Changes in Perception: facts that cannot be quantified

John W Lewis's picture
Chat Date: 
Thu, Jan 28, 2016

This is the second in our series of seven discussions on the sources of opportunities for innovation. These are based on Peter Drucker's book, "Innovation and Entrepreneurship".

Change enables innovation

The general basis for Peter Drucker's description of innovation in his book "Innovation and Entrepreneurship", which underpins this series, is that opportunities arise when changes occur in the environment in which people and organisations are operating.

When conditions remain unchanged, the approaches, processes, products, etc. which have been effective in the past remain effective. But, when conditions change, there are opportunities to innovate by finding different approaches, processes, products, etc. which are more effective under the changed conditions.

On that basis, he identified seven specific areas in which changes can occur, he described these areas and organized them into a general sequence based on their reliability and predictability as sources of opportunities for innovation.

Perception

Changes are perception occur when the situation has not changed, but our interpreation of the situation changes. In a sense, the quantifiable facts are unchanged, but the context in which we quantify them has changed.

The classic example that Drucker uses is the distinction between seeing a glass as half full or half empty. The actual situation is the same to observers who arrive at the two different interpretations. Maybe there are some other aspects too, that Drucker does not discuss. For example, the dynamic situation: although the amount of water (if that's what it is!) in the glass is the same, but one perceives it differently depending on whether we are filling the glass or emptying it.

In a different sense, the amount of water might remain the same, but our perception of the size of the glass might change; or the glass might still be half full, but the glass has shrunk, so there actually is less water! All of these are potentially different scenarios in which different people come to different interprations on the facts in this case.

Facts

Drucker describes numerous example of areas in which facts have historically been interpreteed differnly, leading to innovations. These include: health, eating habits, politics, differences in the role of the sexes in the workploace, societal class differences, and differences in segmentation of markets.

In each of these areas, he describes changes in perception that are based on differences of mood, but not ncessarerily of the situational facts. Nevertheless, they lead to real opportunities that were exploited resulting the value being generated. Drucker wrote:

"Whether sociologists or economists can explain the perceptional phenomenon is irrelevant. It remains a fact. Very often if cannot be quantifited; or rather, but the time it can be quantified, it is too late to serve as an opportunity for innovation. But it is not exotic or intangible. It is concrete: it can be defined, tested and above all exploited."

Timing

His third major point about changes in perception relates to timing.

He describe some tricky aspects of timing. On the one hand, he wrote:

"Yet there is nothing more dangerous than to be premature in exploiting a chagen in perception."

And he also wrote:

"And yet, timing is of the essence. … One has to be first. But precisely because it is so uncertain whether a change in perception is a fad or permanent, and what the consequences really are, perception-based innovation has to start small and be very specific."

So there is a fine line there in getting the timing right.

As an example, consider the messy history of General Motors and electric cars. They launched the EV1 to great fanfare. Then they got cold feet, withdraw all models from the market, incurring the wrath of their customers. Then they had a period when they were convinced that electric cars were at least 10 years away. Then, when Tesla showed what could be done, they eventually launched the hybrid Volt and now the electric Bolt. They have been too early and then too late, but never really on time!

Questions

Let's discuss changes in perception as the source of opportunities for innovation during #innochat on January 28th, 2016 at 12pm Eastern time, based on the following questions:

  1. What kinds of changes in perception might present opportunities to innovate?
  2. Whose perceptions are important to our assessment of changes in the environment?
  3. Where do we look for evidence of changes in perception?
  4. How do we detect these changes in perception?
  5. How do we distinguish between fads and permanent changes in perception?

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