Confidence: How Winning Streaks and Losing Streaks Begin and End by Rosabeth Moss Kanter

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Everybody knows that winning begets winning; but why? Business innovation specialist Rosabeth Moss Kanter decided to find out. In Confidence, she draws on hundreds of interviews and a national survey of over 1,000 companies to explore the reasons why some always succeed and others fail. To illustrate her points, she includes firsthand accounts from business, sports, education, and government. Kanter contends that success and failure become self-fulfilling prophecies; that winning leaders inspire confidence in advance of victory to attract the human investments that make victory possible.

From the Publisher

From the boardroom to the locker room to the living room—how winners become winners . . . and stay that way.

Is success simply a matter of money and talent? Or is there another reason why some people and organizations always land on their feet, while others, equally talented, stumble again and again?

There’s a fundamental principle at work—the vital but previously unexamined factor called confidence—that permits unexpected people to achieve high levels of performance through routines that activate talent. Confidence explains:

• Why the University of Connecticut women’s basketball team continues its winning ways even though recent teams lack the talent of their predecessors
• Why some companies are always positively perceived by employees, customers, Wall Street analysts, and the media while others are under a perpetual cloud
• How a company like Gillette or a team like the Chicago Cubs ends a losing streak and breaks out of a circle of doom
• The lessons a politician such as Nelson Mandela, who resisted the temptation to take revenge after being released from prison and assuming power, offers for leaders in both advanced democracies and trouble spots like the Middle East

From the simplest ball games to the most complicated business and political situations, the common element in winning is a basic truth about people: They rise to the occasion when leaders help them gain the confidence to do it.

Confidence is the new theory and practice of success, explaining why success and failure are not mere episodes but self-perpetuating trajectories. Rosabeth Moss Kanter shows whyorganizations of all types may be brimming with talent but not be winners, and provides people in leadership positions with a practical program for either maintaining a winning streak or turning around a downward spiral.
Confidence is based on an extraordinary investigation of success and failure in companies such as Continental Airlines, Seagate, and Verizon and sports teams such as the University of North Carolina women’s soccer team, New England Patriots, and Philadelphia Eagles, as well as schools, health care, and politics.

Packed with brilliant, practical ideas such as “powerlessness corrupts” and the “timidity of mediocrity,” Confidence provides fresh thinking for perpetuating winning streaks and ending losing streaks in all facets of life—from the factors that can make or break corporations and governments to the keys for successful relationships in the workplace or at home.

Daniel McMahon

Kanter is at her best when explaining how leaders shape and change the culture of an institution. The most interesting stories are those of partial and difficult successes -- reforming the BBC, say, or creating a post-apartheid South Africa. Through her careful analysis of Mandela's fundamental beliefs -- a commitment to dialogue, a respect for foes, accountability, a willingness to collaborate, an emphasis on shared values -- Kanter illustrates how leaders can change a nation. Confidence is a successful book on leadership that illuminates underlying principles applicable to teams and small businesses as well as schools, corporations and countries.— The Washington Post

Publishers Weekly

Drawing on more than 300 interviews with leaders in business, sports and politics, Kanter cogently explains the role confidence plays in the performance of institutions and individuals. Losing streaks are often created and then perpetuated when people lose confidence in their leaders and systems, while winning streaks are fueled by confident people who are secure in their own abilities and the ability of their leaders. Winning streaks are characterized by continuity and continued investment, Kanter argues, while losing streaks are marked by disruption and a lack of investment that typically give way to a self-fulfilling prophecy of failure. Combining theory with practical advice, Kanter details how losing organizations can instill accountability, collaboration and initiative-Kanter's three pillars of confidence-to help start a turnaround. She illustrates her ideas with a number of real-world examples, among them how the new owner of the Philadelphia Eagles stopped the team's chronic losing ways and built a winning organization. Kanter, a professor at the Harvard Business School and author of numerous books (including Men and Women of the Corporation), delivers valuable insights on the importance of confidence to success and on how organizations can create practices that build that much needed asset. (Sept.) Copyright 2004 Reed Business Information.

Library Journal

Sports are usually the first thing that comes to mind when discussing winning and losing streaks. So it's apropos that Kanter (Harvard Business Sch.; Evolve!) would include teams from across the spectrum of high school, college, and professional sports in her research. From her interviews with hundreds of companies, teams, and schools, she dissects the anatomy of winning and losing streaks in organizations. Kanter's training as a sociologist is evident as she examines organizational and personal traits that contribute to success and failure. It's not skills or talents alone that ultimately determine success but an organizational culture and leadership that bring out the best in all members of an organization. People who believe they can win will win; those who believe they can't win won't. Kanter shows how to recognize these patterns early on and turn around a losing record before it becomes legendary. A good prescription for Chicago Cubs fans as well as business collections in all types of libraries. Carol J. Elsen, Univ. of Wisconsin, Whitewater Copyright 2004 Reed Business Information.

Synopsis - Soundview Executive Book Summaries

Whether they are businesses, sports teams, or organizations, those on winning streaks seem to get all of the advantages — adulation, career opportunities, good deals, and the benefit of the doubt. It's easy to feel on top of the world as a winner, but once you face setbacks and a losing streak, life becomes a cycle of loss and failure.
Losing once does not make someone a loser, but what is the difference between losing all of the time and keeping the ability to win? Harvard Business School Professor Rosabeth Moss Kanter explains that it is a question of confidence, and the conscious sense of accountability, collaboration and inspiration that gives people control over their responses to their circumstances. Presidents, managers, coaches and even individuals have the power to choose how they deal with a loss, and whether they are going to allow it to be the beginning of a trend, or have the confidence to learn how to win next time. By studying winning and losing teams, companies and organizations, Kanter has found the keys to confidence and the way to find it when it is lost.

Confidence presents the new theory and practice of success, and explains why success and failure are not mere episodes but self-perpetuating trajectories.

Winners and Losers
After one of the highest-performing decades in its 100-year history, Gillette slipped badly in the mid-1990s, Kanter explains. Poor business practices and overpromising to Wall Street resulted in 15 quarters of missed earnings estimates before a new leader turned the company around and restored accountability. Gillette once had confidence, then lost it, then got it back.

People, groups and companies can get swept up in fortunate and unfortunate cycles of wins and losses. Confidence is often what causes these swings to rise and fall. Kanter writes that confidence is the bridge between expectations and performance; between investments and results.

Positive cycles or winning streaks create positive momentum and increase confidence. People who believe they will win are more likely to put in the effort to ensure victory, Kanter writes. Their halo effect makes it easier to attract the best talent and the investments to perpetuate victory. Losing cycles also feed on themselves, destroying confidence along the way. Losing has a repellent effect that makes it harder for a team to bond and to attract new talent, and easier to fall behind.

Arrogance and Despair
Kanter explains that confidence is the balance between arrogance — the failure to see any flaws — and despair. It is human nature to seek patterns and trends even in random events. But in nonrandom activities, where effort and skill make a difference, success and failure become self-fulfilling prophesies.

Failure and success are trajectories, directions and pathways. Each decision and action is shaped by what happened last time. Once set in motion, streaks harden, and to turn a cycle from decline to success, leaders must restore confidence in the system. In business as in sports, Kanter writes, winning on the playing field is heavily influenced by what happens off the field.

Winners and Losers
People who believe in themselves are likely to try harder and longer, increasing their chances of success. They believe that their efforts will pay off in the future. Kanter points out that these expectations translate into an investment of resources that improve performance in a mini-virtuous cycle. Leaders look more closely, invest more time, and give winners the benefit of the doubt.

Winning is contagious, and leaders can set an emotional tone and shape expectations that produce initial wins. People naturally gravitate toward behaving in ways that support confidence. Kanter explains that accountability, collaboration and initiative are central to confidence, and they occur when winners work together comfortably.

On the other hand, Kanter writes, losing streaks are escalating cycles of decline that erode confidence. Losing makes people feel out of control, and they give in to the temptations associated with defeat. Their powerlessness corrupts confidence, and then it gets weak.

