Innovation at the Olympics

What equipment finance companies can learn from the summer games

Over 30 million US viewers watched the 2024 Olympics this summer. Not only did they see some great competition and great personal interest stories, they also saw some great real-world examples of innovation. When one searches the web for “Olympics and innovation” the results are, not surprising, dominated by AI. But the stories returned are not about athletic innovation creating improved performances. Typical of many innovation discussions the Bing search results included game changing disruption and often focus on the impact of technology:

Innovation has played a significant role in the Olympics. Early innovations included electronic timing and advanced sports equipment, which improved accuracy and fairness in adjudicating events. In recent times, technologies like AI, Internet of Things, and 3D printing are transforming how athletes train and perform, making a significant impact in the modern Olympic Games.

We have stated before and will paraphrase again here: innovation is a change in the behavior of customers, of farmers, of doctors, of people in general that has an economic and/or social effect. Sports is a uniquely human social behavior, and the Olympics is the premier measure of athletic performance. As such Olympic medals are often the result of innovations and the 2024 Olympics had several great examples of how innovations in athletic technique created medal winning performances. We’ve captured three examples and in the spirit of the Olympics ranked them as the medals for Innovation at the 2024 Summer Olympics.

Bronze Medal – Put down your baggage. Winning is the objective, not how you get there.

Malcom Gladwell made “the 10,000-hour rule” popular in his book Outliers: The Story of Success. The Olympics is a collection of the best in the world in each event so it is not surprising that an innovation in how an athlete practices might create a better outcome. Indeed, new playing techniques are shown below to also be innovative, but in this case the innovation was the approach to practice and coaching.

One of the “viral stories” of the 2024 Olympics was the Swedish gold medal pole vaulter and the question “why was someone born in Louisiana not competing for the USA?” The answer was found in an innovation that the Swedish Olympic governing body used to attract the athlete. Armond Duplantis was born in the US to a Swedish mother and a American father who was himself an outstanding pole vaulter. The younger Duplantis’ recognized and attributed much of his early success to the coaching and mentorship he received from his parents. The US Olympic committee believed its tried-and-true system of developing and coaching athletes was “good enough” and refused Duplantis’ request to change their process. Sweden, a country with a consistently wholistic view of social and cultural endeavors, essentially said “We just want to win, so let’s see how it goes with mom and dad.” And win they did: Duplantis won the gold medal and set a new world record.

Winning and/or getting better is why business leaders covet innovation. But continuing with a process or method that “just works” is not a winning strategy. A wholistic view and a willingness to try new methods with a focus on winning is. In equipment finance an example of this kind of innovation is seen when companies embrace the risks of down-market credits or start up borrowers rather than just exclude them with policy as is the tradition of risk adverse lenders. Our recent analysis of over six thousand deals done with companies in business less than three years is that only 18% saw delinquencies over 90 days during the life of the contract. That means a “no startups” policy excludes over 80% of a fast-growing market segment led by ambitious entrepreneurs. A wholistic view with a focus on desired objectives can be both innovative and successful. As was demonstrated by the bronze medal team of Sweden, Armond Duplantis, and his family.

Silver Medal – Put away technology distractions and focus.

Simpler is better. When everyone else has jumped onto the technology band wagon, not doing the same can be innovative. Many great innovators were known to be non-conformists. Yusuf Dikec went viral with his “just a dad” look in the accessory-dominated sport of air pistol sharpshooting. His non-conformism was simplicity. Simple is almost always better when problem solving and, in this Olympics, simple was a solution for competitive focus. He and his partner surprised the competition with a singular focus on just one thing – hitting the bullseye.

Dikec’ shooting stance is the picture of simple. Clad in a “dad outfit” – T-shirt and pants – he fired his pistol with one hand in the pocket of his chinos. No fancy competitive fabrics, no safety glasses, or performance gloves for Dikec. Consistently hitting the target with a pistol is all about body control – breathing, posture, eye focus, and nerves. Dikec found that he did best when comfortable. Putting his hand in his pocket made him more comfortable and less distracted. He found that everyday clothes also made him more relaxed, so he stuck with those. His mixed-team sharpshooting partner used Dikec’s approach and together they hit the mark and won silver. Dikec didn’t conform with new high-tech eyewear and clothing. He innovated with simple to sharpen his competitive edge.

Gen AI is presenting a “simplicity” challenge to many equipment finance organizations today. They are told or believe that they need to adopt GenAI to be innovative, perhaps disruptively so. But the hype rarely describes which problems they apply it or how to apply the technology. Gen AI clearly has value for some businesses and enhances performance for some organizations, but it is not a panacea. Dikec’s example is on point for AI in equipment finance – stay focused on corporate mission and corporate results. AI will be important, but AI adopters can start with a simple question: “What could we predict to help us win more?” Both simplicity and non-conforming are often innovative in a competitive context.

Gold Medal – Small change wins big.

Our Gold medal for Innovation in the 2024 Olympics is also the most instructive. The Swedish men’s beach volleyball team made one simple change that led them to a fast-paced gold medal performance. At a young age David Ahman and Jonatan Hellvig found that they could not compete with bigger more experienced teams using the tried-and-true bump-set-spike sequence that everyone used. So, they made a change. Rather than focus on making a perfect set for a thunderous spike, they just focused on winning each point by hitting the ball where the other team isn’t. Instead of the setter keeping his feet solidly on the sand for a precise set, they switched to a jump-set which gave them the option, each point, to chose who would hit the kill shot. If the blocker goes after the hitter, the setter is in a position above the net to dump the ball to the sand. If the blocker goes after the setter, then set the hitter for an uncontested spike.

The Swedes raced through the field; they won the final round 21-10, 21-13. The competition could not change their defensive behavior fast enough to adapts to the Swedes’ small change creating two chances for a kill shot on every point. They didn’t use new technology, not even game tapes, and didn’t even invent the new technique. Jump sets have been available to all players for decades, but the Swedes changed their playing behavior and used the jump-set to innovate their way to a gold medal.

A jump-set in equipment finance might take several forms. A company can aggressively engage true leases with their residual value risk by adding additional monitoring through the inclusion of IoT and asset values available from equipment reselling sources. An established leasing company can add a floor-planning offering not just as a lower margin wholesale product but as a new channel for higher value retail leases. The right strategy can compete more effectively at the dealership by aligning and automating credit evaluations with a focus on conversions of wholesale to retail. Jump-set innovations don’t require completely new business models, but they are implemented to create new competitive advantages. They are harder to defend, just like the jump-set of the Swedes.

The Olympics are always inspiring. The performances of the athletes are outstanding, and the drama of head-to-head competition creates memories like "Do you believe in miracles!" But the competitions of athletes from all walks of life and all nations is also a showcase of innovation because the distribution of physical capabilities is so tight winning and losing often comes down to small differences in the behavior of the athletes. As a result we see medals won by small differences in coaching, simplifications in competitive focus, and changes in how the game is played. We see innovations implemented by highly trained professionals who are not afraid to experiment because they know they need any edge they can get to win at this level. For those who are interested, they also inspire innovation.