Perception Equation

Perhaps one of the simplest concepts that I have found effective in many phases of my business and personal lives is a simple equation that tries to describe the relationship between perception, reality, and communication.

The first place I remember hearing about this elegant relationship was when I was taking a class at Stanford Business School on Building Market Focused Organizations taught by Dr. Lynn Phillips. Here it was employed mostly on how to relate to customers but the concept is easily extensible to a myriad of purposes. In fact, walking around a building in my organization one might see the equation below on the whiteboard in several offices or conference rooms, written down by employees to maintain focus.

The equation is simply:

Perception = Reality + Communication

Perception:   The resulting collective view or impression that a person or group has about a topic of interest.
Reality:   The actual truth about the topic of interest.
Communication:   The collective information flow to that person or group about a topic of interest.

Basically, it states that person’s (or group of persons) collective impression or understanding on a subject will be influenced by a combination of the reality (or truth) about the subject and what is communicated to that person about that subject.

In many cases, we want to manage one’s perception or at least drive toward getting the desired perception on a topic. According to the equation, this means creating the actual reality about the topic in combination with communication.

If we want someone to have a certain perception and the reality is not consistent with that perception, then ultimately that person will learn the truth no matter how effectively we try to communicate otherwise. For example, no matter how good a product’s advertising, if it doesn’t do what we say it does, the end user will ultimately discover it. Advertising and marketing cannot compensate for product or service flaws.

On the other hand, if we create the reality we want to the person to perceive, and, if we don’t effectively communicate it, the person will never perceive the reality. It’s not unlike the parable about a tree falling the woods. If no one tells us it happened, and we didn’t hear it for ourselves, it is unlikely we will know that a tree fell.

Having a reality that meets or exceeds the expectations of the person in which we want the positive impression will not be successful by itself unless we work to develop a communication plan. This works with any stakeholder and even within family units.

The following anecdotes are illustrative of the concept:

Anecdote 1 — Registration Line at University

Anecdote 2 — Parking at a University

It is quite common for me write down this equation on the whiteboard in conference rooms during meetings with teams.  When someone makes a statement, for illustrative purposes, “The customers believe that the product is too noisy!”

I refer to the equation and ask what evidence do we have that it’s really their perception?  If we agree that is their perception and we want to change it, we need to go back to the equation.  If we want to change our customer’s perception, we must decide what combination of reality and communication must we change to ultimately get the customer to maintain the perception we want.


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[…] Interestingly, this also illustrates the need for setting expectations. Previously expectations were too high and not sustainable on a modern campus with outstanding facilities for students. A good compromise was needed that would be acceptable to students and faculty.  So setting a standard of excellence, five minutes to find a campus parking slot and ten minutes to walk to class, needed to be communicated.  Secondly, just solving a problem doesn’t fix the perception.  A communication plan is required.  See the Perception Equation. […]