Monday, 28 June 2010

Mean reversion strikes again.

In management we call it the Peter Principle. It doesn’t have a name in football but this almost universal law applies just as well. England's miserable eviction from the 2010 World Cup is yet again an object lesson in this most ubiquitous of management principles. Put simply: individuals rise to their position of maximum incompetency. Terry, Lampard, Gerrard and the rest, not forgetting the England manager, have all failed to deliver the performance they showed at club level. The problem that the Peter Principle points to is that we confuse performance and ability. If we perform brilliantly it is assumed that we can perform at that level consistently. A good premier level footballer has an ability to perform well. Occasionally they will perform at an exceptional level. It doesn’t happen every week by any means but a season of good performances at club level may flatter the individual’s ability. Indeed brilliant performance is a relatively low likelihood event. Performing brilliantly does not necessarily mean that they will do equally well the next time they play – by the laws of chance their next performance is more likely to be closer to their average. This is a phenomenon known to statisticians as mean reversion. Once we appreciate that it is the average that measures footballers’ ability rather than their most recent performances then we will cease to be so disappointed when average is all we get.

No comments: