THE SPORT OF

WINNING IN

BUSINESS

What Sport Can Teach

Business About Competition,

Rivalry, Loyalty and Underdogs.

WOOL in conversation with L. Jon Wertheim, Executive Editor, Sports Illustrated, and Sam Sommers, Professor of Psychology, Tufts University, and co-authors of best-selling book, This Is Your Brain on Sports: The Science of Underdogs, the Value of Rivalry, and What We Can Learn From the T-Shirt Cannon. Through the prism of behavioral economics and psychology, they reveal the hidden influences and surprising cues that inspire and derail us-on the field and in the stands- and why the same applies in corporate board rooms, office surroundings and our daily lives.

While Jon is a journalist/editor with a deep interest in psychology, Sam is a psychologist with deep interest in sports. This unique combination takes up an irresistible narrative to reveal why fandom exists, whether we are ready for AI replacing human coaches and why we love the underdogs.

WOOL:If sports can motivate people to go to great lengths, can businesses learn to instill the same kind of loyalty and passion in their customers?

LJW: Rooting for a team or an individual is obviously different from rooting for a product. What drives loyalty and passion in sports is that it’s not choreographed or scripted, and that there is an element of unpredictability. We never get to know whether our team is going to win or lose and that is where a lot of lessons can be learned. Sports fans stick with a team or an individual even during lean years knowing that for every winner, there is a loser. Consumers are more likely to switch allegiances and be less tolerant of underperformance. Consumers want consistency. I don't expect Starbucks or my car to perform differently from one experience to the next. There is a fundamental difference between that and conventional business. That said, businesses can learn how sports teams and leagues build the level of loyalties that keeps fans attached and engaged, even when they are displeased.

SS: Businesses can definitely learn some lessons from the world of sports. Sports teams build brand loyalty by invoking the kind of devotion that you only really see outside of religion. Rituals are one of the ways that they gain loyalty. For instance, when you go to watch a Yankees game and sit on their bleachers, you know that there is a roll call that sets things rolling. If you are a fan of Boston Red Sox, you would know that in the middle of the eighth inning, you will be singing Neil Diamond’s Sweet Caroline. These kinds of rituals unite us with fellow fans and also deepen our commitment to the overall belief system. Brands can do that too. Take your morning cup at Starbucks, for instance. For many people, that’s a ritual and the brand is able to connect with its customers in a special way, just the way sports does with its fans. In addition, business and sports are intertwined too you cannot go a sporting event without seeing all the corporate sponsors present there. Businessmen and women also take their colleagues, contemporaries and potential clients to sporting events and this helps build relationships.

Sports fans will stick with a team or an individual even during lean years; consumers are more likely to switch allegiances and be less tolerant of underperformance.

WOOL:Fandom is not frivolous; it’s about becoming a community, centered around the love and passion for something. So why does fandom exist? What drives the frenzy behavior?

LJW: Sometimes, we see a lot of ourselves in a particular athlete and when they succeed, we feel a degree of success too. With team sports, in particular, there is an element of tribalism and geographical identity. Our warriors versus theirs. Moreover, I think that the investment that fans make in sports plays a role as well. For instance, upon winning their recent championships, a Chicago Cubs fan would have probably rejoiced at an altogether different and possibly higher- level than a North Carolina basketball fan. This is because the Chicago Cubs won their title after more than a century, while North Carolina wins one or two titles every decade.

SS: Fandom is about a lot of things.it is about a community and a feeling of being connected to fellow humans. We are inherently social animals and need affiliation with others. That is the reason we often feel the requirement to be with someone when something stressful happens, and to discuss the situation with that person. While fandom is about the community, it is also about ourselves. We like to align ourselves with the success of others. We like to bask and reflect in the glory of the success of people with whom we’re connected. It feels good when our team wins and we often talk about it in first person using ‘I’ and ‘we’. Something we don’t do when our team loses. So, fandom is about a lot of things - it is about competition but from a safer, and perhaps easier, domain of our couches, computers and stands. We do like the thrill of competition but without some of the risk that goes into sports like football, ice hockey and boxing.

WOOL:Your book, This is Your Brain in Sports..., talks about the 'winner effect', where winning is addictive. What is the 'historic core' in players that keeps them motivated to win? And why do some fail then?

