"Paying Tuition" on a National Scale

Apparently I last posted on this blog on 8th August 2010. That's a pretty long time. I just moved. The study is filled with boxes, though I have managed to tidy up my own bedroom. I've got no wardrobe but I bought this "small wardrobe on wheels" from IKEA (the IKEA PS), which I believe can actually handle all the clothes I actually wear. I'm a little sick of all the unpacking and its currently way too hot for gardening (clearing out the old roots in the soil and replacing some of the clay with more suitable soils).

As I typically do, I read what people have been talking about on the ST Forum this morning (well aware that the editorial team of the forum does a lot of agenda setting). I came across a letter on how the Singapore Tourism Board should factor in cost to evaluate whether an event was successful on some measure ("Going by tourism receipts? Then count the costs of events too", ST Forum, 18 Dec 2010). This is makes complete sense to any business owner: perhaps the two most important numbers are cost and revenue. I am typically critical of bad project management, which I believe the huge Youth Olympic Games (YOG) budget overruns amounted to (S$387 million over a budget of S$105 million, with about 70% or S$260 million going to local expenditures which should be relatively easy to budget for). However, as anyone who has played games such as majong should know, to get good at something one needs to "pay tuition". In majong that tuition entails losing money as you learn the niceties of the game and how to read your opponents; in large event organization, it is experiencing the unforeseen, paying for it and learning.

Singapore's narrative is one of surviving. Being small, this entails punching way above our weight. We have done this militarily. In fact we die this in a very intelligent manner, building up fast enough to gain security but quietly enough to avoid reprisals (it also helped that we were between Malaysia and Indonesia who were jostling for power). In this day and age however, survival is a matter of maintaining relevance to the world rather than avoiding annexation. Again we have to punch above our weight.

Our drive to become a world X hub (where X might be "biomedical", "logistics", "water technology", etc) is an indicator of sound strategic judgment on the part of the government. While I feel that the efforts are lacking in terms of execution, the strategy will work as people learn from experience. Organizing large events falls neatly into this framework, and like most of Singapore's major efforts, it seems that there is "tuition" to be paid. The magnitude of the "fees payable" have been alarming (c.f. YOG), there are grounds to argue (shaky though they might be) that when operating on a totally different scale, things change and past experiences are no longer such a useful guide. An organizational structure good for an organization of 100 staff will probably not be as effective at 1000 staff. Whether this holds or not, we are paying tuition to learn, what has to be done is to ensure that we are learning.

It is natural that initial cash flows are negative in a large project, however the net present value of the project should be positive. It is key that our event organizers not be so embarrassed about operating losses that all the lessons learnt are swept under the carpet. These experiences are what we have paid for. I believe the organizers should, with the public and the services sector, pick apart the execution of past large event to distill the experiences that we have paid so much for. This way, we may start getting positive numbers in our cash flows and turn "Large Event Organization" into a profit generating machine.

Now back to the work of unpacking.