PALAVER TREE COMMENTARY: What Exactly Do They Teach In Business School? — ‘Tope Fasua

Image source: PREMIUM TIMES

By ‘Tope Fasua

…there is no executive course in Harvard, Princeton, MIT or Stanford where you will not find at least a Nigerian delegate, especially in the business departments… Were they taught strategy at all? For if they were, how come almost none of them have deployed strategies to ensure they don’t run into quicksand and have to demand for government bailouts every two years?

I was once close to a Director at a UK Hedge Fund located at Mayfair on London. I used to visit their plush offices somewhere in Saville Row and we’ll sometimes go out for drinks and dinner. The financial markets were in upheaval then. Many of the stuff we were taught about efficient markets and the wonders of derivatives were unraveling right before our eyes. Arcane financial products like Credit Default Swaps, Collaterized Debt Obligations, Mortgage Backed Securities and Structured Products in general were gradually tanking in some of the big ‘uns. Lehman Brothers and Bear Stearns must have recently collapsed, so that must have been 2008.

I recall going out for one of those dinners. I met the CEO of the organization. Ivy league trained all the way. The team was a bunch you’d want to observe silently. At least that is what I did. When you meet people who have done greater things than you could imagine, you have to shut up and learn how they’ve done it; study their personality in the hope that you may learn something very tangible. I didn’t know the exact state of their fund then, but I reckoned they must have something big up their sleeves because here we were, having a blast in the middle of a global meltdown. Every downturn throws up a new winner, I must have thought. Money never disappears in the market; someone makes the money; others lose.

These guys then made a move. One day I was heading to Mayfair only to be told they had moved to Covent Garden. Larger offices. I went to the new office and was wowed. Every room was themed after one Golf legend or the other. They didn’t even have space for Tiger Woods. And I didn’t ask. They had names on each door, of people you’ve never heard of before. These guys are deep. The kind of education they got is certainly different from ours. They attended proper schools like Eton and Harrow and studied Classics. They know real money. Our local champions here don’t know the colour of cool money really. I moved around the office, mouth agape. Covent Garden was the place. For those who don’t know, it is a place of culture. It is where you find the human statues on your way to work, and it’s a short walk from opera houses, theatres and museums. These classy guys had chosen right. What geniuses, I thought!

Two weeks later the company folded up.

As in they were gone! Bankrupt. They couldn’t pay their debts. The leases on the offices could not be serviced. They couldn’t meet up with the obligations on their fund as they fell due. The company became one of the statistics in the global financial crisis of 2008 and 2009. I started wondering; what do they really teach people in these fancy Business Schools that we pay so much to attend? How do smart people make stupid decisions?

These days when I find myself around Victoria Island — Nigeria’s financial centre — I think of the same thing. I always imagine the brain capacity locked inside those plush offices, the smarts, in looks and in intelligence. Then I wonder how they manage to lose so much money from time to time, to the extent that they have to be bailed out by peasants, when the government wades in and pumps in taxpayers money. VI is the graveyard of many smart organizations, especially banks. Recent stories we hear about some of the promising banks just boggles the mind. So, those very smart guys couldn’t keep their hands off the till. No one thought it would be okay to run an institution for 20, 30, 50 years?

I admit though, that I am the un-smart one. Perhaps I missed the lecture where it was taught in business school, that the trick behind being a billionaire is to gyp the system, to deliberately lose money, to borrow and fritter into your personal account, because when you borrow big enough, the government will step in, and with poor taxpayers’ money, give you a mere tap on the wrist (or perhaps a bear hug and a pat on the head for being such smart money-wasters), and you can then go and spend your heist happily ever after. Guys personally become billionaires by sucking the institutions they manage to death!

…I thought about another philosophy that seems rife in Business Schools, especially in Nigeria; the idea that Nigeria cannot get anywhere except it cajoles and courts foreign investors. Most of our ‘intellectuals’ cannot utter a sentence without talking about foreign investors and I worry, that at the base of this dependency lies a certain feeling of inadequacy.

We will come to the Nigerian experience presently. But first to say that this is almost a global phenomenon. Bankers are basically the same everywhere, but the bitter experiences of the recent past, the documentation of history and the angry voices of citizens have set some of the banks in developed countries straight. Regulation has changed and become more proactive. Someone could argue though, that the change only came after they had bailed out airlines, car manufacturers and, of course, banks that they deemed systemically important. In that era, the people who run government conveniently forgot one of the core tenets of capitalism; that the markets should shake out weak and badly-run companies in a process of Darwinian justice. Instead what we saw was a privatization of profits, and socialization of losses; the bigger your debt (or the bigger your stupidity), the higher the chances that government will pick your bills.

