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Loading... The Halo Effect: ... and the Eight Other Business Delusions That Deceive…by Phil RosenzweigLibraryThing recommendationsMember recommendationsLoading...
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will love Sign up for LibraryThing to find out whether you'll like this book.  jamet123 | Jul 10, 2009 |  This is a rare business and management book. But a warning is in order. It is not intended for those seeking the “secret to success” or the formula to “dominate the market.” Phil Rosenzweig, a professor at IMD in Lausanne, Switzerland and strategy consultant, argues that much of business thinking is dominated by nine delusions: 1. The Halo Effect – many performance drivers are simply attributions based on prior performance. 2. The Delusion of Correlation and Causality – Two things may be correlated but we may not know which is the base cause. 3. The Delusion of Single Explanations – Many explanations are highly correlated; the effect of each one is usually less than suggested. 4. The Delusion of Connecting the Winning Dots – It is difficult to isolate the reasons for success. There is no way of comparing them with less successful companies. 5. The Delusion of Rigorous Research – If the data are not good, it does not matter how sophisticated the research methods appear to be. 6. The Delusion of Lasting Success – Almost all high-performing companies regress over time. 7. The Delusion of Absolute Performance – Company performance is relative, not absolute. 8. The Delusion of the Wrong End of the Stick – Highly-focused companies are often successful; yet highly-focused companies are not all successful. 9. The Delusion of Organizational Physics – Despite our quest for certainty and order, company performance does not obey the laws of nature and science. In his final two chapters, Rosenzweig suggests ways for managers to replace delusions with a more discerning way to understand company performance. This book carries no promises of success. Rosenzweig guarantees no successful results. He believes, and I agree, that a clear-eyed, critical and thoughtful approach to management is better than the causal tripe that dominates today’s business bookshelves. Penned by the Pointed Pundit February 20, 2007 9:05:47 AM (  ) PointedPundit | Mar 23, 2008 |  no reviews | add a review
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The most pervasive delusion is the Halo Effect. When a company's sales and profits are up, people often conclude that it has a brilliant strategy, a visionary leader, capable employees, and a superb corporate culture. When performance falters, they conclude that the strategy was wrong, the leader became arrogant, the people were complacent, and the culture was stagnant. In fact, little may have changed -- company performance creates a Halo that shapes the way we perceive strategy, leadership, people, culture, and more.
Drawing on examples from leading companies including Cisco Systems, IBM, Nokia, and ABB, Rosenzweig shows how the Halo Effect is widespread, undermining the usefulness of business bestsellers from In Search of Excellence to Built to Last and Good to Great.
Rosenzweig identifies nine popular business delusions. Among them:
The Delusion of Absolute Performance: Company performance is relative to competition, not absolute, which is why following a formula can never guarantee results. Success comes from doing things better than rivals, which means that managers have to take risks.
The Delusion of Rigorous Research: Many bestselling authors praise themselves for the vast amount of data they have gathered, but forget that if the data aren't valid, it doesn't matter how much was gathered or how sophisticated the research methods appear to be. They trick the reader by substituting sizzle for substance.
The Delusion of Single Explanations: Many studies show that a particular factor, such as corporate culture or social responsibility or customer focus, leads to improved performance. But since many of these factors are highly correlated, the effect of each one is usually less than suggested.
In what promises to be a landmark book, The Halo Effect replaces mistaken thinking with a sharper understanding of what drives business success and failure. The Halo Effect is a guide for the thinking manager, a way to detect errors in business research and to reach a clearer understanding of what drives business success and failure.
Skeptical, brilliant, iconoclastic, and mercifully free of business jargon, Rosenzweig's book is nevertheless dead serious, making his arguments about important issues in an unsparing and direct way that will appeal to a broad business audience. For managers who want to separate fact from fiction in the world of business, The Halo Effect is essential reading -- witty, often funny, and sharply argued, it's an antidote to so much of the conventional thinking that clutters business bookshelves.
(retrieved from Amazon Fri, 24 Apr 2009 07:58:01 -0400)
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He lays out 9 specific delusions and shows how they distort the advice in management books:
- The Halo Effect - tending of analysis of a company to reflect only the overall results
- The Delusion of Correlation and Causality - the lack of proof of causality in many situations
- The Delusion of Single Explanations - one factor is unlikely to be the reason for success or failure
- The Delusion of Connecting the Winning Dots - problems with only considering "winners"
- The Delusion of Rigorous Research - mistaking large volumes of data for good data
- The Delusion of Lasting Success - most companies trend to the mean eventually
- The Delusion of Absolute Performance - companies can do well and still fail if a competitor does better
- The Delusion of the Wrong End of the Stick - successful companies may do various things but that does not mean that doing those things will make you successful
- The Delusion of Organizational Physics - business organizations are just not that predictable
Phil uses various stories to show how the perception of companies and leaders changes when the company's performance does. He also shows how the vivid but unscientific stories that arise from this are then used as evidence by later studies. He repeatedly makes the point that the business world is not a laboratory but a messy and complex world and that this limits our ability to do analysis. He shows that rather than a specific behavior leading to strong company performance, the behavior is at least as likely to be caused by strong company performance. He likens this to Cargo Cults who hope to get planes full of goods to return by recreating the look of a jungle airstrip, mistaking cause and effect.
The overall effect is to make you take most management books with a large pinch of salt - not ignoring them, but recognizing that they are just stories, not science. (