Perception in Business

Perception in Business

Perception is reality! Perception is not always reality! Perception is everything! We all have heard these statements, or some variation of them, at one time or another. Does perception play a role in business? If so, what is its role, how is it exercised, what is its impact?
Perception is a major and old area of study in the field of Psychology. Perception is how we organize, understand and interpret the world around us: what we see, what we hear, what we feel, what we smell, and what we taste. Dependent upon the business you are in, all five senses may play a role or perhaps just one or two. There is the belief that perception alters and may distort our vision of reality, perhaps masking the truth. If people come to a situation with a preconceived notion of what should be, they might tend to see what they expect, not what is there.  So, we tend to bring to a given situation an inherent bias that may color the reality. The point of note here is that in viewing a business situation you need to see what is there, not what you expect to be there based upon previous experience, training, or expectations. That may be difficult to do.
Without a doubt, perception is a complex phenomenon influenced by personal values and/or beliefs, experience, attitude, education and training.  An individual’s level of perception also may have some hereditary basis. Perception operates in all aspects of our life: our personal life; our social life; and, most certainly, our business life.
Specifically, what role is played by perception in business? If one accepts and understands that developing a vision, or predicting where a market will develop, or identifying major trends that impact the basic fabric of society, or determining how best to take advantage of an opportunity, is an essential part of running any business, then you accept perception as a basic ingredient in those processes. Sometimes, that hunch or gut feeling one gets is a form of perception. Remember that perception is how we see things and how we arrange and interpret those things to come to a conclusion or to make a decision.  Consequently, perception is a principal ingredient in the management of a business and it can be a powerful tool in business, if properly recognized and applied.
Perception in business is a reality. It is an essential part of one’s package of business skills. It is a core competency. To deny these statements is to deny a basic attribute of entrepreneurship, leadership and decision-making. Perception is basic and integral to how we see and assess opportunities and how we will pursue opportunities. It is how we view our business environment and the elements that make up that environment both internal (staff, resources, equipment, services, products) and external (the market, the customer/client, the competition); and, it is much more.  It is also the identification and understanding of major trends, especially long-term trends, that affect the basic structure of society (aging population, empty-nesters, women returning en masse to the workforce, decline in manufacturing jobs and the increase in service sector jobs, global economics, growth in the health care industry, information technology and the trend to inter-company collaboration).
Peter Drucker, business management sage of the 20th Century, considered perceptionthe skill essential to making bold, creative decisions. In Managing in a Time of Great Change, he said “Today perceptiveness is more important than analysis. In the new society of organizations, you need to be able to recognize patterns to see what is there rather than what you expect to see.” (Drucker, April 1998, p.9). (In speaking of a new society of organizations, Drucker was referring to the “information society” that we have become and how organizations integrate “…specialized knowledges into one common task.”)
Therein lays the key benefit to applying or invoking the right perception. There also is the core problem. We need to see what is there, not what we expect to see. How do we do that? Here are a few suggestions.
For Drucker, eliminating the ego in decision-making is the major component. The ego is personal baggage based on previous knowledge, previous experience and expectations. It may not be all bad, but, then again, it may. It colors one’s view and may even distort the image that you ought to be seeing.  Clearing one’s mind and taking, as much as possible, an open and simple view of the business environment, to see it as it is and not as one wants it to be is the objective.  The results of eliminating ego, hopefully, are a fresh view and through that fresh view the identification of new business opportunities.
Related to eliminating ego is this: assume nothing. This has been a mainstay in this author’s business philosophy for years and it has served well. Assumptions must fit reality. That means having a good grasp on your business environment: the existing situation, the opportunities for growth, what the competition is doing what the client wants (always a moving target), to mention a few.  So, assume nothing; get the facts; check and re-check and check again.
Acquire a clear and working knowledge of those long-term trends we spoke of in Part One of this Article. These are the trends or shifts in society, existing and emerging, which change the basic structure of society, including the business sector. These long-term trends significantly affect the business decisions we take, or ought to take.
Earlier we quoted Peter Drucker as saying “Today perceptiveness is mor e important than analysis.”  That does not mean that analysis is not important. One may ignore analysis at considerable risk to the business. It means that the perception of an opportunity probably comes first, and should come first, but should be followed with complete research (data gathering) to verify, and to bring substance to the perception or, perhaps, to help modify the perception. This is a reiterative process.
Concerning analysis, there is potential shortcoming to be recognized and avoided. There is a tendency, because of the volume of information that may be available, to select only that information that is necessary to come to a decision. The problem is obvious: one may select the wrong set of information or an incomplete set of information and arrive at an erroneous or at least a distorted conclusion. It is similar to the perception problem (seeing what you expect to see not what is really there). In this age of computers, rapid collection and rapid analysis of data should eliminate this shortcoming.
Perception has always been an important part of the business management decision-making process and will always remain so. If Drucker is right, perception, appropriately understood and applied, is a key business skill and is the leading edge in recognizing and developing business opportunities.

Article By Rick Draker
Chief Operating Officer
Resources for Excellence Inc.
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