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.