Tell Me How This Story Ends
How will the pandemic mark individual psychology and impact human behavior?
This week I am joined by my friend and behavioral finance mastermind, Neil Bage, to bring to you our perspective on the potential after-effects of pandemic stress.
If living in a global pandemic was a psychological study, it would have never been approved by an institutional review board. The risk of harm or injury to participants would have been too high. I doubt anyone would have volunteered to participate, anyway. There is no preexisting body of research that we can turn to for guidance to determine best practices to mitigate or predict the myriad of potentially negative impacts of the crisis. No one was handed a playbook for how to be a human in a pandemic.
For twelve short and long months, the world has stood by, shocked. People are rocked by grief as the coronavirus death toll has continued to climb. We've witnessed widespread job loss. Established businesses continue to board up shop fronts. Professionals had to adjust to working remotely from their kitchen table. Seated next to them sat their children trying to learn through screens. Standing alone, all of these macro- and micro- shifts are hard. In a short span of time, these stressors have been superimposed one atop of another. Graver still is the ever-present reminder of our own mortality.
The definition of trauma involves exposure to actual or threatened death or injury. Exposure can be direct, through learning a relative/close friend was exposed to threat, or by indirect exposure to aversive details of the event. We've experienced a collective global trauma.
The pandemic has fractured psyches and revealed multiple facets of pre-existing frailty: physical, economic, and relational. Strong, confident, gregarious people became quiet, pensive shadows of their former selves. Their live narrowed. They existed in perpetual fear that their time on earth will be cut short by an invisible threat. Intelligent individuals crawled inside themselves, turning to reclusive living, wiping down anything within their reach. People tried to create a sense of control where little has existed. They are deflated, drained, and defeated.
When people experience trauma, they respond in different ways. Common reactions to trauma include hypervigilance and avoidance. For some, lived experience of the last year will converge with risk and impact future decision-making. A subset of individuals may exhibit elevated caution for a prolonged period of time. Conversely, others respond to trauma by engaging in high-risk, sensation-seeking behaviour. At times, survivors are compelled to take actions that are desperate attempts to reorganize a fractured sense of self. Some choices people make after trauma are attempts to medicate and numb pain.
Will the pandemic impact a person's risk tolerance? Many experts claim it won't. Given the trials of the last year, this is a timely and valid question. The answer, however, like any scientific-based question on human behaviour, is not simple or straightforward. Explanations of human behaviour seldom are.
Studies on behavioral risk tolerance abound. To date, research has focused on the stability of psychometric tests and examined how key life events (birth of a child, job loss, etc.) impact risk tolerance. Absent from the current body of inquiry is an empirical study investigating the short- and long-term impact of a global pandemic on risk tolerance. As it relates to risk-taking, it's impossible to forecast exactly what the emotional and behavioural after-effects of the pandemic will be.
We can confidently anticipate post-traumatic growth in some individuals and industries. We can expect to see some dark downsides to the conditions and constraints people have been confined to for a prolonged period of time – socially, physically, and in their own minds.
Peoples' responses to and recovery from trauma have a great deal with the psychological resources they have in reserve going into an adverse event. Individuals with a robust fund of coping skills, social support, and high levels of emotional intelligence often experience trauma, have normative stress reactions, and go on to perform at prior levels of functioning. Responses to trauma become problematic when there is a protracted failure to recover and rebound. When behaviour and a brain are stuck in a response pattern that is adaptive only in old contexts of threat, a person's life shrinks quickly.
Swiss psychiatrist and psychoanalyst Carl Jung wrote: "We deem those happy who, from the experience of life, have learnt to bear its ills without being overcome by them." What separates those who are broken by hardship and those who are transformed by trauma? Resilience. Resilience isn't about "bouncing back." It is about becoming--something new, something stronger.
We stand on the precipice of a 'belts and braces' moment. Get on the front foot and engage with people in your world to see how they are coping (or not). Engage in meaningful discussions to ascertain the impact that Covid has had on their lives. Seek to understand their outlook and see the devastation of the last year from their unique vantage point.
New challenges and stressors will be a part of the transition to creating a different normal. It will behoove people to temper expectations about what lies ahead related to timing, recovery, internal reactions, and engagement with others.
Coronavirus has created pain and opportunity. If we fail to use this watershed chance to reflect, we'll never learn. Let's not fall into the trap of hindsight bias and mistakenly assume we somehow knew how this story ends all along.
We don’t. Nobody does.
To a certain extent, we do get to author the rest of the script of this hellacious story. How? Use agency. Through word and deed, intentionally come alongside the people around you. Listen. Ask thoughtful questions that probe beyond the shallow, safe surface of polite conversation.
It's time to reflect, recalibrate, and forge ahead.
The salience of the pandemic will eventually start to fade. Mark now the lessons you want to hold on to. Let your hard serve as the stepping stone to better.
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If there is someone in your life who needs things like better sleep, improved relationships, managing stress, and becoming more self-aware invite them to the inbox party. The invitation may be the gentle nudge needed to help improve their EQ.