By Tony Samson
FINANCIAL ANALYSTS routinely evaluate current corporate performance by comparing it with that of the previous period. Thus a listed stock that briefs investors and analysts on net income need to state how it compares year on year, whether flat, down, or up and by how much. It is not enough to make billions of pesos in net income for the quarter, the number has to be set against the quarter or year before. It is even compared to the anticipated number. All these comparisons can make even awesome numbers disappointing when paired against last year.
Implicitly, this financial approach of comparative analysis require results to always be improving. And to be impressive and deserving of additional credit or a higher stock target prices (buy and accumulate), the growth has to be in double-digit territory. Economic indicators too are compared year on year, GDP, international reserves, inflation, and even favorable ratings of surveys which may differ in the same period.
Comparisons in business and the economy are usually quantitative. Only attributes that are measurable in numbers can be compared. And even these have to be symmetrical — you can’t compare apples to oranges, except in a fruit salad.
Even leadership styles depend on metrics. The sterling attributes of leadership are bestowed on those at the helm of companies that are growing and profitable, or acquiring culinary schools and delivery systems at a fast clip. Former high-flying stars brought down by slumping revenues and shrinking market shares are portrayed negatively as their numbers decline — he needs a succession plan.
Sports, often like business, deals with comparisons all the time. The Olympic motto is, after all, “faster, higher, stronger.” In any sports event, it is this comparison of performance that determines the medal standing. Even winners of Olympic events need to compare with previous winners to make their achievements more meaningful, by setting new records or breaking old ones; not just faster, but the fastest ever.
The urge to compare extends to social status. Status symbols, like a Birken bag, or an upscale neighborhood, simplifies this comparison game of who is richer. Basketball players in the professional league in the States get to know what others are getting in their highly publicized contracts to serve as the pecking order for status envy. A twice awarded MVP, Steph Curry had to carry on with a contract financially worse than a hundred other players, including some in his own team until this year he got his much deserved stratospheric contract. In that time of middling pay, he simply shrugged off his financial neglect. He wasn’t worried about mediocre players getting more — “anyway, I can’t spend their money.”
Behavioral economics cites the irrational effects of “framing.” A purchasing decision is not done in isolation. The desirability of an item on sale is affected by its previous price. A 70% promo discount makes an otherwise uncontemplated purchase of a bomber jacket seems compelling, only because of the posted saving regardless of the absolute amount. This same framing context affects satisfaction with a performance bonus. A bonus of five million pesos may send one executive jumping with joy, until he finds out that another less worthy executive got twice that amount. Thus comparisons, as the philosopher Søren Kierkegaard points out, can be odious. They introduce envy or a feeling of undeserved superiority.
A person comparing his previously glorious lifestyle and career to his present fallen state can be seized by depression — how much better the past was! Looking back even to miserable days does not help. One is always told to move on and not keep comparing with the past or with those doing much better. It’s a competition that can’t be won.
Comparison should not necessarily lead to competition. There are anyway attributes that are not usually compared, like good health and happiness.
Poets understand comparisons better. They use metaphors for feelings. Shakespeare’s sonnet 18: “Shall I compare thee to a summer’s day? Thou art more lovely and more temperate.” There’s no competition here. It’s just a person not under the weather.
The urge to compare is best left checked. It’s not necessary to be better, just to be good. Most times, good is wonderful enough.
Tony Samson is Chaiman and CEO, TOUCH xda
ar.samson@yahoo.com
