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Regional Business News
regarding the 2010 Olympics
in British Columbia, Canada

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SECURITY & YOUR BUSINESS

WANT TO BE AN OLYMPIC SUPPLIER?
read the fine print and read between the lines . . .



SECURITY & YOUR BU$INE$$
Protecting an Olympic Region
From Terrorism & Fanatics

During a summer Olympic event up to 5,000 municipal police officers could be hired, plus 4,500 highly trained contracted security officers and 2,000 volunteers. Normally this group would operate under a single command and they would work in conjunction with Federal agencies as well as the military. Athens invested over $1.5 billion U.S. in security, and some people in Vancouver are estimating $800 million in 2004, which in all probability will easily grow to a billion plus by 2010. Regarding other services like catering or cleaning, at a Winter Games the numbers are considerably less than that of a Summer Games, but in regards to security the numbers don't drop as much.

Staff in every service sector, like catering and cleaning receives low-level security training that prepares them to recognize abnormalities and teaches them how to report incidents properly. Everyone in the entire Olympic organization provides eyes and ears security whether you are in the security department or not -- including average local residents.

Security has a strong public relations perspective. Psychological control is integrated into the overall culture. When you give people ownership they assume responsibility and they take everything personally. If you attack the Olympics you attack their home. If you speak against the Olympics you speak against their family. Residents take it personally. In order for the Olympics to maintain allegiance they have to inspire unconditional service. Not only does this directly affect security, it also indirectly affects the general perception of the event. As the event draws closer people become more drawn into the culture, even those on the peripheral, like subcontractors and the media. Everyone is ramping up to share responsibility for success of the event and if anyone goes against the flow they are challenged without hesitation. You are either with them or against them. Even forms of protest that would normally be accepted are met with harsh rebuttals and collective intimidation. (Protesting too strenuously to save the kid's ball field adjacent to Nat Baily will ramp up Olympic security in short order.) As stress levels increase tension rises and it's not uncommon to react in irrational ways. The resounding message is, "Do not screw with the Games."

Risk management is an important factor regarding security. In order to protect such a complex organization you have to know and define where the most to the least risk lies. Sounds simple, but when you consider that there are hundreds of thousands of variables the task becomes overwhelming. Risk management agencies of the highest caliber have to research the region and develop a strategy to deploy the available security force. They also have to sell the concept and rationalize their decision to a variety of security forces that do not normally work together and are all vying for the same budget. Whenever money enters the equation things get complicated and this is no exception.

In such a large operation, zones of risk have to first be established, and resources deployed accordingly. For example the police always guard athletes and sensitive areas within facilities, while contract security officers and volunteers manage crowd control and spectator service areas. Buskers and entertainers are also used to distract crowds and relieve tension in sensitive zones.

The health of the local security industry plays an integral role in an Olympic strategy. For example, if the local industry is stable and healthy it poses little problem, but if rules or regulations regarding municipal licensing are unbalanced it has to be addressed before licensed staff are integrated into the Olympic system. There are also various levels of security deployment within sectors and departments. For example, some Olympic sponsors who have active contracts with specific security firms will get first pick regarding the Games, or companies with a large number of international visitors may get priority. Special needs, which are hard to preplan, must also be properly addressed.

It's not easy for private security forces to integrate into the culture of commercial security services that have more military-like order. All the groups have to work together and appreciate everyone's differences in an environment that is often stressful. Police, private services, military and federal officers often work shoulder to shoulder. Maintaining a clear line of command is a challenge.

To make matters even more complex, many of the private security recruits are brought in from outside the industry. They have absolutely no experience and have to also integrate into the central pool. This group is often comprised of students who have little or no training. If the uniform fits and they show up for token training, they get the job.

In general 60-70% of security staff come from the bigger companies and the balance from a larger number of smaller security firms and casual laborers. For example, taxi drivers, schoolteachers and university students are prime targets if the season is right. Everyone underestimates how difficult it is to find enough security personnel. Outfitting them with uniforms and gear is relatively easy. Finding, recruiting, training and keeping them however, is a never-ending struggle.

