Profit Power: How there’s more to success than just gold medals

August 17, 2021 - By Jeffrey Scott

Who really won the Olympics? And what can a landscape firm learn from how success is measured?

The greatest sports competition on earth just ended, with tears of wins, losses and upsets.

(Photo: PeskyMonkey / iStock / Getty Images Plus)

So, who actually won?

The typical storyline measures it by most medals (the USA by a long shot) and by the most Golds (the USA with China right behind).

You can be sure the Chinese government is pointing fingers right now (or worse) and making plans on how to win the next gold wars.

I think there are better ways to measure the win.

The Dutch won 10 golds compared to the USA’s 39. If you measure that on a per capita basis, the Dutch won one gold per 1.7M people, and U.S. won one gold per 8.4 million. Using this ranking, the Dutch did far better than we did.

And if you take the time to eye the top 15 gold-medal-winning countries I think you will see that the Dutch came out on top. (I’m a bit lazy to do the actual computations, perhaps someone will and email me).

Using the per capita measurement, the Chinese will never capture the lead over the U.S., but that’s another story.

We love our sports and we like to win. We like to be the biggest and the best.

Landscape Management measures the top 150 largest firms each year. It gives the winners bragging rights. But these companies, like you, should also consider other metrics.

Your challenge: Measure your wins more precisely to motivate your staff using more meaningful measurements.

It’s not enough to use your top-line sales numbers to indicate your success. We need to figure out more telling metrics:

Net profit is obviously a better indicator.
Net profit per division is even better to help you find your strengths and weaknesses.
Net profit per employee (or a version of throughput or revenue per manhour) will help you identify how well you use your most important asset; and in some divisions, it can help you see which employees are doing the best job with their time.

As you can see, there are many important metrics beyond sales and revenue, but don’t stop there. Look for the trends, because making great money in just one year is not as healthy as making good money every single year.

The lesson here is don’t compare your success with how you think your bigger competitors are performing. Focus on your strengths that will bring you the gold, and you will ultimately outperform your competitors.