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Incentives and Travel Are Under Fire: How Should the Industry Respond?
March 03, 2009
By Steve O'Malley
Recently, several high profile corporations have come under scrutiny for their incentive programs, business meetings and other corporate events. In some instances, these companies have succumbed to unfair criticism and pressure to cancel these legitimate business programs that are effective tools for creating value for organizations.
As an industry we must do all we can to showcase the importance and value of incentives and travel in helping businesses succeed. Incentive travel and motivational events have the power to reward higher performance, ensure effective communications to customers or staff, improve customer service, spur innovation through enhanced collaboration and improve employee and channel partner engagement. Now more than ever, companies are battling to retain their top sales talent and customers. Increasing loyalty and commitment of employees and customers, and retaining talent, are all proven outcomes of these investments.
In addition, completely discontinuing meetings, incentive travel and events would exacerbate the economic downturn by negatively impacting the 2.4 million American jobs, $244 billion in spending and $29 billion in tax revenue generated by the travel industry. If companies stop meeting, the very people the government is trying to protect—the American worker, including blue-collar and service employees, convention workers, hotel workers, maid, laborers, restaurant staff, etc.—will be hurt.
Unfortunately, the back draft of the desire to rein in inappropriate executive compensation has caused many legitimate travel and incentive programs to be called into question. The negative publicity has begun to chill investment in this area, not just in financial services, but increasingly across other industries.
What can we do? It’s more critical than ever for organizations to make a concerted effort to invest in understanding, tracking and reporting on the business value created by travel and incentive investments. Immediately investing in Return on Investment (ROI) and Return on Objectives (ROO) measures, and instituting an organization-wide approach for ensuring the efficacy and transparency of their investments in this area, will mitigate the reputational risk associated with running programs in the current climate.
A good approach includes:
• Defining the business value created through the investment, such as:
• Improvements in product knowledge via employee learning or gaining customer insights.
• Greater personal commitment to business goals.
• Improved sales force productivity.
• Engaged customers, channel partners and employees.
• Establishing measurement criteria.
• Engaging participants in the co-creation of the incentive experience. This approach provides for more effective program design, as well as a clear decision-making path that avoids any implications of impropriety.
• Measuring outcomes and integrating these findings into a dynamic planning and continuous improvement process.
As an industry we must ACT now by:
• Aligning, measuring and reporting business results of travel and incentives investments across your entire organization.
• Communicating the value to stakeholders, including the public, regulatory bodies, employees and channel partners.
• Transforming travel and incentive investments and services models to be more transparent and accountable for business results.
The foundation for success can be summed up in one word: transparency. Companies must demonstrate spending transparency, or the ability to report on all investments being made in incentive programs across the organization. Transparency into the value created is another critical element. Finally, participant transparency requires engaging participants more fully in the co-creation of experiences, and gathering a 360 degree view of engagement across all meetings, corporate events and incentives.
The current tone of the public conversation has caused an unproductive "stop all meetings, events and incentives" reaction. A more thoughtful view should be to use this situation as a springboard to more effective investments and business performance.
Steve O'Malley, vice president, strategy, practice and industry relations, for Maritz Travel Company, has more than 15 years of experience in travel and hospitality. In his role, O'Malley is responsible for the Strategic Meetings Management practice, supplier qualification and managing and driving Maritz Travel's growth strategy. He is also a trustee of the International Site Foundation.
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