🧠 Good news. We will never run out of problems.

It’s early March in Berlin. But for the last two weeks I have been sitting outside in street cafés far longer than any reasonable person should.

Because the sun came out. And suddenly everyone behaves as if Berlin has turned into the Riviera in August. So the sun is back, and I’m also back. With this very newsletter…

Psychology researchers once ran a visual experiment that revealed something surprising.

Problems are infinite.

The researchers asked participants to identify blue dots on a screen. At the start, it was easy. Some dots were clearly blue, others clearly purple.

But then the researchers did something clever. (Not saying the start wasn’t clever.)

They gradually reduced the number of clearly blue dots. Logically, people should have reported fewer blue dots.

But they didn’t.

Instead, participants started labeling purple dots that were slightly blue as BLUE dots.

Because there is no “blue” as such, we see a spectrum of light and label parts of it with a clear name.

And these labels can change.

It is similar to problems. When real problems became rare, people expanded their definition of what counts as a problem.

That is the Blue Dot Effect.

Your brain hates an empty threat monitor.

The implication? Yes, you will never be happy. But there is more…

This is one of the clearest implications. When defect rates drop, teams often tighten definitions.

Suddenly, tiny imperfections become “critical issues”.

Result. More time spent on marginal fixes instead of meaningful progress.

Classic over-engineering trap.

When companies stop taking big bets, suddenly every project that aims to improve something is called an innovation.

I typically get asked by companies, “Can you define innovation for us?” Sure, why bother Wikipedia when you can ask me?

But these companies are not looking for a textbook definition. It’s about the almost philosophical question, “What counts as an innovation?”

If you have a very strict definition, you probably never innovate. If you have a very loose definition, EVERYTHING is labeled innovation.

The result. Leadership insists the company is highly innovative while launching only minor updates.

A better approach. Think of innovation as a portfolio of low-risk, medium-risk and high-risk projects.

In highly regulated environments, once major risks are under control, organisations often expand what counts as "risky."

This pattern is frequently observed in mature organisations with strong compliance cultures.

The danger is slower decision speed without proportional risk reduction.

Remember. You can never reduce risk to zero. But there might be a bigger risk.

It’s in the things you don’t do.

While we are usually aware of the risk of the things we do, we typically ignore the risk of the things we don’t do.

A useful question to keep handy.

Are we reducing real risk? Or redefining what risk means?

Seeing purple dots as blue when blue dots become fewer also means we will never run out of opportunities to improve things and innovate. Yeah 🥹

Your vote helps me sharpen the next one.

See you next week!

Cheers,

Founder of the Psychology of Innovation

Check out my website: https://felixhofmann.net/