INHaven't taken off your pink glasses for a long time? Then grab this book. The author offers a guide for thinking leaders on separating flies from cutlets. If most business books are the equivalent of a cookbook: if you do this, it will work, then this book changes emphasis:Why is it so difficult to understand the reasons for high results?

What did Rosenzweig do? He dissected the business bestsellers of all times and peoples "", "Built to Last" and "" and supplemented them with statistics for the periods that have passed since the companies were transferred to the category of "great fortunes". Result: after the clock struck twelve, almost two-thirds of the princesses turned into gray mice. The reason is the "halo effect": high performance companies at the time of the study played a cruel joke on the researchers. The author teaches managers to be prudent in how they should perceive the conclusions of management gurus.

At the end of the book, the author still tries to answer the question: what leads to high results? He believes that if you leave alone the usual suspects - leadership, culture, focus, etc. - which would be more correct to consider as attributes of results, but not their causes, everything will be reduced to two main criteria: strategy and its implementation. The first is fraught with risks, since it is based on hypotheses, the second with uncertainty, since drugs are good for some, for others they will turn out to be poison. That is why Rosenzweig suggests betting not on the formula for success, but on successful managers, citing the well-known Ani Grove and others as an example.

Metaphors.Bring a couple that I liked. First."Cisco didn't talk about the gold sands of the Internet. They sold shovels and picks to Internet miners, so much so that there was a queue of people who wanted to buy." Second."When explaining failure, it is always easier to claim low performance discipline than seriously think about strategy. It's easier to say that we are going in the right direction, we just need to step up. Admitting you went the wrong way is usually painful and the drugs have a side effect."

Outcome.The book is not boring and is read in one breath. You will not find the Philosopher's Stone in it, but after reading it you will be able to take a sober look at your previous search for the Holy Grail. I recommend you read along with her:

• Evans F., Wooster T.S. .
• Nicholas J. Carr. .

Thanks.For the given book thanks a lot Stas Davydov

Column "new book sales" newspaper "Vedomosti".
The column leader is Andrey Kuzmichev, Doctor of Historical Sciences, Professor of the Higher School of Economics.

Phil Rosenzweig "The halo effect...and eight other illusions that mislead managers"
St. Petersburg: BESTBUSINESSBOOKS, 2008. 250 p.

Every day, top managers discuss numerous "variations on the most burning question of all time: what actions lead to high results?". "This is the quintessence of questions in the business world," says Professor Phil Rosenzweig dryly and furiously, with knowledge of the matter, smashes those who, under the guise of serious research, promote themselves and customers.

Among them were such luminaries of management as Tom Peters, Bob Waterman, Jim Crollins and Jerry Porras (a detailed analysis of their mistakes is contained in the appendix to the book). Michael Porter and Anita McGahan also got credit for a study where they "set out to determine the extent to which a company's profitability depends on the industry in which it operates, the corporation to which it belongs, and the methods it uses."

Rosenzweig notes that the researchers labeled the latter category as “segment-specific impact,” which included customer orientation, culture, HR, social responsibility etc. As a result, "the authors found that 32% of the results of companies can be attributed to" specifics ". But after all, its authors did not understand inside, and in fact, as Rosenzweig writes, as a result, the observed "effects were superimposed on each other, explaining the same 32%".

Why do thousands of researchers build a tower of Babel out of pseudo-labor and try, sometimes quite successfully, to trade their ideas? The reason for this, according to Rosenzweig, is the halo effect - our desire to "create an idea about a subject that is too far from you, often simply inaccessible to direct judgment, in order to bring it closer and evaluate", the human tendency "to grasp at information that is at first glance significant, concrete, which gives the impression of being objective, and projecting it onto objects that are abstract and ambiguous."

In the world of books, there is the same ambiguity. Rosenzweig cites Stanford University's James March and Robert Sutton as saying that "organizational research exists in two very different worlds". "The first is addressed to practicing managers and is full of reflections on how to improve results - say the professors. - Here we find studies whose purpose is to inspire and soothe. The second requires following strict criteria of knowledge and encourages it. Here the supremacy of science, not history."

Why among the bestsellers are mostly books from the first world, explains illusion number 9: "the fallacy of organizational physics." Its essence is that for most researchers, all companies are "made of the same atoms." As a result, many "like to think that some higher order rules the world of business according to strict rules, making it infallible and predictable."

Phil Rosenzweig

The halo effect and other misconceptions of every manager...

To my parents Mark and Jeanine Rosenzweig

The Halo Effect: …and the Eight Other Business Delusions That Deceive Managers

Copyright © 2007 by Philip Rosenzweig

Originally published by Free Press, a division of Simon&Schuster, Inc.

© Israfilov F. A., translation into Russian, 2019

© Publishing House Eksmo LLC, 2019

Reviews of the book "The Halo Effect"

One of best books business in 2007.

