Perception is more important than reality

In his TED Talk ‘’Perspective is everything’’, Rory Sutherland contemplates how there is an imbalance on how we treat creative, emotionally-driven ideas as opposed to how we treat ideas that come from rational, numerical, factual data.

If you are creative, you have to share and convince others of your creative ideas with those more rational than yourself. However, those people who make rational, logical decisions based on data and facts, do now have to seek approval from others, because logic is the answer. In effect we tend to prioritize data-driven, mechanical ideas over psychological ones.

A brilliant example Sutherland uses is Eurostar, who spent in excess of six billion pounds in an effort to reduce the travel time from London to Paris by 40 minutes. For a fraction of this, less than 1% of this enormous amount, you could have put wifi on the trains, which would not have reduced the travel time, but would have in fact made the journey much more enjoyable and useful time for commuters. He goes on to suggest the crazy yet creative and psychological idea of paying all the world’s top male and female models to walk up and down the train handing out free Chateau Pertus to all the passengers and you still would only have invested a tiny fraction of the more logical idea to make the trains faster.

Another genius example of a psychological idea being executed over a logical, mechanical idea that Sutherland discusses is the introduction of the matrix display boards in the London Underground. Instead of investing in more frequent trains, they looked at a solution to reduce passenger frustration by introducing a much cheaper alternative – display boards on every platform that had a countdown clock felt less frustrated by knowing exactly when the train was arriving and how many minutes they had to wait.

The psychological effect of knowing this information made passenger satisfaction increase dramatically. Giving passengers a sense of control over their time was arguably a more effective solution than had they focused their efforts on the enormous investment of making trains more frequent, because the frustration of not knowing how far away your train is and how long you have to wait is less bearable than being informed and in control of your time; “the nature of the wait is not just dependent on it’s numerical quality, it’s duration, but on the level of uncertainty you experience during the wait. Waiting seven minutes for a train with a countdown clock is less frustrating and irritating than waiting four minutes, knuckle biting, going “when is this train going to damn well arrive?”.

When it comes to problem solving, businesses should look at these three things equally; technology, psychology and economics; and seek solutions that sit in the ‘sweet spot’ of satisfying, to some degree, all three of these. Great, trailblazing businesses today, manage to do just this. Google, for example, has a lot of psychological insight at the forefront of its business. Google, Sutherland points out, is as much a psychological success as it is a technological one.

Perception is more important than reality.

Businesses should be aware of the fact that perception is reality. The British postal system spent a huge amount of time and effort going from changing a 98% next day delivery rate to 99%, even though the general perception amongst the market was that most post had a 50-60% next day delivery rate. So what is the point of changing the reality, if the perception remains unchanged? As Sutherland suggests, they would do better to invest in marketing and communicate to their market that they do better than any other country in their delivery times. They should focus on improving their perception of their business services.

Likewise a restaurant producing great quality food, should not overlook the significance of their actual restaurant – the context in which they are selling their produce. Instead of making their food even better, they would do well to focus on making their restaurant décor and service even better to match the quality of the food. This is where Google is successful, not only do they sell great technology but the context in which they sell their products meets a significant psychological aspiration.

Businesses that want to evolve and grow need to base their decisions on human behaviour and work on changing and influencing perceptions. This can make a lot more sense and be a more logical decision than just using reality without the context of psychology.

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