What is the halo effect and how to avoid it?
- Gulchin
- Nov 28, 2020
- 2 min read
To understand how the halo effect works and how to avoid snap judgements, I’d like to share a real life case with you, which highlights an importance of making unbiased decisions.
Dilemma:
The board of a mining company thinks it’s time for a new CEO who would lead the company to the next generation. The hiring committee has a few internal candidates in mind—namely, the heads of the gold, diamond, and silver divisions. All 3 candidates have similar years and types of industry experience and comparable responsibilities.
But the front-runner in the minds of many on the committee is the head of the gold division. After all, his division has had a bigger contribution to company’s revenue over the past few years. It must be because he has been performing much better compared to others, right? Seems like a no-brainer.
But wait...Wasn't it too easy to decide?
Our desire of fitting complicated ideas into simple mental frames based on our impressions makes us to draw conclusions faster than we should.
This is caused by halo effect, as the most of our important personal and professional choices are.
That’s what happened in our case: The front-running CEO candidate’s division had performed better, because there had been a significant spike in the gold prices, something over which he had no control.
Yet the halo of high profits shined on the business-unit leader, the hiring committee’s initial impressions of him, while perhaps, the other 2 candidates would’ve been a better fit for the position.
How to avoid halo effect & snap judgement?
As a leader, to reduce the impact of the halo effect in business decisions:
Acknowledge your intuitions
Then taking a minute to ask yourself: What sort of judgment would I make if I set aside my first impressions?
Build an unbiased process for any important decision (project launches, hiring)
Ask for objective and critical inputs from your colleagues, teams if needed.
From the author:
Thanks for reading this post. Drop me your comments below telling whether you'd like me to share more case studies in the future
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