Our brains love shortcuts, so we often judge people by appearances. The trouble starts when those judgements shape business decisions.
This article looks at how to avoid mistakes caused by the halo effect and authority bias.
What is the halo effect?
The halo effect occurs when our overall impression of a person influences how we judge their individual qualities. We assume competence without having evidence for it. Instead of considering each quality separately, we let the whole impression suggest the answers. It is often triggered by something immediately noticeable: appearance, manner of speaking or job title. What is easy to see starts replacing knowledge about things that are harder to check.
It is simple: a likeable person may be an excellent expert, but being likeable does not establish that. [1] In a study by Richard Nisbett and Timothy Wilson, participants watched one of two interviews with the same lecturer. In one version, he behaved warmly and in a friendly way; in the other, he was cold and distant. His behaviour changed, along with ratings of his appearance, mannerisms and accent. These qualities were rated more positively in the friendly version. [2] Attitudes towards the person influenced judgements of his other characteristics. Participants did not necessarily recognise that influence. [2]
The study gives us a good reason to check whether we have confused liking someone with assessing what they can do.
The halo effect is sometimes equated with first impressions, but the concepts differ. A first impression concerns the beginning of a relationship. The halo effect can influence us later too, when we already know someone and continue to view their decisions through an overall opinion we have formed.
Appearances can be painfully misleading
Imagine an adviser who makes an excellent impression in a meeting. They are easy to talk to, answer without hesitation and tell interesting stories. You may start assuming they can design a sales process just as well. Yet having a good conversation and designing a process are different skills.
In a classic study by Karen Dion, Ellen Berscheid and Elaine Walster, participants attributed more favourable qualities and life expectations to physically attractive people. [4]
Consider these two situations, both as someone buying another person's work and as someone trying to sell their own:
- Someone speaks confidently, has a great website and has worked with famous brands. After a few minutes, you start thinking they probably know their job well. You have not seen how they solve problems. You have not checked what they were responsible for with those clients. But your overall impression is so positive that you decide to hire them.
- The opposite happens too. Someone speaks less fluently, their presentation looks average and the value of their proposal is immediately harder to see. They may have a sensible solution. Now, though, they must overcome the impression you have already formed.
The problem becomes more serious when origin, gender or skin colour overshadow information about a particular person. The halo effect can overlap with stereotypes, although stereotyping involves other mechanisms too. Knowing which group someone belongs to does not replace checking their work.
In practice, I would ask myself: would I consider the same answer equally good if it came from someone with a different appearance, age or position?
Even a recognised authority can be wrong
Similarly, we attribute better qualities to authorities, yet they can fail too. We see this in inaccurate forecasts of crises and in medical practices that eventually proved harmful.
An inaccurate prediction does not, on its own, establish a lack of competence, just as an accurate one does not establish exceptional talent. Ask about the conditions behind the forecast, the person's track record and how they express uncertainty. Saying “we cannot predict this precisely” may be more reliable than confidently naming a date for disaster.
I would apply a similar principle in business: check the quality of a particular expert's work and the evidence in the particular case. Neither unconditional admiration nor reflexive rejection of expertise helps us make a good decision.
It is also worth remembering that expertise in one field may coexist with considerable ignorance in others. Are top chess players intelligent? Yes, but their chess skills alone do not justify assumptions about their competence elsewhere. They have spent so much time within their specialism that they can still make very basic mistakes in everyday matters, as illustrated by the following video.
Authority can switch off critical thinking
Authority bias is related to the problem discussed here, but concerns something different. With the halo effect, an overall impression influences specific judgements. With authority bias, a title, position or reputation may lead us to accept an opinion or follow an instruction with less scrutiny.
A white coat, a suit and insignia signal a role. Today, media appearances, books and follower counts do the same. Such signals can be useful. We still need to check which competence they relate to. [5]
For anyone running a business, an interesting question is what makes disagreement possible. Can an employee tell the boss that the data does not support their idea? Can you ask a consultant a question they cannot answer? Can a less experienced person stop a bad decision?
In aviation, crew resource management training addresses communication and appropriate assertiveness within a hierarchy. FAA guidance describes the balance between respecting authority and raising concerns. [6] This offers a useful idea for a business: agree on a way to raise problems before doing so becomes genuinely difficult.
I would prefer an expert who can show the limits of their knowledge to someone with an instant answer to everything. We should subject our own convictions to the same scrutiny. Independent thinking includes recognising that someone else may know more than we do.
