Last week I had breakfast with my friend and Circle of Leaders member Nat Kreamer at the Olympic Club in San Francisco. Our conversations rarely end without him leaving me with something new to think about. As we pushed back from the table at the end of breakfast, it may have been the surroundings, but sitting there at the Olympic Club he raised what psychologists have come to call the “silver medalist effect.” 

The research he referred to was conducted by Victoria H. Medvec, Scott F. Madey, and Thomas Gilovich in a paper titled “When Less Is More: Counterfactual Thinking and Satisfaction Among Olympic Medalists,” published in the Journal of Personality and Social Psychology in 1995. The study began with an observation that seems, at first glance, paradoxical. When researchers analyzed video footage of Olympic medal ceremonies and athletes’ immediate reactions to competition results, they found that bronze medalists often appeared happier than silver medalists. 

Objectively, this should not be the case. Second place is, after all, better than third. Yet the researchers found that observers consistently rated bronze medalists as displaying greater satisfaction and joy than their counterparts who had finished second. The explanation lies not in the objective result but in the way the human mind constructs comparisons. 

Silver medalists tend to compare their outcome upward. Their most natural thought is that they almost won the gold medal. The proximity to victory makes the missed opportunity vivid. Bronze medalists, by contrast, tend to compare their outcome downward. Their most natural thought is that they nearly finished fourth and left without a medal at all. The silver medalist imagines the triumph that almost occurred; the bronze medalist imagines the disappointment that was narrowly avoided. In this way, the person who objectively did better may experience less satisfaction than the one who finished behind them. 

Psychologists refer to this pattern as counterfactual thinking – the mind’s tendency to construct alternative realities about what might have been. Near misses create especially powerful counterfactuals because the alternative outcome feels so close and so plausible. A slightly faster stride, a different tactical move, or a single moment of hesitation becomes the hinge on which the imagined alternative turns. 

What struck me about Nat’s observation was how quickly this phenomenon appeared in my own work. Within a week of that breakfast conversation, I encountered what might be called the behavioral equivalent of the Olympic silver medalist. A highly capable executive who had been the runner-up in a CEO selection several years ago resurfaced with commentary about the decision and its aftermath. The passage of time had not diminished the sense of the near miss. If anything, the memory of the almost-outcome seemed to remain vivid. 

Leadership environments are filled with moments that resemble this dynamic. Boards select one CEO from a group of capable finalists. Senior executives are passed over for promotion. Strategic alternatives are debated and one course is chosen while another narrowly recedes. Organizations move forward with the decision that has been made, yet for some participants the mind lingers not on what happened, but on what almost happened. 

Medvec and her colleagues observed that the human mind is not a simple recorder of outcomes; it is an engine of comparisons. We continually evaluate reality against the alternatives we imagine. In many cases, the most psychologically powerful comparison is not with the field that was defeated, but with the alternative outcome that lay closest at hand.

More than a century earlier, the American philosopher and pioneering psychologist William James (1842–1910) made a similar observation about human satisfaction. Reflecting on competitive outcomes, James noted that even being among the very best in the world can feel like failure when one has come so close to the very top. The mind does not measure itself against the many who were left behind, but against the one position that remained just beyond reach.

For leaders and boards, this observation carries an interesting implication. Decisions do not merely produce outcomes; they also produce narratives in the minds of those involved. Among those narratives, the story of the near miss can prove remarkably durable.

Perhaps this explains why the Olympic silver medalist appears less satisfied than the bronze medalist standing beside her on the podium. The result itself is not the sole determinant of satisfaction. What often shapes the emotion more powerfully is the persistent comparison with the outcome that almost was.

Reflection for Leaders and Boards

The idea of the “silver medalist effect” raises several questions for leaders and boards – questions that many of us may recognize from our own experience. 

1. Personal Reflection
Do you remember the opportunity in your career that brought you closest to the top – but ultimately went to someone else? How did you process that experience, and what did it teach you about ambition, disappointment, and resilience?

2. The Internal “Silver Medalist”
When an external CEO is appointed, internal candidates who competed for the role often remain within the organization – at least initially. What dynamics does this create?
a. From the perspective of the new CEO, how should the contributions and aspirations of internal candidates who came close be acknowledged?
b. Are there circumstances where difficult – or even seemingly callous – decisions, such as replacing the internal runner-up, may be necessary for the clarity of leadership and the success of the organization?

3. The Board’s Perspective
When boards make CEO selection decisions, do they fully consider the psychological aftermath for the runner-up candidates inside the organization?

4. The Psychology of the “Silver Medalist”
How should leaders manage their own counterfactual thinking – the “what might have been” corrosive inner narratives of regret that can quietly shape judgment, behavior, and future relationships?

5. The Organization Itself
Should organizations think more deliberately about how they handle the aftermath of competitive selections, particularly when several capable leaders have vied for the same role?

6. Leadership Journeys
When you reflect on your own leadership journey, were the defining moments always victories – or were some of them near misses that ultimately shaped you more profoundly?