Much of our business thinking is shaped by delusions -- errors of logic and flawed judgments that distort our understanding of the real reasons for a company's performance. In a brilliant and unconventional book, Phil Rosenzweig unmasks the delusions that are commonly found in the corporate world. These delusions affect the business press and academic research, as well as many bestselling books that promise to reveal the secrets of success or the path to greatness. Such books claim to be based on rigorous thinking, but operate mainly at the level of storytelling. They provide comfort and inspiration, but deceive managers about the true nature of business success.
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.
Customer Reviews:
Avg. Customer Rating: 4.5 / 5.0
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... more info
Must read for any business manager or business analyst:
If you are looking for the "Get Rich Quick" scheme or "Key to Business Success", this book is NOT for you as the author offered none of this. What he offered is far more useful and practical than any business books you would read or may have read. Rosensweig helped us to see falsehood and delusions common in our daily business "analytic", from investment reports to the thousands of business books (e.g. In Search of Excellence) which supposedly offers you the "key to success" or "factors to create... more info
Thought provoking. Full of wisdom. Valuable or not? Depends:
Unless you are willing to fight against the crowd, dont open this book, coz you will read something very different from what you had learnt or read in business schools or popular management literature that Nassim Nicholas Taleb, the author of "Black Swan" and the guru in probabilities management, praised it as one of the most important management books of all time. How dare I challenge one of the brightest living mind on this planet? In short, a must read. p.s. Below please find some of my passages may... more info
How to separate the "nuggets" from the "nonsense":
According to Phil Rosenzweig, "The central idea in this book is that our thinking about business is shaped by a number of delusions...the ones that distort our understanding of company performance, that make it difficult to know why one company succeeds and another fails. These errors of thinking pervade much that we read about business, whether in leading magazines or scholarly journals or management bestsellers. They cloud our ability to think clearly and critically about the nature of business."... more info
