Come July 27, 2012, nearly the whole world will be watching the results of Paul Deighton's labors. That's when the opening ceremony will welcome top athletes, coaches, volunteers, and fans to the London 2012 Olympic Games. As CEO of the London Organizing Committee of the Olympic Games and Paralympic Games (LOCOG), Deighton has been working hard for the last six years in building up the organization and infrastructure to make the Games possible.
Deighton, the former Goldman Sachs chief operating officer, applied for the job after reading an ad for it one Sunday in The Economist. Now he's charged with raising £2 billion from sponsors, broadcast rights, and ticket sales and running an organization that will eventually swell up to involve 3,000 staff people, 70,000 volunteers, and 100,000 contractors.
Recently, Deighton spoke with Pcubed to explain what differences he has found between leading the day to day operational requirements of investment banking and building up and managing a highly visible, multi-year organization whose total reason for being takes place over the course of a compact 29 days.
Pcubed: You recently announced 12 months of Olympic test events involving thousands of volunteers. Is it common for Olympic venues to run practice drills?
Paul Deighton: Yes, it's become so. It started off originally a few Games back as a way of really allowing the athletes who would be coming the opportunity to familiarize themselves with the venues in which they would be competing. But over the different series of the Games it's actually also turned into the opportunity for the organizing committee to test how to run an event in anticipation of the Games. So, of course, we've tried to make it as thorough and as professional and as sensible as possible so different events test different things. The whole idea is to try to make sure that we are successful in translating our plans - which currently sit on a piece of paper - into working on the ground in the venues with real people doing things. We hope in test events to get the chance to respond to issues so that by the time we get to the games themselves we've already had the chance to cope with most of the issues that we might come up against in a real live game situation.
Pcubed: You've been in your current post now for six years. Do you even remember what investment banking was all about?
Deighton: It's all a dim and distant memory when I wasn't yet a patriot.
Pcubed: What are the main differences that you've found between leading those day-to-day operational requirements of investment banking so long ago and the experience of this hard-deadline, one-off initiative with somewhat limited resources?
Deighton: Dealing with limited resources - that's just the human condition, right? You need to figure that out in whatever environment you're in. The principal differences are moving from what is ostensibly an operating business to one that is for six years and 11 months a project business - and then for a couple of months becomes the world's most intensive operating business. That's a very different rhythm and pattern. It's a change from moving from a very mature, effective, strong culture organization to one that you build essentially from the ground up where you have to build the culture. Every year we double in size, so we're always recreating the business as we go along. With projects in an organization like this we're not really learning how to perfect what we do; we're kind of making the best out of what we do for the one and only time we do it, so it's a very different style.
And then there's the environment. In an investment bank - when you're there, of course, you think you're at the center of the universe and everybody is looking at what you're doing and everybody is fascinated by you. In practice, it's a tiny, tiny bubble, which most people aren't really a part of or have much interest or understanding of. When you're in one of those businesses, if you have a problem, you can mostly resolve it and move on before anybody outside would have even have heard of it.
When you're working on a project like the Olympic Games, everybody knows about it and understands it. Everybody thinks they can do your job - everybody with the kind of scrutiny we get from the press, from the TV, from the Tweeters and all the social media, from politicians, you name it. There is no hiding place. So when we have an issue or the suspicion of an issue, everybody gets to talk about it and discuss it and watch you and your efforts to resolve it and that's a very different environment.
In a private business you are driven ostensibly by the profit motive, by the return on investment. And in many respects it makes things easier, because you all talk a common currency. In a project [such as the Olympic Games,] which has the sort of private/public combination, you're driven by a broader set of agendas - some of them financial and economic, some of them social, some of them political, some of them diplomatic. Reaching agreement about how to trade those off and have it move forward is altogether a more complex exercise because it doesn't reduce to the common denominator of money.
Pcubed: Do you think that this job has filled you out as a human being?
Deighton: [laughing] It's withered me away as a human specimen. I like to think I was very filled out and I was just compressed for a while in the banking business. Now I've been restored to my normal, human condition.
