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From Proust to M&A

In ’Remembrance of Things PastThe Way by Swann’(1913), Marcel Proust wrote: “Even the very simple act we call ‘seeing a person we know’ is in part an intellectual one. We fill the physical appearance of the individual we see with all the notions we have about him, and of the total picture that we form for ourselves these notions certainly occupy the greater part.“

Proust may not have been a psychologist, but he put his finger on the well-known halo effect which was only scientifically documented seven years later by Edward Thorndike. The Encyclopedia Britannica defines it as ‘an error in reasoning in which an impression formed from a single trait or characteristic is allowed to influence multiple judgments or ratings of unrelated factors.’ When all the notions we have about someone or something are limited, the picture tends to be filled by extrapolation, preconceived ideas or simply fantasy.

Phil Rosenzweig, Professor at IMD, wrote about the impact of the halo effect in business in a McKinsey article (2007). He argues that financial performance tends to drive on its own the perception of management leadership, corporate culture and strategy because it is an easily accessible source of hardcore data. When growth and profits turn from good to bad, investors are quick to assume that the same factors have lost their shine. The reality is often much more subtle: “Many things we commonly claim drive company performance are simply attributes based on prior performance.”

Consider now what happened to Proust when speaking with his grandmother for the first time through a new apparatus called a telephone in ‘Remembrance of Things Past – The Guermantes Way’ (1920): “Suddenly I heard that voice which I supposed myself, mistakenly, to know so well; for always until then, every time that my grandmother had talked to me, I had been accustomed to follow what she was saying on the open score of her face, in which the eyes figured so largely; but her voice itself I was hearing this afternoon for the first time. […] Without the mask of her face, I noticed for the first time the sorrows that had scarred it in the course of a lifetime.[…] “Granny!” I cried to her, “Granny!” and would fain have kissed her, but I had beside me only that voice, a phantom, as impalpable as that which would come perhaps to revisit me when my grandmother was dead.”

In an instant, a single phone call broke the halo-effect, or replaced it with another, powerful one as Proust’ tender vision of his grandmother is substituted by that of an estranged old lady about to pass away. Proust’s experience illustrates how a slight change of context or angle can provide a vastly different perspective on any given situation through the halo effect.

Mindful of this cognitive bias, one of the most relevant questions when assessing the quality of businesses, should be, according to the above: If a company’s financial performance was not known to me, what would I think about its culture and execution? An interesting approach when conducting due diligence on an M&A target.


“One morning, Saint-Loup confessed to me that he had written to my grandmother to give her news of me, with the suggestion that, since there was telephonic connexion between Paris and Doncières, she might make use of it to speak to me. In short, that very day she was to give me a call, and he advised me to be at the post office at about a quarter to four. The telephone was not yet at that date as commonly in use as it is to-day. And yet habit requires so short a time to divest of their mystery the sacred forces with which we are in contact, that, not having had my call at once, the only thought in my mind was that it was very slow, and badly managed, and I almost decided to lodge a complaint. Like all of us nowadays I found not rapid enough for my liking in its abrupt changes the admirable sorcery for which a few moments are enough to bring before us, invisible but present, the person to whom we have been wishing to speak, and who, while still sitting at his table, in the town in which he lives (in my grandmother’s case, Paris), under another sky than ours, in weather that is not necessarily the same, in the midst of circumstances and worries of which we know nothing, but of which he is going to inform us, finds himself suddenly transported hundreds of miles (he and all the surroundings in which he remains immured) within reach of our ear, at the precise moment which our fancy has ordained. And we are like the person in the fairy-tale to whom a sorceress, on his uttering the wish, makes appear with supernatural clearness his grandmother or his betrothed in the act of turning over a book, of shedding tears, of gathering flowers, quite close to the spectator and yet ever so remote, in the place in which she actually is at the moment. We need only, so that the miracle may be accomplished, apply our lips to the magic orifice and invoke—occasionally for rather longer than seems to us necessary, I admit—the Vigilant Virgins to whose voices we listen every day without ever coming to know their faces, and who are our Guardian Angels in the dizzy realm of darkness whose portals they so jealously keep; the All Powerful by whose intervention the absent rise up at our side, without our being permitted to set eyes on them; the Danaids of the Unseen who without ceasing empty, fill, transmit the urns of sound; the ironic Furies who, just as we were murmuring a confidence to a friend, in the hope that no one was listening, cry brutally: “I hear you!”; the ever infuriated servants of the Mystery, the umbrageous priestesses of the Invisible, the Young Ladies of the Telephone.

And, the moment our call has sounded, in the night filled with phantoms to which our ears alone are unsealed, a tiny sound, an abstract sound—the sound of distance overcome—and the voice of the dear one speaks to us.

