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How Illusion and Delusion Derail Organizations

Issue 56: May 19, 2022

Two colleagues just attended their monthly executive committee meeting. One is the chief revenue officer of the organization, and the other is the head of marketing. The organization is struggling with diminishing membership revenues and sponsorship sales are running behind. The salesperson gave an upbeat, optimistic presentation asserting they would close the revenue gap by the end of the quarter. The marketing executive had a completely different take on the meeting noting that it would take an unprecedented heroic effort to make up the revenue shortfalls.

Or consider this: In Plato’s classic Allegory of the Cave, Socrates describes a group of people who have lived chained to the wall of a cave all their lives, facing a blank wall. The people watch shadows projected on the wall from objects passing in front of a fire behind them and give names to these shadows. The shadows are the prisoners’ reality but are not accurate representations of the real world. The shadows represent the fragment of reality that we normally perceive through our senses, while the objects under the sun represent the true forms of objects that we can only perceive through reason.

Stick with us here. Socrates suggests that the shadows are the reality for the prisoners because they have never seen anything else; they don’t realize that what they see are shadows of objects in front of a fire, much less that these objects are inspired by real things outside the cave which they do not see.

Next, few humans will ever escape the cave. Only a true philosopher, with decades of preparation, would be able to leave. Plato then supposes that one prisoner is freed. Slowly, his eyes adjust to the light of the sun. Gradually he can see the reflections of people and things in water and then later sees the people and things themselves. Eventually, he is able to look at the stars and moon at night until finally, he can look upon the sun itself.

The freed prisoner would think that the world outside the cave was superior to the world he experienced in the cave and wants to share this with the prisoners remaining in the cave and bring them onto the journey he had just endured. But the returning prisoner, whose eyes have now become accustomed to the sunlight, would be blind when he re-enters the cave, just as he was when he was first exposed to the sun. The prisoners, according to Plato, would perceive from the returning man’s blindness that the journey out of the cave had harmed him and that they should not undertake a similar journey. (Wikipedia)


Perception is reality. Or is it? Whether you are a prisoner in Plato’s cave … or a leader or manager, what you do based on personal takes on reality can often make or break an organization’s success. Let’s unbundle the conundrum. Perception is not reality but influences how we see reality. Literally, perception is the ability to see, hear, or become aware of something through the senses. So, perception is the lens through which we observe life, take actions, and respond to others, and a situation or environment. And that perceptual lens is how we make personal and professional decisions. Jim Taylor writes in Psychology Today, “The problem is that the lens through which we perceive is often warped in the first place by our genetic predispositions, past experiences, prior knowledge, emotions, preconceived notions, self-interest, and cognitive distortions.”

People’s behavior is based on their perception of what reality is, not on reality itself. Every individual has his or her own perception of reality. According to IMS, “Because each of us perceives the world through our own eyes, reality itself changes from person to person. While it’s true that everyone perceives reality differently, the reality could care less about our individual or collective perceptions. Reality does not change to adapt to our viewpoints.” IMS has some useful cautionary advice about the perception that we have amended based on our own informed perspectives:

  • Don’t assume that your perceptions are reality (they are just your reality)
  • Be respectful of others’ perceptions (they may be right or perhaps closer to true reality)
  • Don’t hold your perceptions too tightly; they may be wrong (determining accuracy takes critical thinking and admitting it takes courage)
  • Recognize the distortions within you (your inherent biases, your life experiences, and your knowledge) that may warp your perceptions (seeing them, without blinders, will better ground your perception in reality, rather than the other way around)
  • Challenge your perceptions (do they hold up under the microscope of reality?)
  • Seek out validation from experts and others that are considered credible (don’t just ask your friends because they likely have the same perceptions as you)
  • Be open to modifying your perceptions if the preponderance of evidence demands it (rigidity of mind is blinding and is far worse than being wrong)



True reality is an objective fact. Philosophers would argue there is no one objective reality, but for the purposes of our discussion let’s agree that reality is a fixed factor in the equation of life (perception of reality is a variable). In an organizational context, the reality is where cold, hard facts guide strategy, operations, shared purpose, market orientation and correlated goals.

Reality forming tools and approaches include:

  • Using meaningful data and analytics in decision-making
  • Gaining consensus on goals to ensure everyone is on the same page
  • Determining realistic benchmarks and measures of success
  • A growing business based on real market orientation
  • Keeping personal bias in check

We have written about contextual analysis, market orientation, leading with courage and the fault in ourselves (our inherent biases). We have championed facts and data, both of which are not completely objective but are as close to determining true reality as we can get. In consideration of an organization, its response and decision-making, ensuring the reality we collaboratively perceive is critical.

