Book Review: The Halo Effect

The Halo Effect: . . . and the Eight Other Business Delusions That Deceive Managers - Phil Rosenzweig

The Halo Effect is largely a critique of most modern business books that claim to provide the "secret" to company success, such as Good to Great, Built to Last, and In Search of Excellence.  His major point is that most of these studies do not actually measure independent variables that lead to success--instead they are perpetually tainted with research focused on variables that are tied to the success itself.  As an example, many of these studies are based on interviews with managers or executives of the companies regarding variables such as "focus on customer", "company culture", or others, where inevitably, they will be reported as excellent for successful companies and not for unsuccessful ones.
I largely agree with his thesis, which may not be too surprising, as I generally view causal relationships as difficult and fraught with uncertainty.  And I also enjoy taking a skeptic's point of view.  I do think, however, that he may overstate his case in the beginning of the book.  He does soften his strong views by the middle and the end, which I appreciated.

His conclusion is that companies must focus on strategy and execution, both of which are very difficult to do well.  In addition, he posits that what works well in one company may not work well in another, and so, in essence, there are no "magic bullets" to business.

Here are a couple of quotes I enjoyed from Andy Grove and Robert Rubin:
The quality guru W. Edwards Deming advocated stamping out fear in corporations.  I have trouble with the simplemindedness of this dictum.  The most important role of managers is to create an environment where people are passionately dedicated to winning in the marketplace.  Fear plays a major role in creating and maintaining such passion.  Fear of competition, fear of bankruptcy, fear of being wrong and fear of losing all can be powerful motivators.
Some people I've encountered in life seem more certain about everything than I am about anything.  That kind of certainty isn't just a personality trait I lack.  It's an attitude that seems to me to understand the very nature of reality--its complexity and ambiguity--and thereby to provide a rather poor basis for working through decisions in a way that is likely to lead to the best results.

Book Review: Right Here With You

Right Here with You: Bringing Mindful Awareness into Our Relationships – Andrea Miller

This book is a series of essays written on mindfulness and enlightenment applied to relationships. I like the essay format quite a bit, which is probably not too surprising, given that that is primarily what I write for pleasure myself. Regardless, the series of essay format allows ideas to be succinctly presented, without requiring them to be “filled out”, which often happens in the book format.

The essays are divided into various sections, somewhat correlated with phases of the relationship, including the unrealistic, hormone induced romantic phase, the later realization of reality and, to some extent, disappointment, and the ending of relationships. The final section is a bit more uplifting and focuses on broader aspects of personal growth and relationships.

I’m looking forward to revisiting many of the essays in the book, when I go through it again.

Book Review: How to Win Friends and Influence People

I just finished my annual re-read of this book.  My favorite chapter still remains the first one, which prescribes: “Don’t criticize, condemn, or complain”.  As with many of the chapters in the book, I believe internalizing that single concept can have dramatic changes in life’s outcome.  It is also interesting to read the book from a mindfulness/enlightenment perspective, rather than as a set of tricks that can be employed when interacting with people. 

I had forgotten the last several chapters that focused on improving leadership and related interactions with people.  There were several very nice reminders and skills that seem to be quite helpful. 

As always, it was fun to read Carnegie’s anecdotes and enthusiasm. 

Book Review: The Widow's House

The Widow’s House (Book Four of the Dagger and the Coin) – Daniel Abraham

I enjoyed reading the latest in Abraham’s Dagger and the Coin series, but I do feel like the story quality has diminished since the beginning of the series. As usual, Abraham seems to slip in major financial ideas, almost in an underhanded way of teaching finance to unsuspecting Fantasy readers. Previous books focused on lending and underwriting, but the big reveal in this one (somewhat of a spoiler alert), relates to sovereign debt and essentially the creation of a federal reserve. Abraham uses this as a vehicle to use economics to compete with war, though it seems to me to be a temporary solution, at best, since sovereign has historically been used to fund wars, at times.

Book Review: The Way of Zen

The Way of Zen - Alan W. Watts

I thoroughly enjoyed this book.  It was by far the best explanation of Zen that I have come across, written by and for westerners.  I particularly appreciated the first section of the book, which provided cultural background for Taoism and Buddhism and the resulting combination to form Zen Buddhism.

