IOF Finances presentation

Next weekend, on 19-20 January, the IOF Council and the Commissions are meeting in Warsaw for the regular annual IOF joint meeting. The short common program contains an interesting topic: IOF Finances.

 

IOF meeting Jan 2018

This is a most interesting development for several reasons. The IOF leadership was not particularly interested in talking about finances before. They did not present anything even on the Presidents’ Conference in July 2017. Despite the IOF finances being on a knife edge the leadership just sent a letter to members July 2017 a week later to explain that they were handling financial issues since october 2016. It makes you wonder what happened that now they decided to talk about finances.

What makes it even more interesting is that the audience of this joint meeting has little to do with finances. There will be 60 or so participants invited to discuss commission matters and meet the Council for half a day. The participants are delegated to different commissions who have rather technical mandates from discipline development through mapping standards to environmental protection. They are not representing member federations. Few of the participants have relevant business background to understand finances.

In financially distressed companies management typically starts to talk about finances to technical people when they see the possibility of a financial meltdown right around the corner. We have to follow these developments closely. I will share with you any information I receive as soon as they become available.

 

Critical to Quality – Talk vs Action – Part 2

On 7 December the President of the IOF has published his thoughts on matters critical to quality of major events. These were refreshing thoughts, albeit somewhat unexpected, that emphasised core qualities of orienteering events like quality of maps and course setting.

“For me, CTQ at IOF major events are maps, course setting, punching and timekeeping. Of course, there are also important areas like event arenas, logistics, accommodation, ceremonies etc. at big events. But if we fail in CTQ areas, the event will be remembered forever!”

For a moment one could hope that the IOF leadership has realised what are the things organisers should focus on when staging major international orienteering events.

Yet, when we try to match the words of the President with the obligations put on organisers by the IOF, we see a mammoth gap between the two.

Mismatch between talk and action is not alien to the IOF leadership as I showed in the post about the 2024 Olympic ambitions. This is the second part of the talk vs action series.

Below I show some examples of mismatch based on the IOF Event Application documents released late 2017. That was about the time when the wise words of the President were published. Unfortunately, neither the detailed formal evaluation of applicants, nor the explicit and often contractual obligations match the words of the President.

That is really pity. In case of organisations, especially of organisations built on the effort of volunteers, matching words and actions is the single most critical feature of leadership quality.

Continue reading “Critical to Quality – Talk vs Action – Part 2”

Esports on Olympics – no joke

I have to admit that when I wrote my modest proposal I was very much focused on the workings of the IOF and invoking the spirit of Jonathan Swift’s original work, including the wording of his disclaimer. I have to admit, that in this process I did not do thorough research on esports, as it looked like more of an illustration that unexpected leftfield contenders may also show up as rivals for inclusion in the Olympics.

I received a few comments that one should not be serious about the prospects of esports; that the quote from the Paris organisers about being open to esports was from August; it was made before they got officially appointed; and in any case Bach, the President of the IOC, voiced reservations even in April about whether esports can be considered seriously as a sport.

So I looked a bit deeper, and I was stunned about the developments over the past months. Both the International Olympic Committee and FIFA made major steps embracing esports.

The direction of the Olympic movement appears to be pretty much 180 degrees to the one that would favour our beloved traditional Orienteering, whether it is done on foot, on bike or on skis.

Continue reading “Esports on Olympics – no joke”

Virtual-O – orienteering’s best chance for the Olympics

In this modest proposal I would like to lay out the key arguments for promoting the virtual format as the headline competitive format for orienteering as an Olympic sport. Thanks to the effort of Peter Furucz, the founder and developer of Virtual-O, now the IOF leadership can promote a truly marketable product for inclusion in the Olympic Games in Paris 2024.

Virtual O - map

Virtual O control

Youth appeal, a key factor for Olympic inclusion, is undeniably much stronger for a computer game than for outdoors activities these days. No wonder that the organisers of the Paris 2024 are open to the introduction of esports in the program.

Virtual orienteering solves the main concern of IOF’s leadership that the current version of orienteering is still difficult to televise and too complex to understand by  outsiders not involved in the sport. Virtual-O fully fits the strategic direction of the IOF. In essence, it is the synthesis of the declared strategic directions. It is absolutely global, visible, attractive, simple, environmentally friendly, and easy to understand for everybody. It is perfectly positioned for the Olympics.

Some may argue that this move may require some additional compromises over and above the compromises that were needed to change orienteering championships from 90 minute struggles in some of the world’s most complex remote forests to a 15 minute run on asphalt in touristy cities on C courses.

We must  have all the confidence that the uncompromising drive of the IOF leadership towards the Olympics will ensure that all the required compromises are met to make orienteering an absolutely positively definitely truly virtual sport.

This confidence is also based on the fact that this proposal is fully in line with IOF’s core strategy to meet orienteering’s potential audience in the cities, instead of trying to lure people into the forest. Bringing orienteering out of the forest to city parks was the first step. But that has proven still not attractive enough for the masses of  TV audiences.

To make orienteering attractive to a larger audience, especially TV audience, the IOF has to take orienteering where the people are.

Since most of the TV viewers are on the couch in the living room, orienteering must be brought to the couch!

Yes,  there will be resistance in the forest. The supporters of the Ancien Régime will cry foul. They will try to cling to the obsolete view that orienteering at its best is one of the physically most demanding sports on earth.

We should not worry about them. The IOF leadership has a proven track record to ignore requests of groups of athletes regardless the number of world championship titles they may possess. Money talks. The siren call of the millions of dollars promised by Olympic participation talks louder than athletes. We can be confident that the IOF leadership will do their best to make orienteering virtual, if that what is needed to attract more money.