Kanter explains that there are three situations that trigger turnarounds: Some organizations are terminally ill; some turnarounds begin when a loss of external confidence finally compels change; and some turnarounds are simply an unanticipated byproduct of normal life events, such as succession. While each turnaround is different, she writes, they all start with the need to make unpopular decisions about a situation that's full ugliness has been denied. It's hard for that kind of clarity to come from inside the organization, she argues, so new leaders are required because they are better able to disentangle system dynamics in which they are not caught up. Copyright © 2006 Soundview Executive Book Summaries

• Read an Excerpt

Read an Excerpt

1


The Locker Room and
the Playing Field:
Booms, Busts, Streaks, and Cycles


Sometimes it seems as if there are only two states of being: boom or bust. When things are up, it feels as if they will always be up. People come to believe they can succeed at anything they try; companies proffer grand visions of innovative futures; and investment is easy to attract. When things are down, it seems as if they will always be down. That's how depressed people feel; that's why recession-dominated economies find recovery elusive; that's why teams or businesses or schools can stay in decade-long slumps.
Any company, any group, any person can be swept along by one of these fortunate or unfortunate cycles. What causes them to rise or to fall is often a matter of confidence. Confidence is the bridge connecting expectations and performance, investment and results. It is a familiar term used every day to indicate future prospects in a wide variety of circumstances--the self-confidence of athletes, consumer confidence in the economy, public confidence in leaders, or votes of no confidence at board meetings. But there is remarkably little understanding of what lies behind it. Consider the following dramatic examples, and the questions they raise about how confidence builds or erodes.
The women's basketball team at the University of Connecticut consistently broke records, winning ten Big East conference championships and chalking up a seventy-game winning streak. For the 2002-2003 season, the individual talent level of the team was well below that of its predecessors and many of its opponents, yet the team of valiant women continued to rack up victories. They wereconfident that they could win, even without the very best players. Why?
Although its competitors canceled hundreds of flights and lost millions of dollars during America's Great Blackout of August 2003, Continental Airlines kept flying and even made money, despite power outages at its Newark and Cleveland hubs. Within minutes after the Northeast electric power grid went down, employees were on cell phones sharing ideas about dealing with the crisis. Far from losing money and passenger goodwill, Continental increased both, exceeding forecasts by $4 million for the two days following the blackout. The company's employees had confidence in one another that enabled them to spring into action as a team. Where did it come from?
The Philadelphia Eagles were roundly booed by fans for picking rookie quarterback Donovan McNabb over a more highly rated running back who was seen as a better athlete. The mayor of Philadelphia even introduced a city council resolution urging the other choice. Recruiting players such as McNabb for "character," not just for raw athleticism, gave the once-mediocre Eagles the confidence to bounce back from losses and win more regular season games from 2000 to 2003 than any other professional football franchise. The New England Patriots were even better at converting character into championships. In terms of individual ability, quarterback Tom Brady was not considered the best in the National Football League, yet through strength of character he led his team to two Super Bowl wins in three years and an almost-unprecedented fifteen-game winning streak in 2003. What was the connection between character, team culture, and top performance?
After one of the highest-performing decades in its hundred-year history, Gillette, the global consumer products company, slipped badly in the mid-1990s. Poor business practices and over-promising to Wall Street resulted in fifteen quarters of missed earnings estimates before a new leader turned the company around and restored accountability. Gillette once had confidence, then lost it, then got it back. Why did they fall into a "circle of doom" in the first place, and how did they break out of it?
At De La Salle High School in Concord, California, successive generations of student athletes won every single football game for over twelve years, even when they faced the toughest national competition. But at Prairie View A&M University in Texas, no matter how hard the spunky student athletes tried, or how much talent was on the team, they lost all but a mere handful of games over the same period. What happened to confidence during these winning or losing streaks to make further success or further failure seem inevitable?
On January 29, 2004, thousands of British Broadcasting Corporation (BBC) employees mobbed the streets outside television studios in one of Britain's largest industrial actions ever. But this wasn't a protest of labor against management--far from it. The crowds were protesting the resignation of their boss following a report faulting a BBC News account of British government intelligence about weapons of mass destruction in Iraq. Over a four-year period, the BBC's chief had moved a demoralized organization to renewed initiative and innovation through leadership actions that his now-empowered executive team vowed to continue and extend. What had awakened the passion of the people and produced this unusual show of commitment and confidence?
Nelson Mandela spent twenty-seven years in prison under the apartheid government of the old South Africa. Yet, after being released and becoming the new South Africa's first democratically elected president, he resisted the temptation to take revenge. Instead he led the divided country out of a cycle of decline to one of hope and enterprise. He extended his personal confidence in people, even those who had wronged him, into a national culture of respect and inclusion. How did he do that?


