Business News Strategies and Opportunities in Olympics Sport Regions

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Originally published April 1, 2004

Terry Wright VANOC VP

  Terry Wright  The VRCA invited Terry Wright former Vice President, Bid Development and Operations with the Vancouver 2010 Bid Corporation to speak to members at VRCA headquarters. All in all it was a good presentation. Terry obviously knows his stuff from the inside out.

It was a reasonable turnout, but there were more empty seats than I expected considering Wright's stature and experience at the podium. According to VRCA staff many more members reserved a seat than actually showed up. Wright shared quite a bit of good information, unfortunately his presentation ran a little long and many of us rushed off to salvage what was left of the business morning as soon as he wrapped it up. Some even left during his presentation, which was unfortunate because the question period at the end was informative and interesting.

With a little research, most in attendance would have had a better appreciation of what Wright was talking about, but many in the crowd are busy running businesses and don't have time to root through documents trying to figure how to leverage Olympic momentum. One of the most interesting questions asked after Wright spoke was how smaller enterprises would share in the wealth. The question came from a member who noticed in Wright's presentation that perimeter/security/fencing requirements were going to be substantial. Wright rifled through a list of other products and services (most were not directly related to construction) that would also be needed, but at the end of it I don't think he relayed effectively enough how SMBs (small and mid size business) would play a more integral part. Not sure if it was his delivery or more the fact there really isn't a whole lot for the people who were in the room to benefit from in direct relation to Olympic projects.

Our research indicates about half of the architects and construction companies in the GVRD mistakenly believe they won't benefit from an association with the Olympics. Consequently many expressed they are NOT interested in pursuing 2010 strategies. Wright had a perfect opportunity and did little to convince doubters otherwise, which is a shame because the economic potential is great, but not in the way most companies realize.

An interesting trend that bubbled to the surface throughout his presentation was that many products and services would be supplied by foreign companies. It was a little unsettling listening to Wright explain that only the 'best' experts in the world were being hired to design 2010 Olympic facilities and structures, but that only a very small portion of these experts would be Canadian. The IOC justifies it by claiming they don't want to reinvent the wheel. Apparently Canadians can supply the brawn, but when it comes to the brains we have to order out. It's even more disappointing when you also consider that due to the shortage of skilled tradespeople in BC we might have to look outside our borders to supply the brawn too.

Everyone who was in the room knows how the 'expert syndrome' works. Once you have your 'expert foot' in the door you have tremendous influence regarding who builds to your specifications. It's easy to argue at the end of the day "Of course it doesn't work. You used my expertise, but not my people. If you would have used the team I wanted we wouldn't have these problems." Unfortunately, it's not a bad argument because it's partially true. John Furlong, CEO VANOC talks about inclusiveness. Well inclusiveness starts at the top and weaves its way through the entire system. It's not a bottom up process.

I know everyone wants to be upstanding and stay positive about the Olympics, but the challenges described above are common in the Olympic arena and they have to be addressed early because later in the game finger pointing runs amok. An example Wright used referenced hiring foreign expertise to design the luge track. The German designer they picked tabled a design that created G forces of 6.2 on two of the corners. Experience tells us that forces above 4.5 puts extreme pressure on the ice and breaks it down. According to Wright the human body can handle 6.2, but the ice can't, especially after repeated runs. As I listened all I could think of was maybe we should hire a Canadian architectural and engineering team to come up with a luge design that is more realistic. After all, more of Canada is perpetually covered in ice than five Germanys combined. We know ice. We can buy the track knowledge and study past designs as well as anyone. In fact we can start by knocking on Alberta's door. A good plan would have been to 'contract' the highly specialized expertise, but only in a vertical consulting scope, and not such a broad design capacity as they've chosen to do. Keep design in Canada. Maybe Canadian engineers can also develop denser ice that won't break down so easily. Can you imagine the excitement of a faster slide? It wouldn't make much difference for TV viewers, but it would certainly add a little excitement in the sled and keep those Lycra-clad tobogganers on their toes. Ice on steroids. Bring on 6.2 Gs.

During his presentation Wright referred to the challenges Athens is currently experiencing. He talked about the construction chaos in Greece, which is a serious problem (see below), and at another point in his presentation he spoke of the cost of tickets for the events in 2010. It went a bit off track when a member asked about access to blocks of tickets and if he would be allotted the same access as much larger companies who paid more to sit at the head table. The question basically was, would the SMB be locked out of the running because he wasn't a sponsor or supplier? The short answer is yes, but honestly, I couldn't exactly follow the lengthy explanation from the podium even though I know the answer is yes. The reality is that the pot is big, but it takes much more money than the average SMB will ever be able to ante up. Not only will SMBs not be able to afford it, they won't have the access even if they could. Wright did a pretty good end run to soften the blow. He almost had me convinced it was a non issue.

At one point Keith Sashaw graciously jumped in and bailed Terry out when he started going in circles regarding a question I asked about gouging. Keith was on his game and smoothed things out quickly. I brought up the point that gouging goes on in many sectors of the Olympics including ticket prices, licensing, land taxes, sponsorships, you name it, the list is endless. My argument was that when the construction industry wants to get a fair shake for their contribution it's implied they are gouging, but it's not gouging when everyone else does it. When everyone else does it it's referred to as opportunity.

I know, I know, I'm a bad guy for being financially motivated, but who wouldn't look bad compared to the altruism of John Furlong? Unlike John though I openly admit I'm here to help SMBs mine real gold, and if I do my job right I'll also end up with a nugget or two myself.

