Risk management is a concept that more and more sport leaders are embracing. In part, this shift towards proactive, integrated and system-wide management of risks is due to the changing expectations of members and the requirement of funders to have more evidence of good business practice. I would also like to think that more sport leaders are embracing the benefits of ‘pausing to assess risks’ because it’s the smart thing to do.
The Risk Management Project
Since 2007, I have facilitated or co-facilitated over 40 risk management workshops among national, provincial and community sport organizations. The Risk Management Project (RMP) is a multi-year collaboration between the Canadian Centre for Ethics in Sport (CCES), the Sport Law & Strategy Group (SLSG) and the Department of Sport Management at Brock University. The methodology that is taught in the workshop is based on the ISO standard of Risk Management and refined for the Canadian sport landscape . It was tried and tested by an early group of sport leaders and the risk treatment strategies and lessons learned along the way have been shared to the benefit of all participants. The impact of the RMP is impressive. The research findings from Brock University indicate that participants have been able to embed and sustain the knowledge they acquire during the workshop, in a way that supports the enhancement of their business objectives. Here’s what Myles Spencer, Chief Operating Officer of Rugby Canada had to say about the impact of the risk management workshop had on their organization. “Participating in the Risk Management Workshop brought a new perspective to the importance of risk management within our organization. Our Board and staff have now embedded risk management into our governance and annual planning.”
A shift towards proactive solutions
As the one constant from workshop to workshop, I believe it is critical for sport leaders to integrate the principles of risk management into their overall business strategy and corporate culture. Note that I reference both strategy and culture; both are required in order to fully benefit from risk management. Melanie Herman, executive director of the Nonprofit Risk Manager Center, agrees . In a blog on the importance of reducing risks, she advocates to “put values into the spotlight”. She argues that as complexity increases and the nonprofit morphs into an organization with multiple business lines, it’s easy to leave culture behind. Values are a way to pay attention to what matters most. She advocates two strategies that I believe are essential to cultivating a highly efficient and enlightened workplace. Firstly, she makes the case to define your organization’s values. In my book on managing by values, Values-in-Action, I make what I hope is a compelling case to be more intentional about integrating values into your organization’s systems, policies, programs and culture. Herman invites organizations to do the same. “By letting our values take center stage, we reduce the risk that a vital culture of teamwork and caring will disappear or dissipate with our success.” She goes even further by inviting stewards of the organization to ask and listen to its employees. Surveys, feedback sessions and other forms of employee engagement can provide essential information on how the organization can improve its culture and thereby reduce its risks.
Why are values more important now than they ever were? I believe what is more important than ever is to invest in a strengthened culture. Managing by values is a smart risk treatment strategy that helps to mitigate a number of high level risks … risk related to employee morale, risks related to effective decision making, risks related to communications, and risks related to systems integration. Trust is required as a foundational element to launch from when dealing with the aforementioned risks and research has shown that when there is an orientation towards managing by values, the trust meter is stronger than in cultures where values are undefined.
So what are values and how do they impact the performance of my sport organization?
Values are principles or beliefs considered worthwhile or desirable. They help guide behaviour, define goals and establish standards for acceptable conduct. Values have renewed meaning and purpose in today’s business world, as corporations struggle to deal with the taint of wrongdoing and unethical business practices, while striving for success in turbulent and uncertain business environments. Sport in Canada can be viewed from the same business perspective – on an annual basis it is a $16 billion industry, and according to the Conference Board of Canada, sport not only significantly strengthens the Canadian economy, it is also a dominant influence at all levels of Canadian society .
In addition to having the capacity to reach every part of Canadian society, sport in Canada is also perceived by the Canadian public in a surprisingly uniform fashion. Canadians consistently expect that sport will adhere to the highest ethical standards based on shared values, and they express a strikingly common view of what those values should be. In Canada, those shared values are defined as the True Sport Principles, which articulate the kind of environment Canadians expect to see upheld for children and youth . Yet despite this remarkable consensus on the values that are integral to sport, Canadians report that these values are not manifested in the Canadian sport experience. The result is that while Canadians share a common view of the values that should guide sport, or of the ‘sport we want’, that ideal bears little relationship to the current experience of sport, or the ‘sport we have’. In fact, 92 percent of Canadians believe that sport has the potential to make a positive contribution to the development of youth and the quality of life in communities, but fewer than one in five believe that sport is living up to this powerful potential .
From a business point of view, it is challenging to be thinking about on the field excellence and the extent to which values are being lived when leaders are busy managing the tyranny of the immediate. Just as coaches and athletes are focusing on achieving excellence on the field of play, so too are sport administrators busy with running the business of sport to achieve optimal results. Given today’s complex environment, focusing exclusively on the bottom line is insufficient to meet public expectations. A different way to manage is worth further consideration.
