In mathematics there is no difference between ‘The glass is half full’ and ‘The glass is half empty’. But the meaning of these two statements is totally different, and so are their consequences. If general perception changes from seeing the glass as ‘half full’ to seeing it as ‘half empty’, there are major innovative opportunities.
Here are a few examples of such changes in perception and of the innovative opportunities they opened up – in business, in politics, in education, and elsewhere.
1. All factual evidence shows that the last twenty years, the years since the early 1960s, have been years of unprecedented advance and improvement in the health of Americans. Whether we look at mortality rates for newborn babies or survival rates for the very old, at occurrence of cancers (other than lung cancer) or cure rates for cancer, and so on, all indicators of physical health and functioning have been moving upward at a good clip. And yet the nation is gripped by collective hypochondria. Never before has there been so much concern with health, and so much fear. Suddenly everything seems to cause cancer or degenerative heart disease or premature loss of memory. The glass is clearly ‘half empty’. What we see now are not the great improvements in health and functioning, but that we are as far away from immortality as ever before and have made no progress toward it. In fact, it can be argued that if there is any real deterioration in American health during the last twenty years it lies precisely in the extreme concern with health and fitness, and the obsession with getting old, with losing fitness, with degenerating into long-term illness or senility. Twenty-five years ago, even minor improvements in the nation’s health were seen as major steps forward. Now, even major improvements are barely paid attention to.
Whatever the causes for this change in perception, it has created substantial innovative opportunities. It created, for instance, a market for new health-care magazines: one of them, American Health, reached a circulation of a million within two years. It created the opportunity for a substantial number of new and innovative businesses to exploit the fear of traditional foods causing irreparable damage. A firm in Boulder, Colorado, named Celestial Seasonings was started by one of the ‘flower children’ of the late sixties picking herbs in the mountains, packaging them, and peddling them on the street. Fifteen years later, Celestial Seasonings was taking in several hundred million dollars in sales each year and was sold for more than $20 million to a very large food-processing company. And there are highly profitable chains of health-food stores. Jogging equipment has also become big business, and the fastest-growing new business in 1983 in the United States was a company making indoor exercise equipment.
2. Traditionally, the way people feed themselves was very largely a matter of income group and class. Ordinary people ‘ate’; the rich ‘dined’. This perception has changed within the last twenty years. Now the same people both ‘eat’ and ‘dine’. One trend is towards ‘feeding’, which means getting down the necessary means of sustenance, in the easiest and simplest possible way: convenience foods, TV dinners, McDonald’s hamburgers or Kentucky Fried Chicken, and so on. But then the same consumers have also become gourmet cooks. TV programmes on gourmet cooking are highly popular and achieve high ratings; gourmet cookbooks have become mass-market best-sellers; whole new chains of gourmet food stores have opened. Finally, traditional supermarkets, while doing 90 per cent of their business in foods for ‘feeding’, have opened ‘gourmet boutiques’ which in many cases are far more profitable than their ordinary processed-food business. This new perception is by no means confined to the United States. In West Germany, a young woman physician said to me recently: ‘Wir essen sechs Tage in der Woche, aber einen Tag wollen wir doch richtig speisen (We feed six days, but one day a week we like to dine).’ Not so long ago, ‘essen’ was what ordinary people did seven days a week, and ‘speisen’ what the elite, the rich and the aristocracy, did, seven days a week.
3. If anyone around 1960, in the waning days of the Eisenhower administration and the beginning of the Kennedy presidency, had predicted the gains the American black would make in the next ten or fifteen years, he would have been dismissed as an unrealistic visionary, if not insane. Even predicting half the gains that those ten or fifteen years actually registered for the American black would have been considered hopelessly optimistic. Never in recorded history has there been a greater change in the status of a social group within a shorter time. At the beginning of those years, black participation in higher education beyond high school was around one-fifth that of whites. By the early seventies, it was equal to that of whites and ahead of that of a good many white ethnic groups. The same rate of advance occurred in employment, in incomes, and especially in entrance to professional and managerial occupations. Anyone granted twelve or fifteen years ago an advance look would have considered the ‘negro problem’ in America to be solved, or at least pretty far along the way towards solution.
But what a large part of the American black population actually sees today in the mid-eighties is not that the glass has become ‘half full’ but that it is still ‘half empty’. In fact, frustration, anger, and alienation have increased rather than decreased for a substantial fraction of the American blacks. They do not see the achievements of two-thirds of the blacks who have moved into the middle class, economically and socially, but the failure of the remaining one-third to advance. What they see is not how fast things have been moving, but how much still remains to be done – how slow and how difficult the going still is. The old allies of the American blacks, the white liberals – the labour unions, the Jewish community, or academia – see the advances. They see that the glass has become ‘half full’. This then has led to a basic split between the blacks and the liberal groups which, of course, only makes the blacks feel even more certain that the glass is ‘half empty’.
