August 25, 2016
The British have shown us how to become a nation of winnersPosted in Irish Independent · 64 comments ·
It’s very rare that an Irish writer will celebrate any achievements of our nearest rival on the sports field, but we must acknowledge the amazing achievements of the Brits in the Olympics. To take such a hoard of medals is impressive; to do so when you were so far behind 20 years ago suggests a management and business lesson for all of us.
There are so many overlaps between competitive sport and competitive economics that there is little doubt that the transformation of British athletics will be studied in business departments of universities for years to come.
All countries strive to enhance their economic performance in a competitive world. Small countries in particular have to find that clever trick or five that will help us achieve a better standard of living for all (or at least that is what governments should be striving for).
Interestingly, the strategy that the British used to overhaul their athletics system borrows quite a bit from former communist states, rather than from the free-wheeling Americans. This is also a salutary lesson for economic strategy — sometimes when you are small, you have to take matters into your own hands. If there is a business story buried in the performance of UK athletics, could it be more central planning and less free markets?
When looking at sport, we are not just talking about the UK but also other countries that over perform at the Olympics.
For example, although the Brits did well, they came in only 13th place when you weight their medal haul for their population.
The top five countries when weighted for population are the Bahamas, Jamaica, Croatia, Fiji and New Zealand. What is going on in these countries and what does it tell us about business and economics?
When we look closer at what drives sporting success, we see what could be described as a very Cold War, Soviet-style blueprint.
The first key aspect is women’s participation. This reflects the fact that countries with higher levels of gender equality — a sure sign of development more broadly — do better in the Olympics. Next up are specialisation and central planning.
The Brits, the Croatians and the Aussies are such countries that have completely overhauled their athletics using specialisation and central planning. Leaving sport, like economics, to chance just doesn’t work.
The Brits adopted a ‘no compromise’ rule after the 1996 Olympics, whereby they refused to support financially sports where they were not performing. This is a highly controversial move but it worked in terms of diverting cash into sports where they had some advantage or semblance of advantage. Their cycling team is probably the best example of this, where they have become dominant.
Another key to doing well in the Olympics is finding a niche.
It’s crucial to find a sport that few others play. Securing a niche obviously increases your chances of extracting a haul. In a world of huge populations playing a small number of sports, finding an obscure market is extremely clever. In business too, it’s always better to find a product or an area where there are not many competitors.
Finally, one of the key factors in common with all successful nations is central planning. This means an orchestrating body at the top that is picking winners.
This sounds extremely old school, but it has parallels in lots of successful economics. It is how Asian countries, particularly South Korea, developed their economies after the Second World War.
Borrowing from Japan, the Koreans centrally planned everything, diverting the country’s resources into certain industries where they might have an advantage over the more free-market Americans. Today, consider how many high-end products and brands come from Korea? Yes, there are loads.
In a similar way, success at the Olympics demands a central plan and money. Central planning allows nations to allocate funding strategically to different types of sports, build schools, offer subsidies and invest in research.
And finally, there is money. You need money to do well in sport. Twenty years ago, the British languished in 36th in the Atlanta Olympics medal table. So how did the UK turn its situation around?
The most pivotal change took place in 1994, with the creation the National Lottery and the decision to allocate public funds to Olympic sports. The British have increased spending on Olympic sports from £5m a year before the 1996 Atlanta Games — when the UK came 36th in the medals tables, to £350m (€410m) by Rio 2016, where it came 2nd.
It sounds like lots of money, but in truth it is only one quid per taxpayer per year.
Is that worth the glory?
Money pays off. The cycling effort is one of the highest-funded Olympic sports in Britain, getting around £30.2m. By the end of the Games, every member of Britain’s 14-strong cycling team had won at least one medal each.
We’ve had our own success in sports too. So it’s not that Irish teams can’t emulate the British.
For example, did you know that the Irish boxing team has been, per capita, the most successful sports team in the world? Over the 10 years from 2005 to 2015, in the Olympics, the World Championships, the European Championships and the new EU Championships, this team won 57 gold medals, 49 silver and 96 bronze.
Under head coach Billy Walsh, Irish boxing copied the best; in this case, what he saw on a training camp in Russia. He copied how they trained, what they ate, when they rested and he asked the boxers for total commitment.
The regime was so tough that in the first year he lost half the squad; but those who stayed got fitter, stronger, more confident and then started to win medals.
In the past, an Irish boxer would fear being drawn against an existing European medal holder and the fight was lost in his head before he stepped into the ring, but the little (and then bigger) wins meant this inferiority complex changed.
Rio was not our finest hour but still, the boxers have shown what can be done with the right set-up. It can be done.
If we are serious about sport, we can look across the water and elsewhere and do great things of which we would be rightly proud.
It is such a shame that while the Brits come home with 65 medals, Ireland’s Rio Olympics will be mainly remembered for the events away from the sporting competition, rather than on the winners’ podiums.