Sports Risk Management

For decades, the game of football (also known as soccer in some places) has been known to be a crowd-puller. Take one tournament for instance, The FIFA World Cup, which is scheduled to happen after every four years.

The build up to this tournament is intense, a lot of resources ranging from time, personnel, finances etc. are invested just to make this month-long event one worth remembering.

Then we have other tournaments and sporting events such as the UEFA European Football Championship, Africa Cup of Nations, UEFA Champions League, Absa Premiership, English Premiership, Six Nations Rugby, Cricket World Cup, Australian Tennis Open, and Formula 1.

The list is endless. At all these sporting events, thousands of jubilant fans fill the stadiums to full capacity expecting to experience a moment of a lifetime.

However, what is important to note is that sporting events normally have to deal with terrorism, weather, event type, result, hooliganism, riot, anarchy and stampede risks, only to mention a few.

All these risks and others have the capability to disrupt the much loved game but the risk of this happening is very minimal in the eyes of the committed fans.

For example, in the UK, no matter how cold and snowy it becomes, football fans are willing and prepared to ignore the cold weather and throng the stadiums in thousands.

The threat and fear of them suffering a cold or getting influenza is nothing compared to the cost of missing the much-loved and beautiful coveted game of football.

However, as we all know, risk is inherent in all aspects of life. Though it is impossible to completely eliminate risk, through careful planning, it can be managed.

Just like the business environment, the world of sports is inherently full of risks and these too need to be identified, assessed, monitored and managed.

I deeply regret what happened at the football match in Egypt on Wednesday night. Egypt’s worst soccer violence claimed at least 74 lives in the northern city of Port Said, plunging the nation into rage and prompting protests and clashes with police in the capital. According to reports:

“At least 1000 people were injured in the violence on Wednesday 1 February 2012 when soccer fans invaded the pitch in the Mediterranean city after local team al-Masry beat Cairo’s Al Ahli, Egypt’s most successful club 3-1.

Hundreds of al-Masry supporters surged across the the pitch to the visitors’ end and panicked Ahli fans dashed for exit. But the steel doors were bolted shut and dozens were crushed to death in the stampede”.

What started as a night to enjoy a game of football ended up in disaster. I don’t think many of the fans from both teams saw this coming. As mentioned earlier on, even though risk is inherent in all aspects of life, there is still the need to effectively and efficiently manage it.

This is not the first time a stadium disaster has claimed lives of innocent victims and injured thousands. According to Reuters, the information source company, here is a look at some of the major disasters in soccer stadiums since 1960:

• May 1964 – PERU: In one of the worst ever soccer disasters, more than 300 fans died and 500 were injured in a riot during an Olympic qualifying match in Lima.

• January 1971 – BRITAIN: Sixty-six people died in a crush at Ibrox stadium in Glasgow as they were leaving a match between Rangers and Celtic.

• October 1982 – RUSSIA: Fans were crushed as they left a UEFA Cup tie between Moscow Spartak and Dutch side HFC Haarlem at the Luzhniki stadium in Moscow. Officials from the former Soviet Union did not disclose the tragedy for years. When they did, the authorities gave an official death toll of 66 although the number who died could have been as high as 340.

• May 1985 – BRITAIN: At least 56 people were killed and more than 200 injured when fire broke out in the stands at Bradford.

• May 1985 – BELGIUM: Thirty-nine fans, mostly Italians, died in rioting before the European Cup Final between Italy’s Juventus and English club Liverpool at the Heysel Stadium in Brussels.

• March 1988 – NEPAL: A stampede towards locked exits in a hailstorm at the stadium in Kathmandu killed more than 90 fans.

• April 1989 – BRITAIN: Ninety-six people were killed and at least 200 injured in Britain’s worst sports disaster after a crowd surge crushed packed fans against barriers at the English F.A. Cup semifinal match between Liverpool and Nottingham Forest at the Hillsborough stadium in Sheffield.

• October 1996 – GUATEMALA: Up to 82 people died when an avalanche of fans tumbled down seats and stairs at a World Cup qualifying match between Guatemala and Costa Rica in Guatemala City.

• April 2001 – SOUTH AFRICA: At least 43 people were crushed to death when fans tried to force their way into Johannesburg’s huge Ellis Park stadium during a top South African league match.

• May 2001 – GHANA: Around 126 people were killed in a stampede at Accra’s main soccer stadium when police fired teargas at rioting fans.