SS: We talk about the ‘winner effect’ in the specific context of studies that show that animals who win a fight against an intruder in their home territory want to fight more often. There is seriously something addictive about winning these fights, and for animals, it is biological. We discuss this in a chapter where we focus on fights in hockey. However, it is more of a general proposition. competing is something that is physiologically and emotionally arousing. We have an entire chapter in the book about rivals. Like North Carolina vs Duke, Michigan vs Ohio State and Yankees vs Red Sox, for instance. And how rivalries get more juices flowing and manage to ratchet up performances to a higher level. This is often a good thing and companies take advantage of it to promote rivalries in the marketplace and, in turn, inspire workers. There is also a downside to this: in a rivalry scenario, we tend to take more chances, and sometimes stretch the ethical limits of what we should or should not do. So, competing and winning is a double-edged sword. It not just has a mental and psychological effect on us but a biological one as well.

Competing and winning is a double-edged sword. It not just has a mental and psychological effect on us but a biological one as well.

WOOL:With the advent of moneyball tactics, do you think scouting for quarterbacks or the right talent at the right time is easier and more effective? Will digital bring in the inflection point?

LJW: The whole moneyball debate has been framed a little crassly as intuition versus analytics, art versus science and data versus gut. It is an intersection and interplay, and not an either. Additionally, there is no doubt that scouting techniques and technologies, including virtual reality, are changing how we assess positions, players and athletes. However, I also don’t think that we are ever going to reach an inflection point where all assessment can be done digitally. Player interviews, talking about leadership skills and some of the unquantifiable aspects are always going to be a part of assessment.

SS: There is certainly more information available to teams now than ever before. You can, for example, watch a film of a high school quarterback from Arkansas that very night, even though you may be in Northern California. So, the proliferation of information has changed everything from scouting to the way we, as fans, follow sports, fantasy sports and the like. It is as old as the moneyball, or maybe older than that. The tension between data and the more subjective human element of what leads to success is intriguing. However, I don’t think that we have actual formulas yet for what leads to success. If we did, someone as brilliant as Bill Belichick wouldn’t have been able to wait till the later rounds to draft Tom Brady. Hence, we do not have it down to a science. Information is great and there is still a fair amount of art as well as science to the scouting process. I am not sure if we are ever going to get past it and, at some level, that was what the moneyball idea was about. Perhaps, the best way to evaluate is to do a little bit of both.

Artificial intelligence will play 'a' role in sports and not 'the' role. At some level, these tools biodata, AI or conventional moneyball analytics will help deepen our engagement, efficiency and assessment.

WOOL:Should startups and upcoming brands sell their underdog brand biography or should they concentrate purely on their USPs?

SS: Something that most Americans understand intuitively is that we love the underdogs. What appeals to us are teams or individuals who pick themselves up, against all odds. The quintessential Cinderella story. And while it is natural to root for the underdogs in the world of sports, it holds true for other domains as well. Every politician claims that he or she is the underdog or the outsider. Even companies do the same. In fact, the idea of the underdog brand biography is pretty pervasive, almost ubiquitous and companies as big as Google, Microsoft and Apple state that they were started by a few individuals in a garage somewhere. When people portray themselves as the underdogs, they make us think that they have worked harder and are, hence, more righteously worthy of our support. The funny thing though is that not everyone can position himself or herself as the underdog. The other funny bit is that as much as we like the underdog on those first Thursday and Friday games of the NCAA tournament, at the end of the day, most of us are rooting for the Kentuckys, the North Carolinas, the Dukes or the UCLAs. The big names and the blue-chip stocks. We talk about shopping locally but then often go to the big box store or shop online. While we do have a love affair with the underdog, our wallets or our long-term loyalties often lie with the favorites. So, what you often see is a fairly successful company trying to remind everyone that it was once the underdog. And there is sense in that because while you like to see the underdog, you will continue to follow it only if it does fairly well too. So, while the startup may claim to be the underdog, it needs to post some results quickly or people will find someone else to follow or watch.

WOOL:Do you see AI replacing human coaches in the future? What could be the possible implications of this in the business of sports?

LJW: This is an interesting question. I think AI will play 'a' role in sports and not 'the' role. At some level, all these tools. Whether it is biodata, AI or conventional moneyball analytics. Will help deepen our engagement, efficiency and assessment. But I also think that sports, in some ways, is bulwark against that. Its central characteristic. Being unscripted and lacking choreography and the human element attached to it. Make it an interesting counter to data that may be less creative.

SS: The idea of artificial intelligence replacing human coaches is a fascinating one. We do not talk about it in the book but it is intriguing. While we would like to think that there is a major human element to coaching, we see more and more coaches rely on, for example, an NFL chart that tells you when you should go for two points instead of one, or other sports algorithms and formulas that dictate the ideal line-up or the ideal time, for that matter, to go to sleep on a road trip. So, technology and the appeal of the algorithm is quite clear in sports. At the same time, coaching and doing it successfully is hard to pin down, much like team chemistry is. However, there seem to be individuals who thrive on both the strategic as well as the interpersonal aspect of coaching. Whether we can ever replace that with AI is an altogether greater question while psychologists would like to think otherwise, I think only time will tell.

