Phil Rosenzweig has authored a book debunking the "heavy research" used in popular business books including In Search of Excellence, Built to Last, What Really Works, and Good to Great. His focus is the eponymous "halo effect" which can easily be understood as ascribing additional virtues to arbitrary criteria. In these business books, successful companies are examined and key principles are supposedly extracted from rigorous analysis of the data. Rosenzweig critiques this approach by suggesting that business articles and reflective interviewing tends to link good performance with other desirable qualities and bad performance with less desirable qualities. For example, was LEGO visionary and bold when they expanded into adjacent markets or were they foolish and wreckless. The same actions and decisions are measured by their outcome, generally without an appreciation for the lens being used to view the results.

Specifically, Rosenzweig describes the following key delusions when examining businesses

1. The Halo Effect (p. 64)
   To many things that are thought to contribute to performance are often attributions based on performance.
2. Delusion of Correlation and Casuality (p. 72)
   Inferring causality from correlation is a common mistake. Indpependent variables have to be measured separately from the things we are trying to explain.
3. Delusion of Single Explanations (p. 75)
   It is difficult to untangle rival alternatives and we tend to focus on a single answer for the comapny being analyzed.
4. Delusion of Connecting the Winning Dots (p. 92)
   Conclusions can't be made by studying only the single case. In Search of Excellence only looked at successful companies.
5. Delusion of Rigorous Research (p. 100)
   The volume of research won't matter if the data is studded with Halos.
6. Delusion of Lasting Success (p. 101)
   Success is not permanent. Good companies regress to the mean, underperforming companies often move up towards the mean.
7. Delusion of Absolute Performance (p. 111)
   Success is not absolute, it must be understood within the industry. Kmart made all of the improvements Walmart made, it did them later with different results.
8. Delusion of the Wrong End of the Stick (p. 121)
   Simply examining one side of the equation may not lead to understanding. Are all of Collin's hedgehogs successful?
9. Delusion of Organizational Physics (p. 100)
   We can't put companies in petri dishes and run neat experiments. Business is not like physics.

Rosenzweig provides interesting summaries of the business books as a byproduct of doing the analysis. His succinctness is worth repeating.

In Search of Excellence (p. 85)

1. A bias for action--a preference for doing something--anything
2. Staying close to the customer--learning preferences and catering to them
3. Autonomy and entrepreneurship--breaking the companies into smaller companies
4. Productivity through people--all employees need to know their best efforts are essential
5. Hands-on, value-driven--executives need to remain engaged
6. Stick to the knitting--remaining with the business or market the company knows best
7. Simple form, lean staff--fewer layers
8. Simultaneous loose-tight properties--dedication to the central values combined with tolerance for employees

1. Having a strong core ideology that guides the company's decisions and behavior
2. Building a strong corporate culture
3. Setting audacious goals that can inspire and stretch people (BHAGs)
4. Developing people and promoting from within
5. Creating a spirit of experimentation and risk taking
6. Driving for excellence

1. Devise and maintain a clearly stated, focused strategy
2. Develop and maintain flawless operational execution
3. Develop and maintain a performance oriented culture
4. Build and maintain a fast, flexible, flat organization

• Discussed at length without a summary, Rosenzweig focuses much of his critique towards this book.

Much of the book is spent critiquing other business books. Clearly in doing this work and a lifetime of other work, Rosenzweig has his own opinions. Strangely, he doesn't provide research for his own work, he clearly defers to Michael Porter and suggests the key business insight should be

1. Strategy
   

   Strategy is about performing different activities from those of rival competitors or performing similar activities in different ways. A strategy is not a goal or an objective or a target. It's not a vision or mission or a statement of purpose. It's about being different from rivals in some important way.

2. Execution
   

   In turn, execution is all about carrying out those choices. It refers to the way that people, working together in an organizational setting, mobilize resources to deliver on the strategy.

1. If independent variables aren't measured independently, we may find ourselves standing hip-deep in Halos.
2. If the data are full of Halos, it doesn't matter how much we've gathered or how sophisticated our analysis appears to be.
3. Success rarely lasts as long as we'd like--for the most part, long-term success is a delusion based on selection after the fact.
4. Company performance is relative, not absolute. A company can get better and fall further behind at the same time. (Kmart)
5. It may be true that many successful companies bet on long shots, but betting on long shots does not often lead to success.
6. Anyone who claims to have found laws of business physics either understands little about business, or little about physics, or both.
7. Searching for the secrets of success reveals little about the world of business but speaks volumes about the searchers--their aspirations and their desires for certainity.

1. Any good strategy involves risk. If you think your strategy is foolproof, the fool may well be you.
2. Execution, too, is uncertain--what works in one company with one workforce may have different results elsewhere.
3. Chance often plays a greater role than we think, or than successful managers usually like to admit.
4. The link between inputs and outcomes is tenuous. Bad outcomes don't always mean that managers made mistakes; and good outcomes don't always mean they acted brilliantly.
5. But when the die is cast, the best managers act as if chance is the irrelevant-persistence and tenacity is the key.