• February 2012 – EGYPT: Fans rioted at the end of a match in Port Said when the local team al-Masry beat Al Ahli, one of Egypt’s most successful clubs. At least 74 people were killed and more than 1,000 people injured.

From the above sporting stadium disasters, we learn that:

1. Every Sports Club must have Risk Assessment: This involves carefully examining what could go wrong and cause harm to the members, fans, property or equipment during club activities. Even though many hazards are unavoidable, it is important that as a club you take satisfactory precautions that the risk of harm is small.

According to (Decker, 2001), a good sport risk management approach involves performing three assessments:

  1. Threat Assessment
  2. Vulnerability Assessment
  3. Criticality Assessment

As a sports club manager, performing these assessments will help you:

  • Identify the hazards
  • Decide who may be harmed and how
  • Evaluate the risks and decide precautions
  • Record your findings and implement them
  • Review your assessment and update it

2. Conducting inspections of the facility is critical: Since most of these stadiums are used week-in-week-out, over time, as a result of pressure exerted on these facilities, they will start to wear out.

Regular inspections involve checking and adding lighting as well as enhancing communication networks. If the facilities are not properly attended to, a similar disaster like the October 1996 in Guatamela City would be inevitable.

3. Implementing access controls is necessary: Had the exit in Port Said stadium not been bolted and shut, the loss could have been minimal. It has been noted that, those who died and those who were injured did so because they couldn’t escape the stampede.

By taking advantage of technology, sports club managers need to ensure that access to the stadium can be monitored and managed from another secure location. Had this been the case in Egypt, the fans would have easily exited the stadium.

Using CCTV security cameras also helps locate problematic sections of the stadium. Access controls also involve checking backpacks and enhancing background checks. Access controls are also important in case of fire.

4. Maintaining close contact with law enforcement representatives regarding possible threats is necessary: Reports coming from Egypt indicate that the build-up to the match was tense but the level of security was thin.

Managers need to ensure that there is proper security in terms of police, healthcare practitioners and other law enforcing agents to control the situation should violence escalate.

5. Developing or updating emergency responses and evacuation plans is very important: Risk management is all about being proactive as opposed to being reactive, thus, there is need to have disaster management plans in place at all times.

These plans should not be left accumulating dust in cabinets but should regularly be updated. Sports club managers should regularly review their risk registers and perform what-if-analysis to gauge their vulnerability and the criticality of different disaster scenarios.

Above all, we learn that identifying the greatest threats, eliminating and reducing vulnerabilities will help minimize risk at sport events.

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Leading in Uncertain Times

One of the biggest challenges facing business leaders today is making the right decisions that will ensure their organizations succeed, survive, and remain competitive in an increasingly uncertain and complex environment.

A recent post, The best way to lead in uncertain times may be to throw out the playbook, by Strategy+Business has several good points.

The article is about the COVID-19 pandemic, how global companies navigated through the crisis, and how best to prepare for future disruptions. Here are some key points and my comments.