In addition, going virtual will solve many of the current problems of orienteering from long start lists, through following, till environmental impact.

What’s not to love about it?

You may read more about Virtual O on its website, on its facebook page, and even in an interview with Peter on the IOF website.

You may read more detailed arguments for this proposal below.

Continue reading “Virtual-O – orienteering’s best chance for the Olympics”

Olympic Ambitions 2024 – Talk vs Action

There were some fascinating developments over the past couple of weeks around the practical implementation of the IOF’s Olympic vision, and we could get additional insights both into the position of our favourite sport on the world scene and the real level of commitment of the IOF’s leadership.

Just a quick reminder to those sane people who spend their “orienteering time” training and competing instead of reading IOF publications: The vision of the IOF is that orienteering shall be a truly global sport and included in the Olympic and Paralympic GamesThis was taken so seriously as recently as January this year, that Mikko, one of the Vice Presidents, requested volunteer commission members to leave the plenary session of the joint IOF meeting if they did not believe in the Olympic dream. He did so before the discussion on the IOF’s strategy, including the Olympic vision. Several participants confirmed that it did not sound like a joke, but a clear suggestion that simply devoting your time, expertise and energies to orienteering is not enough for the IOF’s leadership. You are no good for the IOF, if you do not believe in the Olympic vision.

Yet, when it comes to implementation of the Olympic vision, we can observe something that feels like a refreshingly quiet passivity that may signify a more rational approach by the IOF leadership.

Apparently the initiative to start working on an application for Paris came from the FFCO, the French Orienteering Federation. The public announcement that orienteering becomes a candidate sport for 2024 was made with no IOF representation. There was not even a news item on the IOF website about the FFCO announcement on the meeting with the President of the Paris 2024 organisers. It feels like a stark contrast to the devotion to the Olympic dream expected by Mikko from everybody in the IOF structure.

Of course, this quiet passivity may be the sign of acknowledging reality. L’Équipe, the French sports daily, ran a survey about the three sports people expect to be on the Olympic program in 2024. Orienteering did not make it to the 12 sports to choose from.

The question is whether we see a changing IOF strategy, or a confirmation that the Olympic dream is just a pipedream.

Or could it happen that simply no more money left in the IOF beyond spending on essential tasks?

Continue reading “Olympic Ambitions 2024 – Talk vs Action”

The Agency Problem – Part 1

A case that may both demonstrate the reason for budget overruns and the general lack of controls within the IOF is the story when Brian Porteous, the President at the time, decided (apparently single handedly) to spend money over the anyhow loss making IOF budget on the SportAccord convention in 2013.

Brian decided to ignore the 2013 budget that was approved in July 2012, just 6 months before. A budget that he himself proposed as Vice President at the time of budget preparation.

The Council members, according to the Council minutes, did not blink, as in many other cases when the President made interesting decisions. The member federations had no meaningful mechanism to react.

As a result of the extra €14,100 spent on the SportAccord Convention the budgeted loss  of €52,400 for 2013 has become a loss of €66,600.  There was still some reserves left to spend.

IOF Budget 2013

Before we get into details of this story, I think that it would be useful to introduce some theoretical background.

The Agency Problem

The core issue around the IOF is what business literature calls the Agency Problem. This is an unavoidable feature of large organisations where owners  (shareholders, or in our case 70 member federations) entrust an agent (CEO/President, Board/Council) to run the organization on their behalf.  Unavoidably, the two parties will have different interest and the agent will run the organization in a way that is not optimal for the owners. Conflict of interests and moral hazards are frequent problems. The lost value to the owners is called the Agency Cost.

Continue reading “The Agency Problem – Part 1”

Ten Years of Underperformance – Update

Over the past month I was too busy to deal with much more entertaining things than documenting the mismanagement and slow motion crash of the IOF. But now I have some time to continue with this gruesome task.

The Council had a meeting on 13-14 October. The published minutes (#186 here) provide additional information and data on the Council attitude to IOF finances.

The Council minute looks like a good old Soviet party communique: all good news, as long as you do not scratch the surface. It reinforces the feeling that the IOF leadership considers finances as their little internal business members should not get involved in.

The 19 page long minutes do not even mention the IOF – Letter to members July 2017 sent by the IOF President after the last Council meeting. The one that was carefully sent after the Presidents’ Conference regarding financial issues and the major revision of the budget. It was a “no event” that the IOF leadership apparently prefer to forget about and erase it from publicly documented history.

The key message of the minutes that revenues are up and expected to rise, while costs are largely under control. The funny bit is that the additional costs mentioned (regional event medals, higher overseas event advising costs, SEA for the World Games) are ones that should have been known when the 2017 budget was prepared. The fact that IOF Leadership uses them as an excuse for higher costs just underlines the feeling that the 2017 budget submitted to the General Assembly for approval was – mildly speaking – not thought through.

Yet, with all the improvements 2017 is still expected to show only a small positive result estimated at around €9,000 (85% below the €66,000 budget), and the updated forecast for 2018 was €30,000, that is over 80% lower than the €169,000 presented to the General Assembly. As expected, the GA approved original budget numbers were carefully not mentioned in the Council minutes.

Now it is official that Council expects to underperform their own budget by a 10 year combined gap of over €500,000 as a result of not meeting their own targets in any year since 2009.

IOF Net income vs budget - update

It is also interesting to zoom in the (2016-18) budgets presented to the General Assembly 2016. The gap between Council promises and delivered results has exploded.

Continue reading “Ten Years of Underperformance – Update”