What the Final Four Can Teach the Big Four About a Winning Culture

Last week’s post (March Madness, April Sadness Biases for Investors and Hoopsters Alike) generated more feedback than usual, so I thought we’d do a follow-up post. With the annual NCAA Men’s Basketball tournament (aka “March Madness”) behind us, have we learned anything new about what separates  the elite teams from all the other contending teams?

Yes, but there’s more to it than meets the eye.

As mentioned last time, the 2025 tourney was only the second time in history that all four top-seeded teams (Auburn, Florida, Duke and Houston) made it to the Final Four. That being said, we expect fewer “Cinderella” upsets in the future because it’s easier than ever for elite players to transfer to top contenders. And it’s easier than ever to compensate college athletes directly through Name Image & Likeness (NIL) deals.

But what if there’s something more going on? Could that explain why Florida and Houston advanced to the national championship game and why Duke and Auburn – the two highest ranked teams coming into the tournament – had to watch the finals on TV?

Could those same attributes explain why some professional service firms sail through busy season and year-end crunch time, and others implode and point fingers when the pressure is on?

Dan McMahon, CPA, Founder and Managing Partner of Integrated Growth Advisors says, yes. He believes that team culture, whether in the office or the hardwood, has as much to do with it as raw talent, coaching and mentorship.

“Houston is a culture-first program,” noted McMahon. “Under head coach Kelvin Sampson, their identity is built on grit, relentless defense, and a next-play mentality. Their players embrace tough games and physical play—and they rarely get rattled,” McMahon noted. Against Duke, he said that Houston’s consistency and mental toughness showed through against the exceptionally talented, but relatively inexperienced Blue Devils.

“While Duke has a legacy culture from the Coach K era, sustaining that under new leadership takes time,” said McMahon. “Duke usually brings in the most talented freshmen in the country, but they’re still evolving [under third-year head coach Jon Scheyer] in terms of forging a new identity. Culture takes root over years—not just seasons,” asserted McMahon.

Florida, the eventual champion, “played like a team on a mission,” related McMahon. “Their chemistry, unselfishness, and execution were clear against Auburn in the semi-finals.” He said Auburn head coach, Bruce Pearl, had done an “incredible job instilling intensity and passion,” but Florida seemed more poised and more connected in high-pressure moments. “Auburn had energy—but Florida had balance. In March, the more emotionally steady, values-aligned team seems to win the big games,” explained McMahon.

Here’s the thing: culture doesn’t guarantee victory—but it raises your floor, and in March and April, that matters. “Strong cultures create clarity under pressure,” said McMahon. “And that’s often the difference between closing out big games or watching them slip away.” Every March he said, we witness elite college basketball teams rise—or fall—based on how well they execute under pressure. “The difference rarely comes down to raw talent. It’s about culture, clarity, and leadership,” he said.

According to McMahon, players at Houston and Florida don’t have to guess what to do in the final seconds of a game—they know instinctively what to do, having run through each scenario countless times in practice. The players inbound the ball with confidence, not confusion. They know exactly where to be on the court at the start of the play and where to move as the play develop. They trust their roles. They operate within a system that’s been built and reinforced day after day.

Now shift the lens to the world of accounting firms and other professional services firms.

Over the course of his career, McMahon says he’s found that the highest-performing firms share many of the same traits as the top tier college sports programs:

1. Defined roles and responsibilities.
2. Strong tone at the top.
3. Clear mission, vision, and values understood by all.
4. Proven systems in place that replicate success.
5. Team members don’t need to be spoon-fed by coaches/superiors. They anticipate, adapt, and execute.
   
   

As a result, McMahon said the highest-performing firms don’t fall apart during tax season or year-end planning season —they rise to the challenge. “They’ve put in the reps,” asserted McMahon. “They’ve invested in leadership development, cross-functional communication, and process accountability. Their team members know what’s expected of them—and why.”

By contrast, McMahon said lower-performing firms resemble teams without a playbook. “They have lots of individual talent, but no shared system. They have unclear roles. Leaders haven’t built trust or communicated expectations. Every crisis feels like the first time. The firm survives tax season, but just barely – and excuses and finger-pointing prevail rather than accountability.”

On whose team would you rather be?

Conclusion

How is your firm managing through crunch time? I’d love to hear from you.

#marchmadness, #firmculture, #governance, #accountability

March Madness, April Sadness Biases for Investors and Hoopsters Alike

Maybe because the rest of the world is in such turmoil, the basketball gods gave us an eerily predictable and uneventful NCAA Men’s Basketball Tournament. As we head into the final weekend of “March Madness,” the Final Four remaining teams (Auburn, Duke, Florida and Houston) are each heavily favored No.1 seeds for only the second time in the history of the tournament. It’s like having the four largest cap companies in the S&P 500 outperforming the other 496 names by a large margin all at the same time. It doesn’t happen often.

