Business Lessons from March Madness

As we finish off the second quarter this year, the hockey and basketball seasons are drawing to a close. The relative lack of attention being paid to the NHL and NBA playoffs caused me to reflect on "March Madness." Offices everywhere were excited and talking about this college tournament, even people who were just barely sports fans. Are people really that interested in college basketball?! I think not. Is the NCAA really that smart in marketing and promotion? I'm not so sure. Certainly, this phenomenon has caught the attention of marketing professionals (for example here).

So, what marketing lessons can we learn from the excitement surrounding this event? 

It has been estimated that companies lose well over $100 million in labor costs with employees watching games duriung  working hours and teasing each other  during the early rounds of the  tournament (check here). Other  "business experts" have suggested that  companies embrace the tournament and  use it to build morale and have fun.  What will you be doing when March comes around next year?

What can we learn from March Madness?

In reviewing dozens of blogs and articles written about the meaning of March Madness for business, I found the blog by Jonah Berger, a Marketing Professor at the Wharton School, worth reading.

Dr. Berger highlights three psychological aspects of the tournament that build excitement for people. Since one of my master's degrees is in Experimental Psychology, I could relate to his point of view.

Three lessons of March Madness for businesses:

1. Cinderella sometimes wins. This year, Harvard a #14 seed, won its first tournament game ever, Wichita State upset top-seeded Gonzaga and a #15 seed (Florida Gulf Coast University) made it to the Sweet 16 for the first time ever, People were fascinated with the performance of these underdogs. Americans love to root for the underdog. 

Teams that are slightly behind often wind up winning. Analysis of NBA games shows that teams that trail by 1 at halftime actually perform better than teams that are 1 point ahead at halftime. LeBron James, for example, performs better when his team is behind late in the game.

Perhaps a good way to motivate people would be to compare your company, your personnel or yourself to those that are just ahead. People and teams work harder when they perceive that they are behind, but close. As you move forward, you will eventually be far ahead of where you are today.

Regardless of who your key competitor(s) is(are), how will you motivate your employees to pass them? You might begin by asking your employees what motivates them and their perceptions of the competition, as well as their perceptions and the customers' perceptions (your customers and theirs) of where you are superior to the competition.

Michigan basketball.jpg

2. Rivalries can be both good and bad. UNC vs. Duke, Michigan vs. Ohio State, Cal vs. Stanford...the college rivalries abound! Red Sox/Yankees, Dodgers/Giants, Bruins/Canadiens...they are everywhere in pro sports as well. While rivalries and competition can motivate and lead to outstanding performances, they can also create unsportsmanlike behavior that can get out of hand, such as the Giants fan who was nearly beaten to death after a Dodger game last year in LA.

Some companies like to fan the competitive flames internally for promotions and raises. This can motivate some to perform exceedingly well. It can also drive others to behave inappropriately.

We would suggest that you look at your own rivalries. Where have you been successful and where has your rival succeeded (a Won/Lost analysis)? How do your own employees feel about your successes and failures? What might be done to win more often, in their view? In our experience, a number of employees have an exaggerated sense of your failures, but they embrace winning.

3. Be wary of success. Some coaches seem to do well and often get into the tournament, without getting very deep into it. Other coaches always seem to do well in the tournament, even without a top-ranked regular season. What are the keys to this kind of leadership? Many coaches believe that a loss late in the regular season may actually help them teach their players humility and not to rest on their laurels. Coach K at Duke states in his book that the key to success for a basketball player is the ability to forgive himself for a bad play or mistake and say, "Next play," to focus constantly on what it takes to win.

Everyone wants to be successful. When your business grows, how do you maintain the hunger and motivation you had as a small company? It is tougher to keep a larger company from becoming complacent. In psychology, people become risk averse once they have become successful. Companies tend to do so as well. How do you maintain focus on the qualities that achieved success as you grow?

As Dr. Berger says, "So next time the boss complains about you ducking out early to catch a game, tell her you're just doing research."