And so these were my thoughts when we heard about Etisalat’s inability to pay their debts of over ₦530 billion to 13 Nigerian banks, and how those banks had set about liquidating and taking over the operations of the company. In the first place, this is a company that earns money daily. Its services are reputedly good but very expensive. I’m their customer, so I should know. How could it have gotten itself into a situation where it is unable to simply service its debts? Banks would not fret if there is movement in their accounts. Etisalat is meant to be owned and run by Emiratis, who are some of the richest people on earth. Where did all the money go?

Then I thought about another philosophy that seems rife in Business Schools, especially in Nigeria; the idea that Nigeria cannot get anywhere except it cajoles and courts foreign investors. Most of our ‘intellectuals’ cannot utter a sentence without talking about foreign investors and I worry, that at the base of this dependency lies a certain feeling of inadequacy. Yes, we have capital deficits, and could do much better with our infrastructure, but how can we be so fixated on foreign investors when we empty our own capital into foreign countries, after we must have stolen the country blind anyway? When we aren’t sending money abroad either to buy irrelevancies or to invest in other people’s countries, we prefer to hide our people’s money from our people. We simply deprive our people from enjoying their own commonwealth. We dig soak-aways and dump money there, we stuff overhead tanks, and of late, we discovered that many of our ‘big men’ prefer sending the money to their villages where they sneak into village huts to pinch little by little, like rats, for their continued oppression of the people.

How can we be expecting foreign investors to fix our country? What are business schools teaching? Why are we not keenly encouraging accountability and also local investors?

Of late, what has become obvious is that these so-called foreign investors have learnt never to bring any money into the cheap asset they acquire in Nigeria. On one hand are those portfolio investors who invest in treasury bills and cash out up to 16%, or Federal Government bonds, or the stock market. Those trained in our business schools say we MUST devalue the naira in order to keep attracting them! We listened for a while and before we knew it, the naira became perhaps the trashiest currency in Africa. I am still awaiting an explanation of that rationale. Why should an economy so big also have the weakest currency in Africa? And if we say other African countries have overpriced their currencies, why must it be Nigeria who gets to be the guinea-pig by devaluing first?

On the other hand, we saw how the guys that bought our power asset under the Jonathan government complained about having no capital to run their operations. In October 2015, they were bailed out with ₦213 billion. Apparently many of them had rushed there because there was a kill to be made. People don’t invest in Nigeria except to make a kill. Not for them a five or 10-year plan before breaking even. And so when they rushed in, they soon realized that things would be tougher than expected. They sought bailout. Nigerian people paid up. As I type this, their financial analyst friends have started sensitizing the government that the power sector is about to collapse and that these companies will need another ₦730 billion bailout. Nigerians will also pay up. If they were SMEs, they can as well keel over and die as soon as possible. No one will give a toss. This economic philosophy that rewards criminals is simply insane. SMEs are statistically better run than these large companies in Nigeria because managers cannot keep their hands off the cookie jar.

Just last week, we learnt about how bank directors in Nigeria were ‘directly’ responsible for 40% of the bad loans sitting on our banks’ books (₦1.85 trillion). Insider dealing is rife. People take it for granted these days. Nigerians have become more carefree than ever in these matters, after all, serial bad debtors emerge as bank chairmen in Nigeria.

Meanwhile, while the going was good, these large companies put our banks under immense pressure – of course with the connivance of the banks. The deposits that innocent customers put in were swept enmasse and lent to these guys at giveaway rates with little or no collateral; because they are big. The best the banks will get from most of them will be a ‘Negative Pledge’, which means simply that this big client is only promising that it will not give its asset to any other bank without the lender’s knowledge. Big companies borrow today at around 12% in Nigeria because they can arm-twist the banks, while SMEs cannot get any funds below an all-in rate of 30%. It’s no wonder why SMEs die faster, in spite of being more frugal with resources, and big companies continue to survive. The big companies also dictate economic policies because they have friends in high places. You can imagine the future we are creating for ourselves, where careless borrowers crowd out honest managers.

For Etisalat, the move made by the banks to take over the company, sent the CBN and NCC into a flap. Meetings were urgently convened and the banks placated. The banks probably wanted to make a point so that the CBN will take it easy on them on other matters. You cannot ask them to take it easy with Etisalat and then harangue them for other issues, can you? Wink, wink.

