An illusion is when you see something but do not understand how it happened. It looks real, but logic and experience tell you that what you see cannot be. A delusion is when you act on the assumption that something is true, when it is not. In effect, you can be deceived because you are not thinking correctly, or because someone deliberately deludes you by deceit or indeed by creating a delusion.

Both illusion and delusion can, and do play, an important part in business. For example, Irving Janis the psychologist, showed that when teams make major mistakes, they are often under the illusion of invulnerability. That may come about because of previous success and the failure to see different evidence before them. Janis called this ‘Groupthink’, where people collude with each other to create an illusion that all is well, when it is not. Acts of delusion can then follow. Investigations of how mechanically sound jet-airplanes have crashed, killing many people, have shown that the crew were problem solving under a self-created delusion, rather than critiquing and questioning the evidence.