What is managing by values?
The notion of ‘management by values’ has evolved significantly from the early years when ‘management by instruction’ dominated the landscape. This approach to getting the job done made sense when change happened slowly and we lived in a world characterized by little risk and uncertainty.
In response to growing uncertainty, ‘management by objectives’ became the predominant approach in the 1960s. Tools and techniques to forecast and plan for the future such as strategic planning and brainstorming became the norm. This management philosophy helped leaders address the need to become more focused on the bottom line and is the dominant management philosophy that I see used in Canadian sport. Case in point, government funders ask sport organizations to prepare strategic and business plans to establish objectives, and then evaluated the organization’s success on achieving those objectives. An organization’s success (or lack of it) in achieving stated objectives in turn had a dramatic influence on future funding and future potential for success.
This being said, I have recently observed a shift towards a different management philosophy by a growing number of sport leaders who are looking to measure success beyond the bottom line. I would characterize this approach as an orientation towards ‘management by values’, which has been described as the third phase of this evolution of management philosophies. As the prevailing environment surrounding organizational decision-making and management has gone from being ‘certain’ to ‘uncertain’ and now to ‘complex’, the earlier management approaches have been less than adequate. Management by values is concerned with developing management systems that are capable of integrating values into organizational strategies, policies and procedures. Dolan, Garcia and Richley have written extensively about management by values as a strategic leadership tool that can have immensely practical results for organizations, through acknowledging the complexity inherent in the environment; channeling the daily efforts of individuals towards an organization’s strategic vision; redesigning organizational culture along more humanistic lines; and including ethical principles into strategic leadership .
I continue to believe that this more inclusive approach to management holds tremendous potential for improving Canadian sport through enhancing the capacity of the sport system, embedding values-driven sport, and ultimately leading to more positive experiences for sport participants.
What more can we do as sport leaders?
As organizational leaders who are getting ready to embark on a more systematic, progressive and intentional way to manage risks, my invitation to you is to not only consider those that keep you up at night, but to also stretch your thinking so you are intentionally exploring those that may be preventing your organization from reaching its higher potential. To support you in our journey together, I’ve identified a few questions that I invite you to consider.
- Tolerance for risk: What is your tolerance for risk? Do you like to take risks or are you more risk averse? Exploring this question will help you be more aware of your natural inclination.
- What’s on the horizon: What big risks are worth embracing over the next year that will help to advance our mission? What is happening in sport that we need to pay attention to? What additional information do we require to understand and act?
- Lessons learned: What can we learn from risks that came to pass? What opportunities might we gain from the risks we fear the most? What can we apply from our crowning achievements?
- What does the Board think: Is our board contributing to a shared understanding of the organization’s high level risks?
- Investing in resources: Have we made an appropriate commitment in terms of personnel time and financial resources to understand the risks we face and make adjustments as needed?
I believe that managing by values can offer sport organizations an effective and robust approach to dealing proactively with risks. It can lead to transformative results. However, it is not a quick fix. As I write in my book “It requires a commitment by leaders to actively find ways to monitor and measure their organization’s performance not only against objectives but also against their core values. When values are made explicit, sport organizations and their leaders can build the kind of environment where the promise of an optimal sport experience for all participants is more fully realized.”
 For more information about the impact of the risk management workshop on sport organization, please review the study in the Sport Management Review, Management training and national sport organization managers: Examining the impact of training on individual and organizational performances by Patti Millar and Julie Stevens; Review 15 (2012); pp. 288-303
 For more information on the Non Profit Risk Management Centre, please visit http://www.nonprofitrisk.org/
 For more information on the status of sport in Canada, please review Strengthening Canada: The Socio-Economic Benefits of Sport Participation in Canada by Bloom, M., Grant, M. and Watt, D. (2005) through the Conference Board of Canada. Ottawa, ON.
 For more information on the True Sport Principles, please visit www.truesport.ca.
 For more information on the statistics, please review the following report: CCES (Canadian Centre for Ethics in Sport), (2002). Canadian Public Opinion Survey on Youth and Sport, Ottawa ON and (2004). The Sport We Want Symposium Final Report, Ottawa, ON.
 For more information about management by values, please review Managing by values: Cultural redesign for strategic organizational change at the dawn of the twenty-first century in the Journal of Management Development by Dolan, S. L. and Garcia, S. (2001). or Managing by Values: A corporate guide to living, being alive, and making a living in the 21st century by Dolan, S, Garcia S, and Richley B. (2006) or Values-in-Action: Ignitiing passion and purpose in sport organization by Bell-Laroche, D. (2013) at www.sportlaw.ca.