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Apples with caviar

How do we know that we’re doing a good job?

Talk to most CEOs in listed companies and they will tell you that the company’s share price is the ultimate barometer of their performance. Business strategy is therefore often in service to the share price as it provides the clearest and quickest affirmation of success.

Our equivalent in football is the league table. At any given time during the season we know how we stack up against our rivals, with each game an opportunity to demonstrate our progress.

But as a true measure of our performance, the league table is inadequate. We know that it is often inaccurate as a barometer of true, underlying performance, but also fails to take account of the vastly different budgets at each team’s disposal. It is comparing apples with caviar.

For example, Arsenal finishing higher than Burnley last season doesn’t mean that their management team is doing a better job.

To get a true measure of our performance, we therefore need to look beyond the league table. For example, through measuring outcomes against what we would have expected to happen, we can baseline our interpretations more effectively.

We can use many measures to form our expectation. Our budget relative to other teams in the league, for example, provides a baseline against which we can measure our efficiency at getting a return from our resources.

La Liga’s top performers by this measure are Getafe (finishing 8th with the 18th biggest budget), Betis (finishing 6th with the 13th biggest budget) and Girona (finishing 10th with the 19th biggest budget). This is not footballing alchemy, but rather footballing efficiency. These clubs have all maximised the return on the pitch from their available resources.

Increasingly, clubs who aspire to do the same are seeking to better understand and benchmark their performance in similar ways. Live dashboards tacking pounds per point and other relevant KPIs are cropping up in ever more boardrooms. Smart clubs will account for the league table’s variability through using multiple seasons or measures for underlying performance.

For most teams, the ultimate goal is to win through spending smart, not spending more. Tracking this type of information is merely the first step.

About Ben Marlow

Ben Marlow has created 38 entries.