What measuring Olympic athletic performance can teach business

Posted on | August 9, 2012 | No Comments

How should one measure the performance of countries at producing Olympic medal winners, and of the Olympic athletes themselves?  Some members of the press are having some fun answering that question—and there are some lessons for business too.

The National Post played around with various ways of adding up the medal count to compare countries. You can add up the total number of medals each country wins, or you can give each medal—gold, silver or bronze—a score of 3, 2, 1 and add up the scores. Or you could just count the gold medals. The Economist looks at country athletic greatness another way: how many athletes does it take  country to win a medal? The fewer athletes it takes, the greater is that country at winning medals.   In other  words, use an indicator or medal-wining efficiency. Each indicator tells you something different, and the countries rank differently depending on the method.

The Economist asks what measure could be used to measure Olympic “greatness” of athletes. Naturally that depends on how you define greatness. While Michael Phelps has won more medals than any other Olympian, the Economist points out that if you count the number of medals Olympic athletes win as an indicator of greatness, you essential “guarantee that the greatest Olympian will always be a swimmer,”   because there are so many swimming events swimmers can enter compared to other sports.  You could measure the longevity of athletes—over how many Olympics they win medals. Or versatility—in how many sports they win medals.

The real problem is defining whatever it is you are trying to measure. When it comes to measuring athletic performance, there is pretty much an infinite number of ways to do so. As in business performance indicators, all indicators are misleading indicators in one way or another. So choose your measurement poison, and make sure you know its side effects.

In these examples, they are trying to measure something that is defined by the suggested measurement process. All such instrumental “definitions”  suffer from the countless other definitions that sound just as reasonable.  But what, in the end, is actually being measured?

© 2012 Greenbridge Management Inc. Blog post based on the book misLeading Indicators: How to Reliably Measure your Business, by Philip Green and George Gabor.

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