Even though it is easier respectively than recruiting, sourcing hardware, equipment and uniforms does present a challenge, and it has proven especially difficult in the past to get enough gear for training. Quite often contracts are signed at the last minute or sometimes never at all. Sponsors and suppliers can't take or fill orders until they know quantities. No one wants to jump the gun. It takes time to train security staff and it's not uncommon to have uniforms and equipment delivered a day or two before they are needed.

The saving grace is that only the police and military carry weapons and that there is no need for confrontational training. Hardware includes training videos and viewing equipment, and communications gear like radios, video surveillance, scanners, metal detectors, wands, x-ray machines, etc.

Training to use this gear is complex and larger security companies are often concerned that brining these skills to a wider group of people undermines their competitive edge. They are also concerned that low level training for the Olympics will adversely lower standards in the community after the Games are gone, which would in effect also undermine their competitive edge. Training procedures for staff regarding equipment is not as long or complex as one would receive for a full time licensed security officer. Temporary Olympic recruits receive only the most basic of training and are then licensed to operate the hardware. Larger companies argue against setting a precedent that would make it easier for small companies to compete with them after the Olympics leave town.

The security industry is driven on paranoia -- and the Olympics heighten it tenfold. Quite often local Olympic organizations overestimate their needs. It throws budgets upside down when Olympic organizations initially predict they need 12,000 security workers, and then after more rational thought decided 4,000 will do -- don't laugh, it happened in Australia. In Athens however, the pendulum swung the other way when they brought in 70,000 security workers and 1,000 security cameras.

Like all Olympic services (catering, cleaning, etc.), security also has to deal with hiring from outside of the local area where the worker is posted. Traveling across an Olympic region is incredibly difficult, and security workers, just like catering staff will not travel six hours round trip for a twelve hour shift, especially (unpaid) volunteers. Extended travel times are not uncommon when you take into account all the security checkpoints. A trip that normally takes twenty minutes can take three hours during the Games. There is incredible pressure on regions to make sure public transport infrastructure and roadways are efficient. If not, the problem is magnified.

Another challenge is the creation of a central labor pool. Like all the other disciplines i.e. catering, cleaning, etc., security companies are hesitant, in fact adamant about not contributing the names of their employees to a database where their competitors have access to it. It creates a challenge because when top companies refuse to play, the central security labor pool will only contain green recruits who can only be used as a stopgap measure for low-level placement.

This challenge provides an opportunity for a smaller security company, or an enterprising small or midsize business that can organize a wild card private database of highly trained and qualified security specialists to take HR control.

The problem was so challenging that in Sydney in 1999 there were 50 expressions of interest, but only 10 tenders returned. Once the big players crunched the numbers they discovered it wasn't worth giving up their competitive advantage.

Unfortunately, the big players also had the best-trained and most qualified people. The top three major companies walked away and left it to company number four to manage the chaos. Company number four, and all the other smaller firms became players in a market they thought they were going to be shut out of. It turned out that smaller contracts issued for a single area did better than a more complex agreement that covered several venues.

It's a good lesson for all SMBs. Smaller enterprises in chaotic environments are more efficient than top-heavy agreements that can't adapt quickly.

Here's something else that might surprise you -- Olympic organizations hire companies outside of their core competency. In other words, Olympic organizations approach a company for one reason, but contract them to provide a different service - a service they don't specialize in but one that can be created by simply shifting gears and making a few small changes in strategy.

For example, if a company manufactures widgets, and in their daily effort to keep prices low they are experienced at hiring low-level workers at base rates, they often have a high churn rate of employees. They have to recruit four times the amount of workers they actually need because people keep leaving or are fired. The manufacturer becomes very efficient at finding, interviewing, hiring and processing workers. They don't recognize that this skill is highly coveted by labor starved Olympic organizations and when they knock on Olympic doors trying to sell widgets they discover the Olympics needs something else.

