The Business Value of Meetings: Test Your Knowledge Jack J. Phillips PhD Chairman, ROI Institute, Inc.

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1 The Business Value of Meetings: Test Your Knowledge Jack J. Phillips PhD Chairman, ROI Institute, Inc. The Issue The recession has brought radical changes to the meetings and events industry. With the cuts in spending for meetings and events and the image of the value of meetings and events coming into question, there is more scrutiny than ever before. In the 2011 Global Survey of Chief Marketing Officers conducted by IBM, 63% of CMOs said that ROI will be the metric that matters by 2015, surpassing customer satisfaction, brand, and new accounts. As we continue to come out of the recession, the challenge is to connect more meetings and events to business value, particularly those corporate meetings that are designed to add business value, and major association meetings that need to provide value to their participants. From either perspective, the business value must connect the meeting to key improvement measures of productivity, quality, output, time, and efficiency. Some progress has been made, but much still needs to be done. This article provides a simple quiz to test your knowledge about the business value of meetings and events. Background Professional organizations in the meetings and events industry, aided in part by many hotels, resorts, and convention and visitor bureaus, has attempted to show the value of meetings and events in a variety of ways. In 2003, MPI tackled the issue head- on by selecting the ROI Methodology to be promoted within its membership. MPI teamed up with the ROI Institute to offer workshops, ROI certification, and books to help its members address this issue. One of the books, Proving the Value of Meetings and Events: How and Why to Measure ROI, co- published by MPI, was made available exclusively to MPI members. The Professional Convention Management Association supported the ROI Methodology and offered many sessions on the topic to introduce it to its members. Also, International Special Events Society (ISES) supported the same methodology in some of its programs. To date there have been three books published on this process for the industry. There are over 200 Certified ROI Professionals in the meetings and events industry. To achieve this designation the individual conducts an ROI study to be approved by the chairman of the ROI Institute. Jack Phillips, chairman of ROI Institute, Inc, was named one of the 25 most powerful people in the industry by Meeting News. Meetings and events professionals have flocked to webinars, seminars, workshops, meeting sessions, and even five- day ROI certification trainings to learn more about ROI. Types of Data While progress has been made, these efforts only scratched the surface. There is still much more to be achieved for the industry. For the most part, the industry has adopted a set of data that is accepted to reflect the outcomes for meetings, listed in Figure 1. Think about all of the meetings and events organized by you and your team. As an exercise, please enter your current status, indicating the percent of meetings evaluated at this level each year. What is clear is that executives, sponsors, clients, and others who fund meetings want more done on their business value. Otherwise, funding may diminish. The trend is disturbing for 1

2 the industry, according to the Wall Street Journal. Since 2000, exhibit- hall space has grown 35.4%, while attendance is down - 1.7%. Measurement in the Meeting and Events Field Level Measurement Category Current Status* Best Practice Comments About * Status O Inputs/Indicators Measures inputs into meetings and events including number of meetings, attendees, audience, costs, and efficiencies. 1 Reaction Measure reaction to, and satisfaction with, the experience, ambiance, contents, and value of meeting. 2 Learning Measures what participants learned in the meeting information, knowledge, skills, and contacts (take- aways from the meeting). 3 Application Measures progress after the meeting the use of information, knowledge, skills, and contacts. 4 Impact Measures changes in business impact variables such as output, quality, time, and cost- linked to the meeting. 100% This is being accomplished now. 100% Need more focus on content and perceived value % 15-25% Must use simple learning measures. Need more follow- up. 10% This is the connection to business impact. 5 ROI Compares the monetary benefits of the business impact measures to the costs of the meeting. *Percent of meetings and events evaluated at this level. 5% The ultimate evaluation. Figure 1 - Measurements and Meetings and Events Field 2

