SuttaCentral
How do people interpret this passage? 
This is like a person whose turban is on fire. The person will
arouse a superior effort in order to extinguish it completely and
be diligent in trying to get it extinguished. In the same way … one
should arouse superior diligence and be willing to make an effort
to train in collected mindfulness.
The simile of the head being on fire is in quite a few suttas. I’m not sure which one you are referring to above. However, SN56.34 is pretty clear with what this means with regard to right effort.
“Sir, if our clothes or head were on fire, we’d apply extraordinary enthusiasm, effort, zeal, vigor, perseverance, mindfulness, and situational awareness in order to extinguish it.”
The Buddha is encouraging us to bring the above attitudes to extinguishing our internal fires.
ETA all ‘head on fire’ suttas