The decade long erosion of the financial stability of the IOF discussed in the previous post did not come as a result of a sudden event. It was the result of continuing underperformance of the IOF leadership who missed the budget target for 10 years in a row.
Please see updated numbers to this post here.
This post has turned out to be longer than expected. I had little time to write it, so I could not make it shorter. Here is the summary if you are also pressed on time:
- The IOF Council has missed the budget target every year since 2009. The target set by themselves, and rubberstamped by the General Assembly without change. It would take a miracle to achieve the targets for 2017 and 2018. That makes 10 years of missed targets. 10 years of continuous underperformance.
- It is unlikely that this was due to lack of skills: the leading figures of the IOF during this period (Ake, Brian and Leho) all prided themselves with business background.
- Looking at recent events one may get a feeling that the IOF leadership just did not care about the budget approved by the GA, hence they could not possibly deliver it:
- In a letter to member federations about the difficult financial status of the IOF signed by Leho and Tom, the “GA Budget 2017” is different from the 2017 budget published as approved on the IOF website in the minutes of GA 2016.
- In the same letter they claim that in October 2016, 2 months after presenting the 2017 budget to the GA, they already started to modify it “to get costs in line with expected income”. There was not a hint of an unexpected event that could have modified expected income in the 2 months after the GA. This gives the feeling that the Council presented a 2017 budget to the GA that was not realistic, but the GA approval gave the Council free hand to modify it to their liking.
- The outcome of budget modification(s) started in October 2016 was not shared with member federations until 14 July 2017, nine days after the Presidents’ Conference in Tartu. This gives the feeling that the IOF leadership decided to avoid any open discussion about budget modification with the member federations who approve the IOF budget.
Here are the details of the story that may make you wonder how long IOF member federations will put up with being treated like this.
The Council missed their own target every year since 2009, for 8 consecutive years. They already conceded that 2017 will be missed (€66,235 surplus was budgeted, but only €9,767 was expected in July 2017). It looks also highly unlikely, that in 2018 the budgeted €169,010 surplus, that is 2.5 times(!) higher than ever achieved in the IOF’s 56 year history, will be delivered. That gives a solid 10 consecutive years of missing the budget as shown on the chart below.
For updated data please see this post published after the October 2017 Council meeting.
This level of underperformance is most remarkable under any circumstances. It is even more remarkable, because
a) the IOF was run by experienced managers according to their CV, and
b) the budget was set by the Council themselves, only rubber stamped by the General Assembly.
Officially it is the General Assembly who sets the budget, but in practice it simply approves the one submitted by the Council. I could not find a case in recent memory when the GA modified the budget. I could not even find a case in recent memory when the GA has even debated a line item. There were some high level remarks now and then, but everything was approved as suggested by the Council. So we are not talking about some stretch targets not being met. No, simply the IOF leadership could not deliver for 10 consecutive years on their own promises made with no external pressure. Remarkable.
Skill or Will?
Seeing this level of underperformance one should ask whether it was due to missing skill or missing will. Could it happen that the leadership of the IOF did not have the basic skills required to prepare and deliver a budget for a quite simple small operation? Or was it due to lack of motivation or intention to deliver on their promises, and follow the budget approved by the General Assembly? Or was there something else behind all this?
Let’s try to find some pointers that may help us decide.