Annual Accenture Award for best article of the year: “Misunderstanding the Nature of Company Efficiency: The Halo Effect and Other Business Illusions.”

“I was consumed by this book. She demystifies the explanations for success in the management literature by making persuasive arguments based on facts. It should become one of the most important management books of all time and an antidote to the many bestsellers from gurus presenting unreliable models and naive arguments.”

“In The Halo Effect, Phil Rosenzweig did us all a great service by expressing the unspeakable. His open-minded analysis was a welcome antidote to the superficial, stereotypical, and absurdly simplified explanations that underlie today's popular business books. This is the right book at the right time."

“Books on business very rarely combine a realistic perception of the world and scientific rigor. Rosenzweig's book is a striking exception - it is a magnificent work, the need for which is long overdue.

“Rosenzweig not only ridicules bad writing and pseudoscience in management. It explains why they are so bad and what you can still learn from them despite the authors' efforts."

“He writes masterfully, using simple and illustrative examples, strict, but not pedantic, and does his best to be fair to those so-called experts who are blown to smithereens.

"An insightful look at business and advice on doing it."

“This is an amazing, well-reasoned book that challenges much of what we know about business, leading us to view research findings with great skepticism. This is more of an appeal to reason than practical guide for managers, but it really helps to appreciate what's behind the new (and old) ideas we're being told about."

“A review of a large body of business literature showing that the advice given in countless best-selling business books may be much less helpful than it seems… A detailed, sometimes devastating scatter of numerous business books and popular business analyzes.”

"A cheeky new book that shows how problems in research methodology and misinformation are damaging the management literature, turning it into encouraging parables rather than solid evidence-based guides... including books by Jim Collins and Jerry Porras" Built to Last and Collins' Good to Great, arguably the most influential management publications in recent years.

"Refreshes and corrects."

“Rosenzweig deserves a round of applause for his bold, provocative work…He has posed a serious challenge to his business school colleagues and also to the business media.”

“A masterful debunking of many myths and misconceptions in management. If you want to avoid the next silly fantasy and, as Kipling wrote, "control yourself among the crowd of confused, swearing at you for the confusion of all, then this book is an excellent guide."

"A brilliant and sobering book."

The halo effect and other business illusions

The tendency to draw inferences about a company's culture, leadership, values, and other performance under the influence of its overall performance. In fact, much of what we believe is the reason for the improvement in the company's performance is just our assessment based on its results.

Two variables may be correlated, but we don't know which is the cause and which is the effect. Does employee satisfaction lead to high performance? Evidence suggests that the success of companies has a stronger effect on employee satisfaction than vice versa.

Many studies show how any single factor - good culture company, attention to customers or a strong leader - leads to improved performance. But since many of these factors are highly interdependent, the effect of each individual is often less than we think.

If we choose a number of successful companies and start to explore what they have in common, we can hardly find the reasons for their success without being able to compare them with others that are less successful.

The effectiveness of a study is determined by the quality of the data, not the quantity: if the quality of the data leaves much to be desired, then their quantity no longer matters.

The performance of even the most successful companies degrades over time. The idea of ​​finding a plan of action that would guarantee stable and lasting success is, of course, attractive, but unattainable.

The results of companies are always relative. For example, a company can objectively improve its results, but at the same time lag even further behind competitors.

Just because successful companies often use targeted strategies does not mean that such strategies necessarily lead to success.

The performance of companies is not subject to the immutable laws of nature and cannot be predicted with scientific accuracy - as much as we would like to.

Foreword

This book is about business and management, success and failure, science and fiction. It is written to help managers think for themselves, without relying on the advice of a variety of experts, consultants, and opinion leaders, each of whom claims to have discovered something new and hitherto unknown to anyone. Think of this book as a guide for the thinking manager to help him separate the wheat from the chaff.

If someone needs a manual that reveals the secret of success, the formula for market dominance, or six simple steps to prosperity, then this kind of literature is more than enough. Every year, dozens of new books promise to reveal the secrets to the success of leading companies such as General Electric, Toyota, Starbucks, and Google. " Learn these secrets and apply them to yourself!” Just as many books are about business stars such as Michael Dell, Jack Welch, Steve Jobs or Richard Branson. " Find out how they managed to become great, and do the same! Other books will tell you how to turn a company into an innovation pipeline, create a solid strategy and a clear organization, and leave all competitors behind. " That's how you can easily defeat everyone!

In fact, despite all the secrets, formulas, guarantees and promises, the path to business success is still just as elusive. Rather, it is now even less clear than ever, given the growing global competition and the ever-faster pace of technology innovation. Perhaps that is why we are so attracted by these promises, revealed secrets and secrets, ready-made recipes for quick solutions, because in extreme circumstances we want miraculous remedies.

