Is This Madness? How Losing by Just a Little Can Help a Team — or Company — Win

Yesterday was the first day of “March Madness” in the United States, a two-week period in which 64 college basketball teams vie for the National Collegiate Athletic Association championship in a tournament that rivals the World Cup in fan frenzy.

It was also the deadline for an estimated 37 million Americans to place bets on the outcome of the tournament — not just the ultimate champion, but the winner of every game in every round. For a fee, participants in the betting can compete with pools of co-workers or other informal groups to see who has the most accurate picks. The winners get the pool of money generated by the entry fees.

Wharton Professor Jonah Berger on “Losing to Winning”

That means an entry with just a few bad picks in the first round of the tournament is probably doomed to fail. But what if one of the betting participants could know in advance which teams would be leading at halftime in those first-round games? The logical move in that situation is to pick the team that’s winning, right?

Maybe not. According to recent research by a pair of Wharton professors, teams that trail by a little at the half actually have a better chance of winning the game than the squad in the lead.

Wharton marketing professor Jonah Berger and Devin Pope, a professor of operations and information management, found that teams which were slightly behind at the half won more often than they lost. Their research paper, which is based in part on the results of more than 6,000 recent college basketball games, is titled: “When Losing Leads to Winning.”

But Berger noted that these findings could just as easily apply to the workplace, because they suggest that employees — like basketball players — should be more motivated and thus perform better when they are close to, but just short of, an important goal.

Close Enough to Taste It

“Take any situation where someone is so close to a goal that they can almost taste it,” Berger noted. “The fact that they’re almost there makes them work harder.” Thus, in the corporate world, where goal setting is an important management tool, Berger said it’s a good strategy to pick milestones that are within reach, such as passing a close competitor in sales.

Focusing on goals that are close and achievable may be more motivating than lofty but unrealistic goals, according to Berger. “You want to pick a target that’s close, where you are almost there but not quite.”

Pope, his co-author, elaborated: “A lot of tools are used in the workforce to motivate people, such as wages, bonuses, etc. While surely these things can have motivating effects, one should not underestimate the potential importance of psychological motivation as well. This paper shows that the psychological impact of being behind by a small amount can cause significant increases in performance.”

Motivational behavior is not Berger’s usual academic focus. Usually, he delves into topics such as social contagion, viral marketing and decision-making issues like those explored in Malcolm Gladwell’s best-selling book, The Tipping Point. But Berger began to think about the issue of motivation while coaching youth soccer. “As the coach, I always had to say something at halftime. And I always tried to be motivating. But I noticed that regardless of how much I emphasized that we needed to work hard, the players always seemed more motivated when we were behind.”

When Berger came to Wharton, Pope mentioned an interest in similar issues, so they began to look for statistical evidence to back up the idea that trailing slightly could be a motivator. Earlier research into major sports shows that a team taking an early lead in a game tends to win two-thirds of the time. The reasons are self-evident: The unit jumping to a quick advantage is likely a more talented squad, and the trailing team must make up extra ground to win.

But Berger and Pope decided to look at how smaller halftime deficits affected the outcomes. To do that, they collected the results of 6,572 college basketball games played between 2005 and 2008 in which the difference at halftime was within 10 points.

As expected, the data showed teams with big halftime leads usually went on to win. For example, a college squad that is leading by six points at halftime is the victor about 80% of the time. But there is a significant deviation from the expected result for a team that is losing by just one point at the half. Using the rest of the data to control for expected performance, the trailing team ought to win about 46% of the time, according to Berger. But, in fact, those teams won 51.3% of the time.

Why does this happen? Berger and Pope believe that the answer lies in how losing affects people’s drive. “Being slightly behind can be good because of the psychology of human motivation,” Berger said, adding that the score provides the players with a reference point for working just a little harder. “If you’re behind, you get a little more motivated. You work harder and because of that, you are more likely to succeed.”

Indeed, there was no advantage to being far behind at halftime. The researchers note that their findings jibe with earlier research showing that animals run faster when they are closer to a food reward and that people work harder at a task when it is closer to completion, not when the goal appears to be distant.

Second-half Surge

Consistent with the notion that being slightly behind is motivating, the basketball data show that the effort of the trailing team seems to be greatest right after the half. Teams that were trailing by one point at the half outscored their opponents by an average of 1.2 points in the second half — and half of that average boost came in just the first four minutes of the 20-minute period. The researchers found no evidence to suggest that teams with a one-point lead were easing up.

But how to translate these findings into the business world, where there is not a large scoreboard hovering over the players’ heads? Here, Berger and Pope suggest that the role of managers as motivators looms larger — to set goals that are understandable, achievable and within reach.

They also conducted a secondary experiment in which people were paid to compete in a short, simple game that involved typing letters on a keypad. Midway through the game, one group of participants was told that they were close behind, slightly ahead, far ahead or far behind. A control group was not given any information at the break. Just as the real-life basketball results had suggested, the group that exerted extra effort was the one that had been told it was only slightly behind midway through.

“First, merely telling people they were slightly behind an opponent led them to exert more effort,” they write. “Competitive feedback that they were slightly behind not only increased effort in general, but did so more than being tied, slightly ahead or receiving no competitive feedback at all. Second, while being behind boosted effort, it did so only when participants were not too far behind.”

Additional research showed that motivation is closely tied to self-confidence. In another sample group in which participants played the keyboard game, they were also evaluated for their self-efficacy — that is, their belief in their ability to accomplish goals. The researchers found that people with higher self-efficacy were the most capable of exerting extra effort in the second half.

Stop to Take Stock

Berger and Pope see these finding as useful to other fields — not just business but also in academic settings. For example, they suggest, a team of researchers involved in a competition should focus on the ways that they are slightly behind the opposing academic teams. They also recommend what they call “strategic breaks” — in which managers cleverly design the timing of breaks to allow employees to stop and take stock of their efforts.

The concept, according to Berger, is similar to how skilled coaches might cleverly use timeouts to control a game. “You obviously want to call time out when the other team is on a run so that [the opposing players] don’t gain confidence,” he said. “But you also want to call time outs in a way that motivates your own team — for example, when they are just slightly behind their opponents.”  

Wharton marketing professor Maurice Schweitzer recently co-authored a paper called, “Goals Gone Wild,” documenting, among other things, how overly ambitious goals set by managers led to scandals at firms such as Enron and Sears when employees felt compelled to cheat in order to reach the lofty targets. Berger said that this finding is one more reason why managers would want to focus on more achievable goals. “What these examples show is that the goals were set too high. Monetary incentives made employees extremely motivated, but the goals were so unreasonable that they didn’t have the ability to meet them — so they cheated.”

The goal of the research, Berger noted, was not so much to gain insight into sports but to open a window into human motivation. “The psychology of these situations is the same, whether it’s sports or business or academics. [It's about how] we motivate employees or researchers, and how we use competitive situations to help them succeed.”

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