What the Olympic Games teaches us about Project Management Risk
On July 23rd, Tokyo officially opened the 2020 Summer Olympic Games. As we know this is a year late (and a few billion dollars short). Hosting the Olympics is one of the largest international projects one can undertake and the risks associated with it are more voluminous than an Olympic size pool. Unfortunately for Japan, there were more unanticipated risks than the normal risks associated with hosting the Olympics.
In the 2016 Rio games, some of the risks that had to be managed were:
- Increased security presence
- 26,000 cases of the Zika virus in Rio in the first few months of 2016
- The sailing venue was Guanabara Bay and if a few teaspoons of water were digested by the athletes, it would cause illness
- Removing 32 tons of dead fish from the lagoon for the canoeing venue
- The entire project was slated to cost 4.6 Billion dollars, but eventually came in at over 11 Billion
All of this is for projected revenue of just over 9 Billion dollars.
While this is the fourth time Tokyo will host the Olympic games, some of the additional risks that Japan faced were largely due to Covid-19. It was a complete unknown when Tokyo was awarded the successful bid for the games in 2013.
- Due to the pandemic, the games were delayed for a year. This budget rose to over 15 billion, with 2.8 billion dollars caused by the delay.
- In Rio, there were 6.5 Million spectators in attendance of the 7.5 million tickets. Due to the pandemic, Tokyo is in a state of emergency. That means there will be no fans, only the athletes, support staff, and journalists. That is about 800 Million in lost revenue.
- These risks are still being felt as the first volleyball match was canceled due to a positive covid test.
And to top it all off, there is the risk of earthquakes in and around Tokyo. Apparently, during the past 30 days, Tokyo had 10 quakes of magnitude 3.0 or above and 19 quakes between 2.0 and 3.0. The latest was a 3.2 only 8 hours ago as I write this.
I am sure we all wish the athletes the best of luck and I can now appreciate the effort and foresight of the tens of thousands of staff who work to make this event happen!