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Comment by rweba | Hacker News Reader

One of the best books I read last year was "The Halo effect"

https://www.amazon.com/dp/B000NY128M/

It talks about exactly this issue: If company A is successful, we explain it by saying that the management is absolutely brilliant, if company B does the exact same things but is failing, we explain it by saying that management are totally incompetent.

It's a major cognitive bias which renders most "business press" articles totally worthless.

The solution, obviously, is to gather a large amount of data and do some rigorous analysis.

People have tried to do this but the general conclusion is that there are no real simple rules that a business can follow to always succeed despite our eager desire for simple explanations.

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Yeah reminds me of one of Buffett's sayings "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.". Perhaps illustrated by Eddie Lampert who used to be considered a genius ("first Wall Street financial manager to exceed an income of $1 billion in a single year"), taking over Sears which hasn't gone great (stock from ~$100 to $2.3).

I love that book. Short anecdote: back in 2006 I was lucky to get an early copy through a high-flying management consultant. The book basically rips into everything that is wrong with management consulting — but for some reason this person was completely unaffected by this book and kept praising it. After talking for a few minutes, it dawned on me: this person hasn’t read the book! ha ha.

Anyway after reading the book I thought phil rosenzweig was a genius and this book ought to be more popular.

I personally refer to this as the "Marissa Mayer problem." To me the real mark of success and brilliance is not just succeeding once, its succeeding multiple times. Jumping on the Google or Amazon rocketship and doing well there, while there is something to be said about the fact that you didn't screw it up, doesn't necessarily mean that you are brilliant. She went to Yahoo, and while she did a decent job putting lipstick on a pig, I think it showed that she is a mere mortal and not a genius.

What is impressive about Amazon IMHO is that they have succeeded in multiple businesses. One could argue that they are all under the halo of "ecommerce" but what was just a bookseller spread into virtually everything sold online, reshaping distribution networks, moving into groceries, content, etc.

To be fair to Mayer, I don’t think anyone could have saved Yahoo.

She presided over a (mostly) graceful decline which allowed a reasonable end to the company.

She wasn’t some genius but I never understood why she was considered that by some anyhow: she’d previously shown solid competency not amazing insight.

In a recent NYT interview, here's what she had to say about that: "[T]iming is everything... Yahoo’s offerings could consume hours a day, and trying to regain that moment in time was really hard... regaining that contextual relevance that was afforded to Yahoo in 1999 and the early 2000s was difficult."

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