Mike Hohnen

Coaching for personal growth, change and development

Meeting ROI

Are you in a broken market?

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This beautiful comment from Seth Godin struck a raw nerve with me.

In the ongoing discussion that I have been having on this blog and with clients about the meeting market we also need to ask that question: is it a broken market?

Read this and tell me what you think:

What every mass marketer needs to learn from Groucho Marx

Perhaps the most plaintive complaint I hear from organizations goes something like this, “We worked really hard to get very good at xyz. We’re well regarded, we’re talented and now, all the market cares about is price. How can we get large groups of people to value our craft and buy from us again?”

Apparently, the bulk of your market no longer wants to buy your top of the line furniture, lawn care services, accounting services, tailoring services, consulting… all they want is the cheapest. The masses don’t want a better PC laptop. They just want the one with the right specs at the right price. It’s not because people are selfish (though they are) or shortsighted (though they are). It’s because in this market, right now, they’re not listening. They’ve been seduced into believing that all options are the same, and they’re only seeing price. In terms of educating the masses to differentiate yourself, the market is broken.

Fixing this is almost always a losing battle. Just because you’re good at something doesn’t mean the market cares any longer.

The Marx Brothers were great at vaudeville. Live comedy in a theatre. And then the market for vaudeville was killed by the movies. Groucho didn’t complain about this or argue that people should respect the hard work he and his brothers had put in. No, they went into the movies.

Then the market for movies like the Marx Brothers were making dried up. Groucho didn’t start trying to fix the market. Instead, he saw a new medium and went there. His TV work was among his best (and certainly most lucrative).

It’s extremely difficult to repair the market.

It’s a lot easier to find a market that will respect and pay for the work you can do. Technology companies have been running this race for years. Now, all of us must.

If Wal-Mart or some cultural shift has turned what you do into a commodity, don’t argue. Find a new place before the competition does. It’s not easy or fair, but it’s true. You bet your life.

[Please note that nothing I wrote above applies to niche businesses. In fact, exactly the opposite does. You can make a good living selling bespoke PC laptops or doing vaudeville today, even though the mass of the market couldn’t care a bit. How he got in my pajamas, I’ll never know…]

Blatantly copied from one of my favorite blogs Seth Godin – read more here

Is the meeting industry doomed?

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Kodak did not loose the market for paper film because of Fuji or Agfa. The market for film was replaced by digital cameras. British Airways need not worry to much about Lufthansa or SAS – Ryan Air is a problem and so on.

In these examples what has happened is that competition has come from where it was least expected and in both cases this competition was initially ignored as not significant – “they are not delivering the kind of quality that we do” – and bam! One day we wake up and Ryan Air is a huge airline business and we all have digital cameras in our pockets – even the pro’s

This has happened in industry after industry ever since the buggy whip business was exterminated by automobiles. Why and how this happens is well documented by Clayton Christensen in his wonderful book : The Innovators Dilemma

The same shift in client behavior is now occurring in the meeting and conference industry. The competition is not from other regular players in the market but from a combination of events that together have created a perfect storm. Once the storm is over the market will never be the same again.

The elements that are causing this are:

1. The financial crisis has forced business to be more careful how they spend their money so they question the value of every thing – if it is not adding value why are we doing it? ROI i now a key requirement – see more here

2. CSR – The realization that we need to curb our Co2 emissions and one of the big sinners in this is of course travel. (It is also a convenient excuse to cut travel cost)

3. Time pressure on every one means that we are are all looking for ways to cram more into the same 24h/7d week /360d year frame – there is now mores stuff to do, read, see than we have ever experienced before and that means prioritizing. Asking one self hard questions like: is this worth the effort ( travel, money, another night away from home etc).

4. Web 2.0 the big shift from web 1.0 is the ability to interact – real time two way communication on the web. Virtual classrooms, breakout rooms – web casts etc. There is a whole new industry that is growing rapidly and that sees a huge opportunity to replace the traditional meeting environment with a virtual environments. Brush up on Web 2.0 and learning here

Points one 1-3 are the problems we would all like to see solved and point 4 seems to be a possible solution. Not perfect but it works and is easy ( Just like digital cameras)

“At IKEA Virtual Meetings should always be first choice”

Progressive business are responding fast. IKEA has a campaign running called Meet More Travel Less

Tandberg, TNT and Vodaphone are others also working on this.

TANDBERG – 100 000 video calls per month – 2500 flights avoided, 2,5M$ saved on business trips (30M$per year) – 17500 man-hour saved per month – 275 tons of CO2 saved per month

TNT – On track to save nearly11,5 $ in 4 years by replacing travels with videoconferencing – ROI:71%

VODAFONE – 25% reduction in business trips in 2 years – Resulting in double digit millions of cost savings

The response from the meeting industry is ahh.. no need to worry, virtual meetings will never be as good as f2f meetings.

Perhaps not but that is exactly what Kodak said about digital cameras, What BA said about the zero service concept from Ryan Air and what the vinyl record producers said about music on CD’s.

So is there no hope for the meeting industry – yes there is but we need to understand how to deliver value. Class rooms and serial power point monologue are not the solution.

The problem with creating value in the traditional meeting and conference set up is that it is very limited – there is often a short term entertainment value, the odd aha experience – but that’s it.

