SBJ/July 11-17, 2011/In Depth

Eyeing the homestretch

LOCOG CEO Paul Deighton has built a solid track record, but with a year to go before the London Games, can he close the deal?

On a recent June afternoon in London, Paul Deighton strides into his spartan, 15th floor office in Canary Wharf carrying the 2012 Olympic torch. He raises it and holds it inches from his eyes, scanning its honeycomb design with a look of admiration.

The torch was revealed a day earlier at St Pancras International station, becoming the latest physical evidence of the London Olympic Organizing Committee’s (LOCOG) long march to the 2012 Games. Though Deighton, LOCOG’s chief executive officer, wasn’t in attendance, he knows the specs of the torch by heart and ticks them off like a stamp collector detailing the significance of a prized postmark.

“It’s 800 millimeters tall. Made of aluminum alloy. It weighs 800 grams. It has 8,000 circles representing the 8,000 torchbearers. And what else can I tell you? Designed over there,” Deighton says, pointing out a floor-to-ceiling glass window, “in East London. Engineered to the north of here in Essex, and manufactured in the midlands in Coventry, the heart of manufacturing in the U.K. It’s quite light.”

After handing the torch to a colleague in the office, Deighton notes that he wouldn’t be among those 8,000 torchbearers. “I don’t know how much time you spend in this country,” he says, “but the general attitude is that we shouldn’t have any advantages as a result of our position.”

Sitting the relay out would be unthinkable for many previous Olympic chief executives. Billy Payne ran the Olympic torch across the football field at the University of Georgia in the 1990s, and Mitt Romney passed it on in Utah before the Salt Lake Games in the early 2000s. But Deighton will abstain from the opportunity, and his decision to do so is reflective of his understated, behind-the-scenes management of the 2012 Games.

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Olympic mascot Mandeville joins Deighton to open the London 2012 store at Heathrow Airport in March.
During his five years of working on the Olympics, Deighton has earned a reputation as an understated team player with unshakable optimism, strong interpersonal skills and sharp business instincts. Those attributes have been critical, as he’s balanced the interests of groups ranging from government to sports federations to the International Olympic Committee, and confronted the unprecedented challenge of the recent global recession. His success has positioned him as the first CEO of a summer organizing committee since 1996 to manage an Olympics from beginning to end.

“This is a very difficult job,” NBC Olympics President Gary Zenkel said. “It’s a seven-year cycle, a six-year run. There are a lot of changes that happen naturally. Macro changes. Economic changes. Public opinion shifts and wanes. There are government changes. Local priorities change. I can’t imagine and haven’t witnessed anybody who has dealt with that better than Paul. He’s doing a fantastic job.”

One of the reasons Deighton has succeeded to date is because of the partnership and division of responsibilities he shares with LOCOG Chairman Sebastian Coe. The gold medalist and two-time world record holder in the 1,500 meters attends media events like the torch unveiling and responds to the majority of media requests, while Deighton oversees the day-to-day operations of raising sponsorship money, controlling expenses and developing operational plans for the Olympics. It’s a combination that’s served each of them well.

“He’s got a chairman that’s good at the public facing bit, and he’s got enough on his plate for Christ’s sake without
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having to worry too much about the public facing side of it,” said Simon Clegg, the former CEO of the British Olympic Association and the current CEO of Ipswich Town Football Club.

With Coe’s help, Deighton has built an organizing committee that is positioned to deliver the Games on time and under budget. Venues are on track for completion this summer, test events are beginning, and anticipation is mounting in Olympic circles that LOCOG will deliver a Games that may not rival the spectacle of Beijing 2008 but will be a more than fitting encore.

“Some of the qualities you will see in abundance are energy, enthusiasm and vibrancy, and the combined weight of that will create an atmosphere that will be unprecedented,” said Darryl Seibel, the head of communications for the British Olympic Authority. “It will be very different but no less remarkable [than Beijing] due to Paul and Seb and their team.”

Answering the call

Chief Executive. London Organising Committee for the Olympic Games. A role of the greatest national importance for an outstanding and visionary leader. The person: Skills and experience must include exceptional team building and leadership qualities …

The more Alison Deighton read the classified in The Economist, the more it grabbed her attention. It seemed written for her husband Paul, who was seated nearby watching a soccer game that Sunday.

“This job is for you,” Alison said, looking up.

Deighton, who was the chief operating officer of Goldman Sachs’ European division at the time, scanned the ad and chewed over the opportunity. He had spent 22 years at Goldman, the bulk of his professional carer, and seen the firm expand its European operations from 100 employees to 4,000, but the Olympic job did seem written for him. He called the headhunter at Odgers Berndtson and added his name to a list of 500 candidates.

