The Halo Effect and Champions
"Most management books, the author says, focus on the question, "What leads to high performance?" But Phil Rosensweig asks a different question: "Why is it so hard to understand high performance?"
To get at the answer, The Halo Effect focuses on nine "delusions" that Rosenzweig claims wrongly influence business thinking -- including one for which the book is named, the halo effect. A company's performance creates a halo, either good or bad, that influences the way the firm is perceived, he notes. When a company is performing well -- sales are brisk, the stock is rising -- people are quick to conclude that the firm has visionary leaders, a superb strategy and a corporate culture that brings out the best in employees. When performance goes down, the company's leaders are suddenly seen as arrogant, their strategy is perceived to be too risky and the corporate culture is stifling."
You have to enjoy a book named the "Halo Effect and Eight Other Delusions" when after finishing the book you can only remember the Halo Effect -which is neat demonstration of the book's main thesis. Rosenzweig argues, effectively with examples, that when we rank outcomes with various attributes, we tend to simply the process by focussing on a single dimension or attribute. For example, if we want to rank the leadership abilities of two companies the tendency is to use the attribute or value dimension of profitability. If one company is more profitable, then we will tend to rank or compare the companies with respect to other attributes using profitability as the proxy measure. In short, profitable companies are winners on every dimension of value. Which is both absurd and prevalent thinking.
Here is a nice example, from my favourite MLM site, Mary Kay Cosmetics on Champions. Here is a Mary Kay description of Champions.
"I've studied champions for many years, and I want to share 10 qualities that I've found to be consistent among them:
1. The victory is won in their head and heart before the work is done.
2. Champions know the rules of the game and they're willing to play better than they've ever played before.
3. Champions believe the risk of victory is worth more than the disappointment of failure.
4. Champions have champion mentors.
5. Champions know there's nothing more powerful than a winning attitude.
6. Champions are motivated by their dream, but are made by their routine.
7. Champions focus on maximizing their strengths, not protecting their weaknesses.
8. Champions have unquestionable integrity.
9. Champions are extra-milers. They don't do just enough to get by; they do the and then some.
10. Champions NEVER give up! I'd like to elaborate a little further on a couple of points. Take #1, for instance: The victory is won in their head and heart before the work is done.
Over the years, I've seen many Sales Directors miss a goal simply because they never believed they could achieve it. These Sales Directors said all the right things to others, but they hadn't convinced themselves that they deserved the victory, or they simply weren't willing to put forth the effort needed to achieve the goal."
Notice how you cannot determine who is a Champion until you see the results of their sales - from which it follows that they must have superb on the other nine attributes. It also appears that Champions are unable to detect fallacies - effect, therefore cause.
