Growing up as an inspired athlete, making sure I was consistent with my demeanor was always a priority. Some athletes have superstitious routines while preparing for a game and to them, if they didn’t follow their routine, it could turn out to be the reason for underperformance. Was I superstitious? Sure! The occasional stir-fry and the way I tied my skates were a must before heading on the ice. As an athlete, it is crucial to show up and continuously give it your all, game in and game out, mentally and physically. Consistency was no option. The ones who consistently showed up to play would excel and the ones who didn’t, did not last long. Even at a young age, it was noticeable that athletes who consistently performed well had a premium, whether that be more ice time, more games played, the first to have chats with scouts or other little perks. Reminiscing about my hockey career led me to the interest in analyzing whether consistency in performance and preparation in both business and athletics truly equals increased value, and therefore higher pay.
Let’s try to quantify this and see if consistency is the main ingredient.
CEO – Highest Paid vs. Lowest Paid (Performance for 3 years)
I took a look at the 30 highest-paid CEOs in tech in 2016, according to Business Insider and compared the following 2 metrics: 1) Profit Margin and 2) Revenue.
Highest Paid CEO on the list, Mark Hurd, CEO of Oracle: $41.1 million:
Lowest Paid CEO on the list, Ursula Burns, CEO of Xerox: $13.1 million:
As you can see, even though the performance of both CEOs were dwindling downwards, the one with less change who provided a more consistent pattern demanded a higher premium to lead the ship. In this example, the difference for inconsistency is $28 million less pay!
HOCKEY GOALTENDER – Highest Paid vs. Lowest Paid (Performance for most recent seasons with greater than 25 games played)
Now, let’s see if this is the same in sports. Let’s take a look at the NHL’s top 30 highest paid goaltenders for 2018 and compare the following metrics: 1) Goals Against Average – the average of how many goals are scored on the goaltender per game (the lower the better) and 2) Save percentage, how many shots are stopped on average by the goaltender (the higher the better).
Highest Paid Goalie, Carey Price of the Montreal Canadiens, salary $10.5 million:
Lowest Paid Goalie, Thomas Greiss of the New York Islanders, salary $3.3 million:
As you can see, once again, even though both goaltenders’ performance is dwindling downwards, Carey Price’s performance is a little more predictable. The slightest difference in inconsistency for both GAA and SV% leads to a difference in pay of $7.2 million; this is what consistency is worth in sports. Like Al Pacino’s famous speech in the blockbuster, Any Given Sunday, “Life is a game of inches”, and it is so true, the slightest difference in consistency leaves a ton of money on the table.
So, there you go! A simple example and comparison showing that consistency is what the top guys want to see, is indeed, where the value lies. Now, are there other factors that may increase the value of a CEO or goalie? Sure. But we can see that a CEO or goalie with less radical swings and a more consistent performance yields a higher pay. This pay is given because their performance is reliable. Management and/or Board of Directors are confident about what the results game-over-game (goalie) and month-over-month (CEO) will be from Mr. Hurd and Mr. Price. The bottom line is that consistency becomes momentum and momentum becomes commitment; a commitment to learn, develop and win. This is where the magic happens when you stay consistent in your work ethic, consistent in what you believe in, consistent in your vision and keep showing up day after day. You demand a premium because you are a professional, you are reliable and you are mitigating the biggest fear of human beings – the unknown.
How do you stay consistent? Comment, share and let me know!
Oracle Annual Report:
Xerox Annual Report:
Carey Price Stats:
Thomas Greiss Stats: