The Halo Effect

The Halo Effect is one of the best 25 business books I’ve read, and it’s a title I read annually to keep me grounded in my thinking. In this conversation, Phil Rosenzweig explains the halo effect, along with several other delusions business leaders are bombarded with daily from the press, business authors, and consulting gurus. After this conversation, you may have different opinions about the best-selling books Good to Great and Built to Last.

Interview Highlights

• the reason the host reads this book annually
• a simple definition for the halo effect
• remedies for overcoming the halo effect heuristic
• research flaws in Good to Great
• issues with rigorous research
• the problems with lasting success
• backward causalities
• business culture and financial performance
• “When the legend becomes fact, print the legend.”
• the reliance on measures independent of performance
• greed and hubris
• NPS and Great Places to Work
• Phil’s favorite business books

While some studies of company performance meet the standard of science, many are better described as pseudoscience—they follow the form of science but are better described as stories.

Phil Rosenzweig

Our search for excessively simple explanations, our desire to find great men and excellent companies, gets in the way of the complex truth.

Phil Rosenzweig

Ten Business Delusions That Deceive Managers

I’ll echo what Nassim Nicholas Taleb says about these ten delusions in the Praise section of The Halo Effect. “It should stand as one of the most important management books of all time, and an antidote to these bestselling books by gurus presenting false patterns and naive arguments.” He is so correct.

1. The Halo Effect
2. The Delusion of Correlation and Causality
3. The Delusion of Single Explanations
4. The Delusion of Connecting the Winning Dots
5. The Delusion of Rigorous Research
6. The Delusion of Lasting Success
7. The Delusion of Absolute Performance
8. The Delusion of the Wrong End of the Stick
9. The Delusion of Organizational Physics
10. Greed and Hubris

This book is written to help managers think for themselves, rather than listen to the parade of management experts and consultants and celebrity CEOs, each claiming to have the next new thing. Think of it as a guide for the reflective manager, a way to separate the nuggets from the nonsense.

Phil Rosenzweig

Important Links

• IMD Biography Page
• Amazon Author Page
• Simon & Schuster Bio Page
• Twitter

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