Sunday, 31 August 2008

2+2= whatever I want it to be

I spent a couple of weeks this summer in the States and found it interesting to watch the Olympics on TV from a US perspective. Two things that struck me were firstly that to the US audience the only sports that existed were the ones involving US potential medal-winners which gave an interestingly lobsided view of the Games, and secondly that just because the screen had the word LIVE on it and the commentators said "Now we go live to the 100m..." that didn't necessarily mean the event was actually LIVE in the traditional sense of "HAPPENING AS YOU WATCH" as opposed to "LIVE" in the sense of "IT WAS LIVE WHEN WE RECORDED IT ABOUT 12 HOURS AGO".

However, the thing I scratched my head about most was the medals table. In most parts of the the world China were the undisputed leader of the medal table having ammased 51 Golds to the USAs 36 Golds and whenever I checked the BBCs website for an update countries were ranked by number of golds followed by silver then bronze. But in the USA, it was not yet time to ceed global supremacy to the emerging Chinese powerhouse. Oh, no. For two weeks we were bombarded with a different cut of the medals table based on the total number of medals, irrespective of type, and using that measure USA won again, 110 to China's 100. Hurray!

At the start of the two weeks, this oddly shaped table looks wierd to me and I felt a bit sorry for the USA having to resort to such a technique just to stay on top of the table. But as the broadcasters kept consistently reassuring me that this was the right way to look at the table and that USA was holding on to its lead, by the end of the Olympics I had become convinced (almost) that perhaps this was the "correct" way to look at it and perhaps the rest of the world had got it wrong after all.

When I worked at a big management consultancy in the 80's we used a similar technique. We were in competition with a group of other big firms, all consulting arms of accountancy firms. We were all on a par with each other except for Accenture (Anderson Consulting in those days) who were miles ahead on any performance metric you could chose. So in one fell swoop we dealt with this problem. We concluded that they were in a different business to us and therefore they didn't count. Suddenly we were back at the top of the table. Masterful!

Measuring performance is a tricky business, for any business and particularly for start ups that are in new business sectors. It is dificult to tell what is right and wrong. Is the USA "right" or playing with the numbers? Were we "right" at the consultancy (Accenture definitely had a very distinct business model compared to the rest of us). As an entrepreneur you need to have your own view of how to measure your business and then be clear and consistent about it.

If someone wants to tell you how to measure the performance of your business, well that's up to them, but you need to have your own view. If they think its "eyeballs" (yuck) but you think its "stickiness" (yuck) then you just keep focused on your measure. If they want to compare you to Facebook numbers but you want to compare yourself to Linkedin, then you keep focused on your measure. Don't get fooled into thinking that someone else has a monopoly on truth in this area. Everyone seems to be feeling their way and your view is as true or as not true as anyone elses, so stick with it, keep articulating it and eventually if someone likes what you are doing they will decide that your measure is right and if they don't like what you are doing then they will come up with a meausre that tells them what you are doing is rubbish.

So, who really won the Olympics? The correct answer is Uzbekistan, scoring a very impressive 2, and beating Jamaica into second place, on the well known "number of athletes at games per medal won"

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