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This book has not been much noticed by our reading community, and quite in vain, because it talks about things that often mislead us (people in general, as well as members of the community who read business literature and reviews on it, in particular) astray.

Reading business literature (especially all sorts of success stories) should start with The Halo Effect. Having read and comprehended this book, I am more than sure of it. Because a lot of the things that business literature talks about are misrepresented. halo effect is when, for example, you look at some successful company and think, “Why are they so successful? Let's see, we'll see... Yeah, everything is clear - they use KPI. They also have a lot of innovation, and at the same time they pay a lot of attention to their employees.” Opa - the business recipe for success is ready - people and innovations are our everything!

The problem is that these “reasons” are nothing more than circles in the water.

A couple of years pass, the market goes down (or something else happens - because something happens all the time!), and we notice that the same company is in the ass - losses, loss of market share, etc. and so on. “Ai-yay-yay!”, We exclaim, “What is the problem? Let's see, let's see... Yeah, everything is clear! Innovating, they have moved too far from their roots, chasing new profits, and the bulk of consumers have turned away from them! Voila - another recipe for business is ready - we must be who we are and not change our essence!

As you may have guessed, this time we behaved in exactly the same way - the same circles on the water - we still do not see the true reasons. The trees are swaying, the wind is blowing.

The world around us, as well as its narrower segment - the world of business - is a very complex dynamic system with non-linear laws. Applying linear laws to it, we run the risk of hitting the sky with our finger. Not only that, we do it regularly.

My favorite Tom Peters and Robert Waterman hit the sky with their book “In Search of Excellence”. After spending the financial analysis results of the 35 "perfect" companies in this book, we find that five years after the book's release, the total shareholder return (change in the market price of the shares plus any reinvested dividends) of 12 of them still exceeded the Snadard & Poor index 500, and 23 was below the S&P 500. Ten years later, 13 companies outperformed the market and 18 lagged behind it. The rate of return also changed. Five years before the Peters and Waterman studies, and five years after, 30 of the 35 "perfect" companies saw their profits decline (compared to the year the studies were conducted). (For those who are interested in the details, the book provides comparative tables for these data.)

The situation is similar with the visionary companies of Collins and Porras from the books Good to Great and Built to Last. And the thing is, notes Phil Rosenzweig, that these studies were carried out statistically incorrectly, and also considered the business system as linear. Data on companies was taken from publications in the media, which work on the principle of "the dog barks, the wind blows" and is also extremely susceptible to halo effect - the ability to judge details by the overall impression.

If a company is successful (at a given time), then all its components are successful - management, strategy, approach to working with personnel, etc. Similarly, if a company suffers losses, then its business components are not successful (at the same time, everyone forgets that these are the same components - nothing has changed :).

The halo effect is an easily observed psychological illusion. In addition to it, the author describes eight more illusions that business is subject to:

• halo effect- the ability to judge the details by the overall impression.
• Correlation and causation— is not the same thing.
• The fragmentation of single explanations- the systems are non-linear.
• The illusion of solid victories- everything changes.
• The illusion of painstaking research- tons of processed information are presented as proof of the scientific nature of the study (even if this information is taken from the media :).
• The illusion of continued success- it is impossible.
• Illusion of absolute result- consider the company's activities outside the context of the market (a company can show profit growth and, nevertheless, be in a deep ass, because other companies in this market show growth many times greater).
• Illusion of Misunderstanding- an explanation that is true for a certain set of options is presented as universal, for example - the top ten companies are highly customer-oriented, therefore, in order to become the best, a company must be customer-oriented.
• The organizational physics fallacy— there are no permanent laws, or they are difficult to formalize — there are no universal laws and rules in business.

To one degree or another, many business bestsellers fall prey to one or more of these illusions.

Conclusions? Business is too complex a system to try to apply linear laws to it - if we want to get a really meaningful result, we must consider business as a dynamic system with complex relationships - like a fractal, and not like a figure from Euclidean geometry, the laws of quantum physics, not Newtonian.

In general, to perceive the world linearly is a big mistake not only for business gurus, but also for many modern scientists from other fields of knowledge (which is, for example, the treatment of diseases with pills, when a symptom is treated with drugs, but multiple side effects come out), politicians, parents, teachers and other people. As far as I know, there are attempts to describe the world with more complex than linear models, for example, The Theory of Everything, but it is not yet possible to use them in practice. So, it remains only to rely on common sense.

The book not only contains extremely important and useful information for all of us, makes you think, but is also very easy and interesting to read, written in good language, contains many (sometimes funny) practical examples.

Phil Rosenzweig, "The Halo Effect...and Eight Other Illusions That Mislead Managers", 2008, BestBusinessBooks, ISBN 978-5-91171-009-5.

P.S. Many thanks to the BestBusinessBooks publishing house and personally to Margarita Adayeva-Datskaya for the provided book.