Never trust anyone who downplays their financial motivations. The difference between me and those on the Olympic side is that my motivations are front and centre. I openly admit my primary motivation is financial, whereas John Furlong would like us to believe he's in this mainly to create a better sports community. I think Furlong is capable of pulling this off, but I don't buy his posturing. As long as he sees this through to 2010 John Furlong's contract with VANOC guarantees him 1.8 million dollars in salary alone, so keep this in mind the next time you hear him waxing altruistically poetic about the community. I want good things for the community too, we all do, but I would feel much better if his primary goal was to make this a financial success for everyone, including SMBs. If Furlong succeeds in this endeavor all the good community stuff will follow. It worked in Sydney and to a proportionate extent it will work here too. I've had a good career helping SMBs create wealth and I'm not about to be thrown off track because the BIG business Olympic machine makes it seem politically incorrect by virtue of artificially inflated community spirit. Hopefully, Vancouverites will see through the charade, but maybe this is why the architectural and construction industries are already so disenchanted. Even though Dick Pound's public criticism of Furlong was a bit extreme, I'm beginning to appreciate his point of view.

Many in the Olympic organization would like us to believe they're here primarily in the spirit of goodwill. Meanwhile property taxes have shot up 5.8% and houses prices are increasing hundreds of dollars every day in direct relation to the Olympics. This is gouging at a subversive level. Drastic increases like this are not good for the community because when the crash comes the effects are catastrophic for all but the most wealthy. It doesn't matter how you cut it, 'Official Sponsors' with corporate ties to the Olympic BIG BOX machine will come out of this with a big roll of bills in their pocket, but it won't necessarily be the same for SMBs unless VANOC takes very decisive steps early in the planning stages. The only way most companies are going to share in the wealth is if VANOC creates and promotes effective trade initiatives with the rest of the world. So far I haven't heard anything really concrete in this direction.

Of all the people I've seen over the last six months who have given a 2010 presentation in an official capacity Terry Wright is the first who really, albeit inadvertently clarified what I've maintained all along. SMBs don't have a whole lot to gain regarding the Olympics unless, UNLESS they leverage alternative strategies.

It's time for VANOC to spell out clearly why we need the architectural and construction industry to get more excited about the Olympics. Going for gold 'medals' and a few new sports facilities aren't good enough reasons because the price is too steep. SMBs need real gold to counterbalance being subjected to having to do business in an Olympic region. If the design and construction industry can deliver on time and budget and VANOC orchestrates strong trade initiatives, everyone, including SMBs across all sectors (construction too) will share the wealth. If VANOC fumbles, the only companies to prosper will be BIG business and those who actually provide a direct service or product to the Olympics. The supplier list is smaller than you think, but these companies will be very vocal in their support, so don't get caught up in their noise because it will be at your expense. If you have to pay higher taxes and conform to stricter municipal regulations you should get something out of it too. Considering that Vancouver is such a strong independent business community I'm surprised associations like the Chamber of Commerce and Board of Trade aren't demanding more information. Everyone voices strong objections to Walmart or Home Depot, but when it comes to BIG business Olympic strategy they seem to be uncharacteristically passive.

We've done extensive research and spoken to architects and construction companies throughout the GVRD and the one resounding message we're getting from SMBs is that they don't see how they can compete so they aren't even going to try. Unbelievably, some in the design and construction industry actually tell us it's too early and they won't get in the race for a few years. One architect even told us he wouldn't consider anything for six years. We reminded him the Olympics were in six years and he corrected himself and said, "oh, then maybe sooner."

No one is suggesting a small or even mid size company is going to win a large contract. That's reserved for the companies who can deliver on a large scale, but if they were at the VRCA meeting they would have heard Keith Sashaw talk about opportunities to build what he feels to be a myriad of small projects that will start a few years out and continue throughout the Games. Unfortunately, by the time most companies get in the game the race will be over.

Realistically, even when the projects Sashaw is talking about come to fruition it's still not enough to justify the expense of having to operate a business in an Olympic region, but there are other ways to leverage Olympic momentum. In regard to veiled threats levied at the construction industry regarding gouging in reference to the price of concrete and steel, I haven't heard anyone on the Olympic side talking seriously about using structural wood to build Olympic facilities. Wood is one of BC's most valued natural resources. The South Surrey Arena and Abbotsford Rec Centre use structural wood. Check out the Lubor Trubka architectural site to get a feel for what can be done. When the world thinks of BC this is the 'homegrown' that should come to mind.

No one is suggesting SMBs should jump in with both feet. VANOC isn't saying it, Terry Wright isn't saying it, Keith Sashaw isn't saying it and I'm not saying it either. But what I am saying is that companies have to at least start to prepare to get themselves up to speed. This is a once-in-a-lifetime opportunity, but not in the way most imagine. The BC construction industry has been so down trodden over the last few years they're still trying to pick up the pieces. Rag tag teams might cut it for second rate condo construction, but the Olympics will put the GVRD under a very bright global spotlight. It's time to upgrade your CAD software and knock the mud off your boots. It's an opportunity to salvage a leaky reputation and prove to Canada and the rest of the world that BC can in fact design and efficiently build lasting and impressive world class structures.

Take a page from the ROOTS Olympic marketing strategy and stake your claim before someone else pulls the rug out from under you. The boys from Toronto are smart and have already grabbed front page headlines in the Vancouver Sun to boast of their intentions to not only be involved in 2010, but also Torino and Beijing. The first companies making noise on our turf should be local architectural and construction companies, not out-of-province clothiers. Think BIG Vancouver. Think BIG!

*Ed. Note: We invested over three years and a six-figure budget researching Olympic organization relationships with sponsors, contractors, suppliers, partners, etc. The results surprised us too -- mouseover below

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