He doubted he would be considered because his background as an investment banker didn’t make him the prototype to become CEO of a sports organization, but he interviewed well and ultimately earned the approval of the U.K. government, the mayor of London and the British Olympic Association.

Though it was the only job Deighton said he would leave Goldman Sachs for, he was still unsure of what to expect
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Deighton is content to do much of his work behind the scenes while LOCOG Chairman Sebastian Coe (right) serves as the public face of the effort.
when he was named CEO in December 2005. He had no sports experience, he had never worked with the government and he knew next to nothing about the IOC.

“I came to it expecting to be surprised, to have moments of enormous challenge, to have moments when it would be quite unclear to me how we would get through and sort something out, to have moments when we had difficulty with different partners,” Deighton said. “So I came in expecting a real challenge. But that was why I was interested in doing it.”

Deighton made up for the gaps in his knowledge after he started the job by collecting loads of information about the Olympics. He traveled to New York and met with Zenkel and other NBC executives. He visited Vancouver 2010 CEO John Furlong. “He went around and really educated himself,” Zenkel said.

Deighton then began installing at LOCOG some elements of the corporate culture he had left behind at Goldman Sachs. Like the investment bank, he wanted LOCOG to rely on teamwork, provide effective internal communication, and thrive on the shared passion and enthusiasm employees had for delivering a once-in-a-lifetime event.

Charlie Wijeratna, the former director of commercial negotiations at LOCOG who is now the executive director of the English Premier League’s Tottenham Hotspur, said the LOCOG staff bought into Deighton’s team vision because he didn’t make organizational changes too quickly or bring in too many of his own people. Instead, he earned their trust and favor by meeting with each member of LOCOG’s staff for half an hour.

“It was brilliantly done,” Wijeratna said. “That transitional phase was handled very skillfully, and I don’t think he lost anybody emotionally or relationship-wise along the way.”

He maintained the support of his top executives by empowering them to make key decisions, Wijeratna added. For example, the commercial department recommended that LOCOG award the domestic Paralympic broadcast rights to Channel 4 rather than the BBC because the former was a more favorable financial deal. Doing so meant that LOCOG, which relies heavily on government support, would be awarding something to a private company, Channel 4, rather than a public one, the BBC. But Deighton didn’t waver, and he took the commercial department’s recommendation.

“The Goldman Sachs ethos is that we work as a team, so that it’s not about me but what we do together,” said Terry Miller, LOCOG’s general counsel and the former international general counsel at Goldman Sachs. “He brought that skill with him, and it’s something that’s worked in a way that everyone has seen the benefits of [at LOCOG].”

He didn’t just build that type of trust among his internal team. He also built it with LOCOG’s most important external partners, the Olympic Delivery Authority, which is responsible for constructing all of the permanent venues for the Games. In some previous Olympics, like the Sydney Games, the local bodies have been plagued by infighting. But Deighton formed a strong friendship with former ODA Chief Executive Officer David Higgins by meeting weekly to “chew the fat.”

“No agenda. Just the two of us,” said Higgins, who resigned last year to run Network Rail. “We had a very open relationship. I would tell Paul everything that was going on even if it was commercially against our interest and Paul would do the same. We kept those confidences.”

Beating the crash

Deighton made a number of shrewd business decisions early that kept the organizing committee on sound footing. Prior to his arrival, the committee had already launched a public lottery and begun raising some of the $3.2 billion it needed to operate, but Deighton pushed the committee to accelerate its plans for selling sponsorships.

He had the commercial division hire McKinsey & Co., the management consultancy, to assist it with determining when to go to market, what categories to sell first and how much to ask for sponsorships.

The first tender process in the financial services category, an area later ravaged by the global recession, began months earlier than envisioned in October 2006. In early 2007, Lloyds signed on as the official financial services partner in a deal valued at $125 million. It was the first of a series of tier one deals with Adidas, BP, British Airways and Nortel that LOCOG closed before the financial markets collapsed in the fall of 2008.

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Venues are on schedule and some, such as the handball arena (above), have already played host to test events to work out operational kinks.
Those early deals put the organization in a position where it didn’t have to panic after the recession. It also gave the organization enough momentum to sign 10 more deals in 2009 after the recession. Today, it has sold 95 percent of its sponsorship inventory and generated more than $1.4 billion of its operating budget, which puts it slightly ahead of schedule for hosting the Olympics.

“There were several deals that if we had done after the crash wouldn’t have happened,” Wijeratna said. “Getting going early was very important, and Paul definitely put energy into that.”

Deighton didn’t just have the foresight to help LOCOG beat the recession. He also protected its rights in several categories. When the IOC made a push to sign Cadbury as a sponsor of The Olympic Partner (TOP) program, Deighton pushed the organization not to do it. After the IOC backed away, LOCOG went on to sign a deal with the confectionary company worth more than $30 million.

