My daughter Meredith is in a competitive swim club. It's a great sport for her because she isn't directly competing against other athletes. She gets to compete against herself, and the clock.

It's about continuous self-improvement. Well sort of. If that were the case, why weren't her times improving in practice?

Two weeks ago she beat her previous personal best by a combined 16 seconds. This weekend, she blew that new personal record out of the water (sorry, bad pun) by 17 seconds. Why? Social facilitation, that's why.

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The social facilitation theory dates back to 1898 and is the first ever sports-psychology experiment. Dr. Norman Triplett noticed that cyclists tend to have faster times when racing in the presence of a counterpart as opposed to racing the same track alone. He then demonstrated this effect in a controlled laboratory experiment and concluded that children perform a simple lab task faster in pairs than when performing by themselves.

How did this happen? The presence of another competitor served to liberate latent energy not ordinarily available to the person. This would also explain why Meredith's times improved in the meets but not in practice.

In business and sports, people play harder when there is a scoreboard.

We've gotten away from keeping score in youth sports because we don't want to damage kids' self-esteem or have them be labeled as "losers" after a game they didn't win. In business, many companies have created cut-throat, toxic cultures because of how they keep score. Maybe we just need to teach people the right way to keep score.

I'm an admirer of Warren Buffet, the world's most successful investor and fourth richest man in the world. He lives a simple life in the same small home in Omaha that he bought for $30,000 back in 1955. I even bought Berkshire Hathaway stock just so I could attend his shareholder meeting next year and meet him.

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My favorite Buffet strategy is what he calls the inner scoreboard. Your inner scoreboard is the set of standards by which you judge yourself. The outer scoreboard is when you allow your self-worth be predicated upon the judgment of others.

Buffet judges his investments on two criteria: Did the business help our customers or did the business help our employees? Note that he is one of the richest entrepreneurs in America and nowhere on his inner scoreboard is turning a profit mentioned. It's a natural byproduct of helping his people and the customer.

It doesn't matter if the media or public love an investment he made, if it doesn't measure up to his two inner criteria, it wasn't a success in his mind no matter how financially successful it may have been.

The lesson children and employees learn very early on is what you as their mentor are putting emphasis on. If your emphasis is on what the public is going to think about you, and you lose sight of how you should really behave, you'll end up with an outer scoreboard that doesn't serve anyone well. You get what you emphasize.

What's your inner scoreboard? In essence, inner relates to the concept of intrinsic value and the outer scoreboard is merely based on market value alone.

Inner scoreboard for Meredith is improving her times and her outer scoreboard would be whether she won. 

I asked Meredith the other day: "If the world couldn't see your times, would you rather be thought of as the fastest swimmer in the pool, but in reality have the slowest time, or be thought of as the worst swimmer in the pool and actually have the best time?"

I was proud of her answer.

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