In Sydney a company called WFI (Workforce International) usually provided maintenance staff for industrial shutdowns, but the Olympics needed low-level security staff to fill a last minute gargantuan gap. Not only did they need workers, they needed someone to handle the entire cycle of recruiting and management. WFI were out of their field of expertise, but because they had experience in other similar disciplines they felt they could modify their operations and win the contract.

Compounding the challenge was the fact that as usual everything was running extremely late. The Olympics needed 2,000 people at the last minute. WFI submitted an expression of interest in June of 1999, but didn't get confirmation that they won the contract until early 2000. What's worse, they didn't get a copy of the signed agreement until late September - the Games were already in progress. They worked for six months without a contract all the while suffering under heavy penalties for not being able to deliver workers.

WFI felt they were not allowed enough time given that they had to process 10,000 people in order to find 4,000 who would be qualified and ready to fill 2,000 positions only six months away. Many of the new recruits had zero security experience. Part of the challenge was to hire people in March and keep them excited about the position, which was only a temporary job for two weeks in September. Talk about herding cats. WFI had to negotiate fair and equitable pay scales and ensure that everyone stuck around long enough to see the job through to completion.

As time went on though some situations grew increasingly worse. For example WFI was one of the companies that had to absorb penalty costs set by the Olympics of $55 per hour for security workers who didn't show up for their shift. No-shows were not in the 20-30% range everyone expected, but a whopping 50%. The $55/hr was spent on police who covered security shortfalls.

As a solution, WFI developed an idea called the "Flying Squad" and wanted to locate this last minute replacement security crew in the Olympic park, but the Olympic organization wouldn't allow it. The Flying Squad was a standby team of security personnel that could step into any position upon a moments notice. Instead of meeting close to the venues (Olympic organizations wouldn't provide space) out of desperation WFI had the squad meet and scheduled them on the street outside the Olympic park. It's a good example of what small contractors have to put up with regarding cooperation from Olympic organizations.

Because they hadn't received a signed contract, WFI were well within their legal rights to bail on their commitment, but they were stuck between a rock and a hard place considering their investment and that they would look like the bad guys, so they nervously stuck it out. Thankfully it worked out well in the end.

Another challenge they faced were last minute changes by the local Olympic committee. Instead of processing security personnel through a central scheduling area SOCOG decided to send them straight to their posts, which made it difficult and in some cases impossible for workers to sign in and out. If they couldn't sign in and out of work they didn't get paid. Whether SOCOG did this purposely in order to time-shift cash flow is open to some debate. Whatever the reason, 700 people didn't get paid and it caused an administrative log jam, which made the situation even worse. It's at times like this when people quit or just don't show up for work and the chaos grows exponentially worse.

SOCOG changed other aspects of the security strategy, but failed to advise WFI or include them in meetings regarding logistics. WFI had to call on the Labour Council to intervene. Whether SOCOG was purposely using abusive strategies or they were just wildly out of control is unclear. The result though was chaotic and not a responsible way to operate a security program.

A situation WFI categorized as their worst experience was directly attributed to using the communal labour pool organized by the Olympic committee. According to WFI, workers from this pool were poorly informed regarding the administrative aspect of signing in and out of their shifts. Consequently some of them were not paid for four weeks. WFI felt they were liable, but had no control to manage or rectify the situation.



Want to be an Olympic SUPPLIER?
read the fine print and read between the lines . . .

Kitsilano Chamber of Commerce
2010 Procurement Workshop

Kudos to Narges Nirumvala, VP of the Kits Chamber for organizing and managing a 2010 "Workshop" for small and midsize businesses in Kitsilano. The Plaza 500 Hotel at Cambie and 12th housed the seminar and did a great job, but unfortunately only about 30 people showed up (including the hosts and speaker from the 2010 Commerce Centre, Huan Ngo).