For many, many people in my old business - the financial business - financial markets are fascinating. Doing new transactions, watching market movements, creating new securities, figuring out how to see what a value is and put on profitable trades, solving company problems through coming out with wonderful financing ideas or looking at corporate restructurings. These are complicated and fascinating things, which are really extraordinarily challenging and give you the chance to work with some really good people who are inspirational. I had all that for 25 years or so and it has clearly been responsible for a lot of my own development.
That is all great, but you sort of dig very deep in a relatively narrow channel. When you're outside it, you do get a sense of that space, of its narrowness.
I love the fact here that I touch on so many different parts of life in the country now. We're very focused on putting on a great show and all the operational things behind that and the huge construction and engineering project. The politics are very significant. The money raising is a big part of it. Reaching out into the communities and getting them engaged is a huge part of it. Managing the media is a vital part of it and getting your message across there. We're projecting London and the UK to the rest of the world and welcoming that world when it comes here in 2012. It is a wonderful thing to be doing. The beauty of this job is you get to do all that.
There aren't many other platforms which allow you that opportunity in any kind of forum. Investment banking is actually a pretty broad one compared to most. But hosting an Olympic Games - I hesitate to say "unique" - but it's certainly one of the more fascinating stages on which to dance.
Pcubed: Recently at a sporting event, you mentioned that private sector skills are needed to make these large public sector change programs happen especially to time and to budget. What do you mean?
Deighton: Work in private sector skills really help to get these projects moving in a number of areas.
Firstly, even in a big public sector project there are very significant commercial components, whether it's dealing with suppliers, partners, or sponsors, in my case. Really understanding what makes them tick is very important to get them to the table and to get them to work with you and to get the best deal out of both of you. Clearly you bring that understanding from the private sector.
I've found a lot of people who have spent their whole lives in the public sector - in some ways they're a bit intimidated by it. They think there's a little more to the private sector than there really is and as a result don't quite know how to deal with it.
It works both ways. If you've worked in both, you can hopefully get a sense of it; but when your whole experience has only been on one side of it, having to manage the other side of it is always a bit trickier.
So when you're doing a big project even in the public sector, there are very significant private sector components. Understanding what motivates them is important.
I think that in the private sector you're used to running an organization. We've had to build one here from scratch in quite a demanding way. You're used to getting your money's worth out of them, because you've got to get a return to your shareholders.
Let's say that the public sector isn't structured in a way that its organizations necessarily run with that kind of financial discipline. They're dealing with broader public policy objectives.
I also think generally what you learn in the private sector is how to get stuff done, not how to manage processes or develop policy. Ultimately, what we all love in people who work for us are those who get things done. As a general proposition you learn about how to get things done more directly quite often in a private sector background, because if you don't, you don't make any money and you don't survive.
Pcubed: To fold that question inside out, are there insights from your time at LOCOG that you would try to inject into investment banking if you were to return?
Deighton: Yes. It's really operating in a much more complicated environment. The analogy I always use is a skiing one. Your technique as a leader has to be like your technique as a skier on a black run - [you have to be] really strong or you fall over.
Things that make it difficult are the things like I've touched on already - working under media scrutiny, dealing with the massive public expectation we've got.
The Olympic rings are one of the most recognized brands in the world and we make huge promises to bring the Games here, transforming East London, for example. That's not Mickey Mouse stuff. We've got to deal with every little bit of government - from central government to city government to local borough government. There are the elected officials as well as the civil servants. There are athletes who care about this. There's the International Olympic Committee. There are all those government people I talked about. There are our sponsors. There are the other agencies who deliver big services to us - the police and the transport authorities. There are all the people around the world who run Olympic committees and sporting governing bodies who care about this. There are the broadcasters. It's the biggest TV show on earth. The broadcasters pay a lot of money for this and they have a big stake in making sure it's a great show.
In this project another thing is you're managing huge change every day. We go from zero people to Games time, when I'll have 6,500 people working for the organizing committee plus 70,000 volunteers and over 100,000 contractors. Over the course of seven years we build a large company, and then when the games are over we dissolve it. And within all that you've got to motivate a very diverse group of people who work for you, who go through very different series of cycles.
