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3 Mental Blind Spots That Could Explain Why Adidas Waited To Drop Ye

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“Adidas will not tolerate anti-Semitism and any other form of hate speech…the company has made the decision to immediately end its partnership with Ye,” the newspaper said on Oct. 25. press release. That statement expresses a principled and admirable stance against the anti-Semitism of the rapper formerly known as Kanye West after his antisemitic tweet on October 10 that he would go “death con 3 on JEWISH PEOPLE”.

Yet Adidas waited much, much longer than… Other companies who cut ties with Ye. Even Ye’s own talent agency dropped him for Adidas. In fact, Adidas delayed so long that Ye taunted them with his October 16 appearance on the Drink Champs podcast, saying “I can say anti-Semitic things, and Adidas can’t drop me. Now what? Now what?”

Related: ‘Unacceptable, hateful and dangerous’: Adidas, corporate rift, athletes dropping Ye-related brands as rapper loses billionaire status

Adidas was under particular pressure to drop Ye because of his dark past. A German company Founded by a former member from the Nazi Party, Adidas had a particularly strong reason for dropping Ye earlier than other companies. Adidas Faced mounting pressure of the Anti-Defamation League and other organizations to drop Ye given his Nazi past. A Change.org petition The campaign, set up by the Anti-Semitism Campaign, which urged Adidas to cut ties with Ye, had collected 169,100 signatures by October 25.

Still, Adidas refused to drop Ye until all the other companies dropped it. Rather than get ahead of the issue and immediately drop Ye after his anti-Semitic tweet on October 10, or even his mockery of Adidas on October 16, the company had to be shamed and pressured into cutting ties with Ye. As a result, Adidas has seriously damaged its brand and damaged its reputation with anyone who opposes anti-Semitism.

What explains the poor decision-making by the Adidas leadership? It is a classic case of the ostrich effect: A dangerous error of judgment in which our minds refuse to recognize negative information about reality. It is named after the mythical concept that ostriches bury their heads in the sand at a sign of danger. The ostrich effect is a type of cognitive bias, one of many mental blind spots that influence decision-making in all areas of life, from the future of work to mental fitness.

The leadership of Adidas bury its head in the sand. It refused to acknowledge the growing damage to its brand from Ye’s anti-Semitism, as well as his past bad behavior, such as having wearing models “White Lives Matter” T-shirts in early October.

Such denial in professional settings is more common than you might think. A four-year study of 286 organizations that fired their CEOs, found that 23% were fired for denying reality, meaning they refused to acknowledge negative facts about their organization. Other Research shows that professionals at all levels suffer from a tendency to deny inconvenient facts.

Adidas’s denial likely stems from the cognitive bias known as the sunk cost fallacy. According to Adidas’ pronunciation, the termination of the contract is expected to “have a short-term negative impact of up to €250 million on the company’s net income in 2022, given the high seasonality of the fourth quarter.” Presumably, by 2023, the impact will be much greater, at least well over half a billion.

Related: Facebook to Ban Holocaust Denial, Citing Rise in Anti-Semitism

The collaboration with Ye had a Long history since 2013 when the company moved its brand away from rival Nike. In 2016, Adidas expanded its relationship with the rapper, calling it “the most important collaboration ever between a non-athlete and an athletic brand.”

In other words, Adidas has invested a lot of money and reputation in its relationship with Ye. That kind of investment makes our minds feel strongly attached to what we put those resources into, throwing good money after bad.

You often see this happen with large projects that turn out badly, such as Meta’s Metaverse project. Several high-profile industry figures recently criticized The efforts of Mark Zuckerberg. That includes Palmer Luckey, the founder of the VR headset startup Oculus, which Meta acquired in 2014 for $2 billion. Luckey said “I don’t think it’s a good product” about Horizon Worlds, Meta’s main metaverse product. He called it a ‘project car’, a luxury car that the owner spends a lot of money on as a hobby. So far, Facebook’s shift to building the metaverse has been costly, with the company losing $10 billion last year and Wall Street analysts predicting it will lose more than $10 billion again this year.

Likewise, you see sunk costs in key relationships. That can range from marriages that lasted much longer than necessary to branded partnerships like the one between Adidas and Ye.

The last cognitive bias that is relevant here is called hyperbolic discounts. This term describes our brain’s focus on short-term, highly visible results, rather than much more important and less visible long-term results. Adidas didn’t want to deal with the near-term financial blow by cutting ties with Ye. However, Adidas failed to give sufficient weight to the long-term damage to its brand by failing to do so.

Short-term financial damage is very visible and painful, while long-term brand damage is much less visible and less painful. But realistically, such brand damage is much more important to adidas’ long-term success.

In my advice, I’ve seen many executives struggle with the same three mental blind spots when faced with top performers who engage in bad behavior ranging from rudeness to sexual harassment and discrimination. Leaders deny it happened because they invested so much in the top performer, be it a top salesperson or a top data scientist, and they don’t consider the long-term impact on organizational culture and employee morale.

In fact, it’s easy for anyone to fall for these three cognitive biases when someone you appreciate is behaving badly. Fortunately, forewarned is for two: if you know these three mental blind spots, you can look out for these problems in your own professional and personal life.

Shreya has been with australiabusinessblog.com for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider australiabusinessblog.com, Shreya seeks to understand an audience before creating memorable, persuasive copy.

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