Archive for July 29th, 2008

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

Pročitano u prvoj polovini 2007. godineImage by .nele via Flickr

The Halo Effect. ..and the Eight Other Business Delusions That Deceive Managers.  Phil Rosenzweig. 2007. ISBN 9780743291255.  This is a must read.  The author literally blows the roof off the popular business books (and gurus)  like In Search of Excellence, Built to Last, Good to Great.   He explains perfectly one puzzle I have always had. When a company is booming along the business press is all over it in praise of everything about it. Then bam, a few bad quarters and the rock start managers become bums, the business has lost its way, employees are arrogant, products are out of step and so on. It just never made sense to me. This is called the Halo effect.  The business books above ( and others) based their premise on outcomes, not inputs.  (Read the book to learn more about that)

The same problems are true of top 100 , best of 40  business lists. They ignore the input data and focus on the outcome. To better see what’s up, you need to rely on  measures that are not shaped by performance , else your data is haloed. Fascinating reading also on the  impact of the eight other delusions.  For us it was gratifying to read a clearly stated rational that it is strategy and execution that need to be looked at, with the risk laden strategy bit being the input that needs to be most revisited.  We also hear much too often from some clients ” We have the right strategy, we  just need to execute better.”   Excuse me?  Revisit the strategy and dare to test and question its ongoing validity.  Blaming execution is often a fall back excuse.

This book reaffirms the high wire act of business. It dismisses the “Do this four things right and you will be successful” schools, to take  the reader back to what Michael Porter first stated about business.  Then you will read the business press as stories, not reports – since the science, if any,  is faulty.  You can enjoy the popular business books as really great stories (eg Good to Great is another example of the Rags to Riches plot line), while enjoying this books analysis of what really happened to all the featured companies in the best seller business lists!   You can still enjoy listening to the highly paid gurus, while knowing they do not have any secret sauce. Great easy read – your travel time will vanish . Buy it, read it (and more Michael Porter) and then review it annually – for a kick in the head.

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