They all come for very different periods. Some of them have been working on the bid and this takes a decade out of their lives. There are many others who just come for the last six months or the last 18 months and who may be Games jockeys who go around the world doing this. The closer you are to the end, the harder it is for their allegiance to be totally to you because they have their eye on the next job, because they have to pay their mortgage. And they work alongside people who are started out very starry-eyed, who want to be part of the greatest show on earth, the greatest thing happening in their city in their lifetime. And after a couple of years of slogging away in the accounts department, maybe it doesn't feel quite like that. So how do you keep them motivated so they feel like they're just as involved in putting this thing on as somebody in one of the more obviously front-end sport-focused roles?
Pcubed: With this kind of build-up, what kind of qualities are you looking for in the people you're directly interacting with?
Deighton: For me it's very, very important that people feel like they're on a mission - they want to come here because they want to be part of putting on something that will stay in their lives as a transforming experience. When I interview people here and ask, "Why do you want to do this?" the people who get the tick in the box are the ones who say, "My god, this is my dream to come and be part of the Olympic Games when it's in London. I'd do anything to work here." They don't quite have to put it like that, but I want them to be inspired when they arrive, because then my only job is to keep [the inspiration in place] rather than to have to inspire them in the first place - then all I can do is mess it up by demotivating them.
Pcubed: Do you have a big role in hiring and interviewing people? At what level are you personally involved?
Deighton: I used to meet everybody who joined. I don't know whether it came as more of a relief to them or to me when I stopped doing that. The most important thing I did during the first six months was to hire the top team. It's very easy to make a mistake when you do that, very hard to rectify it, so you need to get it right. It's not often you get to have a business as big as the one I've got now, which I've really invented, because they're all my guys. Normally when you're running a business of this size, you've kind of inherited a business that's been there for a long time. Here, you live with the consequences of the people you've chosen, because you're the one who did it. You need to have thought about the kind of team you want, the qualities you want, and how you expect them to work, and how you are going to interact with them.
Pcubed: You talked about the how this job is like skiing the black run. Have you fallen on your runs yet?
Deighton: That's the only way I learn. I'd had some experience with working with the public sector in the finance business [because] I had extensive dealings with regulators. You deal with regulators when you're in the finance sector. But I didn't have the kind of extensive interaction at all levels, particularly, for example, in local government with so many elected politicians and ministers. I've had to learn how to deal with them. It's different from how you deal with business people because they have different interests. They expect different things from you. So I certainly got better at that.
I've certainly made some mistakes at the beginning. I think I was forgiven because my mistakes were all along the lines of - as we say here - just wanting to make the boat go faster. In other words, being very focused on what it would take to make the Games great and not worrying about anything else. Sometimes with politicians it's very important to worry about something else because that's how you get them to help you make the boat go faster.
Pcubed: Any sense of what decisions are left right now to fret over? Are there particular metrics you're continuing to pay especially close attention to?
Deighton: Yeah, we've still got many aspects of the hardest part of this job to do. We need to be able to do all the operational things to do to make the Games go smoothly. We need to be able to plan for all the contingencies you need to put in place in case they don't. The scale and scope of the Games means you're testing all the capacities this city has. Even though it's a very big city, the Games are just huge, so we're pushing the resources we have absolutely to the limit and coordinating all these different events happening more or less simultaneously. It just requires an awful lot of planning and practicing and reconsidering your resource plans, figuring out how to train your resources, looking at what things are really going to cost. You're constantly iterating on that plan because it's very big and it's very complicated and it needs changing all the time to get it to the right place.
Pcubed: Final question, Paul. You're in a position where you have the opportunity to meet practically every elite athlete who lives, and I understand you're a major big-time fan. Is there anybody in particular you're hoping to meet?
Deighton: I've always been really blown away by Roger Federer and Rafael Nadal, the two best tennis players in the world. They're not just at the top now, but they've been at the top forever. And they're just such incredible ambassadors not only for their sport but for sports generally. There's a sort of authentic classiness in them you rarely come across in people who are as good as that.