In a situation where we are all under pressure. Supply, by far, outstrips demand in virtually all industries and services – most business’ create meetings and conferences in order to help participants change – but as any one who has tried to get a teenager to clean up their room by telling them to do so, will recognize, we do not change because someone tells us to do so ( there would be no smokers left in the world if that where the case) Telling does not work.

We change when we arrive at our own conclusions. ( if you do not believe me read Change or Die that will help you reach your own conclusion)

So having one or even worse a series of speakers stand up and tell us what to do, think or feel in order to cope with change is relatively useless – the ROI is negligible – and in that connection the speakers fee is not the main cost, it is the time and travel of the participants.

In order to create real change we need to gather people in order for them to interact. Change requires learning and learning is collaborative – no I do not mean 10 min of ‘networking at the coffee break – but real meaningful conversations – deep dialog.

Only through dialog will you get people to reach their own conclusions and then hopefully act on them. Yes we can have inspirational input if it is short, sweet and to the point AND gets people thinking and talking.

But this will require the meeting industry to radically change their formats,( venues, room, seating,speaking formats, tools, etc) those that do will survive those that don’t will join the buggy whip business as interesting business cases for future students to smile at.

Are you the frog in the pot?

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During summer, a period notoriously known for its lack of news, the media seem to have been very busy reporting and analysing a steady news stream predicting their own demise. We have seen headlines such as ‘Not dead yet’ or ‘Thinking the unthinkable’ the latter referring to a possible scenario in a not too distant future where the New York Times is no longer published — not on paper at least.

If you have not followed the discussion the crux of the matter is very well summed up in the following video clip:

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
End Times
www.thedailyshow.com
Daily Show
Full Episodes		 Political Humor Joke of the Day

My point here is not so much to enter into the discussion — to me the conclusion is inevitable — but to point out the fact that once again an industry has been caught out by the famous frog syndrome.
( if you drop a frog into a very hot water it will do its very best to scramble and get out, if however you put it in a pot of cold water and heat the pot slowly, the frog will not try to get out before it’s too late ) i.e. not responding to gradual changes in your environment. The situation in which print media finds itself today was predicted five if not 10 years ago. They just all hoped that the pot would not get too hot. In 10 years time this will be a classic business school case in line with the one about the buggy whip manufacturers, typesetting and landline telephones.

So how does that relate to the world of hotels, travel and conference centres? Well – I think there is a similar shift taking place in our environment. Well possibly not directly in our own environment but in the environment that provides us with our business.

There are three key drivers of this shift: The financial crisis, energy/co2 awareness and Web 2.0 together they have inspired a growing number of business leaders to rethink the need for travel and face-to-face meetings.

IKEA a trendsetting company is running an internal campaign under the banner of: Meet more – travel less. Encouraging the use of interactive web technology for meeting purposes while at the same time reducing travel costs and CO2 emissions. The target for 2009 is to reduce travel by 50 percent and CO2 emission as a consequence by 25 percent. And they are not the only ones, they are just very visible in the way they do it.

It makes sense. Cramming 20, 50 or 500 people into a conference room and feeding them an endless parade of PowerPoint slides, be they ever so pretty and well-designed is not efficient knowledge transfer, (let alone learning) We know that.

Ah but wait – I hear you say – what about the networking? That is the truly important part of meetings – it may be important, but traveling 4 or 6 hours, spending 2 days away from the job and then taking a chance on who you share the stand-up coffee table with during a 10 minute break is not efficient networking.
You could spend an hour systematically working LinkdIn, Facebook or even Twitter and you would probably produce some far more interesting connections and possibilities. So lets not kid ourselves about the networking.

And there is a fourth driver adding to this:

“During the next 5-10 years, the Millennium generation will become a signi?cant proportion of meeting participants. This is perhaps the largest generation gap in history and the consequences for meetings will be fundamental. If meetings for the older generations serve the purposes of information and networking, this means online communities, such as Facebook and MySpace to the younger generations, and they learn from Google, Wikipedia and online peers more than parents, teachers
and conference speakers. They don’t see the difference between virtual and real any more than they see why work and play should not happen at the same time. ” From The Meeting Manifesto

But it is not just meeting planers who are shifting their focus to ROI – the other sector where we can see a shift is taking place as well is within the training industry. Traditional training companies are also in the hot pot if they still believe in classrooms and PowerPoint’.

“Learning budgets are decreasing. Spending on external services are decreasing even more. And learning departments need to do more with fewer resources.

If you are inside a corporate learning department, assuming you still have your job, then you feel this by being more busy. In many ways, that’s not a bad feeling compared to either the person who lost their job. Or the people who have seen their learning business crushed by this”
Read more here

So two major purchasers of hotel rooms, F&B and meeting space, the meeting organizers and the training companies are in this shifting paradigm. Looking for new solutions and ways to connect but with out the travel. What was once a considered a perk – is now almost a curse.

Meetings and tourism are now two different worlds.

Tourism is all about pleasure and experiences which is fine, but meetings/training are business and business means somebody is looking for a return on investment. If there is no ROI or if it is too low, meetings (gatherings/trainings etc) in their current form will be cut.

That is what is happening in the market just now.

And if you think that once the so-called crisis is over then everything will be back to normal and we can do business as usual then and you have just joined all those very uncomfortable newspapermen in their very hot pot.

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If you would like to pursue this subject here are a few links that you may find interesting:

European Event ROI Making Meetings and Events More Profitable.

The Meeting Architecture Manifesto

The state of Learning as a Business