Anthony Hilton: Most firms seem optimistic about their own future. They can't all be exceptions
Saturday 19 May 2012
I'm not a great believer in business awards, having been a judge in too many to have kept faith in the integrity of the judging process. But if an exception can be made, it should be to recognise the justice in the fact that the annual report of WPP, the advertising and marketing services group, picks up gongs on a regular basis.
It gets the accolade because it looks good and is worth reading, as I was reminded earlier this week when browsing through the current version and finding an article by Jeremy Bullmore, one of the great figures in British advertising.
His subject was the placebo effect. In drug trials it is customary to give one half of a test group the new drug being trialled and have the rest of the group take a compound with no active ingredients and then plot the differences between the two. The problem is that those getting the worthless compound frequently report that they also feel better.
Wine tasting is similarly susceptible. Put some average stuff in a bottle and label it house plonk, put the rest in a bottle and label it as if from an expensive French château, and the test group will swear that the château wine is far superior.
Mr Bullmore's purpose was not to mock the people coming up with the duff answers, but rather to point out that they genuinely believed what they reported. His point is that through some complex process in our brains, perception influences reality. What people believe – whether it is true or false – influences the way they feel, what they believe and the way they behave without them knowing it. In the sample they did really feel better; they did prefer one wine over the other.
It set me thinking about a placebo effect in the economy. On Thursday I was in Newcastle addressing the local Entrepreneurs forum – a brilliant organisation which provides mentoring advice and support for several hundred local entrepreneurs determined to lead the revival of the North-east as a business hub. What you find talking to groups like that, or reading surveys of sentiment in medium-sized firms up and down the country, is that they mostly report that they are doing all right. But ask them about future prospects, and the mood immediately darkens. They are far more optimistic about their own business than about the economy as a whole. All the stuff which hits them daily about the euro and double-dip recessions makes them think they must be an exception.
So we need to worry about the placebo effect in business – that perception will again become reality. If everyone is exposed to a remorseless diet of gloom – whether or not it is true – it will change their behaviour. Even if their own business is doing well they will lose confidence, and gradually fall victim to the downturn themselves.
Inspirational leadership has a role to play here. Cameron and Osborne lose no opportunity to tell us how brave they are in seeking to impose austerity on everyone. They would do a lot more good if they started dispensing hope – talking about the glass being half full rather than half empty and giving us a vision of how and when things are likely to improve. If they don't believe, how can they expect anyone else to?
- 1 The difference between a migrant and refugee, in one sentence
- 2 Miley Cyrus calls out hypocrisy of women’s nipples being taboo
- 3 Celebrity Big Brother 2015: Tila Tequila kicked off show after 'describing Hitler as a good man'
- 4 iPhone 5c to be discontinued, no iPhone 6c to replace it
Spain accused of 'provocation' after letting Russian submarine refuel off Gibraltar
The difference between a migrant and refugee, in one sentence
Allonautilus scrobiculatus: World's 'rarest' creature spotted for only the third time ever
Miley Cyrus calls out hypocrisy of women’s nipples being taboo
Celebrity Big Brother 2015: Tila Tequila kicked off show after 'describing Hitler as a good man'
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
Iain Duncan Smith calls for urgent ESA overhaul as part of drive to cut down welfare costs
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...