It is she, it is her voice that is speaking, that is there. But how remote it is! How often have I been unable to listen without anguish, as though, confronted by the impossibility of seeing, except after long hours of journeying, her whose voice has been so close to my ear, I felt more clearly the sham and illusion of meetings apparently most pleasant, and at what a distance we may be from the people we love at the moment when it seems that we have only to stretch out our hand to seize and hold them. A real presence indeed that voice so near—in actual separation. But a premonition also of an eternal separation! Over and again, as I listened in this way, without seeing her who spoke to me from so far away, it has seemed to me that the voice was crying to me from depths out of which one does not rise again, and I have known the anxiety that was one day to wring my heart when a voice should thus return (alone, and attached no longer to a body which I was never more to see), to murmur, in my ear, words I would fain have kissed as they issued from lips for ever turned to dust.

This afternoon, alas, at Doncières, the miracle did not occur. When I reached the post office, my grandmother’s call had already been received; I stepped into the box; the line was engaged; some one was talking who probably did not realise that there was nobody to answer him, for when I raised the receiver to my ear, the lifeless block began squeaking like Punchinello; I silenced it, as one silences a puppet, by putting it back on its hook, but, like Punchinello, as soon as I took it again in my hand, it resumed its gabbling. At length, giving it up as hopeless, by hanging up the receiver once and for all, I stifled the convulsions of this vociferous stump which kept up its chatter until the last moment, and went in search of the operator, who told me to wait a little; then I spoke, and, after a few seconds of silence, suddenly I heard that voice which I supposed myself, mistakenly, to know so well; for always until then, every time that my grandmother had talked to me, I had been accustomed to follow what she was saying on the open score of her face, in which the eyes figured so largely; but her voice itself I was hearing this afternoon for the first time. And because that voice appeared to me to have altered in its proportions from the moment that it was a whole, and reached me in this way alone and without the accompaniment of her face and features, I discovered for the first time how sweet that voice was; perhaps, too, it had never been so sweet, for my grandmother, knowing me to be alone and unhappy, felt that she might let herself go in the outpouring of an affection which, on her principle of education, she usually restrained and kept hidden. It was sweet, but also how sad it was, first of all on account of its very sweetness, a sweetness drained almost—more than any but a few human voices can ever have been—of every element of resistance to others, of all selfishness; fragile by reason of its delicacy it seemed at every moment ready to break, to expire in a pure flow of tears; then, too, having it alone beside me, seen, without the mask of her face, I noticed for the first time the sorrows that had scarred it in the course of a lifetime.

Was it, however, solely the voice that, because it was alone, gave me this new impression which tore my heart? Not at all; it was rather that this isolation of the voice was like a symbol, a presentation, a direct consequence of another isolation, that of my grandmother, separated, for the first time in my life, from myself. The orders or prohibitions which she addressed to me at every moment in the ordinary course of my life, the tedium of obedience or the fire of rebellion which neutralised the affection that I felt for her were at this moment eliminated, and indeed might be eliminated for ever (since my grandmother no longer insisted on having me with her under her control, was in the act of expressing her hope that I would stay at Doncières altogether, or would at any rate extend my visit for as long as possible, seeing that both my health and my work seemed likely to benefit by the change); also, what I held compressed in this little bell that was ringing in my ear was, freed from the conflicting pressures which had, every day hitherto, given it a counterpoise, and from this moment irresistible, carrying me altogether away, our mutual affection. My grandmother, by telling me to stay, filled me with an anxious, an insensate longing to return. This freedom of action which for the future she allowed me and to which I had never dreamed that she would consent, appeared to me suddenly as sad as might be my freedom of action after her death (when I should still love her and she would for ever have abandoned me). “Granny!” I cried to her, “Granny!” and would fain have kissed her, but I had beside me only that voice, a phantom, as impalpable as that which would come perhaps to revisit me when my grandmother was dead. “Speak to me!” but then it happened that, left more solitary still, I ceased to catch the sound of her voice. My grandmother could no longer hear me; she was no longer in communication with me; we had ceased to stand face to face, to be audible to one another; I continued to call her, sounding the empty night, in which I felt that her appeals also must be straying. I was shaken by the same anguish which, in the distant past, I had felt once before, one day when, a little child, in a crowd, I had lost her, an anguish due less to my not finding her than to the thought that she must be searching for me, must be saying to herself that I was searching for her; an anguish comparable to that which I was to feel on the day when we speak to those who can no longer reply and whom we would so love to have hear all the things that we have not told them, and our assurance that we are not unhappy. It seemed as though it were already a beloved ghost that I had allowed to lose herself in the ghostly world, and, standing alone before the instrument, I went on vainly repeating: “Granny, Granny!” as Orpheus, left alone, repeats the name of his dead wife, is decided to leave the post office, to go and find Robert at his restaurant, in order to tell him that, as I was half expecting a telegram which would oblige me to return to Paris, I wished at all costs to find out at what times the trains left. And yet, before reaching this decision, I felt I must make one attempt more to invoke the Daughters of the Night, the Messengers of the Word, the Deities without form or feature; but the capricious Guardians had not deigned once again to unclose the miraculous portals, or more probably, had not been able; in vain might they untiringly appeal, as was their custom, to the venerable inventor of printing and the young prince, collector of impressionist paintings and driver of motor-cars (who was Captain de Borodino’s nephew); Gutenberg and Wagram left their supplications unanswered, and I came away, feeling that the Invisible would continue to turn a deaf ear”

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