  • Rather than follow a rigid blueprint, executives must help organizations focus on sensing and responding to unpredictable market conditions.
    • Comment: Senior leaders play a vital role in providing clarity about the organization’s strategic direction, creating alignment on key priorities to ensure the achievement of enterprise objectives, and ensuring the business model is continuously evolving to create and capture value in the face of uncertainty. They must not rest on their laurels and stick to the beliefs and paradigms that got them to where they are today and hope they will carry them through tomorrow. Regulatory changes, new products, competition, markets, technologies, and shifts in customer behavior are upending many outdated assumptions about business success. Thus, the businesses you have today are different from the ones you will need in the future hence the importance of continuously sensing changes in the global economy. Employees and teams often feed off the energy of their leaders and tend to focus their attention where the leader focuses attention. If the leader is comfortable with current business practices and rarely embraces the future or challenges the status quo, then the team is highly likely to follow suit.
  • When it became clear that supply chains and other operations would fracture, organizations began scenario planning to shift production sources, relocate employees, and secure key supplies.
    • Comment: Instead of using scenario planning to anticipate the future and prepare for different outcomes, it seems most of the surveyed organizations used scenario planning as a reactionary tool. Don’t wait for a crisis or a shift in the market to start thinking about the future. The world is always changing. As I wrote in The Resilient Organization, acknowledge that the future is a range of possible outcomes, learn and develop capabilities to map out multiple future scenarios, develop an optimal strategy for each of those scenarios, then continually test the effectiveness of these strategies. This does not necessarily mean that every change in the market will impact your business. Identify early warnings of what might be important and pay closer attention to those signals. In other words, learn to separate the signals from the noise.
  • The pandemic forced the organization’s senior management team to re-examine how all decisions were made.
    • Comment: Bureaucracy has for a very long time stood in the way of innovation and agility. To remain innovative and adapt quickly in a fast-changing world, the organization must have nimble leadership and an empowered workforce where employees at all levels can dream up new ideas and bring them to life. Identifying and acting on emerging threats and potential opportunities is not the job of the leader alone but every team member. To quote Rita McGrath, in her book Seeing Around Corners, she writes, “Being able to detect weak signals that things are changing requires more eyes and ears throughout the organization. The critical information that informs decision-making is often locked in individual brains.” In addition to the internal environment, the leader must also connect with the external environment (customers, competitors, regulators, and other stakeholders), looking for what is changing and how.
  • It’s worthwhile for leaders of any team to absorb the lessons of sense-respond-adapt, even if there is no emergency at hand.
  • Sensing: Treat the far-flung parts of your enterprise as listening stations. The question leaders must ask is, “What are we learning from our interactions beyond the usual information about costs and sales?” Train your people to listen for potentially significant anomalies and ensure that important information is not trapped in organizational silos.
    • Comment: Cost and sales data are lagging indicators that reveal the consequences or outcomes of past activities and decisions. Although this information can help leaders spot trends by looking at patterns over time, it doesn’t help understand the future and inform what needs to be done for the numbers to tell a different story. In addition to lagging indicators, pay attention to current and leading indicators and understand the relationship between these indicators and outcomes.
  • Responding: Improve communication across intra- and inter-organizational boundaries. Leaders should view business continuity as an essential function that acts as connective tissue for the enterprise.
    • Comment: In addition to creating mechanisms that allow the free flow of information both inside and outside the organization, decision-makers should also be comfortable receiving information that challenges their personal view of the world, even if it’s not what they want to hear. Create a culture of psychological safety where people are not afraid to share bad news for fear of getting punished, but rather are acknowledged and rewarded for speaking up. Leveraging the diversity of thought enables leaders to anticipate the future as an organization, decide what to do about it collectively, and then mobilize the organization to do what’s necessary.
  • Adapting: Challenge assumptions, and question orthodoxies. There’s always the temptation to mitigate threats simply by applying existing practices harder and faster. One way to get at those deeper issues and encourage double-loop learning is to ask, “What needs to be true for this to be the right approach?”
    • Comment: In an increasingly uncertain environment, it’s difficult to survive and thrive with an old business model or outdated technologies. Many businesses fail because they continue doing the same thing for too long, and they don’t respond quickly enough and effectively when conditions change. As a leader, stay curious and connected to the external environment, look for market shifts, understand what needs to be regularly refreshed and reimagined, adopt new technologies and capabilities, and adapt in ordinary times but also during times of transition. Unfortunately for many leaders, it’s just more convenient for them to continually downplay the fact that conditions are changing than take the appropriate course of action that drives business success.

How are you preparing your organization for potential future disruptions?

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The Collaborative Organization

These days the term collaboration has become synonymous with organizational culture, creativity, innovation, increased productivity, and success.

Let’s look at the COVID-19 pandemic as an example. At the peak of the crisis, several companies instructed their workers to adopt remote working as a health and safety precautionary measure.

Two years into the pandemic, they are now asking their employees back to the office full time or are planning to adopt a hybrid model.

The need to preserve our collaborative culture and accelerate innovation are two of the top benefits being cited by organizational and team leaders for bringing workers back.

Collaboration is indeed essential for the achievement of team goals, functional objectives, and the overall success of the organization.

Today’s breakthrough innovations are emerging from many interacting teams and collaborative relationships.

When teams, functions, and organizations collaborate, the whole is greater than the sum of its parts; group genius emerges, and creativity unfolds.

But, what makes a successful collaboration? What are the key enabling conditions?