3 These levels show a progression of data as a participant reacts to a meeting, learns new information or skills, uses those skills and information in their work or life situations and consequently generates an impact in their world or in others around them. When monetary value is placed on these impacts and is compared to the cost of the meeting or event, the financial ROI is developed. ROI can be developed from the corporate perspective, the individual participant s perspective, the sponsor s perspective, or the exhibitor s perspective. Dozens of case studies are now available representing all of these different perspectives. Take the Test Now, take a few minutes and take the test. Figure 2 shows a list of statements about the value of meetings and events and how the different levels relate. Check either, Usually True or Usually False. Be careful, this could be a little tricky. Issues About the Business Value of Meetings and Events Issues Usually True 1. A positive reaction to a meeting or event will usually translate into business value from that meeting. 2. The business value of a meeting or event begins with alignment of the meeting or event with the business need. 3. If participants have great take- aways from the meeting (what they have learned), business value should follow. 4. Most meetings and events should have objectives defining desired participant actions after the meeting. 5. If the meeting and event is designed to drive business value, then it is essential to have business objectives provided to participants. 6. When participants completely understand why follow- up data is needed, they will usually respond appropriately. 7. Motivational speakers at meetings cannot drive business results. 8. It is not possible to forecast the business value of a meeting before it is conducted. 9. If participants are motivated to take action after the meeting, they will usually drive business value. 10. Most meetings and events should be evaluated at the business impact or ROI level. 11. The best time to think about business evaluation of a meeting or event is after it has been conducted. 12. Until your clients ask about business value and ROI, there is no need to focus on results at these impact and ROI levels. Figure 2 - Issues About Business Value of Meetings and Events Usually False 3

4 Interpretation Here are the answers and the interpretations. 1. Usually False. Positive reactions do not correlate with business value. There are too many other issues between a reaction and a business value. The positive reaction could be based on the experience in the meeting or event and not the content. Business values come from content. 2. Usually True. To ensure that business value, the first step is to ensure the meeting is connected to the business. A classic example is a sales meeting being clearly connected to the sales goal, indicating the sales that should be increased after the meeting is conducted as participants apply what was learned from the meeting. 3. Usually False. Participants often have take- aways from meetings, but they rarely use them to deliver business value. The take- away is what a participant has learned and research has shown that a participant must take action on what was learned within three weeks; otherwise it is lost, misfiled, or forgotten and it is not likely to translate into business value. 4. Usually True. It is important for meeting organizers and planners to define specific actions desired as participants leave the meeting. This eliminates the mystery of what should be accomplished and provides the focus necessary to achieve the business results. 5. Usually True. A meeting designed to drive business value should have business objectives. The objectives clearly define the impact measures that should change or improve if the participants apply what they have learned on the job. Without these objectives it is often unclear what is expected of them and the consequences of their actions, the impact measures. 6. Usually True. When participants fully understand why you need data and what you will do with it, they are generally willing to provide it to you. This is an area that needs some work but it is not extremely difficult to collect the data. It takes discipline, determination, and clever techniques to get it sometimes. 7. Usually False. Motivational speakers can drive business results, if those speakers have a call to action with an impact attached to it. The best sales motivational speakers often drive sales goals. Other motivational speakers can influence performance from individuals. The key is that the speaker must move from offering entertainment to only offering very important content, while creating a strong desire to take action that can lead to important impact measures. 8. Usually False. It is possible to forecast the value of meetings and it is being accomplished in many settings. The key is to identify the business measures up front, involve a variety of expert stakeholders, including the participants and forecast the impact measure that will improve as a result of the meeting. Although this is difficult and sometimes not as credible as desired, it can be done will provide powerful data. 9. Usually False. Unfortunately, motivation to take action doesn t necessarily mean action will be taken. There are significant barriers for participants to take action. They have good intentions, are often motivated, and make a list- but they don t follow up. Research has shown that up to 90% of the participants in a meeting will never do anything with what has been learned, even when they are learning important take- aways. This is a tremendous challenge but can be tackled by the planner to try to remove those barriers. 4