Similarly, he worked to persuade the IOC to let LOCOG sell an official grocer sponsorship. The IOC pushed back because it worried competitors of its global partner, Coca-Cola, might be able to get too close to the Olympic marks. Ultimately, the parties compromised and LOCOG sold Sainsbury, a U.K. grocery chain, an official sponsorship of the Paralympic Games.

“He is an aggressive leader who aggressively and vigorously advocates for his position, but he does it in a proper way,” said Davis Butler, the president of Encompass, who was with the IOC’s marketing department at the time.

The sponsors who signed with LOCOG found Deighton to be incredibly supportive. Though he didn’t attend many of LOCOG’s public events, he made a point of getting to sponsors’ public events. He spoke at a retailers’ conference two weeks ago for Adidas and appeared for the opening of every one of Adidas’ AdiZones, a series of multisport outdoor venues the company developed in each of London’s host boroughs.

“His schedule must be so complex but he’s been very accessible, more so than any chief executive at an Olympic Games in the past,” said Erica Kerner, the head of Adidas’ Olympic efforts in London.

Facing the finish

Taped to the glass wall behind Deighton’s desk are a series of 8.5-by-11-inch color-coded calendars. They form a halo behind his head when he sits down to talk about the monumental task facing the bid over the next year.

There are 55 Thursdays left until the opening ceremony. That’s the way Deighton likes to put it when he talks about the Games. It condenses the 300-plus days remaining to a smaller number that injects a sense of urgency into the task at hand.

“We are 83 percent of the way through the time we get to stage the event, because we started on the 6 of July 2005, that inauspicious day for us in Singapore,” said Deighton, who’s dressed in a tailored pair of khakis and a blue, spread collar button-down shirt open at the neck. “We’re pleased with where the project has gone to so far, yet fully conscious of the fact that the final year and a bit has very significant challenges both because you have to pull together so much, particularly around the operational preparations and because at this point, the whole world is focused on every move and every step you make.”

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Deighton joined Paul Bush (right), chief operating officer of EventScotland, in May in Edinburgh to announce the first confirmed locations on the Olympic torch relay route.
Deighton is especially sensitive to that scrutiny. The organizing committee was facing sharp criticism for its ticket process, a ballot system that received more than 20 million requests for 5 million tickets. That led the press to question how the event could be the “people’s Games” if the people couldn’t attend, and to question where tickets not sold publicly were going. The issue has required consistent management from LOCOG’s communication team, but Deighton couldn’t be more relaxed.

“There are always huge pressures around ticketing,” he said. “It doesn’t always take the same form. The form it’s taking here in some ways is a high quality challenge because so many people want to come. There just aren’t enough tickets to keep them all happy. You don’t want to disappoint anybody, but the reason we’re disappointing people is because so many people want to come.”

The issue is only the first of many challenges that LOCOG will have to address during the last year. It will need to build its temporary venues, retrofit completed facilities it takes over from the ODA, host a series of trial competitions designed to test the new facilities, manage the addition of nearly 5,000 staffers, train a volunteer staff of 60,000 people, and deal with a host of unforeseen issues that arise.

As a result, Jet Set Sports CEO Mark Lewis, who worked on the Atlanta and Salt Lake City Games, said that it would be premature to say whether or not Deighton has done a good job as LOCOG’s chief executive.

“It would be like saying a cake tastes great right after you put it in the oven,” Lewis said. “He may have baked the best cake ever, but we just don’t know yet. It’s a big job and they have attacked it well. We’ll see how it turns out. Everyone hopes they succeed.”

To date, few criticisms have been leveled at Deighton’s management of LOCOG. The one thing some questioned is his reliance on data and information before he makes a final decision on something. It’s the Goldman way, but some observers wonder if that will prevent him from making snap judgments as the sand runs out of the hourglass on the Games.

Those who know Deighton best, like Wijeratna and Miller, say it won’t be an issue. Gilbert Felli, the IOC’s executive director for the Olympic Games, believes it will be an asset.

“That’s what I like about Paul Deighton,” Felli said. “A lot of studies have been made and can demonstrate the best thing to do. It’s proper management when you want to bring a solution forward.”

Members of his leadership team, sponsorship executives and broadcast officials who have worked with Deighton are confident he can deliver on all the promise the Games have shown. They say the culture he has created is strong enough to integrate the addition of so many new staff and volunteers, and point to his ability to control costs to date as proof he will be able to manage the unforeseen expenses that pop up in the final stages of preparing to host the Olympics.

“They have faced stronger headwinds than any organizing committee I can recall for a summer Games and at every instant, they’ve risen above the challenge and succeeded,” Seibel said. “I have to believe they will continue to do that.”

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