WOOL:In the book, you correlated the tendency of rooting for lovable losers to IKEA’s desk building experience. What do they have in common? What inferences can we draw?

LJW: Well, the struggle involved in building IKEA desks is what leads us to perhaps contort and inflate its value. I think the same happens with sports. We go through this level of struggle when rooting for a team that causes us to distort and contort the value of a victory.

SS: When you put your heart and soul in the team that let you down or disappointed you, it means that the team is really important to you. No wonder then that you keep coming back for more. While it is a pain, and sometimes difficult, to assemble my wooden desks and bookshelves from IKEA, once completed, I tend to value that piece of furniture more than if it was to be delivered by another furniture store. I sweat it out while using dowels and other tools to put together that furniture and, therefore, it must be really important to me or I wouldn’t have put in that much effort. Rooting for a losing sports team is a similar psychological experience.

WOOL:Sports has the power to change the world, to inspire and unite people in a way that little else does. Do you think sports will be the last straw to save humans?

LJW: Relying on sports to save humanity that's putting a lot of pressure on it. Having said that, sports clearly has an ability to unite, owing to its common language and the common emotions it stirs. While the notion that sports can save humanity might be an over-statement, it is undoubtedly a force of goodwill and unity.

SS: I love the notion of sports as the last best hope for humanity and, as a huge sports fan myself, I would like to believe that that is the case! But, knowing a bit too much about sports, I'm realistic enough to believe that it is a mirror into the human condition. It reflects as well as shapes the way we think about society and the motivations therein. It is true that sports can inspire the world and bring people together. For instance, there is this notion that the Olympics or the World Cup unites folks, with happy people crossing paths that they wouldn’t have otherwise. Or a story about Israeli and Palestinian athletes striking up a friendship at the Olympic village. But, sports can also encourage people to commit terrible acts in the bleachers when people have had too much to drink like a parking lot incident where a rival fan is attacked. So, sports has great potential for both a positive and negative effect on our behavior. I think it definitely sheds light on human nature and psyche.

Business and sports are intertwined. It's about amplifying positive experiences.

WOOL:What trends do you foresee in the business of sports?

SS: We touched on one of the trends being the ubiquity of technology and experience from the fans’ perspective. As technology continues to develop, we will have interesting dilemmas to wrestle with from genetic enhancement to the strategic use of prosthetics. In terms of the business of sports, you can see how participatory sports fandom is now in the virtual era whether it is fantasy sports or websites that allow you to pay for a personalized experience with a particular athlete. That kind of access is something that sports fans now tend to expect and take for granted. You will also see more and more teams release videos of behind-the-scenes in the locker room and post these on Instagram. That is how people consume media these days. They don’t sit down to watch a certain TV show at 8 o’clock things are consumed at their own pace with background information, multiple angles and multiple perspectives and that is certainly going to continue.

WOOL:The quirkiness of sports is also a reflection of who and what we are and the force that shapes human behavior. How can companies mint habitual customers by understanding the mechanics of consumer behavior?

LJW: I don’t know if that’s a quirk about sports or the fact that it is just unscripted. The uncertainty or solitude that a game involves is the real advantage of sports. This unpredictability factor is what differentiates it from any other experience. For instance, even when we read a book twice, the ending stays the same. When we see a movie more than once, the ending stays unchanged. But, when it comes to sports, we just never know and the outcomes are beyond replicable. This is the real advantage of sports and it will be interesting to see how a business goes about achieving it as, at some level, they strive for predictability. For example, you want your American Airlines experience to be the same every time and you want your fast food meal or chipotle to taste the same, whether you’re in New York or California. The consistency that brands strive for is much different from what we like about sports, which is why we don’t know if a player is going to have a 50-point game or a 10-point one. So, I think that predictability is the interesting point of differentiation between sports and business.

The consistency that brands strive for is much different from what we like about sports. Predictability is the interesting point of differentiation between sports and business.

DR. SAM SOMMERS is associate professor of psychology at Tufts University in Medford, MA. An experimental social psychologist, he is interested in issues related to stereotyping, prejudice, and group diversity.

L JON WERTHEIM is a sports journalist and author. He has been a full-time staff member for Sports Illustrated since 1997 and has covered tennis, the NBA, sports business and mixed martial arts.