Will the Tokyo Olympics be a winner?

Few other megaprojects draw as much public attention as hosting the Olympic Games. In 2013, when Tokyo won the bid for the 2020 Olympics, the world was a different place. Japan hoped that the Olympics could help stimulate growth in its lacklustre economy, which was still impacted by the fallout of the 2011 Fukushima disaster. The idea of hosting the Olympic Games was also popular with the public. According to polls, eight out of 10 Tokyoites supported the bid. The Olympic Games, proponents argue, showcase a country to the world. It is a two-week event to celebrate sports, national culture and heritage.

In March 2020, COVID-19 forced the postponement of the Games by one year. Questions remain as to whether 2021 is a certainty. The Olympics last experienced a crisis when World War II forced London 1944 to become London 1948. The postponement presents a massive logistical and financial challenge to the organisers.

We have long been critical of the Olympic Games. Bids for hosting the Games consistently and severely underestimate the outlays of the event. Our research shows that not a single Olympics that has reliable data has delivered the competition within the budget set out in the bid. Cost excesses are in the billions. Tokyo’s official budget stands at 1.35 trillion yen (£10bn). The Japanese state auditor found government projects worth 1.06 trillion yen (£8bn) whose scope is directly relevant to the Games. Yet, the Tokyo Organising Committee does not account for the government spend in its budget. On top of that, the city of Tokyo is spending 810 billion yen (£6bn) on Olympic-related projects.

Adapt to thrive

Despite the outlay, the anticipated economic boost has not materialised. Japan’s GDP growth since winning the bid has stayed below the 2013 increase of two per cent, according to World Bank figures. Since Tokyo won the bid, public support globally for hosting the Olympics has waned. The International Olympic Committee (IOC) selected five cities to enter the final stage of the bidding process for the 2024 Games. In 2015, Hamburg’s citizens voted against proceeding with the bid. One year later, Rome dropped out after electing a mayor who ran on a platform against hosting the Games. Finally, in 2017, just before the final bid competition, Budapest also suspended its bid. The dropouts left only Paris and Los Angeles in the running. Instead of forcing the two cities to compete, the IOC awarded 2024 to Paris and 2028 to Los Angeles.

This setback came despite the IOC’s attempt to change. In 2014, the IOC adopted its ‘Agenda 2020’, which set out ‘20+20 recommendations’ to improve the sustainability of hosting the Games. Critics of the Games, like us, have argued that these changes are not fundamental enough, but at least they show an appreciation of the need to adapt the Games. Thomas Bach, the IOC chairman, explained the need for change when the IOC launched Agenda 2020 in December 2014. He argued that the Olympics need to become more sustainable, transparent and ethical in a fragile world with more political, financial and health crises.

The failure to award the Games through a competitive bidding process was already a predicament for the Olympic Movement when COVID-19 hit. Whether crises have an internal trigger, like the Olympics sustainability crisis, or an external trigger, like COVID-19, a set of critical factors determine whether organisations survive or fail. Three failure factors are common in organisations that collapse because of crises. Organisations tend to either miss the crisis, misunderstand the crisis in a way that leads to ineffective responses, or fail to learn from the crisis.

In the current situation, most organisations and projects have grasped what COVID-19 means. Trial-and-error learning dominates when organisations learn to respond to crises. Most organisations have implemented first responses and continue to find new ones. These responses will, hopefully, ensure survival through this crisis, which is why now is the time to start thinking hard about what can be learned from this.

Our research has shown that dismissing a crisis as being a unique event kills organisations in the long term. Therefore, learning from and through crises is essential. Research has found that learning focuses on four questions: first, how did we respond to the crisis? Second, how did the crisis change the relationship between our organisation and its members? Third, what are the structures, routines and processes that we need to (re)build, improve or let go? Fourth, how did the crisis change our organisation’s identity and values?

Lessons to be learned

This summer, we are having more and more of these conversations in our homes and at work, and these will continue long after we emerge from the COVID-19 crisis. As leaders in projects, we need to drive these conversations, and that starts with reflecting on our leadership. How did you respond to the crisis? What worked and what did not work? How did the crisis change your relationship with team members? What practices do you want to start, stop or continue? How did the crisis change and challenge your values and identity as a project leader?

The Learning Legacy has been part of the Olympic Movement since Sydney 2000. The IOC and the leaders of the Tokyo Organising Committee will try to learn from the recent events and their response. So should we all.