To wring out additional costs, Bullock recategorized all expenses as either must-haves, nice-to-haves, or non-necessities — what he calls a “tiered level of importance.” Must-haves — including such “Tier One” requirements as the 400-meter speed-skating course, with safety padding and viewing stands — were assumed. But a high percentage of permanent seats, more expensive than temporary seating, became a Tier Two “nice-to-have” item. As for Tier Three items, “Under the system here, if anything is classified as a Tier Three item, you know it’s probably toast,” says Cathy Priestner Allinger, SLOC’s managing director of sports.
Such classifications took care of a lot of overhead automatically. Travel to Lausanne, Switzerland, the home of the International Olympic Committee, was replaced by conference calls in most instances. The flow of free souvenirs to SLOC visitors was ended, and office flower arrangements were cut back, along with expensive “protocol” dinners. “We’re not doing fancy lunches anymore, either,” Bullock says. In addition, he told managers to eliminate contingency funds from their individual budgets. “I asked everybody for their padding,” the CFO says.
Overall, cuts have been deep. Staff and administration reductions have amounted to nearly $40 million, or 12 percent. In addition, Bullock wrung a 17 percent savings of $13 million from food services when SLOC found a sponsor, Compass Group, to take over much of what had previously been considered a $20 million cost center, turning it into a money-maker for the organization. Similar cost-cutting trade-offs were made with sponsors in information technology and other areas.
Almost nothing, in fact, has been sacred — even the time-honored tradition of using volunteer staff. Originally, for example, Bullock set a target of 40,000 volunteers. But he soon learned that holding down the voluntarism level was a money-saving measure. “Volunteers, while they bring a tremendous amount of value, are also a tremendous expense, with uniforms, support, and feeding,” he says. Bullock has since cut back the target to 26,000.
A Breath of Fresh Air
To secure the necessary cuts, Bullock realized he had to win the trust of Olympic staffers. There was no magic to this, in Bullock’s mind. “People knew that we didn’t have any choice,” he says.
But Allinger, herself a 1996 silver-medalist for Canada in speed-skating, says that the way Bullock conveyed the message spoke volumes. “What impressed me was the way Fraser went about asking us to reduce spending by coming up with our own lists of priorities,” she says. “He’s never come in to me and said, ‘Take this out of your budget.’ He’s a breath of fresh air.”
Bullock also made sure he gave managers early proof that items would be added back from the central contingency fund if necessary. In one case, he reinserted a $135,000 charge for a special pedestrian bridge at the Soldier Hollow cross-country biathlon venue. Without the bridge, it turned out, athletes and spectators would be sharing venue access — something that raised security concerns.
Overall, says Cindy Gillespie, SLOC vice president, federal relations, “We’ve gone through quite a mind-shift.” A veteran of the 1996 Summer Games staff, she notes that in Atlanta, “the overriding view was that our Games would be the biggest and greatest Games ever.” But at Salt Lake City, staffers have bought into the idea of an “essentials-only” Games, she says.