The Champion’s Curse: Navigating the Perils of Victory

Napoleon once remarked that the moment of greatest vulnerability is immediately after victory. It’s a familiar concept not only in military history, but also in business, sports, and investing. In his book, The Dichotomy of Leadership, former Navy SEAL Jock Willink describes “The Disease of Victory”:

A chief contributing factor to recklessness comes from what military historians have long referred to as “the disease of victory.” This disease takes place when a few battlefield successes produce an overconfidence in a team’s own tactical prowess while underestimating the capabilities of its enemy or competitor. This is a problem not just for combat leaders but for leaders and teams anywhere, in any arena, throughout the business world and the civilian sector.

Most environments are dynamic, continuous efforts. The game or battle is never over. There’s always another round, perhaps tomorrow, maybe next year, or a decade from now. Whether it’s the win you had last week, the successful product launch, or the decisive battlefield victory, the pursuit doesn’t end, because competitors and enemies never stop. ?

There are 4 smart ways to handle a victory: 1) celebrate, but in moderation, 2) acknowledge the role of luck, 3) prepare for the opponent’s response, 4) counteract the “Success Disease”

Celebration in Moderation

Celebrating, much like drinking, should be done in moderation. By all means, enjoy and celebrate a victory. But limit the duration. Wise coaches often give their players 24 hours, perhaps the weekend, to celebrate a victory. Then it’s back to the grind. Back to the process.

Former football coach Bill Walsh advised:

Formally celebrate and observe the momentous achievement—the victory—and make sure that everyone feels ownership in it. Praise, bonuses, and other rewards can make it special…allow pats on the back for a limited time. Then formally return to business as usual by letting everyone know the party is over.

The Role of Luck

Victory obscures the role of luck underlying the victory. Randomness and luck are forces hard to recognize, and even if they were recognizable, they’re overlooked because our egos attribute 100% of the victory to our effort, our decisions, and our perseverance. When we overstate our own role in victory, we don’t appreciate how close we were to defeat. We drop our guard after victory, and the good luck that supported us now turns against us.

Mistakes are always occurring, but are temporarily concealed up by luck, good effort, and hard work. ?

The Opponent Has a Voice

Your opponent will respond, it’s just a question of when and to what degree. The quietness after a victory is temporary as opponents reconsolidate and plan their next move. As we’ve seen with the wars in Iraq, Afghanistan, Vietnam, etc., initial victories don’t lead to permanent success. Instead, it becomes a multi-year, if not multi-decade slog to sustain past “victories.”

We learn from history that complete victory has never been completed by the result that the victors always anticipate—a good and lasting peace. For victory has always sown the seeds of a fresh war, because victory breeds among the vanquished a desire for vindication and vengeance and because victory raises fresh rivals. -No More Heroes: Madness and Psychiatry in War

In his book On Combat: The Psychology and Physiology of Deadly Conflict in War and in Peace, Lt. Col. Dave Grossman describes why a counterattack, immediately after defeat, is a wise strategic move:

Consolidation and reorganization on the objective is a standard military term for what occurs after victory. The enemy has fled the hilltop and has been secured. The battle is over. Or is it? Remember Napoleon’s words that “the moment of greatest vulnerability is immediately after victory.” This is why a smart military leader will counterattack immediately after the enemy has pushed his troops off of a position…Since the enemy might relax and become vulnerable in their victory, it is possible that even a small force could overpower them and recapture the objective.

It doesn’t matter if you’re an athletic team, an occupying army, or a Fortune 500 company. When you win, people take notice, and want to take you down. Bill Walsh explains:

Never fall prey to the belief that getting to the top makes everything easy. In fact, what it makes easier is the job of motivating those who want your spot at the top. Achievement, great success, puts a big bull’s-eye on your back. You are now the target—clearly identified—for all your competitors to aim at.

Success Disease

Success and victory often bring complacency to the victors. Success can inhibit learning and adaptation by removing the discipline to closely examine what worked and what failed. After all, how often have you changed your methods and tactics after a victory? In most cases, we double down on what worked in the past, again, likely ignorant of the role of luck, changes in future environments, and the adaptability of the enemy.

Once again, Bill Walsh sums up what he calls, the “Success Disease”:

Success Disease makes people begin to forego to different degrees the effort, focus, discipline, teaching, teamwork, learning, and attention to detail that brought “mastery” and its progeny, success. The hunger is diminished, even removed in some people. “Complacency” may be too strong a word to describe it, maybe not. Perhaps “contentment” describes it. You feel content after navigating up the hard and treacherous road to victory. This is understandable; you should feel satisfaction and contentment. But when it lingers—sets in—you and your team are suffering from Success Disease.

Use victory to make hard choices. You rarely hear companies with record earnings growth announce layoffs. Instead, layoffs are usually done after growth has cratered. Don’t wait to have your hand forced. It’s the excessive hiring and wasteful spending during the successful times that causes problems. Address it now and don’t wait. ??

Bill Walsh continues:

Use the time immediately following success as an opportunity to make hard decisions, including elevation or demotion of individuals who contributed—or didn’t—to the victory. This window is brief. Use it.

Seasoned investors appreciate this concept. The time of greatest concern is when everything is going great because fundamentals are ignored and hubris reigns. There’s nothing like easy gains to induce greed and contentment.

Former Army Lt. General Hal Moore sums up the point:

When nothing is wrong, there’s nothing wrong — EXCEPT there’s nothing wrong. That’s when a leader has to be the most alert. Complacency kills.

It’s human nature to keep doing what’s been working. It’s the simple idea of inertia.

Let’s look at how Andy Grove, former CEO of Intel, describes the “inertia of success”:

Senior managers got to where they are by having been good at what they do. And over time they have learned to lead with their strengths. So it is not surprising that they will keep implementing the same strategic and tactical moves that work for them during the course of their careers – especially during their “Championship season”…I call this phenomenon the inertia of success. It is extremely dangerous and it can reinforce denial.

In his book Deep Thinking: Where Machine Intelligence Ends and Human Creativity Begins, chess grandmaster Gary Kasparov agrees:

When you have had success, when the status quo favors you, it becomes very hard to voluntarily change your ways.