As a consultant, we sometimes encounter clients who only want to pay for the outcome but not the inputs or the efforts. It is probably true that a client takes on the cost of the work and all of the risks when they are just paying someone for the efforts, but they do also get most if not all of the upside pertaining from the subsequent business success. Of course, the consultants get a track record or credential but that’s probably a win-win situation, not something you’d expect the consultant to be paying the client for.
But paying for effort, monitoring it and managing the risk continuously can sometimes be the only way to achieve success, rather than striking an agreement with someone whom you would only pay for success. You see, outcomes are often not a function of incentives, they are a function of effort, timing, chance and many things outside the agent’s control. By paying for success, you might not even be optimising the effort for success.
And that brings me to the payouts for Olympic medalists. A gold medalist for Singapore gets a payout of a million SGD, whereas an Australian gets a payout of $20k AUD, which is about $17.5k SGD at current market exchange rates. The point isn’t about whether that is a lot or little; and in any case, the Singapore government might say there are so many Aussie gold medalists that it would not be worthwhile paying them too much. The point is that Australia probably already spend a lot more money upfront in terms of public infrastructure for sports, supporting local sport teams, supporting talented coaches, and promoting a culture of sportsmanship. The ‘outcome’ of Olympic success is already ‘bought’ when they make those investments.
On the contrary, Singapore still thinks that sporting excellence and investing in sports is out of a desire to win. I think that’s a shame, because there are so many other great outcomes that comes from a strong sports culture. And I think the many years of ‘investing’ into Olympics thus far had been out of that desire to ‘buy outcomes’, which is probably why we are offering such a big payouts to the Olympic medalists for Singapore. It allows us not to spend taxpayers money if we don’t get the medal – but at what costs to our sporting culture?
If we are prepared to secure a gold medal, why not take 90% of that million dollars and spend it on something like paying coaches better so they can focus on coaching a one or two teams rather than two handfuls? And why not alter the education system so that civic values are also taught through sporting interactions? There are so many possibilities only if we are willing to put our minds to it, and think about the effort we want to pay for, rather than trying to buy an outcome.