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66 THE PRACTICE OF INNOVATION

big firms have not yet accepted that their competitor exists, let alone
that it is successful.
Behind the incongruity between actual and perceived reality, there
always lies an element of intellectual arrogance, of intellectual rigor
and dogmatism. “It is I, not they, who know what poor people can
afford,” the Japanese industrialist in effect asserted. “People behave
according to economic rationality, as every good Marxist knows,” as
Khrushchev implied. This explains why the incongruity is so easily
exploited by innovators: they are left alone and undisturbed.
Of all incongruities, that between perceived and actual reality may
be the most common. Producers and suppliers almost always mis-
conceive what it is the customer actually buys. They must assume that
what represents “value” to the producer and supplier is equally
“value” to the customer. To succeed in doing a job, any job, one has
to believe in it and take it seriously. People who make cosmetics must
believe in them; otherwise, they turn out shoddy products and soon
lose their customers. People who run a hospital must believe in health
care as an absolute good, or the quality of medical and patient care
will deteriorate fast. And yet, no customer ever perceives himself as
buying what the producer or supplier delivers. Their expectations and
values are always different.
The reaction of the typical producer and supplier is then to com-
plain that customers are “irrational” or “unwilling to pay for quality.”
Whenever such a complaint is heard, there is reason to assume that
the values and expectations the producer or supplier holds to be real
are incongruous with the actual values and expectations of customers
and clients. Then there is reason to look for an opportunity for inno-
vation that is highly specific, and carries a good chance of success.

IV

INCONGRUITY WITHIN THE RHYTHM OR
LOGIC OF A PROCESS

Twenty-five years or so ago, during the late 1950s, a pharmaceutical
company salesman decided that he wanted to go into business for him-
self. He therefore looked for an incongruity within a process in medical
practice. He found one almost immediately. One of the most common
surgical operations is the operation for senile cataract in the eye. Over