Posted on Wednesday 4 September 2013 by Ulster Business
Our patterns of work are shifting, the ways and means that we use to reach and connect with our customers are becoming ever more digital, and the way they engage with our products and services continues to challenge our business models. These points have never been more resonant as we shine a light on our globalised marketplace following the G8 meeting in Enniskillen.
Some things never change though: a seemingly great deal; the strength of a good commercial hunch; our ability to know – far better than anyone else – what is best for our own organisation. These things are unerring, right? In fact, our faith in these things couldn't be farther misplaced. With global leaders having bid a fond farewell to Fermanagh, we look at the important role perception plays in commerce.
Apple Inc has long been the darling Cupertino. Staking their claim as the earth's most cash rich organisation, they've been heralded as a poster-child for innovation in virtually every commercial report in the last fifteen years. In the period after the previously ousted Steve Jobs returned to the company in 1995, it experienced meteoric growth. It's cutting edge design, use of simple intuitive interfaces, warm retail store feel, world class customer service and stand-out organisational culture have all been cited as ingredients in it's winning formula.
Corporate analysts unpicked their business model ad nauseam. Journalists lauded their style and vision as truly revolutionary. Authors flooded book shelves with paperbacks brimming with the 'secrets' of how the giant achieved their success, and promised to teach how yours could too (all for a paltry £9.99, with copies available at all good airports). Apple could do no wrong.
By 2008, though, the sentiment had slowly begun to change. As consumers and companies squirreled away their pennies and chose to 'make-do' with their existing devices rather than upgrade, the company's sales and share price began to slip. And as the share price began to decline, so did the sentiment of the commentators. What was once revolutionary now seemed evolutionary; innovative store spaces were dubbed cold and formulaic; Apple was reportedly becoming staid, predictable, and worst of all 'conventional'.
The poster-boy had become the problem child. It was losing its grip on the cutting edge, and was teetering on mediocrity. Yet nothing structurally had changed in the organisation. The same visionary leadership team were in place, the same investment in future technology continued, the same development programme forged ahead. The only thing that had shifted were their sales patterns, a factor that was more a result of the economic situation than any organisational issues. In the space of months they had gone from being a shining light of innovation, to being the inevitable yesterday's man through no fault of their own.
So what's going on here? The 'halo effect' occurs when one single element of a person or organisation stands out to us so much that it affects how we see them as a whole. For Apple, as its value soared so did the perceived value of everything it touched. The entire organisation was seen as an unqualified success without any real in-depth investigation as to why, or what was making it so.
In other words, we find a sensational fact or feature and irrationally generalise from there that every aspect of the company must be equally as sensational. We accord excellence where it's not always due. Equally though, we treat organisations that are going through short or medium term blips with caution and tend to expect that not only is their model flawed, but their future too is doubly uncertain.
First discovered almost a century ago, the halo effect has the power to dramatically affect our decision-making, the way we see our own organisation and the way we see other organisations around us. Put simply, a single standout characteristic makes a good or bad impression on us that is so powerful that it overshadows every other aspect, skewing how we see the bigger picture.
Decades worth of studies have shown that we all subconsciously regard more attractive people as being more honest, trustworthy, friendly, and generous. Evidence shows they find it easier in the workplace too, and even teachers have been found to, on average, subconsciously give better looking pupils markedly higher grades.
The halo's impact is perhaps most notable in advertising and marketing. When we think of Penelope Cruz, we don't automatically think of her as the perfect endorsee for Nintendo DS. Indeed, the link between Ozzy Osbourne and "I can't believe it's not butter" seems even more tenuous. But perhaps none was more surprising than Mikhail Gorbachev appearing in a recent Louis Vuitton commercial. We see individuals who have achieved success, notoriety, or even just plain old recognition – and we accord that same perceived quality to whatever wares they're flogging.
We fall victim to the halo effect in every business transaction. Think about the last great pitch you were audience to. What's the one thing that stands out to you about the experience? Chances are that enduring characteristic – good or bad – has coloured your view of the product, the people, and the entire organisation.
The lessons for buyers, managers, and leaders are clear. The moment that you've formed a judgment on a person, product or service, immediately challenge your own view. Inspect what it has been based on and see if that same feeling remains when you do more than scratch the surface on the product offering. More importantly, what aspect of your organisation is forming a halo with your clients? Those 'always-late' account reports and invoices might seem like a trivial administrative delay in your office, but to your client they just might be the tip of the mismanaged wedge.
And what happened to Apple? The analyst dissent continued until the now omnipotent iPhone gained commercial teeth in 2008, quickly followed by the iPad, and share prices grew in multiples of hundreds of percent. Back on top, it had regained its crown as "perhaps the greatest company ever conceived".
And you can bet they'll have another revolutionary product around the corner to save any perceived falls from grace. iHalo, anyone?
Find out more about David's work on www.davidmeade.co.uk and follow him on twitter @davidmeadelive