5 10. Usually False. Only a few meetings should be taken to this level. Meetings that are very strategic, important and expensive that will attract the interest of those who will provide funding for the meeting are taken to the ROI level. Usually about 5% of meetings that are evaluated at the ROI level, for best practice. 11. Usually False. The time to think about the business value of the meeting is at the conception of the meeting, so the meeting can be aligned appropriately with the business measure and expectations can be set in the form of application and impact objectives. In addition, expectation for what must be achieved can clearly be developed from participants before they come, ensuring the likelihood that there will be business value. 12. Usually False. Waiting for a client or key funder to ask for ROI or impact is too late. It will take some time to get processes in place, to change some bad habits, and to ensure the proper alignment for the meeting to add to business value. The important issue is to be proactive and don t wait for this to occur. So How Did You Score? A score of 10-12, is excellent knowledge of business alignment. Your meetings and events should be adding business value. You are a leader in this level of accountability at this process. A score of 7-9, is above average, but there is some room for improvement. You are making progress with of this process, but fine- tuning is needed. It is recommended that you pursue more detailed information about the business value of meetings. A score of 4-6, suggests that much improvement is needed. The business value of meetings is a mystery and your meetings and events are probably not delivering value for your clients. A score of 3 or less suggests almost no understanding of the business connection. You need to update your resume. ROI Crash Course The ROI Methodology is a tool to achieve business value of meetings. As shown in Figure 3, five elements make this process the used. The framework is based on the concept of the five levels of data described earlier. It also uses a step- by- step process model for planning the ROI study, collecting data, analyzing the data, and reporting the results. The process is driven by guiding principles, which serve as standards for the process. The standards provide consistency, preserve resources, and create credible and believable results that are CEO and CFO friendly. As with any model, this is a process that must be applied. The ROI has an amazing track record of use with 3,500 certified ROI professionals in 5,000 organizations. Finally, a variety of implementation issues must be addressed to define responsibilities, minimize resources, build capability, and set goals. For more information on this methodology, see 5

6 Figure 3 - Basis Elements of The ROI Methodology Barriers to Progress So what keeps meetings and events professionals from doing this? The professional field has barely scratched the surface of connecting the meetings and events to business value. This is a challenge that must be tackled to convince wary executives to continue to invest in meetings, events, and conferences. What keeps them from doing it? Here are the top 5 barriers: 1. Fear of results. Meeting planners and event organizers have a fear of the outcome. If it is not adding the value then how will it affect my meeting, my client, my success, and my performance? In reality, a negative ROI will not kill the meeting. Instead, this is an opportunity to improve it. Also, negative results should not reflect on the performance of the planner. To overcome this, they should always be approached with a spirit of process improvement. Making the effort to evaluate their meetings on a proactive basis will often secure the kind of support needed from the client. Make sure the client understands that if it is not delivering the value that we thought, then we will make some adjustments. Most of the time, the client will readily accept this type of arrangement. 2. Perceived complexity. ROI Evaluation is perceived to be a very complex process with all types of mathematical formulas, financial terms and equations, and statistics that most planners don t want to even think about. In reality, it comes down to very simple mathematics. It is a ratio of the net benefits to cost. Even if the evaluation does not go to the ROI level, there are other important levels of data that are extremely usefully, valuable, and needed. The process is straight forward, sequential, and logical. 3. Time. Meeting planners don t have time for extra activities and they don t see time for doing ROI. This issue may mean that the process has to be outsourced to others, just like arranging for a keynote speaker. This industry is has invested very little in measurement and evaluation and this must change. The good news is that evaluation is not that expensive. An ROI study for a major meeting may cost less than $5,000 total in time for meeting with a budget over a million dollars. If it were outsourced to others the evaluation would probably be in the $25,000 range. If outsourced, $25,000 is not much to pay for a $1,000,000 meeting (2.5%)- to see how well it is working for key stakeholders. 6

7 4. Know- how. Unfortunately, meeting planners don t know how to do this. The preparation for the field rarely includes this type of analysis. Fortunately, some of the professional organizations are stepping up and offering a variety of courses. For example, courses are routinely offered by the ROI Institute. 5. Access. Planners indicate they do not have access to people to secure the data. For most studies, access is not an issue. What is needed is the commitment from the participants to provide the data. This can be secured when extra steps are taken in the beginning of the meeting to get people more involved, more engaged, and more committed to provide data. Next Steps Do you want to show the value of a meeting? It is being accomplished now and will continue to be accomplished, but it will take learning new processes, taking a few risks, and exploring some unknowns. The payoff can be tremendous. If it is not pursued, the consequences can be devastating. 7