Association does not establish causation
When Cisco was successful, commentators praised the way the company was run. After its share price collapsed, those same areas began to be described as weaknesses. [3]
What matters in this story is the way judgements are formed, more than the share price itself. When we know the result was good, it is easy to attribute it to excellent management. When results deteriorate, similar behaviour can suddenly look incompetent. The story changes with the outcome, even though assessing individual decisions would require separate evidence.
The point is to avoid explaining management quality solely through the result, and then using that management quality to explain the result. That takes us round in circles.
Imagine a company whose sales increased during a sharp rise in demand across its industry. The boss may be making excellent decisions, but may also be benefiting from favourable conditions. To distinguish between the two, I would check results against competitors and look at what actually changed inside the business. I would ask the same questions about a weaker result.
This is useful when reading business bestsellers too. If an author first selects the winners and then asks how they succeeded, they get stories from people who already know the ending. Interesting stories, but ones that need checking.
The halo effect is also related to errors about causation and overlooking alternative scenarios. In each case, we construct a convincing explanation too quickly.
Sales growth and a new boss appeared at roughly the same time. Did the boss cause the growth? Perhaps, but coincidence alone does not settle it. Similarly, an association between the number of books at home and children's results does not, without further analysis, establish buying books as an independent cause of success. [8–9]
Taleb points out that a visible result does not show every possible ending. Someone may have won despite a risky decision, while someone else failed despite sensible preparation. [10] When assessing an entrepreneur, I would therefore also consider what they knew at the time and what risks they took.
A good result can give a halo to a bad way of working too. Look at how it came about before deciding to imitate it.
Everyday examples
1. A famous logo can make too much noise
Imagine two firms. One displays the logos of major clients; the other describes a few small projects. At first glance, it is easy to favour the first.
But what do we actually know? Did the firm develop the client's whole strategy or produce a single piece of content? Who was responsible for the result? Was that project similar to ours?
A famous logo can be useful information. We still need to check what it demonstrates. Experience on a large production does not automatically tell us whether this supplier can help us.
2. A beautiful proposal can obscure difficult questions
A similar trap appears when comparing proposals. One document is beautifully designed; the other looks ordinary. The first is easier to read and more pleasant to look at. That is a real advantage. The trouble starts when we stop checking the scope.
You can receive a beautiful proposal that still leaves you unsure what you will get or who is responsible for implementation. You can also receive a less impressive document that lets you assess the cost and each side's obligations.
Before choosing a supplier, I would write down separately what I know about the quality of the presentation and what I know about the quality of the proposed work.
I discuss presenting an offer clearly in my article about landing pages.
3. Why does a tennis player sell coffee machines?
A famous athlete can draw attention to an advert. Their success and the audience's affection may also create positive associations with a product. But what does tennis have to do with coffee?
Winning tournaments does not demonstrate knowledge of coffee-machine engineering. Similarly, an actress's popularity does not provide medical confirmation that an advertised tablet works.
The same problem applies to entrepreneurs. Someone builds a successful company, and suddenly we ask them to explain economics, relationships and raising children. We may be interested in their opinion. It is still worth checking which matters they actually have experience in.
4. The halo effect appears in relationships too
Falling in love shows how easily we idealise someone. We are so taken with a person that behaviour which would otherwise irritate us receives a generous explanation.
Something similar can happen with a favourite colleague. We attribute their lateness to an excessive workload, while seeing the same lateness in someone we dislike as disregard for their duties.
When making an important decision, separate your feelings towards the person from your assessment of a particular action. You can like someone very much and still conclude that they did a task badly.
Should you care about your own presentation?
Of course. A clear website, a well-prepared meeting and an understandable explanation of your offer help clients assess working with you. If you are good at your job, make that visible.
That comes with responsibility. A presentation should make competence easier to check. Show an example, explain your contribution and let people ask about the result. Acknowledge where your experience ends.
I would not want to build a reputation on the belief that making a good impression is enough. I want clients to have a reason to work with me after checking the details. I discuss this approach in my article about corporate jargon.
How can you keep your own judgements in check?
For an important decision, I would start by writing down criteria before watching another presentation. If I am looking for someone to organise sales, I want to know how they identify a problem and move from diagnosis to action. A fluent account of past successes is an addition to that assessment.
Next, I would ask for an example of a similar task. What was the starting point? What exactly did this person do? How do we know what the result was? When several people contributed, ask how responsibility was divided.
