As you may know, last night was Game 1 of the Eastern Conference Finals, pitting the Cleveland Cavaliers against the Detroit Pistons. I watched both the game and the coverage afterward, noting the musings of one particular sportscaster on SportsCenter who said something along the lines of the following,
If the Cavaliers had won last night, LeBron James would have been celebrated for pulling off a triple-double and leading his team to victory. Alas, in the closing seconds of the game, James passed the ball to Donyell Marshall who attempted a three-point shot that would have put the Cavs up by one. But Marshall missed. Instead discussion of James’s performance will be about how he only had ten points and zero free throws.
A quick disclaimer, this isn’t a perfect quote, but you can see where it’s going.
I recently read a book entitled The Halo Effect…and Eight Other Business Delusions that Deceive Managers by Phil Rosenzweig, which highlights the phenomenon to which this sportscaster was alluding. The book discusses how we are fundamentally unable to separate evaluations of performance from the apparent results of those efforts. In this case, Dr. Rosenzweig talks about the Halo Effect in the context of management writing. He highlights how, in almost all research into the subject—and certainly in the case of top-selling management books—the methodology is to take a group of successful firms and ask their managers what led to the success. Because the sample is contingent upon the results, the answers are shaded by the Halo Effect.
In essence, it’s not so much that successful firms necessarily have great culture, inspirational teamwork, and transparency—characteristics that are often attributed to them through this “research” process. It’s that in hindsight, managers of successful teams or firms tend to say that such is the case.
While reading the book, I couldn’t help but think about the application of this phenomenon to sports. Rosenzweig spends considerable time talking about how there is no formula for success, but even more that success is relative. An organization can adopt all the newest technology and break their own revenue records, but they're only going to get ahead by outperforming their competitors. Relative performance matters. The same clearly holds true in sports, which is inevitably what brings a dynasty back down to earth after a few years on top. Despite relatively stable knowledge and a pretty limited number of variables (at least compared to say, the tech industry), the three-peat remains ever elusive for most teams.
Rosenzweig is wise to warn us to be careful of the Halo Effect in analyzing success in the firm. He points out that “[s]trategy always involves risk because we don’t know for sure how our choices will turn out.” (p 145) A certain amount of failure is the predictable result of taking risks, no matter how calculated. Rosenzweig contends that the trick is navigating risk such that failure will not be detrimental to your operations. This is indeed what LeBron James attempted to do last night in evading a double-team by passing the ball to a wide open teammate with a stellar three-point record. He took a risk, and it didn’t work out. He defended his decision by saying, "The winning play when two guys come at you and a teammate is open is to give it up. It's as simple as that. You're going to make some, and you're going to miss some. Unfortunately, that one was to win the game."
Much like those journalists who cover business news, sports writers have been unable to separate their knowledge of the game’s result from their analysis of James’s decision to pass the ball. "[T]he only thing anyone is going to remember about Game 1 of the Eastern Conference finals, won by Detroit 79-76, is this: With the game on the line, LeBron James didn't take the biggest shot. He let Marshall take it instead." (ESPN)
Comments