#68 Phil Rosenzweig: The Halo Effect

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Mar 4, 2025

Phil Rosenzweig, a celebrated professor at IMD Business School and author of "The Halo Effect", debunks myths in management literature. He discusses how people's perceptions can dramatically alter their judgments about companies and their leaders. Rosenzweig emphasizes the importance of critical thinking and the risks of the halo effect, showcasing its implications in both business and everyday life. He also shares insights on investing strategies, his experiences at Hewlett Packard, and how Warren Buffett's philosophy informs his views on company performance.

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INSIGHT

The Halo Effect

The halo effect is a cognitive bias where a general impression influences specific judgments.
High-performing companies are often perceived as having great leadership, strategy, and motivated employees, but this isn't always true.

ANECDOTE

ABB and the Halo Effect

ABB, led by Percy Barnevik, was highly praised during its successful period.
When its performance declined, the same aspects were criticized, demonstrating the halo effect.

INSIGHT

Halo Effect Today

The halo effect remains prevalent, though fewer books claim to reveal success secrets.
It's crucial to assess company strengths independently, rather than assuming universal excellence.

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