Comparing candidates using the same questions also helps. Otherwise, we assess one on their conversation, another on their portfolio and a third on a friend's recommendation. We end up with different impressions that are difficult to use fairly for a single decision.
There is another question I would like to ask myself more often: if the name and famous logos disappeared from this proposal, what would still persuade me to choose it?
This kind of comparison helps reveal where we have information and where we are filling in the gaps.
Sometimes it helps to hide what stands out most
Blind assessment can help limit the influence of appearance and authority. For example, auditions behind a screen let a committee focus on a musician's playing without seeing the performer. Goldin and Rouse's findings supported greater impartiality and an effect of such auditions on women's opportunities in orchestras. [7]
Businesses can design processes similarly. Assess a sample of work before reading the author's CV. Compare proposals by scope before getting excited about logos. Let team members write down their assessments before the boss speaks.
The aim is to limit the influence of information that does not answer the question being asked. If we are choosing a supplier, what matters is whether they can do the work we need. Status can add context, but should not do the whole assessment for us.
A good impression is worth checking
I care about making a good impression. As an entrepreneur, I also have to watch for the moment when I start treating an impression as evidence.
You can like someone and still ask about the scope of work. You can appreciate a beautiful website and check whether the offer behind it makes sense. You can admire success in one field without assuming that person has an answer to every question.
At your next important decision, try to separate what you see from what you have assumed. Sometimes the most expensive mistake is hidden in that difference.
FAQ
Does the halo effect only concern appearance?
No. An overall impression can arise during a conversation or from other information. In Nisbett and Wilson's study, the lecturer's behaviour influenced ratings of his other characteristics. [2]
Is the halo effect the same as a first impression?
No. A first impression forms at the start of contact. The halo effect concerns the influence of an overall assessment on specific judgements and can also occur in a longer relationship.
Are well-known clients in a portfolio worthless?
They are useful when the scope of the work is clear. Check the supplier's role and how closely the project resembles your own problem.
How can I limit the halo effect when choosing a supplier?
Set criteria before meeting, ask comparable questions and request evidence relevant to the particular task.
Sources
[1] Edward L. Thorndike (1920), A constant error in psychological ratings, Journal of Applied Psychology, 4(1), 25–29. https://doi.org/10.1037/h0071663
Original text: https://web.mit.edu/curhan/www/docs/Articles/biases/4_J_Applied_Psychology_25_%28Thorndike%29.pdf
[2] Richard E. Nisbett, Timothy DeCamp Wilson (1977), The halo effect: Evidence for unconscious alteration of judgments, Journal of Personality and Social Psychology, 35(4), 250–256. https://doi.org/10.1037/0022-3514.35.4.250
Original text: https://deepblue.lib.umich.edu/bitstream/handle/2027.42/92158/TheHaloEffect.pdf
[3] Phil Rosenzweig (2007), The Halo Effect: … and the Eight Other Business Delusions That Deceive Managers, Free Press. https://www.simonandschuster.com/books/The-Halo-Effect/Phil-Rosenzweig/A-Must-Read-Guide-for-Managers/9781476784038
[4] Karen Dion, Ellen Berscheid, Elaine Walster (1972), What is beautiful is good, Journal of Personality and Social Psychology, 24(3), 285–290. https://doi.org/10.1037/h0033731
[5] Robert B. Cialdini, Influence: The Psychology of Persuasion, HarperCollins, 1998, p. 208 onwards
[6] Federal Aviation Administration, AC 120-51C, Crew Resource Management Training (historical document). https://www.faa.gov/documentLibrary/media/Advisory_Circular/AC_120-51C.pdf
[7] Claudia Goldin, Cecilia Rouse (2000), Orchestrating Impartiality: The Impact of “Blind” Auditions on Female Musicians, American Economic Review, 90(4), 715–741. https://doi.org/10.1257/aer.90.4.715 . Full text: https://dash.harvard.edu/entities/publication/73120378-e9fa-6bd4-e053-0100007fdf3b
[8] Hans-Hermann Dubben, Hans-Peter Beck-Bornholdt, Der Hund, der Eier legt. Erkennen von Fehlinformation durch Querdenken, rororo, 2006, p. 175 onwards; storks example: p. 181.
[9] National Endowment for the Arts (2007), To Read or Not To Read: A Question of National Consequence. https://eric.ed.gov/?id=ED499045
[10] Nassim Nicholas Taleb (2001), Fooled by Randomness, Random House, p. 23.