Let’s consider a simple, less philosophical example to demonstrate the point. Some people are colorblind. They may not see blue or red and when something blue or red is within view, their mind registers grey. Say the colorblind person is with a co-worker, and they are considering a new interface design that is based on the trusted and calming effects of the color blue. The colorblind person cannot see the blue and must trust the co-worker’s description of the design and whether it projects the intended emotional effect. The colorblind individual’s reality in this context is informed only by what the co-worker says, which then must be internalized and trusted. In this example, the mind logically records the information and forms an opinion that may guide future decisions, responses and actions. This type of foundational and influential perception of reality occurs time and again in decision-making, actions and responses when the conditions of a situation, problem or environment seem similar. In other words, it creates a perception of reality even if we don’t own it originally.

Perceptual Bias

Perception of reality is based on personal bias. Let’s look at our political landscape. We live in a country divided and each faction is convinced their beliefs and values are real and right. Those who hold contrary or conflicting beliefs and values are seen as adversaries; those not in the know or who are poorly informed. When emotions run high on both sides, one thing is for sure: Bad business decisions are often made under emotional pressure. And when emotions run high, leaders and managers are more likely to fall victim to innate cognitive biases that can cloud their judgment. Remember, the rigidity of the mind, most often resulting from high emotion, leads to intellectual, psychological and emotional blindness. We fail to see what we need to see because we don’t want to see it.

Taylor states, “Going to extremes, a massive divide between perceptions in a country would likely lead to a slow, but steady, the disintegration of the institutions that hold a society together (dystopian themes in literature and film or, well, our world today).” If we agree that biases are perceptual, let’s look at a few of the many variations of bias that we see play out in organizational culture every day.

  • Confirmation Bias seeks out information that reaffirms our past choices and we discount information that contradicts our past judgments and makes people more likely to listen to information that confirms one’s existing beliefs and cancels information that doesn’t. The result is an illusion or delusion of reality informed by what is in our heads based on past experiences, encounters, and knowledge we have gained. Therefore, the illusion or delusion informs what we hear or read from others, what we think of others, and what they represent, and if different than our own judgment, well then, of course, they are wrong, and we aren’t.
  • Availability Bias is the tendency of people to base their judgments on information readily available to them. The availability of information is inconclusive. We may not have all the information we need or know the information we need in addition to what we already have to act, respond or make a decision. We make the decision and take the action or response regardless. Why? Our gut wants to fill in the blanks.
  • Representative Bias assesses the likelihood of an occurrence by drawing analogies and seeing identical situations in which they don’t exist. We are the sum total of all that we know and have experienced. We constantly seek to relate what we are considering or experiencing and accord to our past considerations or experiences. We often force-fit the present to the past even if factors and variables are very different across both. The behavior stems majorly from our lack of comfort in change and something new, both of which create anxiety as well as a fear of failure.
  • Anchoring Bias makes one overly influenced by the first piece of information gathered and prone to ignore the rest. As we grasp to find the piece of information or fact, we need to confirm our beliefs, values, decisions, possible responses and actions, and we hone in on the first piece of information or fact that seems to fit so well with our thoughts and perceptions. Everything we find after the first pass is dismissed as it doesn’t fit the rigid mindset that has already formed.
  • Optimism Bias tends to make a person overestimate the likelihood of success and underestimate the probability of failure. Most, including those we consider heroes of exceptional human beings that we admire, are optimistic. They live with the promise of the positive, that things will get better and that any problem can be solved. The optimism of course is important; if we weren’t optimistic at least some of the time, we would stick our heads in the sand and simply give up, overlook what’s going on, and head back into the cave (as Plato described). We must also maintain some element of pessimism to ensure we are considering the factors and variables at play, and recognize what we don’t know, and what might happen. Simplistically, we need to have a plan B to reduce the risk of possible failure.


What happens when perception morphs into illusion or even worse, delusion? This describes the state of an organization that maintains illusions and delusions when they never correlate to market forces and dynamics. S Prabhat writes for, “Though illusion and delusion can be thought of as synonyms, they have different meanings. Illusion is an unreal vision and delusion is a false belief. Simply speaking, an illusion is a distortion of the senses and fools the mind.” Taylor states, “There is a psychological theory that posits what is called positive illusions, which involve holding a slightly inflated view of one’s capabilities, which can have psychological and practical benefits (e.g., gives hope, enhances persistence).”

Consider the concept of self-love that embraces an individual’s good and bad attributes, accepts those attributes and holistically inflates positivity over negativity. In an organizational context, if it operates in an illusion that overly values the positive attributes, the illusion results in an unrealistic vision and one that isn’t based on reality. An unrealistic vision can lead to severe consequences, for example resulting in misjudging the market, miscalculating a competitor, an overly optimistic projection, or misaligning a workforce.

Delusion is a fixed belief in something one perceives to be the truth even after others contradict it. Illusion pertains to the mind and delusion pertains to belief, and neither are real. For example, magic is an illusion that is complicit among people. So are overly optimistic financial projections, and the belief that employees are fulfilled in their jobs.

Delusion is when people think that what they see or hear is real. In the political sphere, it is who won the presidential election. In business, it is holding onto legacy practices and keep doing what has always been done believing that things will return to normal and everything will be okay – just as it was in the past. Delusions also stem from leaders and managers who are siloed and rigid in their thinking, failing to listen to others around them. Their train speeds ahead, despite the delusion, in the hopes of a connection to reality though by sheer dumb luck all the while proving others wrong. Like an illusion, delusion comes with severe consequences as typically the train derails.

Illusion/delusion can sideline an organization by pursuing the wrong goals and even operating on a false infrastructure of faulty premises. In organizational change and transformation initiatives, the promise of technological adoption, perceptions of enhanced operational processes, or overly optimistic aspirations to better serve customers first and foremost comes from our perceptions of reality and what is possible. Through aspiration and expending of energy, we want a return and a reward. We then overly focus on the potential, become rigid in our thinking and view the efforts as leading only to positive outcomes. When our aspirations and energies stem from illusion and delusion, we miss the critical knowledge and information we need on the factors and variables at play to form a perceptional and social reality that is far from the true reality.

Here are just a few organizational examples that form from Illusions/delusions :

  • Setting unobtainable and unrealistic, disconnected goals
  • Faulty projections of achievement, goal attainment or expected outcomes
  • Unrealistic expectations of workforce competency and adaptability to change
  • Making key business decisions on gut instinct despite what others think
  • Believing only you know your customers and your market intuitively or that the data lies

Perception and Reality in the Workplace

Perception and reality get complicated when considering the perceptions each employee holds about the workplace. Regina Anaejionu states, “Depending on the personality of the worker, the communication level of coworkers and managers and the overall workplace environment, the way employees perceive their jobs can be quite different from what actually exists. Further, the way managers perceive employee working conditions can differ greatly from what workers experience. It is important that managers and owners invest time and other resources in making perceptions and reality line up at work.”

We all have read over and over again how Amazon requires its leaders and managers to spend time once a year in the customer service center with the intent of maintaining contextual connections to Amazon’s customers. Although it seems like a simple act and requirement, and surely one might question if a day or a few days is enough time, the activity can help leaders and managers “see” the environment and context that those serving customers see.

In our work with clients who are focused on serving distinct groups of professionals, we ask if a requirement to spend time with professionals in their environments has been implemented. Most often it hasn’t and ingrained illusions and delusions about customers result in personal perceptual opinions on what customers need. They focus on features and functions, without the context of what customers truly need or want. Illusion/delusion can result in taking the wrong actions, affecting the wrong responses, or making the wrong decisions.

When individuals across a workforce internalize and curate their own perception of the organizational reality, the workforce in whole and in part is not working to an organizational shared purpose and market orientation that is reflective of reality. Individual perceptions become the basis for individual and group-based actions, responses and decision-making. Imagine hundreds or even thousands of individual employees, each holding their own illusions or delusions about where they spend nearly one-third of their waking time. Now think about how those disconnects from true reality impact organizational performance.

Individual perceptions and true reality across the workforce can come into conflict in many serious ways according to Anaejionu.

  • Job Satisfaction: An employee’s perception of individual opportunities for advancement and salary or hours, versus that of other workers, can severely affect job satisfaction.
  • Duties and Expectations: Workers’ thoughts about workload and the time to complete assigned tasks may differ greatly from what supervisors or other coworkers think of their workloads. Reality may actually be somewhere in between, but owners and managers should take time to survey employees in a non-forceful way and allow them to feel that their responses are valuable.
  • Communication: With the overflow of memos, emails, meetings and conversations in the workplace on a daily basis, it is important to verify that employees are receiving the intended message. Communication quality control occurs when the sender of a message follows up with the recipient to ensure a mutual understanding is reached.
  • Working Relationships: Often committee or team working situations result in a small percent of the team doing most of the work. Make sure a team leader or supervisor sets specific roles and duties for each team and those methods are in place to double-check who does what. Many managers perceive that a project went well just because it was completed on time, but this is not always the case.
  • Diversity: Companies sometimes feel that they are doing a great job at supporting their workers and accommodating their diverse lifestyles. This perception may not match up with the reality that employees face. Think of the needs of your employees and try to accommodate them without being asked.

Illusion/Delusion Distorts Change and Transformation

When illusions and delusions formed by individual perceptions take hold, organizations seeking to change and transform may become overly confident, overly optimistic or hang their hats on the wrong sets of information and premises. Or worse, use opinion to make gut-based decisions. In today’s hyper-dynamic ever-changing marketplace where very little remains constant, an organization can be sustainable and grow into the future only if individual perceptions, illusions and delusions are mitigated and do not inform the reality of strategy and operations.

At 2040, we have encountered the negative fallout of perception-based business plans – and worse, operations with illusions and even delusions. We know how to help clients find their way into a rationalized and real construct that enables innovation and creativity in driving transformation and change. Let us know how we can serve you.

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