What did the Emiratis do with the money? Someone made a comment about their managers’ spending habits, their binges and the fast lives they’ve been living, and so on. I’m not close to Etisalat and so cannot verify. I note though that one of Nigeria’s corporate gurus, Hakeem Belo-Osagie, is their chairman. Why do these gurus run companies aground and make us pay for it? What was his oversight role as Chairman of the Board? Is he not ashamed of himself? This is a person who every government in Nigeria invites to every serious strategy session on the economy! And with all the money Emiratis have, they too refused to bring real funds into Nigeria? Anyway, I have some experience with them. They could be extremely generous, the Arabs. But they are very bad debtors. My small company was once owed money by a Saudi organization for two years! Another organization in the UAE has been owing my tiny company just below US$2,000 for more than four years now. I’ve given up. Is this the attitude the Emiratis brought in with their Etisalat foray into Nigeria?

We hailed Etisalat as much-needed foreign investors when they came. Newspaper editors did features on them. They were said to have brought in US$2 billion. But they must have remitted all they brought, while playing with Nigerian money. While noting that many foreign investors dine with Nigeria with a long spoon, and always make a note to outsmart us (even though we shouldn’t be in a contest), the rest of them have lately invested in businesses like real estate, where a drive around Abuja and other capital cities will reveal several expensive ghost estates; overpriced asset currently decaying where they stand. I visited a few lately and it’s scary. I don’t know how Nigeria will resolve this problem.

But it is not really just a foreign investor issue. Just last week, we learnt about how bank directors in Nigeria were ‘directly’ responsible for 40% of the bad loans sitting on our banks’ books (₦1.85 trillion). Insider dealing is rife. People take it for granted these days. Nigerians have become more carefree than ever in these matters, after all, serial bad debtors emerge as bank chairmen in Nigeria. Our people simply cannot be trusted with money. If the money is there, whether it is theirs to take or not, they just take it. And they have no limits. These are comfortable people. But until they ruin the organizations that they direct, they never stop. And this is why many people in government and the public sector also snigger at us that we private sector hacks should first deal with the log in our eyes before putting the blame for Nigeria’s collapse on their heads.

Yet there is no executive course in Harvard, Princeton, MIT or Stanford where you will not find at least a Nigerian delegate, especially in the business departments. We wear our degrees and certificates like badges of honour. We judge people by those certificates and hardly have any moment of introspection to question whether having those certificates is what it really takes. So one wonders if these executives of ours learnt anything worthwhile in those places. Were they taught ethics, or the value of integrity? Were there perhaps courses on sustainability and how to ensure that their organizations survive into the future no matter what? Were they taught delayed gratification and the need to have moderation in anything they do? Were they taught strategy at all? For if they were, how come almost none of them have deployed strategies to ensure they don’t run into quicksand and have to demand for government bailouts every two years? We are yet to resolve most of the loans in AMCON, and their friends are pushing for AMCON 2 already? It takes bad genius to lose so much money, I believe.

…what is more remarkable is that in Germany, they don’t believe in this way of doing business. As a matter of fact, this fairly recent and unsustainable phenomenon whereby people have to live on loans (mortgage, business, credit cards etc.) is alien to Germany. Wages have been stable for years in Germany…

But I recall my own short Harvard experience. We were told by the professors about Michael Jensen, one of the tough Harvard professors who used to preach crass capitalism. He believed that the concern of the managers of a company should be the maximization of profits, full stop. Not for him all that talk of having a stakeholder view. Unfortunately for Jensen, he was still teaching at Harvard when the dotcom bubble bust around year 2000, and his undergrad students started pelting him objects whenever he wanted to continue his rubbish talk. He had to resign from Harvard to go into private practice. Maybe Jensen’s lecture is the type our executives attended very attentively.

I take a better experience from the Germans. Those people will rule the world one day – hopefully not through the instrument of war. They have since enshrined the involvement of staff on the directorship of their large companies to create controls. They are also giving serious opportunities to women. Germany is the vocational skills capital of the world as well. But what is more remarkable is that in Germany, they don’t believe in this way of doing business. As a matter of fact, this fairly recent and unsustainable phenomenon whereby people have to live on loans (mortgage, business, credit cards etc.) is alien to Germany. Wages have been stable for years in Germany without Germans feeling shortchanged but enabling the country to produce goods and services cheaper than its European neighbours, thereby crowding out other European economies. If you go to Germany today, best go with your cash. They don’t do all that card business. People don’t understand why you have to eat in a restaurant and pay with a credit card. It is in Germany that one of the Tata billionaire brothers was fined for wasting food at a restaurant. They abhor waste of any kind.

Most Germans rent houses till they die, and they die happy. They don’t put themselves under unnecessary pressure or get into trouble while trying to keep up with the Joneses the way the rest of us have become; the way it is now taught in business schools, where its all about the Top 50 Richest List, Richest People Under 40 Years Old, etc. and the companies posting the highest returns. Certainly a lot is wrong with these business school teachings and certificates, and we have a lot to learn from other business models.

Let me close by sharing this anecdote:

A boat was docked in a tiny Mexican fishing village.
A tourist complimented the local fishermen on the quality of their fish and asked how long it took to catch them.
“Not very long” they answered in unison.
“Why didn’t you stay out longer and catch more?”
The fishermen explained that their small catches were sufficient to meet their needs and those of their families.
“But what do you do with the rest of your time?”
“We sleep late, fish a little, play with our children, and take siestas with our wives. In the evenings, we go into the village to see our friends, have a few drinks, play the guitar, and sing a few songs. We have a full life.”
The tourist interrupted, “I have an MBA from Harvard and I can help you! You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat.”
“And after that?”
“With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers.
Instead of selling your fish to a middle man, you can then negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to Mexico City, Los Angeles, or even New York City!!! From there you can direct your huge new enterprise.”
“How long would that take?”
“Twenty, perhaps twenty-five years,” replied the tourist.
“And after that?”
“Afterwards? Well my friend, that’s when it gets really interesting,” answered the tourist, laughing. “When your business gets really big, you can start buying and selling stocks and make millions!”
“Millions? Really? And after that?” asked the fishermen.
“After that you’ll be able to retire, live in a tiny village near the coast, sleep late, play with your children, catch a few fish, take a siesta with your wife and spend your evenings drinking and enjoying your friends.”
“With all due respect sir, but that’s exactly what we are doing now. So what’s the point wasting twenty-five years?” asked the Mexicans.

And the moral of this story is:

Know where you’re going in life, you may already be there!

Many times in life, money is not everything.

“Live your life before life becomes lifeless”

‘Tope Fasua, an Economist, author, blogger and entrepreneur, can be reached through topsyfash@yahoo.com.

Originally published on PREMIUM TIMES

PALAVER TREE COMMENTARY: NYSC As A Metaphor For Nigeria — Feyi Fawehinmi

A batch of members of the National Youth Service Corps scheme

The National Youth Service Corps (NYSC) Scheme has been in the news lately following the death of three ‘Corpers’ across the nation. In most countries, tragic events like these would lead to a bout of soul-searching followed by a rash of reforms to ensure such avoidable deaths do not happen again. But Nigeria is not most countries.

I dislike the NYSC programme and think it is a waste of time and resources. But my reasons for not liking it are slightly different – I think it is an unfair way for government to spend money.

Let’s start from the beginning. Depending on who you ask, there are between 8 and 10 million Nigerian children between the ages of 7 and 14 who are not in school at all. Government doesn’t spend any money on these kids as they are not even in the system. To be fair, primary education is the responsibility of state governments but if these kids don’t get into primary school at all, they cannot get into secondary school where the federal government starts spending money on them.

The Federal Government takes over the funding of education from the secondary school level. Taking the 2016 budget as our guide, the amount spent on all the secondary schools in Nigeria by the federal government comes to just under N40bn. The budget lists 104 secondary schools that share this money. But between primary and secondary school, an estimated 7.2 million children, aged between 15 and 19 had dropped off, based on 2010 figures. The real problem appears to be crossing from Junior Secondary School (JSS) to Senior Secondary School (SSS). In some states, only 16% of children cross this hurdle.

You can see the numbers are adding up. Millions don’t enter the pipeline at all and millions more drop off along the way. The whole thing looks like some kind of hunger games or survival of the fittest. Based on 2013 figures, only 1.7 million candidates registered to write UTME conducted by JAMB for admission into university. They were competing for just 400,000 places which meant that another 1.3 million students had to drop off. And how much does the federal government then spend on the ‘lucky’ few hundred thousand who make it into higher institutions? In the 2016 budget, a total of 90 higher institutions shared an incredible ₦325bn – 68% of the entire education budget.

So to recap. If you are lucky enough to even get into primary school at all, you have tried. Government will spend some coins on you. If you are persistent enough to get through to secondary school, you get more money spent on you by government. If you then make it to university at all, government then opens the funding tap to educate you. And then, if you are able to make it out of higher institutions, you then qualify for even more spending via the NYSC programme. By university, the damage is usually done – if you had not been properly educated through primary and secondary school, you’re unlikely to make it up in university.

In 2016, the federal government budgeted ₦67bn to be spent on something like 260,000 youth corpers taking part in the NYSC programme.

To make matters worse, the ₦19,000 the government pays ‘corpers’ monthly is not means tested. Whether you are rich or poor, you get paid the money. Whether you want it or not, you get it. Unsurprisingly, the programme is now struggling given the crisis in the government’s finances. Why do we do things this way?

It is bad enough that government is pouring the vast majority of the resources on the end of the education process after millions of children and students have fallen away. It then adds insult to injury by spending twice what it spends on secondary education on paying and camping corpers for one year. Does it not matter that we are failing millions of children who don’t even enter into school at all and those who fall by the wayside? Money is not infinite which means that money spent in one place cannot be spent in another place. Every naira spent is a trade-off of one need for another. And the way we spend money on education says a lot about the kind of country we are.

A lot of people do not want to take part in the NYSC programme. That means there are people who will gladly give up the money government is paying them just to get out of the programme. Yet, government insists on paying them. There are some who don’t mind doing it, this is fine. Surely the solution to this is to make the programme voluntary so that the government is only paying those who really want to be there (and saving money in the process)?

The NYSC programme is a metaphor for Nigeria. Even when things are obviously in need of change, it is as if they cannot be changed.

Edmund Burke once said that a state without the means of some change is without the means of its conservation. If you are unable to change things even when it is obvious that they need to be changed, then you are condemned to slow decay.

Is Nigeria capable of self-correction? The National Assembly is now talking about NYSC as a result of the recent deaths. But what happens when things go quiet again? Will we just continue with the programme as if it’s ok and does not need reform? Even saving half of the cost of NYSC and pouring it into secondary education will do wonders.

A country that spends all its money on the few who are able to make it to the end of a brutal process while ignoring the millions who fall by the wayside is a country without the means of its conservation.

Originally published on The Guardian Nigeria

PALAVER TREE COMMENTARY: Avoiding Job Scammers’ Trap — Ijeoma Thomas-Odia

NAIJAGRAPHITTI MONTAGE

By Ijeoma Thomas-Odia

With the desperation brought about by increasing unemployment in the country, more people are beginning to fall victims of job scams. And though this trend has been on for quite a while, concerns have risen, as it is taking new dimensions, with the con men and women daily inventing ‘innovative’ strategies to lure their victims. It has gone so far that people now receive invitation for jobs they didn’t apply for or are knowledgeable about. People are inundated with all sorts of ingenious job proposals and invitations that the undiscerning is easily hoodwinked.

Interestingly, experts are of the opinion that there are more jobs available than those seeking them. They, however, caution job seekers to be wary of scammers disguising as potential employers or employment links, by being more alert and inquisitive. A job seeker, they said, should have enough self-confidence and self-worth to avoid falling prey to scammers.

Yemi Oyefolu, Business Manager, Human Resource Services for Workforce group, explained that there are a lot of naïve people out there looking for jobs and when job seekers become desperate, they are susceptible to all kinds of scams. In addition, the current economic recession in the country has heightened the situation, as the Labour market is over saturated with the entrance of a large number of people that have lost their jobs. Consequently, otherwise intelligent people have become vulnerable and are easy targets of scammers, who appear to be thriving because of all these factors.

“However, it should be noted that scammers do not have any job to offer in the first place,” Oyefolu said. “They will only be asking their victims to pay some money in a bid to get non-existing jobs. Companies that genuinely give jobs don’t just place adverts asking people to come for the jobs. There is always a procedure and structure in place to ensure that people are employed. A lot of people are so blinded to notice these faults and they just keep following and getting into the wrong hands, till they realize there’s no job.”

Oyefolu explained that most licensed recruiters have a guideline they adopt from the Ministry of Labour, and there is also the recruiter’s licence every company needs to get, if they will be recruiting staff.

“The ones that have these licences will go by the regulations of the Ministry of Labour, while the job scammers do not have such licence,” he said.

So, how can one go about identifying job scammers?

“If you walk into a company and they tell you they want to recruit you as a staff, the first thing you should do is to go to their website,” Oyefolu explained. “Some companies will not openly come out with their names, because they don’t want people to know they are the ones recruiting, and which is understandable. But when such companies invite you for an interview, you should observe from their procedures that they are a reputable organization.

“As a job seeker, you are expected to ask questions for clarity. You are also not supposed to pay any fee, as it is against the law to do so. Recruitment agencies will not ask you to pay money because they are getting money from their clients. It can only be a scam, if a fee is involved from the job seeker.”

He said most recruitment agencies would not come out to say they are recruiting staff for a particular private company. So, it is only after series of tests and interviews that the job seeker can begin to discern, if it is for a financial institution or any other.

In Oyefolu’s view, the present poor educational standard in the country is mainly responsible for this unsavoury state. He said: “We have all these half-baked graduates with little or no self-esteem or confidence. So, whenever they see a shortcut they jump at it. You find people saying, ‘If you pay me ₦10,000 now, I will get you a job’, even when they know that such agents have no qualification, yet they fall for it. When a job scammer takes even ₦5,000 from 100 people with the same request, then he has made ₦500,000 and that is a lot of money. Some can go as low as ₦1,000 to get more people to sign in, and then they make a lot of money.

“Although there are genuine and decent jobs, but then the way these are handled makes it look suspicious. For instance, you have five job openings, but you send out invitation to thousands, while asking them to pay a certain amount. This means if you don’t pay that money, no matter how qualified you are, you can’t get the job.”

On the way out of the problem, he said, “The Ministry of Labour should further strengthen their regulations. There are some job scams that are syndicates and the Ministry is aware of them. Regulating this sector cannot be achieved by an individual. It is only the Ministry of Labour that can put the required structures in place.

“For a recruitment firm like ours, you spend about ₦200,000 to get the licence and then ₦2m to get an insurance, which covers a fidelity bond that protects staff salaries or entitlements due to them, as well as, ensures that a company does not engage in illegal practices. If a company goes through all that stress to get these licences and follow the law, then it also needs to be protected in a way.

“So, the Ministry of Labour should be responsible for clamping down on unwholesome recruiting processes, because this is bad business for most of us who are in it legally, though at every forum, we see government’s efforts in achieving this, but then it is not enough.”

He is particularly worried by this trend because it is having a backlash on registered recruitment companies like his.

“Such undesirable conducts hinder our work, because when you need people to apply for a position, and you send out job applications, sometimes there are no responses, especially when there are no details about such job. With this, we lose the client and money, which is affecting our business,” he said.

Originally published in The Guardian Nigeria

PALAVER TREE COMMENTARY: How Team GB Rose From One Gold At Atlanta ’96 To ‘Sporting Superpower’ At Rio 2016

Twenty years ago, Nigeria finished above Great Britain at the 1996 Summer Olympics in Atlanta, United States. The most surprising achievement was Nigeria's gold in football. Medals · Rank: 32, Gold 2, Silver 1, Bronze 3, Total 6. TEAM GB was ranked 36th in the medal table, with just one gold, at the Atlanta Olympics in 1996. 

In Brazil, at the 2016 Rio Olympics, Great Britain finished 2nd with a total of 67 medals out of which 27 was gold while Nigeria finished 78th with one bronze medal.

Gold medallist Britain’s Andy Murray poses on the podium of the men’s singles gold medal tennis event at the Olympic Tennis Centre of the Rio 2016 Olympic Games in Rio de Janeiro on August 14, 2016. / AFP PHOTO / Luis Acosta

A nation showing others how to plan for Olympic Games

It has been an Olympic fiesta like never before for Britain: their best medal haul in 108 years, second in the medal table, the only host nation to go on to win more medals at the next Olympics.

Never before has a Briton won a diving gold. Never before has a Briton won a gymnastics gold. There have been champions across 15 different sports, a spread no other country can get close to touching.

It enabled Liz Nicholl, chief executive of UK Sport, the body responsible for distributing funds from national government to Olympic sports, to declare on the final day of competition in Rio that Britain was now a “sporting superpower”.

Only 20 years ago, GB were languishing 36th in the Atlanta Olympics medal table, their entire team securing only a single gold between them. This is the story of a remarkable transformation.

As that nadir was being reached back in 1996, the most pivotal change of all had already taken place.

The advent of the National Lottery in 1994, and the decision of John Major’s struggling government to allocate significant streams of its revenue to elite Olympic sport, set in motion a funding spree unprecedented in British sport.

From just £5m per year before Atlanta, UK Sport’s spending leapt to £54m by Sydney 2000, where Britain won 28 medals to leap to 10th on the medal table. By the time of London 2012 – third in the medal table, 65 medals – that had climbed to £264m. Between 2013 and 2017, almost £350m in public funds will have been lavished on Olympic and Paralympic sports.

It has reinvigorated some sports and altered others beyond recognition.

Gymnastics, given nothing at all before Atlanta, received £5.9m for Sydney and £14.6m in the current cycle. In Rio, Max Whitlock won two gymnastics golds; his team-mates delivered another silver and three bronzes.

As a talented teenage swimmer, Adam Peaty relied on fundraising events laid on by family and friends to pay for his travel and training costs. That changed in 2012, when he was awarded a grant of £15,000 and his coach placed on an elite coaching programme. In Rio he became the first British male to win a swimming gold in 28 years.

There are ethical and economic debates raised by this maximum sum game. Team GB’s 67 medals won here in Brazil cost an average of £4,096,500 each in lottery and exchequer funding over the past four years.

As determined by the Sport Industry Research Centre

At a time of austerity, that is profligate to some. To others, the average cost of this Olympic programme to each Briton – a reported £1.09 per year – represents extraordinary financial and emotional value. Joe Joyce’s super-heavyweight silver medal on Sunday was the 700th Olympic and Paralympic medal won by his nation since lottery funding came on tap.

“The funding is worth its weight in gold,” says Nicholl.

“It enables us to strategically plan for the next Games even before this one has started and makes sure we don’t lose any time. We can maintain the momentum of success for every athlete with medal potential through to the next Games.”

The idea of marginal gains has gone from novelty to cliche over the past three Olympic cycles, but three examples from Rio underline how essential to British success it remains.

In the build-up to these Olympics, a PhD student at the English Institute of Sport named Luke Gupta examined the sleep quality of more than 400 elite GB athletes, looking at the duration of their average sleep, issues around deprivation and then individual athletes’ perception of their sleep quality.

His findings resulted in an upgrading of the ‘sleep environment’ in the Team GB boxing training base in Sheffield – 37 single beds replaced by 33 double and four extra-long singles; sheets, duvets and pillows switched to breathable, quick drying fabrics; materials selected to create a hypo-allergenic barrier to allergens in each bedroom.

“On average, the boxers are sleeping for 24 minutes longer each night,” says former Olympic bronze medallist and now consultant coach Richie Woodhall.

“When you add it up over the course of a cycle it could be as much as 29 or 30 days’ extra sleep. That can be the difference between winning a medal or going out in the first round.”

Members of the British Olympic Team take photographs with their medals after they arrive back from the Rio 2016 Olympic Games in Brazil, at Heathrow airport in London on August 23, 2016. Twenty years after a stinging Olympic failure, Britain has risen from the ashes to become a sporting “superpower”. Rival nations have been left confounded by Team GB’s cool performance with 27 golds out of 67 won in Rio which gave them second place in the medals table behind the United States. Justin TALLIS / AFP

In track cycling, GB physio Phil Burt and team doctor Richard Freeman realised saddle sores were keeping some female riders out of training.

Their response? To bring together a panel of experts – friction specialist, reconstructive surgeons, a consultant in vulval health – to advise on the waxing and shaving of pubic hair. In the six months before Rio not a single rider complained of saddle sores.

Then there is the lateral thinking of Danny Kerry, performance director to the Great Britain women’s hockey team that won gold in such spectacular fashion on Friday.

“Everyone puts a lot of time into the physiological effects of hockey, but what we’ve done in this Olympic cycle is put our players in an extremely fatigued state, and then ask them to think very hard at the same time,” Kerry told BBC Sport.

“We call that Thinking Thursday – forcing them to consistently make excellent decisions under that fatigue. We’ve done that every Thursday for a year.”

Britain won that gold on a penalty shootout, standing firm as their Dutch opponents, clear favourites for gold, missed every one of their four attempts.

That hockey team featured Helen and Kate Richardson-Walsh, in their fifth Olympic cycle, mentoring 21-year-old Lily Owsley, who scored the first goal in the final. A squad that won bronze in London were ready to go two better in Brazil.

“We’ve retained eight players who had medals around their necks already,” says Kerry. “We added another eight who have no fear.

“It gave us a great combination of those who know what it’s all about, and those who have no concept at all of what it’s all about, and have just gone out and played in ruthless fashion.

Great Britain’s 16-year Amy Tinkler during the women’s team gymnastics final in Rio

“We get carried away with some of the hard science around sport, but there’s so much value in how you use characters and how you bring those qualities and traits to the fore. You see that on the pitch. Leverage on the human beings as much as the science.”

In the velodrome, experience and expertise is being recycled with each successive Games.

Paul Manning was part of the team pursuit quartet that won bronze in Sydney, silver in Athens and gold in Beijing. As his riding career came towards the end, he was one of the first to graduate through the Elite Coaching Apprenticeship Programme, a two-year scheme that offered an accelerated route into high-performance coaching for athletes already in British Cycling’s system.

In Rio he coached the women’s pursuit team to their second gold in two Olympics, his young charge Laura Trott also winning omnium gold for the second Games in a row.

Then there is Heiko Salzwedel, head of the men’s endurance squad, back for his third spell with British Cycling having worked under the visionary Peter Keen from 2000 to 2002 and then Sir Dave Brailsford between 2008 and 2010.

Expertise developed, expertise retained. A culture where winning is expected, not just hoped for.

“We have got the talent in this country and we know that we can recruit and keep the very best coaches, sports scientists and sports medics,” says Nicholl.

“It is now a system that provides the very best support for that talent.”

Funding has not flowed to all British sports equally, because in some there is a greater chance of success than others.

On Lagoa Rodrigo de Freitas, Britain’s rowers dominated the regatta, winning three gold medals and two silvers.

With 43 athletes they also had the biggest team of any nation there. Forty-nine of the nations there qualified teams of fewer than 10 athletes. Thirty-two had a team of just one or two rowers.

Only nine other nations won gold. In comparison, 204 nations were represented in track and field competition at Rio’s Estadio Olimpico, and 47 nations won medals.

British efforts in the velodrome, where for the third Olympics on the bounce they ruled the boards, were fuelled by a budget over the four years from London of £30.2m, up even from the £26m they received in funding up to 2012.

In comparison, the US track cycling team – which won team pursuit silver behind Britain’s women, and saw Sarah Hammer once again push Trott hard for omnium gold, has only one full-time staff member, director Andy Sparks.

Then there is the decline of other nations who once battled with Britain for the upper reaches of the medal table, and frequently sat far higher.

In 2012, Russia finished fourth with 22 golds. They were third in 2008 and third again in 2004.

This summer, despite escaping a total ban on their athletes in the wake of the World Anti-Doping Agency’s McLaren Report, they finished with 19 golds for fourth, permitted to enter only one track and field athlete, Darya Klishina.

Australia, Britain’s traditional great rivals? Eighth in 2012, sixth in Beijing, fourth in Athens, 10th here in Brazil.

As Team GB have risen, others have fallen back.

In Rio, 129 different British athletes have won an Olympic medal.

Gold medallist Britain’s Mo Farah celebrates near the podium for the Men’s 5000m during the athletics event at the Rio 2016 Olympic Games at the Olympic Stadium in Rio de Janeiro on August 20, 2016. PHOTO: Eric FEFERBERG / AFP

It is a remarkable depth and breadth of talent – a Games where 58-year-old Nick Skelton won a gold and 16-year-old gymnast Amy Tinkler grabbed a bronze, a fortnight where Jason Kenny won his sixth gold at the age of 28 and Mo Farah won his ninth successive global track title.

The abilities of those men and women has been backed up by similar aptitude in coaching and support.

In swimming there is Rebecca Adlington’s former mentor, Bill Furniss, who has taken a programme that won just one silver and two bronzes in London and, with a no-compromise strategy, taken them to their best haul at an Olympics since 1908.

In cycling, there has been the key hire of New Zealand sprint specialist Justin Grace, the coach behind Francois Pervis’ domination at the World Championships, a critical influence on Kenny, Callum Skinner, Becky James and Katy Marchant.

“We have got the talent in this country, and we know we can recruit and keep the very best coaches, sports scientists and sports medics,” says Nicholl.

“It is a system that provides the very best support for that talent. We do a lot in terms of people development. We are conscious when people are recruited to key positions as coaches they are not necessarily the finished article in their broader skills.

“We provide support so that coaches across sports can network and learn from each other. That improves their knowledge expertise and the support systems they’ve got.”

It is an intimidating thought for Britain’s competitors. After two decades of consistent improvement, Rio may not even represent the peak.

Originally published in BBC Sport