The white liberal, however, has come to feel that the blacks increasingly are no longer ‘deprived’, no longer entitled to special treatment such as reverse discrimination, no longer in need of special allowances and priority in employment, in promotion, and so on. This became the opportunity for a new kind of black leader, the Reverend Jesse Jackson. Historically, for almost a hundred years – from Booker T. Washington around the turn of the century through Walter White in the New Deal days until Martin Luther King, Jr., during the presidencies of John Kennedy and Lyndon Johnson – a black could become leader of his community only by proving his ability to get the support of white liberals. It was the one way to obtain enough political strength to make significant gains for American blacks. Jesse Jackson saw that the change in perception that now divides American blacks from their old allies and comrades-in-arms, white liberals, is an innovative opportunity to create a totally different kind of black leadership, one based on vocal enmity to the white liberals and even all-out attack on them. In the past, to have sounded as anti-liberal, anti-union, and anti-Jewish as Jackson has done would have been political suicide. Within a few short weeks in 1984, it made Jackson the undisputed leader of the American black community.
4. American feminists today consider the 1930s and 1940s the darkest of dark ages, with women denied any role in society. Factually, nothing could be more absurd. The America of the 1930s and 1940s was dominated by female stars of the first magnitude. There was Eleanor Roosevelt, the first wife of an American President to establish for herself a major role as a conscience, and as the voice of principle and of compassion which no American male in our history has equalled. Her friend, Frances Perkins, was the first woman in an American cabinet as Secretary of Labour, and the strongest, most effective member of President Roosevelt’s cabinet altogether. Anna Rosenberg was the first woman to become a senior executive of a very big corporation as personnel vice-president of R. H. Macy, then the country’s biggest retailer; and later on, during the Korean War, she became Assistant Secretary of Defence for manpower and the ‘boss’ of the generals. There were any number of prominent and strong women as university and college presidents, each a national figure. The leading playwrights, Clare Booth Luce and Lillian Hellman, were both women – and Clare Luce then became a major political figure, a member of Congress from Connecticut, and ambassador to Italy. The most publicized medical advance of the period was the work of a woman. Helen Taussig developed the first successful surgery of the living heart, the ‘blue baby’ operation, which saved countless children all over the world and ushered in the age of cardiac surgery, leading directly to the heart transplant and the by-pass operation. And there was Marian Anderson, the black singer and the first black to enter every American living room through the radio, touching the hearts and consciences of millions of Americans as no black before her had done and none would do again until Martin Luther King, Jr., a quarter century later. The list could be continued indefinitely.
These were very proud women, conscious of their achievements, their prominence, their importance. Yet they did not see themselves as ‘role models’. They saw themselves not as women but as individuals. They did not consider themselves as ‘representative’ but as exceptional.
How the change occurred, and why, I leave to future his-torians to explain. But when it happened around 1970, these great women leaders became in effect ‘non-persons’ for their feminist successors. Now the woman who is not in the labour force, and not working in an occupation traditionally considered ‘male’, is seen as unrepresentative and as the exception.
This was noted as an opportunity by a few businesses, in particular, Citibank (cf. Chapter 7). It was not seen at all, however, by the very industries in which women had long been accepted as professionals and executives, such as department stores, advertising agencies, magazine or book publishers. These traditional employers of professional and managerial women actually today have fewer women in major positions than they had thirty or forty years ago. Citibank, by contrast, was exceedingly macho – which may be one reason why it realized there had been a change. It saw in the new perception women had of themselves a major opportunity to court exceptionally able, exceptionally ambitious, exceptionally striving women; to recruit them; and to hold them. And it could do so without competition from the traditional recruiters of career women. In exploiting a change in perception, innovators, as we have seen, can usually count on having the field to themselves for quite a long time.
5. A much older case, one from the early 1950s, shows a similar exploitation of a change in perception. Around 1950, the American population began to describe itself overwhelmingly as being ‘middle-class’, and to do so regardless, almost, of income or occupation. Clearly, Americans had changed their perception of their own social position. But what did the change mean? One advertising executive, William Benton (later senator from Connecticut), went out and asked people what the words ‘middle-class’ meant to them. The results were unambiguous: ‘middle-class’ in contrast to ‘working-class’ means believing in the ability of one’s children to rise through performance in school. Benton thereupon bought up the Encyclopedia Britannica company and started peddling the Encyclopedia, mostly through high school teachers, to parents whose children were the first generation in the family to attend high school. ‘If you want to be “middle-class”,’ the salesman said in effect, ‘your child has to have the Encyclopedia Britannica to do well in school.’ Within three years Benton had turned the almost-dying company around. And ten years later the company began to apply exactly the same strategy in Japan for the same reasons and with the same success.
6. Unexpected success or unexpected failure is often an indication of a change in perception and meaning. Chapter 3 told how the phoenix of the Thunderbird rose from the ashes of the Edsel. What the Ford Motor Company found when it searched for an explanation of the failure of the Edsel was a change in perception. The automobile market, which only a few short years earlier had been segmented by income groups, was now seen by the customers as segmented by ‘lifestyles’.
