The Halo Effect - Deepstash
Business Delusions

Our thinking about business is shaped by a number of delusions - ones that distort our understanding of company performance, that make it difficult to know why one company succeeds and anot...

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The Halo Effect

The Halo Effect

by Phil Rosenzweig

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This is our tendency to make inferences about specific traits on the basis of a general impression.

In the business world, it refers to the tendency to look at a comp...

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Just because two sets of things are correlated does not mean that one causes the other to happen. Sometimes one might cause the other to happen. But we won't know which of them is the trigger. Mayb...

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Success cannot be usually attributed to one factor.

Many studies show that a particular factor—strong company culture or customer focus or great leadership—leads to improved ...

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If we pick a number of successful companies and search for what they have in common, we’ll never isolate the reasons for their success, because we have no way of comparing them wit...

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If your data sources are corrupted by the halo effect, it doesn't matter how much data you have gathered, or how sophisticated your methodology was.

Data quality and quantity...

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Almost all high-performing companies regress over time. The promise of a blueprint for lasting success is attractive but not realistic.

Success is transitory, and man...

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Company performance is relative, not absolute. A company can improve and fall further behind its rivals at the same time.

A company’s performance should be measured r...

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It may be true that successful companies often pursued a highly focused strategy, but that doesn’t mean highly focused strategies often lead to success.

Some companies have a focused strategy...

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The study of corporate performance is not a science like physics. We wrongly believe that there are certain rules or a formula for success and if a company follows the rules or the...

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