My uncle’s (branding strategy & research) firm was hired by Citibank (back in the mid 80s) in order to help them find the best way to sell Citi-branded insurance products to their customers through their branch networks. He went out, digested his numerous focus groups asking lots of his typically lateral questions and prepared to present his findings to the executive committee. He was unpopular to certain folk for he never minced words or sugar-coated anything. He went in there and told them Citi doesn’t have a chance in hell of selling their customers insurance since everyone hates their own bank and thinks the other bank is better. So their best strategy (if they want to successfully sell insurance) is to target non-Citi customers who would have a higher opinion of their brand and products than their own. Mgmt was aghast, mortified, offended beyond belief, rejecting his findings and terminating his consultancy effective immediately. So much for embracing truth in the boardroom…..

I will look for the paper (mid 80s IR guru Prof Stephen Hill recounted it to me)

The point was that in America, there is a tendency to reject any form of pessimism, per 6:34’s and Cassandra’s comments. I’ve found American clients have a lot of trouble digesting bad news, I often have to tell them in writing to get through their rosy eyed glasses.

Cassandra,

Great stories. Would love to get a hold of that paper. If you or your LSE buddy would send a copy or a link, it would be very much appreciated.

That said, America does flirt rather dangerously with excessive optimism that results in troubling departures with something resembling objective reality. I recall two interviews on day in early 2001, one with a large US chipmaker, and another with the head of Philips semiconductor division. The American was speaking wishfully about “the bottom being reached” and a “deceleration in order declines and cancellations” whereas the sober-minded Dutchman was speaking of truthfully about near-obliteration wiht no signs of upturn in sight, so with a cash-hoard they were sitting tight on the acquisition front until valuations returned to more reasonable levels. I needn’t say whose perception of reality was closer to reality.

But the most memorable illustration I can recall substantiating Susan’s piece was a seminal study recounted to me by my Industrial Sociology prof at LSE of, I believe Bosch-affiliated plants in the US, Spain, UK and Netherlands, all producing near-enough the same widget (driveshafts, u-joints or somesuch, if I am not mistaken). With an objective measure of quality (in defect rates of the same product) they went on to ask the workers in the different geographical regions their opinions of their work in order to measure the relationship between different workforces perception of reality with objective reality characterized by defect rates.

When the results were tabulated, Spanish workers, it was revealed, had a low opinion of their work, but comparatively low defect rates, conservatively underestimating the quality of their work. The Brits by had a low opinion of their work, but comparitively higher than average defect rates making their perception of reality closer to the mark. The Dutch workers had a high opinion of their efforts, and comparitively had the lowest defect rates, again signaling a reasonable alignment of their perceptions with objective reality. The American workers, however, had a very high opinion of their work, though had comparitively high defect rates making their perceptions of reality most divergent from that objectively measured by defect rates!!

I think this speaks volumes about the world’s general suspicions regarding the nature of both American Optimism (and by extension Triumphalism) and the baggage that it brings, which has real economic and political consequences if proclaimations and rhetoric are more likely to resemble Radio Pyongyang than the BBC. For Lack of Trust creates Uncertainty, and uncertainty receives a higher discount in the marketplace than greater trust engendered by a closer alignment between perceptions of reality and reality itself.

anyway, aren’t optimists the ones who usually buy into a falling stock, hoping for that rebound or even to cut losses by averagingprices/costs? still think the markets are in a bipolar funk, whatever that behavioural expert at the ft thinks, just look at europe

No wonder the mediocre have risen to the top.