When a change in perception takes place, the facts do not change. Their meaning does. The meaning changes from ‘The glass is half full’ to ‘The glass is half empty’. The meaning changes from seeing oneself as ‘working-class’ and therefore born into one’s ‘station in life’, to seeing oneself as ‘middle-class’ and therefore very much in command of one’s social position and economic opportunities. This change can come very fast. It probably did not take much longer than a decade for the majority of the American population to change from considering themselves ‘working-class’ to considering themselves ‘middle-class’.
Economics do not necessarily dictate such changes; in fact, they may be irrelevant. In terms of income distribution, Great Britain is a more egalitarian country than the United States. And yet almost 70 per cent of the British population still consider themselves ‘working-class’, even though at least two-thirds of the British population are above ‘working-class’ income by economic criteria alone, and close to half are above the ‘lower middle-class’ as well. What determines whether the glass is ‘half full’ or ‘half empty’ is mood rather than facts. It results from experiences that might be called ‘existential’. That the American blacks feel ‘The glass is half empty’ has as much to do with unhealed wounds of past centuries as with anything in present American society. That a majority of the English feel themselves to be ‘working-class’ is still largely a legacy of the nineteenth-century chasm between ‘church’ and ‘chapel’. And the American health hypochondria expresses far more American values, such as the worship of youth, than anything in the health statistics.
Whether sociologists or economists can explain the perceptional phenomenon is irrelevant. It remains a fact. Very often it cannot be quantified; or rather, by 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.
Executives and administrators admit the potency of perception-based innovation. But they tend to shy away from it as ‘not practical’. They consider the perception-based innovator as weird or just a crackpot. But there is nothing weird about the Encyclopedia Britannica, about the Ford Thunderbird or Celestial Seasonings. Of course, successful innovators in any field tend to be close to the field in which they innovate. But the only thing that sets them apart is their being alert to opportunity.
One of the foremost of today’s gourmet magazines was launched by a young man who started out as food editor of an airlines magazine. He became alert to the change in perception when he read in the same issue of a Sunday paper three contradictory stories. The first said that prepared meals such as frozen dinners, TV dinners, and Kentucky Fried Chicken accounted for more than half of all meals consumed in the United States and were expected to account for three-quarters within a few years. The second said that a TV programme on gourmet cooking was receiving one of the highest audience ratings. And the third that a gourmet cookbook in its paperback edition, that is, an edition for the masses, had mounted to the top of the best-seller lists. These apparent contradictions made him ask, What’s going on here? A year later he started a gourmet magazine quite different from any that had been on the market before.
Citibank became conscious of the opportunity offered by the moving of women into the work force when its college recruiters reported that they could no longer carry out their instructions, which were to hire the best male business school students in finance and marketing. The best students in these fields, they reported, were increasingly women. College recruiters in many other companies, including quite a few banks, told their managements the same story at that time. In response, most of them were urged, ‘Just try harder to get the top-flight men’. At Citibank, top management saw the change as an opportunity and acted on it.
All these examples, however, also show the critical problem in perception-based innovation: timing. If Ford had waited only one year after the fiasco of the Edsel, it might have lost the ‘lifestyle’ market to GM’s Pontiac. If Citibank had not been the first one to recruit women MBAs, it would not have become the preferred employer for the best and most ambitious of the young women aiming to make a career in business.
Yet there is nothing more dangerous than to be premature in exploiting a change in perception. In the first place, a good many of what look like changes in perception turn out to be short-lived fads. They are gone within a year or two. And it is not always apparent which is fad and which is true change. The kids playing computer games were a fad. Companies which, like Atari, saw in them a change in perception lasted one or two years – and then became casualties. Their fathers going in for home computers represented a genuine change, however. It is, furthermore, almost impossible to predict what the consequences of such a change in perception will be. One good example are the consequences of the student rebellions in France, Japan, West Germany, and the United States. Everyone in the late 1960s was quite sure that these would have permanent and profound consequences. But what are they? As far as the universities are concerned, the student rebellions seem to have had absolutely no lasting impact. And who would have expected that, fifteen years later, the rebellious students of 1968 would have become the ‘Yuppies’ to whom Senator Hart appealed in the 1984 American primaries, the young, upward-mobile professionals, ultra-materialistic, job conscious, and manoeuvring for their next promotion? There are actually far fewer ‘dropouts’ around these days than there used to be – the only difference is that the media pay attention to them. Can the emergence of homosexuals and lesbians into the limelight be explained by the student rebellion? These were certainly not the results the students themselves in 1968, nor any of the observers and pundits of those days, could possibly have predicted.
And yet, timing is of the essence. In exploiting changes in perception, ‘creative imitation’ (described in Chapter 17) does not work. 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.