I’m not sure how many of you watched the historic Super Bowl 51, but I’m pretty sure most of you heard about the amazing turnaround… with the New England Patriots down 21-3 to the Atlanta Falcons at the end of the first quarter, then rallying back strongly to tie the game in the fourth quarter, and to win it in overtime—the first overtime in Super Bowl history. Pretty cool! Now, I know a lot of avid football fans were peeved, to say the least, over the New England Patriot’s deflate-gate scandal, but let’s set that aside for now and focus on the financial lessons we can all learn from the game and how it’s played.
When you and I tune into the Super Bowl, it is for the love of sport and the tremendous entertainment that comes from watching the game, the commercials, the Half Time Show, etc. with friends, family, lots of food and drink, and good cheer. But for the coaches and the players, it’s all business.
And here’s the analogy, metaphorically speaking: The business of proper financial planning and investing is also about winning games, and there are lessons we can all learn from pro-football.
#1 It’s all about The Team
It all begins with recruiting the right people and building a solid team, where all players are critically important to the success of the team. However, their success is reliant upon excellent coaching. To be a top NFL team, you need players with talent, and that talent honed by the team’s various coaches. And it is crucial that the coaching staff leads and get players to perform as a team, with the same ultimate mission: to win the game. So it is with retirement planning: Every financial planning team needs to operate in the same way, by identifying the right coach (in this case, the right investment advisor for your retirement plan), developing talent (by guiding clients on how to set their emotions aside and focus on winning for the long run), and making the right moves in terms of investments, asset allocations, and thinking strategically to, ultimately, come out ahead.
In football, teams have several days to prepare for the next game. This involves studying the playbook and videos of the other teams, to glean as much information as possible to create the best game plan to win. This strategy also applies to many aspects of investing: We need to conduct proper research, do our homework, and collect enough data to create a strong plan or “playbook” for accomplishing our objectives.
#3 Calling an audible
In a football game, the quarterback may change the play on the spot by calling an “audible.” Investing and retirement planning is the same way. Even with outstanding preparation, dynamic circumstances—such as a layoff, sudden illness or market crash— may require a pivot or an adjustment to your plan. In investing (or retirement planning), it’s very important to be nimble and flexible because there is a lot of dynamism. And when that audible is called, it’s important for the entire team to listen to the coach or the quarterback and move quickly as one team. And, when an audible is called, it’s time to quickly change tactics and respond to the shift. This is the execution phase where you don’t want to get overly bogged down by analysis because, ideally, you should have covered what-if extreme cases in your preparation and research phase.
Flawless execution requires excellent communication between members of your team, with each knowing the other’s strengths and goals and anticipating the other’s move. This means playing well together, supporting each other, and maintaining focus. If someone makes a mistake, don’t assign blame; work harder together as a team and support each member to keep mistakes to a minimum and improve each day.
#5 Learn from losses
Even great NFL teams usually lose a few games in a season. But, during the regular season, there is no time to wallow in a loss; they have to prepare for next week’s game. It’s the same for you and your investments (or retirement planning). You will not always come out ahead. There will be bad investments and market dips and crashes, but it’s important to learn from each loss or setback and make adjustments to your strategy for future opportunities. You must get over your losses, emotionally and in your portfolio, and begin preparing for that next game.
So, the next time you watch an NFL game, think about the work ethic involved in the preparation, potential pivots, and overall execution. And put these practices in place to make your financial planning team a long-term winner.
(Commentary adapted from an article by Gary A. Cohen, Associate Dean of the Office of Executive Programs at the University of Maryland’s Robert H. Smith School of Business and contributor to the Washington Post’s Career Coach column.)