As with the last Zen book, I thought I would post some excerpts that I liked:

According to convention, I am not simply what I am doing now.  I am also what I have done, and my conventionally edited version of my past is made to seem almost more the real "me" than what I am at this moment.  For what I am seems so fleeting and intangible, but what I was is fixed and final.  It is the firm basis for predictions of what I will be in the future, and so it comes about that I am more closely identified with what no longer exists than with what actually is!
The perfect man employs his mind as a mirror.  It grasps nothing; it refuses nothing.  It receives, but does not keep.
The idea is not to reduce the human mind to a moronic vacuity, but to bring into play its innate and spontaneous intelligence by using it without forcing it.  It is fundamental to both Taoist and Confucian thought that the natural man is to be trusted, and from their standpoint it appears that the Western mistrust of human nature-whether theological or technological-is a kind of schizophrenia.  It would be impossible, in their view, to believe oneself innately evil without discrediting the very belief, since all the notions of a perceived mind would be perverted notions.  
Their "unconsciousness" is not coma, but what the exponents of Zen later signified by wu-hsin, literally "no-mind", which is to say un-self-consciousness.  It is a state of wholeness in which the mind functions freely and easily, without the sensation of a second mind or ego standing over it with a club.
When he came to Seng-ts'an he asked, "What is the method of liberation?" "Who binds you?" replied Seng-ts'an.  "No one binds me."  "Why then," asked Seng-ts'an, "should you seek liberation?"
There is no place in Buddhism for using effort.  Just be ordinary and nothing special.  Relieve your bowels, pass water, put on your clothes, and eat your food.  When you're tired, go and lie down.  Ignorant people may laugh at me, but the wise will understand... As you go from place to place, if you regard each one as your own home, they will all be genuine, for when circumstances come you must not try to change them. Thus your usual habits of feeling, which make karma for the Five Hells, will of themselves become the Great Ocean of Liberation. 

Rational Enlightenment Essay: Scoping


or Generating the Right Response

Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.
Viktor E. Frankl

When I was younger, I periodically had anger problems—I wouldn’t characterize them as particularly extreme, but problems nonetheless.  Even in early adulthood, I would sometimes overreact.  For example, I might became overly angry when my puppy chewed up some item in the house, or, when a driver nearly ran me out of a lane on a freeway, I had a bout of road rage with my wife in the car.  Over time (and probably more time than was warranted), I realized that these behaviors were unhelpful and inappropriate.  I began to consider how my ideal self might react in any given situation and how I might go about improving my responses.  This thinking eventually led me to the following framework:

The magnitude of any response should be proportional to the future, positive impact of that response.

I’ve thought of this framework as reaction “scoping”, since the magnitude of each response is set according to the magnitude of its positive impact; e.g., if the response may have a strong, positive effect on your future, then it should be pursued vigorously, whereas if the response may have a negligible or negative impact on your future, then it should be minimized. Initially, I supposed that the response should be proportional to the action itself, but there are situations where the action has a large impact but the responses to that action do not, or conversely, when the response has a large impact, but the action itself has very little. Some examples are in order.

Small Action->Small Response

These are the most straightforward situations for applying the framework.  Let’s use one of the examples I’ve already mentioned:  My wife and I had a puppy in her teething stage that we loved very much, and, as you might expect, she would periodically destroy things.  In one particular instance, she used a book that we had borrowed from a friend as a chew toy.  At this point, there were two basic potential responses: 1) responding with anger, or 2) responding with understanding.  It is probably no surprise that I ended up with option 1), which I believe was unwarranted and resulted in an unhappy puppy and master.  Certainly, the destroyed book was frustrating since we had to replace it, but on the other hand, it was only a book—its loss would have no substantial impact on my life.  Moreover, would being angry have any positive impact on our puppy’s or my life at all?  I cannot think of one, other than it serving as an example of undesired behavior.  Accordingly, following the framework, the response should have been minimal—it would not have a positive impact, so why bother?  If, instead of getting angry, I had dispassionately corrected her and given her a more appropriate chew toy, we both could have had a much better day.  There are many other everyday situations that fall under this category, e.g., getting cut off in traffic, an unkind word from a stranger (or even a friend for that matter), spilt milk (after all, there’s no use crying over it), etc.  

Large Action->Large Response

On the other end of the spectrum, there are also times when a response should be strong.  If someone is attacking you and your life is in danger, then a heavy response is warranted.  After all, if no response results in your death or injury, then responding would have an immense positive impact for you.  Of course, the response does not necessarily have to be violent, but it should be pursued with vigor nonetheless. 

Or, consider a more positive event, such as a marriage proposal.  In this instance, the proposal is significant, and the answer will have a dramatic (and hopefully positive!) impact on your future.

Large Action->Small Response

Since I’ve already mentioned the incident on the road, it can serve as the example here.  I was driving with my wife on the freeway, on the way back from a trip to visit our family.  I don’t recall the exact details of what happened next, but as I remember it, a driver in the right-hand lane merged into my lane such that he would have hit our car on my wife’s side. I had to swerve into the left-hand lane to avoid the collision.  My response at the time was less than ideal—I elected to tailgate him and blare my horn almost continuously for several minutes, enough so that he pulled off of the road to start a fight.  Fortunately, I was not so foolish as to entertain that idea, but on the other hand, I was also not smart enough to listen to my wife, who was lovingly trying to calm me down at the time.  While no immediate harm resulted from the incident, I’m sure most would agree my response was not ideal and had the potential to incur deep, negative consequences.

So, instead of that response, what alternatives were there?  Although the other driver could have harmed both my wife and me initially (hence the “Large Action”), I had already successfully dodged his merge and was safe.  At this point, no more response was warranted, i.e., no response would have had a positive impact on my life (hence the “Small Response”).

Small Action->Large Response

Although I basically conceived of this framework for the “Small Action->Small Response” cases, over time, the “Small Action->Large Response” category has become my favorite.  In these situations, the action itself may be small, but the response can have huge, positive impacts.  For example, perhaps a potential mate smiles at you from across the room—in the long run, the smile alone is a fairly insignificant event, and so without considering the impacts of the response, a minimal response might be warranted.  However, a larger response might have a big, positive impact on your life, e.g., perhaps the ensuing conversation might eventually lead to a wonderful marriage. 

One of my favorite examples of this behavior comes from Guy Spier, who is a well-known value investor that I admire, not only because he is a successful investor, but also because he appears to be a wonderful person.  In his thirties, Guy began writing thank-you letters to people for even the most mundane actions; for example, he might write one for a maid cleaning his hotel room, thus generating a larger response than expected from such a small action.  At his peak, he was writing these letters multiple times every day and some of them had meaningful impacts on his life.  Here is how he described his letters in his book, The Education of a Value Investor:
That meal with Mohnish altered the trajectory of my life—even more, perhaps, than my subsequent lunch with Warren Buffett.  If I hadn't bothered to thank Mohnish, many great things that have happened since our first dinner might never have occurred.  I didn't understand this at the time, but I now see that every letter I wrote was an invitation for serendipity to strike.  To many people, it might seem like a waste of time.  But I couldn't win the lottery without a ticket, and these tickets were almost free.  In a sense, this is a value investing approach to life: pick up something cheap that may one day prove to be precious.
Six months ago, I started writing my own thank-you notes to friends and family and have recently expanded to strangers.  Not only have these “lottery tickets” had a positive impact on the people I’ve given them to, in addition to the potential to generate life-altering outcomes, but they have also made me a more grateful person, which is reward enough in itself.


While the underlying idea of the framework is quite simple, implementing it is not.  The primary difficulty is that initial reactions can be almost immediate and reflexive.  For example, it may be very difficult to avoid the initial feelings of frustration or anger when stuck in a traffic jam when you have an appointment; however, even where these feelings have already arrived, there is still a choice as to whether to amplify them or not.  Thus, there is a distinction between reactions, i.e., the feelings or impulses that we do not have a great deal of control over, and responses, i.e., the actions that we actually take.  For example, recognizing that the initial reaction of being frustrated or unhappy won’t fix the traffic situation can allow you to respond by letting go of those feelings.  Or, as another example, after an argument, we often replay the event over and over, thinking of “perfect” comebacks; such a response is a choice to maintain or even feed the initial reaction of anger, rather than letting it dwindle on its own.  Thus, even if an initial reaction has already occurred, there is still choice on how to respond.