In this book I go inside these stories, and many others, to show how confidence shapes the outcomes of many contests of life--from simple ball games to complex enterprises, from individual performance to national culture. I describe what confidence is and where it comes from. I explain the culture of success and failure, why winning streaks and losing streaks perpetuate themselves, and how to shift the dynamics of decline to a cycle of success.
Confidence helps people take control of circumstances rather than be dragged along by them. By illuminating the roots and role of confidence at many levels--confidence in oneself, in one another, and in the system--I offer insights and tools for guiding people and organizations onto productive and healthy paths.


CYCLES OF CONFIDENCE


On the way up, success creates positive momentum. People who believe they are likely to win are also likely to put in the extra effort at difficult moments to ensure that victory. On the way down, failure feeds on itself. As performance starts running on a positive or a negative path, the momentum can be hard to stop. Growth cycles produce optimism, decline cycles produce pessimism. These dispositions help predict the recovery of problem-ridden businesses, low-performing urban schools, or even patients on their deathbeds. We encapsulate this in slogans. When people or groups are "on a roll," they go "from strength to strength." "Losers," on the other hand, seem doomed always to lose, because no one believes in them, no one invests in them, no one helps them improve. That's how the rich get richer and the poor get poorer--or the sick get sicker, the vulnerable become victims, and things start looking rundown because momentum is running down.
Persistent patterns of winning and losing are familiar in sports as well as business. When I was a young baseball fan, the New York Yankees always seemed to win, and the New York Mets always seemed to lose. It didn't matter who the particular players were, or even that legendary Yankees manager Casey Stengel moved to the Mets. Winning teams become "dynasties" that seem to win most of the time regardless of who is on the field--the Yankees in professional baseball, Miami of Florida in college football, North Carolina in women's college soccer, the Australian national team in international cricket. Teams that lose most of the time can start sliding into patterns of perpetual disappointment--the Chicago Cubs, for example, didn't have back-to-back winning seasons in over fifty years.
As patterns develop, streaks start to run on their own momentum, producing conditions that make further success or failure more likely. Winning creates a positive aura around everything, a "halo" effect that encourages positive team behavior that makes further wins more likely. Winning makes it easier to attract the best talent, the most loyal fans, the biggest revenues to reinvest in perpetuating victory. Losing has a repellent effect. It is harder for the team to bond, harder for it to attract new talent, easier for it to fall behind. Winners get the benefit of the doubt. Losing breeds qualms. In the midst of a winning streak, winners are assumed to have made brilliant moves when perhaps they were just lucky. In the midst of a losing streak, if losers eke out a victory, sometimes they are assumed to have cheated.
In short, confidence grows in winning streaks and helps propel a tradition of success. Confidence erodes in losing streaks, and its absence makes it hard to stop losing.


