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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.

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