For millions of people across the globe who have always admired Lance Armstrong and stood by him during the doping allegations, their unwavering support for the man who once inspired, entertained and encouraged them was dealt a big blow last week.
In a two-part live broadcast interview with Oprah Winfrey that was watched by an estimated 28million people worldwide on television and online platforms, the disgraced former cyclist and Tour de France seven-time winner admitted to cheating for years.
Armstrong admitted to taking performance-enhancing drugs throughout his storied cycling career and his confession ended years of often angry denials. Before this high profile interview with Oprah, the former cyclist had been stripped off all the seven titles he won at the Tour de France and banned from athletic competition for life.
Armstrong has already lost over $75 million in sponsorship deals. With an estimated worth of $125 million, his liability is expected to be anything more than $100 million.
Amid all this frenzy surrounding Lance Armstrong, what can we learn about enterprise risk and performance management?
Though he took performance-boosting drugs, there are some performance-busting drugs within our businesses that we learn from Armstrong’s character and need wiping out of the system. These are:
1. A Defiant Drug
In his interview with Oprah, Armstrong continuously stated that he was always “defiant”. Some people outside and inside cycling knew that Armstrong was taking drugs and when they tried to reach out to him to help, he became rebellious towards them. For example, when rumours of his drug taking started circling around, Armstrong lashed out at his accusers, both in the media and lawsuits. He became unmanageable and boldly resisted authority.
Performance improvement is about embracing change. It’s not about adopting a ruthless and relentless “win-at-all” costs attitude that Armstrong adopted. So often we work with peers who always want to use shortcuts to improve organizational performance. When you try to show them the right way of doing things, they throw up their tantrums at you. As a leader or team player, it is very important that you accept help when it is being offered to you. Don’t assume that because you have achieved ABC in the past you are all-knowing, difficult or intractable.
2. A Command And Control Drug:
Throughout his storied cycling career, Armstrong admitted to being a “bully.” He was always commanding and in control. Whatever he said had to be done. It was his way or never. It’s a shame that in today’s corporate world, we still have leaders leading by the stick and carrot approach. They bully around their subordinates, are dismissive of them and prone to new ideas.
The enterprise risk and performance management field is evolving. New technologies and methodologies such as predictive analytics, strategy maps, demand forecasting, customer profitability analysis, activity-based costing, product and channel profitability analysis, value based management, scorecards, performance prism, dynamic pricing and driver-based resource capacity planning. By adopting these new practices, organizations can significantly improve their performance.
There has to be a shift in mindsets of leaders. Old practices of doing things will not continue to deliver the desired results. They might work for now but sooner or later they are bound to falter. Had Armstrong listened to his peers about alternative ways of enhancing his performance instead of taking drugs, today he would not be in the same situation he finds himself in. Some leaders are still crying of poor performance yet still they are not willing to listen and take advice of their knowledgeable subordinates. They are scared of empowering other people resulting in flawed decision making processes.
3. Silo Risk Management Drug
Overcoming silos is seen to be the biggest challenge to enterprise risk management programs. Armstrong was never a good risk manager. He didn’t find any wrong in doping and cheating all those years he cycled and never did it cross his mind that one day he would get caught.
As the old saying goes, “Two wrongs don’t make one right”, Armstrong boldly stated that cheating was the culture of the sport but what he didn’t realise is the fact “majority don’t always rule.” He became so comfortable to the extent that he never imagined the consequences if ever he was to get caught. If he did consider the consequences, he never envisioned the scale. In addition to financial loss and tarnished reputation, there was more at risk. For example, the people he so dearly cared for were deeply hurt. During the interview, Armstrong confessed that his mum, children and friends were a complete wreck because of his actions.
In business so many decisions are made without any hindsight of what can go wrong and the losses that might be incurred afterwards. Business leaders focus more on the financial risks and completely leave out non-financial risks. They do not weigh the impact of their decisions on the society, environment, personnel etc. It’s high time leaders take a holistic view of the entire risks affecting their organizations. Risk management should be aligned with strategy and integrated with performance management. The micro and macro environment is rapidly changing and so are the risks hence it’s suicidal for any leader to remain in his comfort zone.
4. Deception Drug
You can lie over and over again but the truth will always come out. For years, Armstrong lied and misled everyone but eventually he was caught. He was focused more on the short term results than long term effects.
According to USADA:
“Armstrong bullied teammates into doping while overseeing the most sophisticated, professionalised and successful doping program that sport has ever seen.”
No matter how good you orchestrate your plan, someone smarter than you is bound to find those missing links and close the gap. Effective risk and performance management is about being ethical, professional, having good morals and being a person of high integrity.
As a cowboy accountant or finance professional, you can play around with figures and report exceptional results to shareholders and other stakeholders hoping that the truth will not come out, but it will. Take for instance all those rogue traders who have lost their banks billions of dollars in unauthorised trades or companies that tried to hide their loses on their balance sheets. When they started incurring the loses and covering up their tracks, they succeeded for a while but they never thought that their doomsday will come. The day certainly came and the consequences were devastating.
Leadership requires the courage to make decisions that will benefit the next generation. – Alan Autry