What is this article about?
The Leadership Halo Effect and how to avoid delusion: Don’t take your success for granted, Collect and analyse independent evidence, and Use the power of anticipation
-reading time: 4 minutes- / -audience: Leaders-
The Leadership Halo Effect and how you can develop strategies to avoid delusion
I am sure you remember that very successful (former) colleague, who received great customer reviews, drove sales through the roof and outperformed all KPIs. The tendency is to assume that your colleague knew exactly what customers needed, how the company’s assets could be made highly profitable and how to motivate and engage the team. But when this colleague suffered a setback in sales and profits, perhaps people were quick to conclude that your colleague’s strategy and tactics went wrong, that your colleague became complacent, neglecting customers, not being able to motivate and engage the team anymore.
In fact, these things have not changed very much, if at all. Rather your colleague’s performance, good or bad, creates an overall impression – a halo – that shapes how we perceive your colleague’s strategy, leadership, skills, competencies and other elements.
Percy Barnevik, former ceo of abb
The same holds for leadership. McKinsey (2007) refers to the halo of Percy Barnevik, the famous ex-CEO of ABB:
“The same thing happened at ABB, the Swiss-Swedish engineering giant. In the 1990s, when its performance was strong, ABB was lauded for its elegant matrix design, risk-taking culture, and charismatic chief executive, Percy Barnevik. Later, when the company’s performance fell, ABB was roundly criticized for having a dysfunctional organization, a chaotic culture, and an arrogant CEO. But again, the company had not really changed much.”
McKinsey claims that many of the things that we commonly believe are contributions to performance are in fact attributions. In other words, outcomes can be mistaken for inputs.
This is the result of the complexity of defining many everyday concepts in business – including leadership, corporate culture, core competencies, and customer orientation – and that these concepts are ambiguous. We often deduce perceptions of them from something else, which appears to be more concrete and tangible: namely, financial performance.
THE HALO EFFECT
One of the most important fundamental errors of judgment that distort our understanding of performance is the Halo Effect, which is the tendency to attribute many positive features to success and to make the opposite attributions when success turns into failure.
The Halo Effect, a cognitive bias, was introduced by the psychologist Edwin Thorndike and it describes the tendency to make specific inferences based on a general impression.
The Harvard Business Review (2007) acknowledges how the Halo Effect contaminates the data used to judge performance. According to the author, the result is a misplaced belief that we can follow formulas – or routines – to achieve high performance – or successful leadership – when in fact performance or leadership is better understood as relative, not absolute.
The delusion of absolute performance is very important because it suggests that a leader can achieve high performance by following a simple formula or concept, regardless of the leader’s environmental factors. To achieve enduring high performance and leadership excellence, we must do more than follow formulas or concepts.
It is a misconception, caused by the Halo Effect, that leaders can achieve enduring success in a predictable way.
The delusion of lasting success can be attributed for example to popular leadership literature and business books presenting formulas, concepts, habits, or routines of successful leaders.
However, what the authors claim to be the causes of long-term performance are more accurately understood as attributions made about well-known leaders or leaders of well-known companies, that had been selected precisely for their long-term performance and success.
The delusion of lasting success can for example also be attributed to hardly ever-changing corporate leadership programs which are based on leadership visions that were developed during times when the environment and conditions were different.
The recent flash-transition to working from home and online, while facing an extremely high level of uncertainty and volatility, requires different leadership as compared to the stable years of inviting colleagues to your corner office, having a seating order and dress code for physical meetings, and organising large company events where you stood on stage, demonstrating your PowerPoint skills and being the go-to-person during coffee breaks for the so-called buy-in lobby talks.
My advice to (aspiring) leaders is threefold:
1. Do not fall for your own Halo Effect by taking your success for granted
A highly successful client, working as a sales executive in the tech industry, discussed his future with me and his ideal scenario was to stay at his current level for another 10 years until he is 50. He thought he would be cruising towards financial independence.
I asked him how he thought he would be able to pull that off, to which his initial reply was that he has been so successful in the last 10 years, so what could stop it? Then we discussed possible scenarios, such as technological changes which could make his company obsolete, mergers, the risk of younger, more ambitious, and cheaper staff taking over his role, unforeseeable expectations of the company, and so on. We came up with strategies to strengthen his position and sustain his success.
Recently, I received a request for coaching from a highly talented and successful CFO based in Los Angeles who was fully aware that she was in a perfect position and she enjoyed a lot of success, flying through the ranks. Her objective was to start coaching sessions now to be ready once she will face adverse conditions. She is highly aware that there could be many factors beyond her control influence her performance.
“Be the surprise, don’t be surprised“
A famous quote of one of my favourite thinkers, Jonas Ridderstråle, has always been in my head throughout my corporate career and as a leadership coach and developer
2. Analyse what makes you and others successful by collecting independent evidence
Another client, an innovation executive, shared his frustrations that he did not receive the recognition he thought he deserved, whereas his peers made promotion and gained significant exposure to more strategic initiatives.
We kicked off with the Psychological Safety Excellence assessment for Leaders and analysed how my client is perceived by his colleagues when driving engagement, commitment, and responsibility, but also concerning innovation and building trust. In some areas he had top scores, in others, he lagged a bit. He shared his reflection on how he responds to his environment and how he thought his peers do; I provided him with alternative points of view, holding up a mirror. We addressed his strengths and derailers and he committed to assume less and observe more while focusing on using his strengths and avoiding derailing.
Two months later, the tables have turned. My client received the mandate to work on a highly strategic project, in which he plays a more significant role than his peers. There is no sign of frustration and he has managed to obtain a full commitment from his peers. Partly because of his personal strategy and partly because he was the right person at the right place at the right time; he acknowledges both factors.
3. Use the power of anticipation and dismiss thinking that there is a key to guaranteed success
“What got you here, won’t get you there”
Marshall Goldsmith, one of the world’s most renowned leadership coaches
Stay ahead of the game by investing in greater knowledge and understanding of what you can influence and what you cannot influence, and the big picture versus the details. Take a step back and apply a helicopter view, which refers to the ability to rise above the specifics of a particular situation and to see it in its overall context and environment. It is the ability not only to see the forest for the trees but also the ability to see the big picture without losing sight of the details and their implications. Use the helicopter view as a framework for seeing interrelationships rather than things, for seeing patterns of change rather than static snapshots.
Analyse what you would need to apply or change in the short term and what is critical in the long term. Compare your current leadership conditions with potential future conditions and question your skills, competencies, routines and style. Challenge your historic leadership system or blueprint in the light of future scenarios.
In my Leadership Coaching & Development Programs, I use a Road Map approach for my clients’ needs and challenges. Supported by data – provided by a leadership/personality assessment at the start of the program – we break down the big picture into specific actions, which we place on the Road Map to improve the chances of success. The sessions are centred around steering, reflecting and challenging the why and the how of these actions, and adjusting when or where needed. In this way, your historic system can be made future-ready by using the power of anticipation.