CONFIDENCE AND SELF-FULFILLING PROPHECIES


Confidence consists of positive expectations for favorable outcomes. Confidence influences the willingness to invest--to commit money, time, reputation, emotional energy, or other resources--or to withhold or hedge investment. This investment, or its absence, shapes the ability to perform. In that sense, confidence lies at the heart of civilization. Everything about an economy, a society, an organization, or a team depends on it. Every step we take, every investment we make, is based on whether we feel we can count on ourselves and others to accomplish what has been promised. Confidence determines whether our steps--individually or collectively--are tiny and tentative or big and bold.
Confidence is a sweet spot between arrogance and despair. Arrogance involves the failure to see any flaws or weaknesses, despair the failure to acknowledge any strengths. Overconfidence leads people to overshoot, to overbuild, to become irrationally exuberant or delusionally optimistic, and to assume they are invulnerable. That's what induces people to become complacent, leaders to neglect fundamental disciplines, investors to turn into gamblers. But underconfidence is just as bad, and perhaps worse. It leads people to underinvest, to under-innovate, and to assume that everything is stacked against them, so there's no point in trying.
It is human nature to set expectations based on assumptions about whether conditions seem to be improving or deteriorating, about whether the game can be won or will inevitably be lost.
We seek patterns and trends even in events that are random, like gamblers who believe that when they hold a few good hands of cards, they must be "hot," and that the next hands will be equally good. And for nonrandom activities, where human effort and skill make a difference, success and failure easily become self-fulfilling prophecies.
Patterns, apparent or real, become enshrined in myths and superstitions that have an effect on those playing the game. In baseball, the Chicago Cubs always seemed to go downhill during the "June swoon," making June a psychological hurdle. The Boston Red Sox always seemed to play well during the season and disappoint their fans by losing at the end. The New York Yankees always seemed to beat the Red Sox. This was blamed on the "Curse of the Bambino" imposed on Boston when baseball star Babe Ruth left the Red Sox for the Yankees.
In the 2003 playoffs, the Red Sox lost to the Yankees in the eighth inning of the last game of the series when manager Grady Little left pitcher Pedro Martinez in the game, even though he had already thrown more than 100 pitches and (in hindsight) was fatigued. Little, who was later fired (but not because of that call, Red Sox owners said), became the symbol of the curse in action, and fans called for his departure even though he had led the team to a winning season, as though serving him up as a scapegoat would purge the team of its past. But fans' extreme anger reinforced the image of the Red Sox and their extended family as inevitable losers, and sore losers at that. "In Boston, only the World Series counts as winning," Little said. Such reactions undermined confidence that the Red Sox would ever break their curse. In February 2004, when the Yankees landed Alex Rodriguez, considered the best player in baseball, after the Sox failed to make a deal with him, the "curse" was said to continue.
Failure and success are not episodes, they are trajectories. They are tendencies, directions, pathways. Each decision, each time at bat, each tennis serve, each business quarter, each school year seems like a new event, but the next performance is shaped by what happened last time out, unless something breaks the streak. The meaning of any particular event is shaped by what's come before. The same $10,000 in someone's bank account can make him feel rich and getting richer if he had only $5,000 the day before and $1,000 the day before that, or poor and getting poorer if he had $50,000 the previous day and $100,000 two days earlier. History and context shape interpretations and expectations.
In sports, each game starts at zero in a strictly technical sense. Statistically, each player is no more likely to sink the same number of baskets in the next game as in the last game. And unanticipated events pop up: For an airline, weather problems or national emergencies; for the BBC, the suicide of a government source for a news report about intelligence in the war in Iraq; for a sports team, injuries. But many things are carried over from game to game and shape the mood in the locker room; that mood can then follow players out onto the field. The list starts with the quality of players' relationships, the availability of workout equipment, the continuity or turnover of coaches, the size of crowds, the nature of press accounts. (Nearly all coaches say that they tell players not to pay attention to the media. They also say that the players do it anyway.)
The context that creates expectations affects outcomes. American professional football is just a game, but many millions of fans imbue it with meaning as the most-watched national sport. Was it thus inevitable that the New England Patriots would win the first Super Bowl after the terrorist attacks of 9/11? The name alone might have shaped the mood. Perhaps the team bearing the name "Patriots" felt an obligation not to be defeated in front of a U.S. television audience of more than 137 million and another estimated 700 million people in 225 countries. From the first moment they appeared, the Patriots' behavior symbolized national solidarity. At the beginning of the game they ran out onto the field as a team, rather than one by one, with no individual names called in the usual way, signaling their unity--the United Team of America. This was a tradition the Patriots had started in the third week of the season, after losing the first two games. Head coach Bill Belichick, who had come a year earlier to lead a successful turnaround of the Patriots, preached a passion for teamwork and told the players they had to subsume their egotistic instincts in order to win. Then-co-captain Lawyer Milloy and another veteran player introduced the idea of the players running out as a team. For the Super Bowl, this was a hard sell to the league and television producers, Patriots' vice-chairman Jonathon Kraft told me, but the team captains were firm on this point. "Announce us any way you want to," Kraft recalled that they said, "but we will run out as a team." That team confidence gave the Patriots the margin of victory.