  • It extends beyond the boundaries of the organization. Business success is a function of internal and external relationships. Instead of viewing your business in vacuo, understand that you are part of an ecosystem. External to your organization, who do you need to partner with to enhance your value creation processes, achieve/exceed your objectives, or successfully execute your strategy?
  • Ensure the objectives are clear and there is shared understanding by everyone. Unclear objectives are one of the topmost barriers to team and organizational performance.
  • Foster a culture that encourages opinions and ideas that challenge the consensus. People should feel free to share their ideas and not hold back for fear of others penalizing them or thinking less of them. Collaboration is hindered when one or two people dominate the discussion, are arrogant, or don’t think they can learn anything from others.
  • Groups perform more effective under certain circumstances, and less effective under others. There is a tendency to fixate on certain topics of discussion amongst groups which often leaves members distracted from their ideas. To reduce the negative effects of topic fixation, members of the group should be given periods to work alone and switch constantly between individual activity and group interaction.
  • Effective collaboration can happen if the people involved come from diverse backgrounds and possess complementary skills to prevent conformity. The best collective decisions or creative ideas are often a product of different bodies of knowledge, multiple opinions, disagreement, and divergent thought processes, not consensus or compromise.
  • New technologies are making collaboration easier than ever, enabling us to increase our reach and broaden our network. Although new technology helps, it will not make your organization collaborative without the right culture and values in place. First, define what you want to achieve through collaboration then use these tools to promote creative collaboration.

How else are you championing collaboration within your organization to create value and succeed?

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Preparing for Geopolitical Shocks

Geopolitical instability has steadily increased over the past years, and uncertainty in the global economy is at an all-time high. Thanks to globalization and advances in technologies, we now live and work in a tightly interconnected world, one in which the boundaries that previously separated domestic from global issues have disappeared.

Threats are no longer confined to traditional political borders, social structures, and geographic boundaries. Geopolitical shifts have dramatically altered the global economic landscape and brought politics and business together.

The rise of China as an economic and politically influential power has threatened the dominance of the United States as the world’s largest economy. Although the opening of China and a market of 1.4 billion people have benefited both countries, it has also intensified competition and sparked U.S. economic and technological espionage accusations against China, leading to strained relations between the two giants.

U.S. companies operating from China have felt the impact of this tense relationship. The opposite is true for Chinese companies in the U.S.

Across Europe, national populism is on the rise and now a serious force. In 2016, the United Kingdom shocked the world when it voted to leave the European Union, generating reverberating effects across markets.

Banks and financial services companies that once benefited from the EU passporting system have had their cross-border banking and investment services to customers and counterparties in the many EU Member States impacted, causing them to reimagine their value proposition models.

The recent invasion of Ukraine by Russia is another example of a geopolitical event that has had devastating effects on human livelihood and businesses. Although the conflict between the two countries has risen over the years, I think it’s fair to say that few political analysts, governments, and businesses predicted a war to happen.

The war has created a humanitarian crisis, rattled global commodity and energy markets, caused prices to soar, and forced many international companies to temporarily suspend their Russian activities or completely cut ties with the country.

Global supply chains which are already fragile and sensitive due to the COVID-19 pandemic are now facing new challenges in the aftermath of the Russia-Ukraine crisis. Multilateral economic sanctions have been imposed on Russia. A state of affairs that was unthinkable months ago and is now threatening to derail the nascent global economic recovery from the COVID-19 pandemic.

Given the global domino effect of geopolitical events and the shrinking of the distance between markets and politics, the need to better understand and more effectively mitigate geopolitical risk has become more urgent. The business impacts, whether direct or indirect, vary by company type and industry sector.

Your company may not be able to prevent wars between nations, but you can anticipate and better prepare for geopolitical shocks:

  • Integrate strategy, risk, and performance decision-making. Consideration of risks to business success is an important part of the strategy selection and execution process, not an afterthought.
  • Develop a better understanding of geopolitical trends and how they are changing. For example, what are the megatrends in business, politics, and technology that are making geopolitical risks more diverse, prevalent, and consequential?
  • Assess the links between these geopolitical events and business performance. What are the events that matter most to your business? For example, how might current global political trends pose physical, business, and reputational risks to your parent organization?
  • Anticipate how these trends are likely to play out in the short, medium, and long terms, and develop mitigation strategies for each geopolitical scenario. Proactively anticipate and plan for radically different worlds, instead of reacting to problems as they arise
  • Review your mitigation strategies as the world changes. Are they effective enough in case of a major shock?
  • Develop capabilities for continuous learning to anticipate, address, and recover from geopolitical crises.

What do you think?

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