While it would be ideal to avoid these negative reactions entirely, I do not believe that they can be fully excised—even the Dalai Lama still has feelings of anger, which he has characterized as fundamental to humans.  On this topic, he provides the following advice:
Feelings of anger and hatred arise from a mind that is troubled by dissatisfaction and discontent.  So you can prepare ahead of time by constantly working toward building inner contentment and cultivating kindness and compassion.  This brings about a certain calmness of mind that can help prevent anger from arising in the first place.  And then when a situation does arise that makes you angry, you should directly confront your anger and analyze it.  Investigate what factors have given rise to that particular instance of anger or hatred.  Then, analyze further, seeing whether it is an appropriate response and especially whether it is constructive or destructive.   And you make an effort to exert a certain inner discipline and restraint, actively combating it by applying the antidotes: counteracting these negative emotions with thoughts of patience and tolerance. 

A More Difficult Situation

I described this idea to a friend of mine and her immediate response was—“What about divorce?”  At the time, she was not aware that I had split up with my wife six months prior.  Not feeling like revealing this fact at that particular moment, I cleverly answered, “Well, that is much more difficult.” 

I’ll use my own situation as an example, since a split up can take many different forms.  In my case, I had believed that our marriage was better than virtually any other I was aware of and remarked on it in passing to my wife.  That comment began a three-day discussion that ultimately ended with our deciding to split up, though the decision was mostly hers.  By way of explanation to such a surprising turn of events, the reason was essentially this: she was depressed and unhappy, and had been for quite a long time; both of us were aware of this fact, but I had assumed we would work through it together.  She, however, decided that her best option was to face it alone.  

Using the framework, clearly the action falls under “Large”, as my life was now dramatically different.  The response side, however, is a bit trickier.  On the one hand, I did not have much of a choice in the matter, so one might argue that the response would ideally be small, i.e., the split up was not going to be undone, and so my life would go on in a new manner regardless of whatever response I might have.  On the other hand, responses to a split-up can take on many different forms, some healthy and some quite unhealthy.  In that sense, one could argue that the response should be large, since a good one would have a very strong positive impact on my future life.  For example, in my case, I decided to start traveling and meditating, which has resulted in me being the happiest I have ever been.  I’m ambivalent with regard to whether “Small Response” or “Large Response” is used as the category in this case, as in reality, I think both are true; so take your pick if you have a strong preference.  Ultimately, I believe the answer is to continue on as positively as possible, in the present, and understanding that ruminations on the past are generally not helpful.

Of course, the intellectual best response and my actual response were not the same because, as discussed earlier, implementation is difficult.  Overall though, I am happy with the results, and I believe having the framework helped me put things into perspective.  That is not to say it was an easy process—in the beginning months, I cried fairly often, but the intervals between melancholies gradually lengthened until I was largely fine about six months later.  As a side note, there is quite a bit of interesting research indicating that love interacts with the brain in a manner very similar to addiction.  Even further, research indicates that after a breakup, individuals essentially experience withdrawal symptoms.  That being the case, it would be unreasonable to expect that anyone could “think” themselves out of these feelings; they can however, treat each new period of sadness or grief as the stimulus and attempt to respond appropriately.

Extending the Framework

While I came up with this framework specifically for responses, I do not see any reason it could not be extended to any action.  Thus, instead of being restricted to the subset of responses to stimulus, any action can be judged based on its potential future impact.  Under this revised framework, for any action, you could then ask, “Does this action have a potential positive impact on my life?”  If so, the action might be warranted.  It could further be extended to take into account the probability of such a positive impact, e.g., if the action is very likely to produce a positive impact, it should be pursued vigorously, whereas one that is less likely to produce a positive impact might still be pursued, but with less effort invested.  In that case, the framework might be rephrased as:

The magnitude of any action should be proportional to the probability of the future, positive impact of that action.

Scoping (PDF link)