Why being Second often beats being First

There are many things in life that are trite, but few more than corporate mission statements that start with the goal of being the number 1 player in a category or industry.

50 years ago, one company proved the value of being second rather than first.

That company was Avis, a car rental firm whose key competitor was Hertz, at the time a much bigger player in the space.

Avis recognised its position and played to it. It created an ad campaign, now universally recognised as a classic that espoused the values of being number '2' rather than number '1'.

Their first ad, simply said 'we're number two, so why go with us?' The whole idea was 'we try harder - and that's why we're a better option than the one you currently use.'

The copy was brilliantly written and supported by the idea that Avis went the extra mile for customers simply because they recognised they were number two and had to do things better if they were to be successful.

The campaign was a huge hit, saw Avis emerge as Hertz's biggest challenger and is now a case study in the field of effective communications.

Recent research done by an academic at Wharton, Jonah Berg, also proves the merit of seeing oneself or one's team or corporation as being slightly behind.

In a fairly innovative scientific exercise, Jonah ran a typing contest using people seated in different rooms. At the end of the contest's first round, he told some of the participants that they were slightly ahead and told others they were slightly behind, very far behind or tied (on par with the best).

He than ran the contest a second time. The results were dramatic. There was little improvement in the groups that had been told they were very far behind, ahead or tied. There was a dramatic improvement on the other hand among people who had been told they were only slightly behind.

If you study the statistics of NBA basketball games you notice a similar effect. Teams that are a point behind at half time win more games than teams that are a point ahead halfway through the game.

What does this suggest? Our natural tendency is to relax when we know are in a leadership position but increase effort when we're not and when we know the margin by which we trail is not insurmountable.

I am sure there aren't many companies who would want to give up their number 1 positions just to celebrate this key research finding. However it points to a far more important concept, the value a company can add to its position by thinking it's in second place - rather than first - even if this is not the situation.

One company that has adopted this is as a mantra is Starbucks whose CEO Howard Schultz once remarked "success is not an entitlement, but something you have to earn every day."

It's a statement that supports the manifesto of 2ism and is one companies in first place, or second, would do well to note.

Patrick D’Souza, CEO, The Planning Agency