The Halo Effect... and the Eight Other Business Delusions That Deceive Managers

There are so many golden calves in the world of management and leadership theory, and this book knocks nine of them down politely but mercilessly.

My favorite chapter: “The Delusion of Rigorous Research,” coming from a business school professor who knows first-hand what he’s talking about. I’m encumbered by philosophical training, and in the business world, I constantly find myself asking, “Yes, but what does that word actually mean?” or “What kind of evidence could support that claim, and is that evidence you could actually collect?”

More and more content about how to succeed in business and management gets produced… show more.

Finding your voice is hard, so you might start—as I did—by learning what worked for other, more successful people. If it was good for them, it will be good for you, right?

Not so fast. The Halo Effect shows that the stories we read, hear, and even tell ourselves are all skewed by one thing: the outcome. If a company is profitable, its leadership is inspired. If not, they’re fools.

Though written for a business audience, this book helped me not to be distracted or discouraged by other people’s journeys, but to diligently focus on my own.

Nassim Taleb calls this book “one of the most important management books of all time, and an antidote to these bestselling books by gurus presenting false patterns and naïve arguments.” 

Rosenzweig shows that although best-selling management books are inspirational, they are written based on correlational data and lack predictive power. For instance: “Does employee satisfaction lead to high performance? The evidence suggests it’s mainly the other way around—company success has a stronger impact on employee satisfaction.” 

The problem with only studying the “best,” as management classics like In Search of Excellence have done, is that there is no experimental control… show more.

This is a brilliant book, probably the business book I have enjoyed most and which has made the longest-lasting impression on me. Phil Rosenzweig brings a cooly sceptical approach to the mythology of business success and the stories bosses (and organisations) tell themselves about why they have succeeded, or failed. Winning doesn’t necessarily make you a genius, just better than what you were up against. Luck is a big and under-discussed factor, and so on. A book to keep on hand when the latest business “miracle worker” is being praised by everybody else. 

As part of my focus on preventing disastrous competitive surprises and avoiding blinders when it comes to new opportunities, I discovered this little gem authored by an IMD professor, Phil Rosenzweig when I conducted a wargaming session at IMD (my favorite business school). The book is short and very modest and wasn’t accompanied by the marketing hype of such bestsellers as Jim Collins’ books From Great to Greatness…(to bankruptcy?) or McKinsey’s reports of “success formulae” and yet it systematically shreds these works and exposes the delusion, fostered by them, regarding the reasons companies perform well. This book reads… show more.