Sometime in November 2022, when the NBA’s Los Angeles Lakers were coming off a 2-10 win-loss record, when analytics said they had 0.3% chances of even making it to the playoffs, my brother and I made a small fun bet they will win the championship. Our $100 bet was to win $1,500 if the Lakers win the Western Conference Finals. Another $100 wager would yield us $3,500 if they win it all.
The long bet obviously lost but it was an exciting ride. Starting at 13th seed in December 2022, the Lakers got into the play-in, survived and won two series by besting Number 2 Memphis and the defending champion Golden State., but eventually got swept by the Denver Nuggets. Denver has been No. 1 almost all season and they proved it by winning the West.
An article in The Sporting News reported that even after LA lost the first two games of its Denver series, over 90% of the bets at BetMGM had been on the Lakers to win the West. That’s the perception issue, the power of Lebron James and the power of the historic legacy behind the Lakers, the winningest squad in the Western Conference.
This brings us to the behavioral nature of a gamble or bet. People are not always rational when making such decisions. There are psychological factors at play. Obviously, our bet was the wager of two fanatic long-time fans.
Academics categorize these irrationalities in two broad categories. People do not always process information correctly and therefore infer incorrect probability distribution about future occurrences. Second, even if the probability distribution of returns is given, they often make inconsistent or systematically suboptimal decisions.
Despite the fact that analytics already predicted Lakers not making it to the playoffs, or having a low probability of recovering from a 0-2 deficit, the Lakers bet flourished. People tend to overestimate the precision of their beliefs on forecast. That’s the sentiment of believing in a 17-time champion than a Denver team that has never done it before. Or, this is a biased preference for a more familiar Los Angeles storyline.
People have also forgotten (or did not bother to consider) that Denver has been on years-long process of developing their core players together. This is not just from this year. In seasons past they had slowly been building a fighting machine. The dynamic duo of Murray and Jokic started since 2016-17 and their uncanny chemistry has been built over those years. This year represents the culmination of years of preparation as Denver had a dominant season, rising to number one in the West in December and never falling out of top spot. The Lakers was bad all year long, only recovered in February after a trade that brought in role players who fit instantly and emerged contenders after a rough play in.
The Lakers had talent and were lucky that the new guys adapted via a plug and play mode. Based on interviews, there was camaraderie inside and out of the locker room of the rejuvenated team. A soaring team spirit was palpable, and the stars and role players supported each other.
But the results speak for itself. Michael Jordan was once quoted, “Talent wins games but teamwork and intelligence wins championships.” No doubt the Lakers had talent and intelligence. Teamwork was there too, but compared to the more cohesive Denver team, there’s only so much you can build in a few month’s time. Individual talent can contribute to short term success. But how do you maximize on the personal strengths of each player? That will dictate long term success.
There is a reason professional teams go through a training camp and actually practice. Teamwork of the lasting kind is built from a series of repeat action that builds instinctive memory, allowing players to react quickly and making them “unconsciously competent”. This means doing things and behaving coherently with little conscious thought. Practice allows a collective to get into this “unconscious competence zone”, where they do things without even thinking.
What the Lakers did this year was magical in the down stretch, even if it is not a success in Lebron James’ standard who only aims for championship. To build a well-balanced squad, it is critical to have continuity and consistency for a defined time frame. Togetherness builds character, teamwork, and chemistry. There is no short cut to success and betting on haste will most likely backfire.
(Benel Dela Paz Lagua was previously EVP and Chief Development Officer at the Development Bank of the Philippines. He is an active FINEX member and an advocate of risk-based lending for SMEs. Today, he is independent director in progressive banks and in some NGOs. The views expressed herein are his own and does not necessarily reflect the opinion of his office as well as FINEX.)