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The Halo Effect

...and the Eight Other Business Delusions That Deceive Managers

Phil Rosenzweig

Free Press, 2007

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getAbstract International Book Award Winner 2007

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This serious book will change the way many people think about the pursuit of managerial excellence and, indirectly, about the criteria they use for managing and (coincidentally) investing. Phil Rosenzweig provocatively challenges prevailing concepts about the traits that drive corporate performance. He asks revealing questions about previous research assumptions that labeled companies "excellent." It seems that earlier accolades about "the best" companies - including the claims in some blockbuster books - were based on faulty research techniques that led authors to mistakenly attribute achievements to companies that did not accomplish them or could not sustain them. Rosenzweig distills his compelling ideas clearly, and buttresses his case with specific examples and original research, adding to the book's power. As a result, getAbstract would compare this very readable, focused book to fine brandy: palatable, enjoyable, memorable, a little heavy - and imbued with the potential to change your mind. Highly recommended.

Summary

The Great Delusions

Investors and business managers operate under a variety of illusions. Since they face tremendous pressure to produce financial results, both crave simplistic, instructive stories about how great CEOs turned their companies into well-oiled, profit-generating machines. A plethora of books by consultants and professors retells these fables, which managers study as new, easy lessons about replicating the success of industry icons.

But fallacies are at work here. These company performance stories are delusions. Worse, their oversimplified explanations lure managers into thinking that a white knight CEO or a new business plan can easily rectify their problems. To counter these rampant fantasies, managers have to become more critical of business stories' sources, and more selective about what they believe and consider actionable. They must overcome emotional involvement and avoid quick-fix ideas. Critical examination shows that many of the solutions described in business stories are based on delusions about results and performance.

The business press attributes good qualities - without sufficient evidence - to companies that are doing well, ...

About the Author

Phil Rosenzweig, Ph.D., is a professor at IMD, the International Institute for Management Development, in Lausanne, Switzerland. He holds a Ph.D. from the Wharton School, University of Pennsylvania, and taught at the Harvard Business School.

The Halo Effect

...and the Eight Other Business Delusions That Deceive Managers

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The Great Delusions

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