The concerns that Miami lacked a clear hierarchy turned out to be well-founded. In late-game situations, the Heat’s execution and coordination was disastrous. In the 2010-2011 season, their record in close games (those decided by 5 points or fewer) was an atrocious 32 percent, ranking them 29th out of 30 teams. In comparison, the year before, when the Heat had an objectively worse team, but had a clear leader in Wade, their winning percentage in close games was 58 percent. When the new talent came onboard, they fell out of sync because they didn’t have a clear hierarchy.

A year later, the Heat won an NBA championship. Ironically, critical injuries to Wade and Chris Bosh may have contributed to their success. With his fellow starters injured, James emerged as the clear leader of the team. “Dwyane Wade injured his knee … inadvertently solving the ‘dueling banjos’ dilemma,” Simmons said. “Less talent became more.”

Intrigued by this idea, we set out to analyze 10 years of NBA performance with Roderick Swaab of the business school INSEAD. Our analysis revealed exactly what we saw with the Miami Heat: At a certain point, adding more top talent caused teams’ winning percentages to go down rather than up. These teams simply had too much talent.

It turns out that for basketball teams, steeper hierarchies lead to better performance. Why? Teams with a clear pecking order passed the ball more effectively. They had more assists, and as a result, players made more of their shots. As any good coach knows, getting a group of talented individuals—egos and all—to coordinate their behaviors effectively is easier said than done. A group of all-stars can easily tip the balance away from coordination and cooperation to competition and petty rivalry. When individual interests take precedence over what is best for the collective, group performance declines. It no longer functions as a cohesive whole.

The United States Olympic basketball committee recently came to appreciate the problem of too much talent. Though the U.S. team had dominated international competition in basketball in prior years, they stumbled in 2002 and 2004. In the 2002 FIBA World Championship, the U.S. finished a shocking sixth, and in the 2004 Summer Olympic Games, they settled for a bronze medal.

Then, in 2005, Jerry Colangelo took over management of the U.S. men's international basketball teams. He immediately intended to recruit less talent and focus on coordination and suppression of individual interests. As he explained to The Wall Street Journal a few years later,

The first thing I wanted to establish was a real national team, not just an all-star team … That means a commitment from coaches and players for three years. I wanted to build an esprit de corps, camaraderie, and team unity…It's no longer about you, but about Team USA. You walk in the door here and you check your ego at the door … Basketball is the consummate team game...we wanted players who could complement [the stars].

Adhering to this philosophy, Colangelo asked Andre Iguodala to join the team in 2010. As Bleacher Report put it, “Iguodala isn't one of the best players on the team. But Iguodala is a perfect fit for team USA … While most of the guys on the team play good defense, they need a player focused almost fully in their half of the court. That player is Iguodala.”