The annual single-elimination national tournament of college basketball’s 68 best teams is usually filled with wild upsets, heart-wrenching losses and game after game going down to the final seconds in which your favorite team either wins or goes home (season over). No best of seven. No consolation bracket. No do-overs. If you’re a bettor, you need a balanced portfolio of heavy favorites, mid-major standouts and unlikely upstarts to come out ahead. Like the stock market, you just never know which name or sector will get hot at just the right time.

March Madness is the ultimate reality show in which on any given night unheralded Fairleigh Dickinson can end top-ranked Purdue’s season in the first round (2023). University of Maryland Baltimore County (UMBC) can end top-ranked Virginia’s season in the first round (2018). St. Peter’s, a tiny commuter school from Jersey City, NJ can send mighty Kentucky packing in the first round (2022) and then end Purdue’s season in the third round, or Florida Gulf Coast can knock out mighty Georgetown in the first round (2013).

This year’s tournament started out predictably unpredictable in the first round as little- known McNeese State knocked out Clemson; No.12 Colorado State beat No. 5 Memphis; and No. 10 Arkansas beat No. 7 Kansas and then No. 2 St. John’s. But, then the upset gods fell asleep at the wheel and went on vacation early. By the time we got to the Elite Eight teams, we had four No.1 seeds, three No. 2 seeds and one No. 3. Great teams all, but pretty “chalky” as the betting community would say. And not very exciting.

What March Madness teaches us about investing

Despite a more predictable than usual tournament, none of the 34 million brackets filled out on the ESPN and CBS platforms remained perfect after the first two rounds of the six-round tournament.

I bring this up because our collective inability to pick March Madness brackets successfully, despite all the data and analysis available to us free of charge and in real time, highlights many of the behavioral biases that so often derail our investment decisions.

Rory Henry, CFP®, BFA™, Director of Arrowroot Family Office and author of the new book              Holistic Guide to Wealth Management, told me if you're looking at your bracket and wondering why you got your hopes up that a “Cinderella” run would bring back the madness, it's not your fault—"you likely fell victim to one (or many) of the psychological and emotional biases” such as those listed below:

1. Narrative Bias. “We crave stories,” said Henry. “The Cinderellas gave us drama, hope, and belief in the improbable. Without them, we’re left with stats and seedings—logical but less exciting. We’re wired to favor the emotionally compelling over the rational,” he lamented.
   
   
2. Recency Bias. Last year’s upsets? “We expect more of the same,” asserted Henry. “But just because it happened recently doesn’t mean it will repeat. Our memories are short, and our expectations are often misaligned with changing realities,” Henry added. Sound familiar investors?
   
   
3. Boredom Aversion is perhaps the most overlooked bias according to Henry. “When things play out as expected, we feel let down. We miss the chaos. We crave the underdog even as we fill out our brackets with safe picks. Predictability feels less human—and less fun.”

I might also add “Loss Aversion” in which the pain of a loss is felt at least twice as acutely as the joy of the gain. It doesn’t matter if you’re filling out brackets or balancing your portfolio. Losses hurt….bad.

For more behavioral bias that derail or investing and bracket-picking plans, see

What March Madness Teaches About Our Biases.

“March Madness has always been about the irrational exuberance of college basketball fans,” noted Henry. “This year, it’s teaching us a different lesson: that our love of drama, our reliance on the past, and our resistance to predictability—and yes, our delight in making irrational picks—are what made March Madness so fun in the first place. And maybe, just maybe, we’re learning that true madness isn’t in the upsets—but in how we process what happens when they don’t occur.”

From where I sit, this year’s lack of drama is likely to become the norm rather than the exception, thanks to the Transfer Portal and the new NIL deals that allow players to make money – in the seven figures for top players -- from the commercial use of their name, image, and likeness.

“Talent,” said Henry, “is now clustering at big-name programs with deep pockets and brand visibility.” I agree with Henry’s assessment that if you need a skilled point guard, you no longer have to take a chance on 17-year-old high school recruits and wait several years for them to develop in your program. You just go to the transfer portal, search on experienced points guards, and reach out to a proven fourth- or fifth-year player who’s looking for a bigger paycheck at your school. They must no longer sit out a year in order to transfer and wonder if boosters will make good on their under-the-table promises. It’s all out in the open.

And that’s a shame. March Madness has long been the platform for the Weber States, Valparaisos, Gonzagas, Texas Westerns, Butlers, UMBC’s and St. Peters’ to gain national recognition and substantially boost donations and applications. It’s also a chance for the Yales and Princetons of the world to show they can hit the hardwood as hard as they hit the library. Auburn and Arizona learned that the hard way in recent years. Not so this year.

Conclusion

We need those scrapy startups to put the Mega Caps in their place from time to time. Otherwise, we’re just mailing it in and not innovating or getting better. What are you and your colleagues doing to stay hungry and innovative? I’d love to hear from you.

#marchmadness, #innovation, #behavioralfinance