Understanding Perception and Reality

by Small Business Planned

Understanding the difference between perception and reality is one of the most important skills you need to not only excel in small business, but to excel in life. It helps you relate, understand the point of view of others and persuade.

Throughout our lives and especially in our formative years we are exposed to thousands of conversations, incidents and transactions that all shape how we perceive the World. This makes us who we are today.

perception and reality

The Gap Between Perception and Reality is Important to Understand

What’s Perception and Reality?

The answer to this question can become quite philosophical, possibly requiring Keanu Reeves. Perception is how someone interprets a situation based on their life understandings. Reality is how the situation actually is, as accepted by the accomplished experts in the field who have access to all the information.

Sometimes We’re an Expert, Sometimes We’re Not

There are some topics we know inside out and others that we wouldn’t have a clue about. For the things we do know a lot about, our perceptions are close to reality. We intimately understand the subject and how to get the best out of it. For things that we don’t know much about our perceptions can flap in the wind, shaped largely by heresay. Edward de Bono is a guru of these perception misrepresentations and comments:

“Most of the mistakes in thinking are inadequacies of perception rather than mistakes of logic.”
- Edward de Bono

Perception Case study

It’s our past knowledge of topics that defines how we approach them. Let’s take a look at how this works.

What are you an expert in? If it’s potato salad, chances are you know the best potatoes to use, the most appropriate green salads to add and the best mayonnaise. It’s a safe bet to assume you can get a good deal on each of these products and get the freshest produce available. You know where to look and you know where to get the best price. You’re a pro. High five me.

In this case you have the knowledge and experience to achieve the best solution. You’re not swayed by other people’s potentially bad advice and you’re comfortable in your decisions. Your perceptions about making top notch potato salad and the reality of making top notch potato salad are closely related.

But visit another environment where you don’t have a lot of experience in, say healthcare, cookware or architecture and it’s a different story. As you don’t have a lot of experience in these areas, you have an information disadvantage. Enter your perceptions to fill in the blanks.

perception vs reality chart

If You Don’t Understand a Subject You Will Draw on Your Previous Biases

Perceptions act as a shortcut to ‘fill in the blanks’ when you have knowledge gaps. Sometimes this perception gives us the right direction, such as ‘trust the man in uniform’ or ‘the woman in that expensive car will order high quality products’.  Sometimes these perceptions ring true. But other times perception lets us down e.g ‘That restaurant is too cheap it must be terrible’,  ‘I love that singer, so her new album is going to be great’ or 9 out of every 10 small businesses fail.

How to Overcome the Perception Divide

  1. You need to admit to yourself that you are not an expert
  2. If there’s time and opportunity, research your topic to get a general understanding of the area
  3. Approach an impartial expert on the subject. Ensure you’re choosing someone who has been there, rather than ‘just knows’
  4. Clarify the information learned by cross checking it online or by posting questions online
  5. Approach the supplier or primary and ask for their recommendations, noting any similarities in the other advice you’ve receive

Now obviously, the steps above are quite involved and would therefore only be suitable for more expensive or high involvement purchases. For lower priced items a simple (but thorough) online search should be conducted to cross check specifications and recommendations. Try adding the terms ‘review’ or ‘forum’ to your Google search to uncover more helpful results.

Growing your small business,

David Moloney
Small Business Planned


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4 thoughts on “Understanding Perception and Reality

  1. LIsa Wood

    Hello David,

    such a great way of looking at the world…. and a wonderful way to describe what is perception and what is reality. A bit like that saying “you cant tell a book by its cover” !! Perception is also different from one person to another and reality is what it is!!! Great blog post – love the pictures.


  2. Cade

    Hi David,
    Great article mate, I think you’ve done a great job explaining the difference between Perception and Reality.

    Its human nature to use other similar experiences to fill the gap, so I like your suggestions of filling the gap of perception and reality. Validating your own perception is an important place to start.

    In recent years I have learnt to challenge my own perceptions and beliefs, some perceptions have the potential to limit actions and performance. I forget who said this… “your perception is your own reality”. I believe by changing and raising my perceptions, I can change my reality.


  3. Belinda

    Great article David, you have given a clear definition of perceptions and reality. It is something that most of us automatically do but never really think that closely about.


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