Narges, an experienced and savvy Kits Chamber promoter positioned the event as "Sold Out", and for all intents and purposes there wasn't an empty seat in the house, but the small room was a let down for me and I'm sure a few other people. Judging by the size of the house and the questions they asked it's obvious that small and midsize businesses aren't as excited or informed about Olympic opportunities as one would think, especially considering that the Games are less than 5 years away and that some RFPs have already been awarded -- some big contracts went to out-of-town companies.

Interestingly though, for some I'm sure they are happy that few registered because it meant less competition for those in attendance. In contrast, a previous workshop in Abbotsford (and I use the word workshop loosely) attracted a much larger crowd judging from the videos 2010 Commerce Centre speaker Ngo showed throughout the Kits seminar.

Calling it a "workshop" is a stretch because there wasn't a lot of really useful proprietary or background information being shared by the 2010 Commerce Centre. It was mostly generic information regarding how to fill out and submit an RFP. It wasn't exactly a hands-on workshop where you could learn behind-the-scenes secrets of what it really means to deal profitably with Olympic organizations. And why should it be? The 2010 Commerce Centre works for Olympic organizations, not SMBs. Their duty is to administrate and read you the rules.

Contrary to what Mr. Ngo states, the reality is that the 2010 Commerce Centre and VANOC are joined at the hip even though he artfully tried to convince us a few times that they are not connected. Bottom line is that the municipal, provincial and federal governments are partners in hosting the 2010 Games with VANOC and the IOC. They are connected when it serves their purpose. It's not the first time I've heard them downplay their association. The 2010 Commerce Centre, which is funded and managed by the provincial government often state in presentations that they are not connected to VANOC. I suspect they say it because "they feel" it positions them as someone you can trust and that it makes it seem like they might be looking out for your better interests. When it comes to trust, trust me, they are connected regardless of what they say.

If you attend enough Olympic organization business functions you'll hear reps of VANOC or the 2010 Commerce Center sidestep questions that they don't know the answers to, or simply want to dodge. They often frame the question as being something one of their "unconnected non-partners" who conveniently are not in attendance should answer. As expected, at the Kits Chamber Workshop most of the really important questions from the audience were deflected with a videoclip answer or left unanswered when Ngo repeatedly stated that it was a question that only VANOC could answer. Sorry Mr. Ngo, but that's not good enough.

Considering that the 2010 Commerce Centre has a few of these "workshops" under their belt they should know by now that questions from the participants aren't going to be cut and dry. If you can't answer as a rep of the 2010 Commerce Centre then maybe a VANOC rep should also be in attendance and vice verse. Artful dodging sends the wrong message. SMBs want answers. All the questions asked that morning were relevant to the content of the presentation, unfortunately, answers that would have provided true value weren't forthcoming.

As we draw closer to 2010 I predict that organizations like the Kitsilano Chamber of Commerce are going to be stronger advocates for SMBs in regards to Olympic challenges. In time all local Chambers eventually realize that they are the best organization for small and midsize businesses to come to when they need real answers regarding what it means to operate a business in an Olympic region. The responsible Chambers step up to the plate before issues careen out of control, and they address Olympic related issues like commercial property rental costs, taxes, business regulations, traffic congestion, construction chaos (i.e. the Cambie RAV tunnel), displacement of community services (i.e. children's baseball diamonds), etc.

It's not much of a risk for me to make this prediction because in almost every previous Olympic region local Chambers of Commerce were always relied upon to represent and strongly lobby for local businesses in the face of big box Olympic organizations - Salt Lake City and Sydney Australia were no exception and examples in both cities abound.

Chambers of Commerce in Vancouver / Whistler are made up almost entirely of small and midsize businesses. Olympic organizations have their hands full dealing with large corporations, and historically have little time for smaller enterprise. Many times the local Chamber will fight aggressively to ensure that their members are represented and treated fairly. After all, whom else can SMBs turn to -- VANOC, the 2010 Commerce Centre, or maybe the IOC? Not likely because all these organizations are partners with the government and we know how the government regards small and midsize business. Condos beat out commercial enterprise every time downtown.

