WHILE THE rest of us await our tickets, attempt to buy more, or start checking the holiday calendar for time off during the Olympic Games, Deloitte partner Neil Wood is hard at work keeping the budget within parameters and the Games on track.
Wood took up the post of chief financial officer of the London Organising Committee for the Olympic and Paralympic Games (Locog) in 2005. Now, with the Games approaching, he is nearing the finish line.
It has been a tough journey but Wood has drawn on his many experiences from working as a partner in Arthur Andersen, to his time as a personal assistant for Andersen’s managing partner Philip Gore-Randall.
He had only been with Deloitte a year when the London Olympic bid team, led by Barbara Cassani, caught his eye. Cassani’s team created a masterplan that outlined where investment would come from, where the Games would be held, and how the budget would be managed. It was in this attempt that the London 2012 bid team was born.
However, the team wanted a safe pair of hands to look after the budget and keep spending in check. It started the process by looking to the Big Four for an FD, with Wood winning the role. However, it then decided to cast its net out further and published a job ad for an FD in the nationals. Wood again applied and was again successful.
When in 2005 London was awarded the 2012 Games, Locog chairman Sebastian Coe asked Wood if he would be interested in staying on as chief financial officer. Having been on secondment for 18 months already, Wood thought his chances of continuing were slim.
“Eighteen months is a very long secondment,” he says. “I thought they’d say ‘you’ve had your fun, now it’s time to come back here’. John Connolly [Deloitte’s managing partner at the time] actually said ‘do you want to do it?’. I said I did and he said he thought it was a good idea.”
The rest is history, but the road ahead was not without its hurdles. In 2007 the professional services sponsorship was up for grabs and Wood was kept well away from everyone at both Locog and Deloitte to ensure he had no influence over the decision.
“I had about three months when no-one in Deloitte and no-one in the organising committee was allowed to talk to me, which was a fairly lonely time,” he says.
Deloitte was successful and became the official professional services provider for the Olympics, to provide tax, management consulting and financial support services to Locog. Wood is now one of about 130 people – and counting – who have seconded from the firm to Locog.
When he initially joined Locog there were fewer than 50 people in the organisation: their first Christmas party was held at a local pub.
“We had the entire organising committee there around the piano singing carols,” he says.
Locog now boasts an empire of about 4,500 paid staff, including contractors. Wood estimates this year that figure is likely to double.
One of his biggest challenges is managing the rapidly growing organisation, which increases in complexity and size every day, while keeping a tight rein on budgets and understanding the different skills needed to run the finance function of a small business and a mammoth one.
“That’s the challenge,” he says. “You’re building a finance function, you’re trying to keep everything under control so you’re doing that from scratch at the same time as your organisation is growing like crazy. You’re starting with nothing and effectively building a FTSE 100 organisation while at the same time trying to put on the most complex event in the world.
“There aren’t many organisations that go from spending about £9m in its first year in 2005 to £700m last year. We’ll spend about £2bn this year in the lead up to the Games,” he adds.
One of the key aspects to cash management is simply understanding where the funds are being spent.
As with Deloitte, many of the sponsors of the Games provide “services in kind”. Essentially these are services that Locog will use.
In previous Games, Olympics sales teams brought in too many service providers and not enough funding. Wood was heavily involved in setting targets that consist of a percentage for services and the rest in cash to mitigate that risk.
An incentive for Wood’s strict controls in the finance function is his wariness to receive further government funding. The UK government has so far invested about £9bn in the venues and capital infrastucture. However, Wood is keen to reduce the risk of any further funding to reassure taxpayers this is one business it does not have to bail out, but also to maintain control of a company he has worked with for so many years.
“If you run out of money then you lose control because if the government has to bail you out, then they start to want to exercise control over you,” he says. “So it was very important to us to maintain control of the organising committee and therefore very important that we keep our costs within the envelope of the revenues we are able to generate.”
Where it all began
Given that Wood himself labels this job as the pinnacle of his career, he is looking forward to the prospect of going back to Deloitte with the huge plethora of skills and knowledge he has gained during his secondment.
“If I can take those skills into Deloitte then I think there’s a huge amount of value I can deliver,” he says.
“I’ll have been on the client side for about 10 years by the time I finish and I don’t think there are many partners in any of the consulting firms that have done it for that length of time.
“We buy services from a number of professional providers and I know where I can see the value in propositions being offered and I can see the things consulting firms try to do to you as a client which just irritate you. So I’ve got a perspective on how a professional services firm can improve its performance in front of its clients.”
Given all he has learned, Wood is keen to encourage Deloitte staff to take on secondments.
However, he argues he would not do it again; any future Olympics will not have the same appeal as working on Games for your home country.
“When I’m having my more sadistic moments with the 25 year olds on the team, I joke that its all going to be downhill from here,” he says.
“When I speak to those who have been through the experience of organising the Games, they say it’s a bit of a downer afterwards because it is such an exciting project to be involved in. But I don’t know, we all find exciting things to do. If I look back over my career, I’ve done lots of very different interesting things.” ?
Former AstraZeneca finance executive Graham Baker named as the next CFO at Smith & Nephew
Our latest in a daily series of interviews with FDs showcases Kajima Partnerships finance chief Nigel Chism, who is helping the property development business move forward despite political turmoil
Our latest in a daily series of interviews with FDs showcases Semafone CFO Katherine Grover, who talks about the changing focus of her role, and big projects for the year ahead
Caxton FX has appoints Trevor Price as its next chief financial officer