Thinking about risk
It is no stretch to state that the mega-event industry is enormous. This article will focus on major sporting events, an industry which exploded in the 1970s with the commercialisation of sport. The 2000s saw the IOC and FIFA’s marketing revenues top one billion US dollars. Attendance at professional sports events in the United Kingdom exceeded seventy-four million in 2017 – the highest outside of 2012.
Such statistics do lead one to ponder on the state of the industry, and whether such exponential growth can continue. It is difficult to see public interest declining, so, here, we will think about risk. We will assess recurring risks such as financial restrictions, terrorism, and extreme weather, before considering continually-emerging risks such as cyberterrorism. How might risk mitigation improve in the future?
The financial side
It is first necessary to run over the costs of hosting a major sporting event. This is an obvious starting point, but the first hurdle to overcome in bidding for or organising such a competition. Stadia might need to be built, infrastructure will need to be developed. “Optimism bias” is regularly observed in such predictive budgeting, explaining why problems might arise at a later stage than initial planning.
Of course, finances do prove a regular stumbling block. The Swiss city of Berne withdrew its proposal to host the 2010 Winter Olympics after voters rejected a proposal of public funding. Big events are only getting bigger, with more competitors, more spectators and more stakeholders. Fewer countries or cities have the existing infrastructure to consider hosting. A seemingly permanent global financial crisis leaves potential hosts uncomfortable with the level of investment they would have to outlay.
Are mega events becoming so, well, mega, that they are pricing out more and more potential hosts?
Security and terrorism
Sadly, and increasingly so, if you think ‘major event’ and ‘risk’, you think ‘terrorism’. Major events are naturally a principal target of terrorist attacks: they are high-profile and gather huge quantities of people into one space.
It is a lamentably repetitive tale. In 1996, there was a bombing at Centennial Olympic Park in Atlanta. In 2001, the Ryder Cup at the Belfry was postponed for a year in the aftermath of 9/11, an attack which led the IOC to begin to take out cancellation insurance. In 2013, the Boston Marathon was the subject of bomb attack.
It is regrettably difficult to envisage a near future in which such attacks become less prominent.
Such risks have additional consequences. Policing needs to be tighter. Security efforts must be redoubled. More staff must be sourced. This again has financial implications. It characterises how every department involved in organising a major event seems to be faced with more and more responsibilities each year.
Weather and natural occurrences
We intend to leave a more in-depth focus on the environment for a future article, but we can briefly look at the implications arising from the risk of severe weather affecting your event.
The 2011 Rugby World Cup in New Zealand saw a number of matches relocated from the city of Christchurch due to earthquake damage to the stadium and surrounding infrastructure. The New York Marathon of 2012 was abandoned due to Hurricane Sandy.
Extremes of weather might be becoming only more extreme as global warming and climate change continues apace. This is a very difficult risk for the industry to deal with because it can rarely be pre-empted and any effects cannot be quickly mitigated.
Emerging risks of cyberterrorism
The entire infrastructure behind the operation of a mega-event is only getting more and more reliant on technology. Areas such as ticketing, event control and security would be wholly jeopardised if their electronic underpinnings were disrupted. Similarly, breaches could have implications for confidentiality which could not just disrupt, but compromise operations too. Every critical area of infrastructure needs a specific cyber defence strategy.
In the build-up to London 2012 there were a team of around one hundred specialists rigorously interrogating the IT infrastructure to locate potential weaknesses. They sought to establish potential sources of attack and how they might then be thwarted.
A destructive cyber attack is such a threat because of its implications for dealing with other risks. Technologies are used in defending against physical terrorist attacks, such as the missile batteries protecting the main venues at London 2012.
This is a risk where the source of the issue is constantly attempting to become more creative and elusive, and so increasing creativity needs to be deployed in dealing with such issues.
Risk mitigation strategies
As seen, some risks require very specific methods of mitigation. However, there are general steps that can be taken.
The first is knowledge transfer, from event to event. You would think that this would be a given, but you’d be wrong… Sometimes new hosts or organisers want to organise the event their own way, thinking they know the best, and failing to heed crucial lessons learned by previous hosts! This should be simpler when the same venue hosts the same event year-on-year. The battle against organisational amnesia is real!
The second is insurance. This is a painful necessity. Insurance may be costly, but nothing would compare to what you would face in case of severe disruption or cancellation. London 2012 had $1.3bn of insured value, with total market exposure to cancellation estimated at between $5bn and $6bn.
Finally, it is wise to consider risk management technologies. Allow each stakeholder to be directly involved through risk registers and dependency mapping. This enables an overview of all potential risks, how they relate to stakeholders’ interests, and who has the responsibility to deal with them if they arise. At WeTrack, we allow organisers to create detailed timelines and integrate tasks, projects and risks in one visual and intuitive system.
Risks spiral. As events get larger, there are more departments, more stakeholders and more attendees. It is difficult to foresee the popularity of the mega-event industry slowing down, but the risks outlined above remain ever-so-relevant for the organisation of such events.
Written by Peter Ward, WeTrack™
Peter Ward was a project manager and deputy manager of the London 2012 Olympic Park Operations Centre, the main Control Room for the Olympic Park. After the Games he founded WeTrack (www.WeTrack.com) to simplify operational planning for complex events.