If you want to leverage Olympic momentum you're well advised to watch "The Nature of Things" before you get in bed with the elephant. When it rolls you better know how to get out of the way. Historically, small and midsize businesses have an incredibly difficult time profiting directly from their associations with Olympic organizations. What they can do though is grow their footprint and raise their visibility in the market. That alone is worth the price of admission. It's not a coincidence that suppliers rarely mention economic profit.

Huan Ngo actually inadvertently revealed a number of important aspects about how to deal with Olympic organizations, but unless you read between the lines and know the rules of the game, and it is a game, the information would just pass you by. The more you know about the backend the better your chances of profiting.

For example, something that eludes most SMBs is the level of control Olympic organizations wield over suppliers. Ngo clearly warned the room that suppliers would be held legally responsible to deliver what they promised, and if you don't deliver, a large contingent of powerful Olympic lawyers are waiting to ensure you do.

What he went out his way "not" to say however was that local Olympic organizing committees like VANOC are partners with all levels of the government, and if they change the rules or the law "midstream" suppliers have no choice but to comply. In other words, suppliers have to live up to the agreement, but Olympic organizations don't necessarily have to honor it in the manner suppliers expect. It's not an accident that VANOC is officially partnered with the government. It makes it easier to change the law and the rules. And again, examples from previous Olympic regions abound.

If a supplier can't deliver because of something a local Olympic organizing committee changed, and the supplier isn't taken to court to force them to deliver, Olympic organizations have been known to leave an impression with the community that a supplier bailed and left the region stranded. The reality is that Olympic organizations don't have time to litigate because "The Show Must Go On" and they have to continue moving forward. Instead of suing, past local Olympic organizing committees have put unfair pressure on suppliers by portraying them as unreliable.

Suing after-the-fact isn't feasible either, because usually by this time overrun costs are sinking the region and taxes are skyrocketing to pay for the damage. Olympic organizations basically just want to get out of town. Who is going to wait around to sue a supplier for $100,000 when the deficit is $4 billion or more (Athens' deficit is $12 billion to date), especially when it will come out in court that the suplier already lost $100,000 in an effort to deliver a $50,000 service or product.


MISTRUST OF DAILY NEWSPAPERS RISES SHARPLY

According to Pew Research, mistrust of the media has risen dramatically. Pew is a well-respected non-partisan media "fact tank."

45% of people polled in 2004 said, "they believed little or nothing of what they saw in their daily paper. In 1985, the number was only 16%.

In 1985, 55% believed news organizations got the facts straight, while 34% disagreed, by 2003 the numbers were reversed - 56% thought reporting was inaccurate. Today 62% of people feel that news organizations cover up their mistakes instead of admitting their errors.

The number of people who say the media is immoral has more than doubled from 13% to 32% since 1985. 53% of people polled believe news organizations are politically biased.

Pew reports that journalists are widely dissatisfied with the state of their profession, and feel the pressure to increase profits undermines the quality of coverage.

42% believe they DO NOT have the informational background to keep up with the news. 50% go online from work or home everyday and 25% of these people go online daily for the news. Almost 75% of people stumble upon the news while they are doing other things online.

In 2004, 42% received their news from newspapers, 34% watched nightly network news, and 29% got it online.

In Vancouver recently reporter Kim Bolan from the Vancouver Sun admitted that she told "one of her sources" in the Air India crash that information her source held regarding the private confession of a suspect would probably be considered hearsay and inadmissible in court.

Contrary to the Sun reporter's advice the information her source subsequently revealed to the police was admissible in court and the source reluctantly became the Crown's star witness. As a result of her testimony she now fears for her life in a witness protection program.

Both suspects were found not guilty. Bolan, the Vancouver Sun reporter who worked the story for twenty years said that providing false information to her source made her feel bad, but she did it out of ignorance and was not trying to be manipulative. Bolan has since written a book about the Air India trial while "her source" is still in hiding.

To see the entire Pew Research study
click this PDF link (you will need Acrobat). . .


* We invested two 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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