Books The Halo Effect: ... and the Eight Other Business Delusions That Deceive Managers
Books and Publications Average Rating:

Rating: - Polemical; Sound
This is an excellent book and expose on the issues with many business books and case studies in general. The general premise around a Halo is that we use seemingly objective and empirical data (e.g., financial performance) to ascribe attributes around things that are ambiguous or difficult to measure (e.g., culture, leadership, values, etc.). In the case of a company, high performers are often described in effusive terms by the press and its managers (while they are successful), while if the same team has lower performance six months later then the same ambiguous attributes are often described as wrong, culpable, and misguided.

The author also points out some key issues with teasing out cause-and-effect. The emblematic example is the myth that employee satisfaction predicts high performance, whereas the opposite has been shown to be true (via a methodologically sound longitudinal study) - the latter better predicts the former - employees get their bonuses, raises, promotions, etc.

I've read all of the one, two and three star reviews. It seems that the biggest issue people have with this book is that it's somewhat dour, it could be shorter, and the author is somewhat smug in "knocking" down some other business authors and books. I would agree that you could probably understand the Halo concept and some examples via an article, but you would miss out on the richness of some of the examples and exposition. For those who believe in a 5-step recipe for business success, I could see how the book could help to "burst a bubble" in terms of a simple success formula. In terms of providing recommendations, I think the author is pretty clear on valuing the following:

X scenario planning,
X sensitivity analysis,
X longitudinal studies,
X independence between predictor and outcome variables,
X relative vs. absolute performance
X and good critical thinking skills.

If you're looking for a traditional business book around the n-things to success, this is not the book. If you want to be a better critical thinker around business research and decision making, you can't go wrong with reading this book.

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Rating: - Felt like a really important class taught by a really dry professor
This is a short book; it only seemed long. Useful, thought-provoking, and (in spite of the dry writing) very persuasive. Started and finished strong. The middle chapters droned on and on without really saying anything. Read chapters 1, 9 & 10. Skim chapters 2-8. You won't miss anything but filler added to keep book from being a really good paper.

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Rating: - Myth Buster
Ever read one of those business books that touts the greatness of certain companies only to find that the same great companies are in the toilet a couple of years after the published date? The Built to Last companies were seemingly not built to last after all, and the companies that went from Good to Great have slid to mediocrity. Phil Rosenzweig explains that the research commonly done in these widely lauded books is invalid. It is based on people's opinions (i.e. business writers, company managers, etc.). These opinions are all clouded by the Halo Effect, and the fact that there are truckloads of information collected does not change that fact. Wikipedia defines the halo effect as a cognitive bias whereby the perception of a particular trait is influenced by the perception of the former traits in a sequence of interpretations. So, when a company is doing well, people will tend to believe that it has great leadership, there is a focused strategy, there is wonderful teamwork, etc. In other words, all aspects of the company are blanketed in the glow of the success trait. Once the company performance turns for the worse, the opposite is true.

We are great at explaining causality after the fact, and no matter how things turn out, we can provide reasons in the sound bites that people crave. If a company is doing well, it's because their diversification strategy is brilliant. If it's not, the same strategy that was praised for its brilliance is vilified for straying from the core business. The leader that was praised for vision is then chastised for addiction to foolish acquisitions.

Why is it that we continue to get this wrong? One of the main reasons is it's difficult to do controlled scientific studies on businesses. There are so many variables that can impact the direction of a business and it's very difficult to isolate any particular one. It's much easier to rely on the stories and interpretations of others.

Rosenzweig does mention certain legitimate studies, but they don't reveal the clear cut, silver bullet explanations that we desire. He also offers up his explanation for what does indeed lead to higher performance - Strategy and Execution. "If a company makes strategic choices that are shrewd, works hard to operate effectively, and is favored by Lady Luck, it may put some distance between itself and rivals, at least for a time. Success at one moment doesn't ensure success in the next because success invites new challenges, some willing to take greater risks than incumbents... There is simply no formula that can generate success."

Although the Halo Effect is the concentration of the book, as the title mentions, Rosenzweig does tend to eight other delusions as well. It's important for managers to be aware of each in order to get to the truth.

Nick McCormick - Author, Lead Well and Prosper: 15 Successful Strategies for Becoming a Good Manager

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Rating: - Too Smug for My Taste
Rosenzweig's information is interesting in a 'myth busting' sort of way, but for my taste I didn't care for the book. Let me share with you why.

The author spendsover 150 pages chopping down the premises that Tom Peters, Jim Collins and others have shared in their best sellers. All the while, he doesn't really point out what he'd do 'differently' or 'better' or 'instead'...he just sort of scoffs at what he finds to be innacurate assessments.

(Which is debateable - the information was valid at the time, just the companies profiled often faltered in the long run.)

Finally, after much scoffing and myth-busting, he gives props to 3 CEOs/companies that meet his idea of what is 'great'.
(I say great because his earlier-mentioned targets are Jim Collins' "Good to Great" and Tom Peters' "In Search of Excellence".)

Unfortunately, The Halo Effect is written with a certain smugness that may appeal to people who are looking for people at fauly, but likely won't appeal to managers and students looking for information they can learn from and be inspired by. I bought this book with hopes that I can see what was previously done wrong and how it can be done better or differently. I was not inspired. Maybe it's just me, but my future reading will entail work by authors who can be as optimistic and inspiring as they can be honest and direct.