Foresight is also 20/20
How our biases can blind us from reality
If you worked in the Philippines for a company allowed to operate in full capacity during the height of the pandemic, you most probably saw an increase in revenue and transactions during 2020 and 2021 brought about by this unprecedented phenomenon — a black swan of events.
Like most companies, you perhaps made the mistake of attributing this sudden growth to random initiatives and/or campaigns you did during those months. I’m not saying they didn’t produce results or anything but we’ve all likely overestimated their impact and disregarded the fact that we were all enjoying an unfair advantage driven mainly by COVID-19 restrictions.
However, by the second quarter of 2022, you’d most likely experienced a steep decline due to the fact that most restrictions have been lifted. At the same time, the Department of Health began shifting toward what we now know as the endemic phase of COVID-19.
To add to that, on September of 2022, an executive order was signed allowing voluntary wearing of face masks in outdoor settings further suggesting the country’s return to normalcy.
Now if you’ve benefitted from COVID yet didn’t do anything to prepare for when the market eventually corrected itself (it always does), then you’re most likely one of the companies in a state of panic right now trying to figure out what the hell is going on and associating the dip to some arbitrary event in the timeline.
As companies scramble, some are taking extreme measures to to address the decline. Most ran discounts. Some decided to pivot way late into the year. One company did a round of layoffs.
It would’ve been naive to think COVID wouldn’t end and base one’s trajectory solely on the upward trend aided by the restrictions; more so overreact once revenue and transactions start to normalize. One thing to look out for is whether your revenue went up from Q1 of 2020 (right before COVID was recognized as a pandemic in the country) and say Q3 of 2022 (for reasons stated above). If it did, then you should be alright.
Hockey stick graphs always make for an encouraging narrative and gives everyone a good feeling. It provides a goal — a northstar — for everyone to set their eyes on. But when random events like COVID happen, it needs to be taken into account when charting these graphs. Business wasn’t slowing down, it was just regressing to its means.
It’s a good reminder to be careful when looking at data and avoid falling into the trap of confirmation bias — seeing only what we want to see — and it’s always a good practice to question our assumptions every now and then instead of readily giving into our prejudices and heuristics.
