, positive, secure and sure – whether those feelings are based on facts and concrete data or not – they are more likely to spend, hire and take calculated risks. The result of all that confidence is that it usually fuels innovation and economic growth which then fuels more optimism. It is a virtuous cycle.
If all those good feelings serve as fuel for expansion and progress which in turn generates more confidence, then what causes recessions and contractions? What causes the pendulum to swing from optimism to pessimism, breaking the virtuous cycle? One big contributor is fear. It is the curse word of the business world. Fear plays a big role in causing stock markets to fluctuate wildly. Fear often makes employers hold back on hiring even when they know they are short-staffed. Fear causes business owners hold on to old equipment and antiquated systems rather than invest in the tools needed to maximize productivity and increase efficiency. Fear often works as a paralyzing agent undermining businesses and economies. So how should leaders and execs deal with fear in business? What do we even know about how fear affects business?
How to Deal with F-E-A-R
Here is what researchers and industrial psychologists know about fear.
1. It is normal to fear.
Fear is the human alarm system’s way to alert us when danger looms. To fear is normal. In business, the most typical fear is a fear of the unknown. And, in business, there are always a myriad of factors that are unknown. There is no way to know how the outcome of an election, for example, might affect markets and regulations. There is no way to know how legislation might affect business decisions or the stock prices. There is no way to know how the Fed might react to market conditions that could make it either more or less expensive to borrow money. There is no way to know if the price of raw goods and materials will go up or down. And there is certainly no way to know how new innovations – that may not even exist yet – might affect businesses down the road. The list of unknowns in business goes on and on and varies by industry and sector. But if business leaders and managers allow all the unknowns to paralyze them into inaction, all business would end and the economy would crumble. So obviously, business people must overcome – or at least manage – their fear of the unknown.
2. Accurate predictions reduce fears. Faulty predictions augment fears.
There’s a reason a person cannot scare himself. It’s because there’s no element of surprise. The human brain knows exactly what it is about to do. People are skilled at making predictions from past experiences. The scariest moments come when predictions do not match experiences. An incorrect prediction can be profoundly disorienting at a visceral level.
Case in point. For decades, real estate prices went up incrementally on average about 7% a year. There were ebbs and flows, but mostly real estate prices increased. Then, during the real estate boom of 2000 to 2007, real estate prices suddenly soared. Prices were increasing at a pace not seen before on such a scale. Some predicted it would continue indefinitely and many acted on those predictions. Investors purchased property after property, regardless of the price. Homeowners bought homes they couldn’t afford betting that prices would increase. Then, in 2008, the bottom fell out of the economy, recession hit and the real estate market imploded. Fortunes were lost. Foreclosures soared. Bankruptcies skyrocketed. The faulty predictions caused shock waves of fear to ripple through the nation. It took many years for the fear to subside and for banks to begin lending again.
3. Fear does not rise – nor vanish – based on empirical data or statistical evidence.
No amount of data is going to change how people feel about things they fear. That’s because fear is not controlled by the rational mind. Fear is an emotion, and it is instinctive.
Stats on skydiving resoundingly affirm that it is a safe activity. In 2015, there were 3 fatalities and 910 injuries in the U.S. from the roughly 3,100,000 skydiving jumps. That’s roughly .007 fatalities. The average person is more likely to die from a car accident, drowning, electrocution, asteroid impact, or a lightning strike. And yet, none of these statistics will make jumping out of an airplane 10,000 feet in the air seem “safe” or “wise.” Nor do statistics about the number of people who die from lung cancer caused by smoking make smokers quit smoking.
4. Incidents that provoke fear can be mitigated.
The impact of events that provoke fear can be lessened. According to research presented at the 2012 British Psychology Society Annual Conference by researchers Lalitha Iyadurai and Ella James of Oxford University, a seemingly trivial task — like playing a particular video game — can lessen flashbacks and other psychological symptoms following a traumatic, fear-provoking event. When played immediately following exposure to trauma, the Tetris game had a protective effect in reducing flashbacks and stress brought on by fear. It is believed that the visual-spatial demands of Tetris disrupt the formation of the mental imagery involved in flashbacks. Researchers also believe that any game involving that kind of manipulation can work, and it doesn’t have to be a video game. It can be old-school building blocks or jigsaw puzzles.
What does this means for business people who are dealing with the fears generated by the jarring events or wild swings in the stock market? Rather than allow fear to control the situation, it might pay to step back and do something that involves visual-spatial focus, and let the fear pass. Once the fear has lessened, then a business leader or investor can make rational decisions that are less distorted by emotion.
5. Screaming helps release fear.
When fearful, screaming loudly can help. While it’s hard to let loose with a scream in the office, doing so in the right context can be cathartic. That is why yelling when working out or playing a sport is therapeutic. It takes a lot of energy and focus to not scream when something is scary. Thrilling or physical activities provide a safe space to give the internal impulse-control police a break. It is particularly helpful to those who think being scared is a sign of weakness.
This can be applied to the way a company provides support to angry customers. Imagine how much better it would be if frustrated or upset customers had a safe forum for screaming and venting their frustration before getting on the phone or in the chatroom with a customer service rep?
6. Visualization and self-talk can reduce fear.
Visualization is a relaxation technique in which a person imagines himself in pleasant scenarios or scenes in order to combat fear. Visualization is a powerful tool because the brain’s response to imagined scenarios is often on par to its response to real life success and failure. There are two basic ways to use visualization to overcome fear. The person can visualize himself overcoming the fear, which can eventually translate to real life success. And/or the person can visualize a calming scenario in moments of intense fear.
To overcome a fear, it can be helpful to make a point of habitually visualizing oneself succeeding. But it is important to keep the scenario realistic. The person should imagine himself overcoming his fear in a manner that could actually happen. For example, a person who is afraid to apply for a promotion but very much wants to advance and grow his career, should imagine things going reasonably well, rather than imagining himself getting promoted to CEO, which is probably unlikely.. He could picture himself applying for a position that is the next rung up the ladder. He could then imagine the interview going well and the interviewers being impressed with his past accomplishments. He can see himself not stumbling over words and answering questions smoothly without hesitation.
7. Fear can be harnessed for good.
Fear is meant to help alert us of danger. But sometimes fears serve no purpose, such as fear of future unknowns like how future legislation might affect business or whether the price of material goods will rise. Fear of failure is also pretty useless since there is no way to know if a person will or won’t succeed unless he tries.
But sometimes fear can be useful. Fear can be harnessed as a useful and powerful tool for bringing people together. That’s because people who share a frightening or intense experience are more closely bonded. Indeed, Arthur Aron, a researcher at Stony Brook University, found that relationships of all types – from families and couples to colleagues and business associates – tend to improve and grow closer after sharing frightening or intensely challenging situations together. Perhaps that is why companies will take teams out to participate in Paintball Wars and Blindfold Driving and other frightening activities? One British firm, The Teambuilding Company, offers a whole slew of intense – and even really scary — indoor and outdoor events. And for good reason. Additional research by Garry Shteynberg of the University of Tennessee shows that feelings intensify when you experience them simultaneously with others you know. Imagine how a company’s next function might improve — and the bond among colleagues might grow — if the team replaced a company BBQ or luncheon with roller coasters.
Fear is a powerful, typically irrational and almost always useless emotion that can hurt business if not controlled. A business owner cannot calm market fears or control how collective fear affects market trends. What execs and managers can do is simply deal with their own fears and minimize the influence that irrational fears have on business decisions. By using techniques that help ease or release fear, each business professional can push baseless fears aside in order to make the bold decisions and take calculated risks that will help a company grow and prosper. As the late Dr. Martin Luther King, Jr. once said, “We must build dykes of courage to hold back the flood of fear.”
Quote of the Week
“I’ve learned that fear limits you and your vision. It serves as blinders to what may be just a few steps down the road for you. The journey is valuable, but believing in your talents, your abilities, and your self-worth can empower you to walk down an even brighter path. Transforming fear into freedom – how great is that?” Soledad O’Brien
© 2017, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.