The term “Ostrich Effect” was first coined by Israeli economists Dan Galai and Orly Sade in a 2006 research paper that explored investor behavior. Their study provided empirical evidence for the tendency of investors to avoid confronting their financial portfolios during market downturns.
Their work has been influential in the field of behavioral finance and has led to the term being adopted in other disciplines like psychology, healthcare, and organizational behavior.
On software teams, the Ostrich Effect can have particularly negative repercussions.
When teams make data-driven decisions, the Ostrich Effect can lead us to focus solely on metrics that paint a rosy picture, ignoring numbers that suggest a feature or product is underperforming. This skewed perspective can result in poor decision-making, such as allocating resources to less impactful areas.
On a broader level, the Ostrich Effect can manifest in team dynamics. We might avoid discussing conflicts, performance issues, or challenges, leading to a toxic work environment. This avoidance can result in unresolved issues that could potentially derail a project, lead to high turnover rates, or hurt the overall performance of the team.
🎯 Here are some key takeaways:
Maintain transparent communication
Open dialogue with the team about challenges can help manage expectations and build trust so that discussing negative issues is easier.
Don't delay addressing technical issues
Act promptly on technical debt or other issues to prevent it from becoming an overwhelming problem later. Problems are often much easier to discuss earlier than waiting too long.
Focus on the bigger picture
It can be hard to talk about negative things, but understanding the context and where the team is or where the team is headed might make the conversations easier to have.
Cultivate a psychologically safe environment
Creating an environment where the team feels safe to discuss bad news will keep team members from avoiding those discussions.
Recognize your own biases
Being aware of the Ostrich Effect and its influence on your decision-making can help you take steps to counteract it.
📚 Keep exploring
To dive deeper into the topic of attentional bias and its implications for decision-making, check out these resources:
