“Perception is reality. If you are perceived to be something, you might as well be it because that’s the truth in people’s minds” – Steve Young.
People buy products and services because it saves them time, money, or effort. Sometimes it’s the case that they could do the task or make the product themselves, if only they had more time, or cheaper access to suppliers, or got more enjoyment from it. However oftentimes in our modern free-market economy the things we buy are so complex, and require so many specialist skills, that it’s impossible for any one person to know how to deliver them end-to-end. As Milton Friedman famously pointed out, “there’s nobody in the world who knows how to make a pencil”. You’d need to know how to chop down trees, mine graphite, smelt steel, grow rubber, and coordinate thousands of other complex activities, in order to make one simple pencil. Reality has a surprising amount of detail. Maybe you could cobble together a ‘good enough’ version if you allow yourself not to do everything from scratch, but in trying to produce pencils at any level of scale and consistent quality, you’ll encounter a surprising amount of detail. More than any one person can manage.
If you’re not doing something yourself, it stands to reason you also can’t afford to investigate too deeply into the quality of the work. Maybe you could look into it, if only you had more time, or the money to pay for research, or if it didn’t feel like too much effort. You can’t judge quality directly, so you judge it by proxy. Is the packaging torn? Does the salesperson sound confident? Are the builders turning up on time? Is the floor of the restaurant dirty? Does the website look professional? Of course damaged packaging, stuttering salespeople, tardy builders, dirty restaurants, and shabby websites don’t automatically mean you’re being ripped off. You may be dealing with an extremely ethical person or business. The red flags may be a coincidence. Just bad luck. You may still be supremely happy with the final product. However these are signals that something’s not right. You become alert. You start paying attention. Every small incongruity you find, chips away at your trust. If enough of them add up, you begin an active investigation. If you do find evidence of wrongdoing – a cracked case, dodgy contract terms, shoddy work, a hair in your food, bad customer reviews – your suspicions are confirmed, and you resolve to get even.
Those at the very top of their field, know that perceptions are just as important as reality, and spend a lot of time managing them. Luxury retailers use trusted courier services to deliver goods undamaged. The best sales people learn to portray confidence. Professional construction firms inform clients in advance of potential problems. Michelin star restaurants maintain high standards of cleanliness. Software companies commission custom high-end designs for their websites. The very worst in an industry are easy to spot, because they have all of the red flags. It’s the messy middle, where you have to use your judgement. What makes it difficult is that those on their way up, and on their way down, often exhibit the same behaviors. A report might be delivered late because there were multiple mistakes to correct, or because the analyst was up all night working on it. A job interview candidate might dress informally because they’re scruffy, or because they’re confident in their talent. A hole in the wall eatery might not look like much, but they might serve delicious, authentic local food. If you can foster a talent for finding diamonds in the rough, and get comfortable living with a little roughness around the edges, that’s the key to getting exceptional quality, without paying top of market prices.
Milton Friedman - Nobody Can Make A Pencil Except Spontaneous Order
People can't actually judge quality so they look for quality indicators.
Perception is reality…
Quality is fractal
Reality has a surprising amount of detail
The thickness of napkins
Theory of the firm
They will judge you on things that are not directly relevant to your work.
‘evidence of industry’