The halo effect applies to IT

As a skeptic I have to count The Halo Effect as one of the most important business books of all time. Read it. It has a lot to do with the stuff we talk about on this blog.

Rosenzweig's arguments boil down to this: promises by other business books to have found the formula for business success are delusional. He describes nine delusions or misconceptions on which they are based. The primary argument is that the books do lots of apparent research that is (a) subjective and/or (b) after-the-fact analysis, a self selecting sample.

Researchers ask people questions about successful companies along the lines of "what was so good about..." the strategy? the CEO? the culture? working there? etc etc The halo effect is that whatever the strategy or the personality or the decision was, this is described in positive terms if the company was successful. But it is described in equally negative terms if the company was unsuccessful. Any attribute of a company acquires a halo if that company was successful.

And researchers ask questions about successful companies. They do an after-the-fact analysis of a group of selected companies to find what they had in common as if that was the magic formula. "Nineteen of the twenty top companies had an executive jet and a red-headed receptionist".

Most of all, Rosenzweig points out how everybody conveniently overlooks one big element of success: luck. Oh sure, "the harder I work the luckier I get" is still true: you have to do the right things. But many successful companies at some point took a huge punt, and other companies who took the same risk paid the price with failure. So success depends on luck and pulling off a few gambles. You can't control for external factors. Heck, in a system as complex as an organisation you can't control for internal factors! And what worked in one organisation is just as likely not to work in another. ...But you won't hear many CEOs on a gazillion dollars a year admitting that.

Which also implies that success is almost never long term except for a lucky few who pull off successive gambles. An incumbent is likely to either take another gamble and fail, or to become risk averse and miss opportunities which a pluckier upstart will take and win. (Sharemarket investors take note)

What has this to do with IT?

The IT stuff I read is riddled with subjective halo-tainted research and after-the-fact inference.

"These three companies saved a million dollars using this CMDB". How many wasted a million?

"Three quarters of CIOs who have invested in ITIl report their decision was a good one"

"The majority of companies who cut IT costs attribute it to ____[insert here]____"

"You need a CMDB - all the big companies who we have heavily pitched the idea to either have one or a thinking about one"

There is no formula for IT success, in the ITIL books or anywhere else. Do the right things, do them right, then cross your fingers and hope.

Syndicate content