Can webconferences, videoconferences and other virtual meetings really take the place of face-to-face contact?
With travel budgets slashed in the wake of recessionary belt-tightening, companies are increasingly turning to technology as a substitute for in-person contact. Yet business executives overwhelmingly agree that face-to-face meetings are not just preferable but necessary for building deeper, more profitable bonds with clients and business partners and maintaining productive relationships with co-workers.

Predictably the answer to their own survey is that 84% prefer F2F meetings.

But is that the right question to ask if you are trying to understand what is happening in the meeting industry?

Not in my mind it isn’t!

This is the kind of question Kodak asked photographers 5-8 years back: Do you think that digital photos will replace film based photography? No way they all hollered.
This is the question big newspaper publishers asked thier readers 3-4 years ago: “Can you imagine not having a daily morning news paper in print form” Since then a large number of them no longer exist.
This is the question publishing houses where asked 24 months ago “Will the eReader replace books?” – that was before Amazon sold 2 million Kindel’s in 6 months. Now they are not so sure. More on eReaders here

But the reality is this:

This is borne out in Forbes Insights survey, where 58% of respondents said they were travelling for business less today than they were at the beginning of the recession in January 2008, with more than a third (34%) indicating they were travelling much less frequently.

This is my point, it may not be what they prefer – but this is what they do – not because it is better but because it is cheaper, and more convenient.

Surevy: would you prefer to fly Business or Turist?… No brainer right?
But why is tourist class then jam packed and Business reduced to 2 rows that are half empty on many European flights? It is not what we would prefer. It is what we do.

The big danger is that we in the industry stick our heads in the sand as a result of surveys like this – pat each other on the back and knowingly nod to each other: “f2f meeting are better – we know that – they know that. All will return to normal soon, you just wait and see….”

I don’t think so

That is what KODAK thought

The question we should be asking is : Is the market broken? – see this by Seth Godin: “What every mass marketer needs to learn from Groucho Marx”

See also my previous post on this subject: Is the meeting industry doomed?

Read the Forbes Insight survey here

What do you think?

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

Or is it the biggest shift since the Industrial Revolution? This video details out social media facts and figures that are hard to ignore. This video is produced by the author of Socialnomics.

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.

2009 will go down as the year in which the shroud of uncertainty was lifted off of social media and mainstream adoption began at the speed of light

By this time next year, social media will no longer be “social media” — it will be an integrated, unquestionable component of your online and offline experience. Last year we spoke of cross-platform integration across media sites. Open APIs and OpenID made that possible, and even LinkedIn announced last month that it too will finally open its APIs. 2010 will be about integration and a single, cohesive experience across platforms as well as across products and devices — Web, mobile, TV, and video — will become near-inseparable experiences.

Read the full article

—John Mackey, Chairman & CEO, Whole Foods Market & co-founder, Conscious Capitalism, Inc.

Read more here

I have this very clear feeling that a fundamental shift in many of the ways that we have been used to conducting business and interacting with each other is underway. (see also my previous post are you a frog in the pot) And that when the dust settles things will not return to what we have known previously as normal but will have undergone a clear shift. This is not a passing storm but fundamental climate change.

In pursuit of that theme I have been hunting for signs that would support this gut feeling.

This has led me to The 2009 Shift Index published by Deloite and presented on the Harvard publishing website.

Her you will find the following resume of key findings:

The 2009 Shift Index reveals a disquieting performance paradox in the US corporate sector. On the one hand, labor productivity has nearly doubled since 1965. During those same years, however, US companies’ Return on Assets (ROA) progressively dropped 75 percent from their 1965 level.

How can firms be getting lower returns even as they’re becoming more efficient? The answer resides in the heightened competition among firms. Competitive intensity nearly doubled between 1965 and 2008, forcing firms to compete away the benefits of productivity gains, which were instead captured by creative talent in the form of higher compensation and numbers of consumers through increasing performance/price ratios and wider choice.

It’s little surprise to find also that the highest-performing companies are struggling to maintain their ROA rates and are increasingly losing market leadership positions. Taken as a whole, the findings portray a U.S. corporate sector in which long-term forces of change are undercutting normal sources of economic value. “Normal” may in fact be a thing of the past: even after the economy resumes growing, companies’ returns will remain under pressure.

To respond to this performance challenge, U.S. companies will need to let go of industrial- era organizational structures (and the reporting relationships, incentive systems, and managerial processes that go with them) and operational practices in favor of the new institutional architectures and business practices needed to create and capture economic value in the era of the Big Shift.

Companies must move beyond their fixation on getting bigger and more cost-effective to make the institutional innovations necessary to accelerate performance improvement as they add participants to their ecosystems, expanding learning and innovation in collaboration curves and creation spaces. Companies must move, in other words, from scalable efficiency to scalable learning and performance. Only then will they make the most of our new era’s fast-moving digital infrastructure.

So what does this Big Shift entail in pratical terms?

John Hagel one of the co-authors of the 2009 Big Shift index does a superb job summarizing what he essentially sees as a shift from push to pull on his blog Edge Perspectives

What obviously caught my atention was this:

From knowledge transfer to knowledge creation
Most companies today will acknowledge the importance of knowledge flows, but they tend to focus on transferring knowledge more efficiently, especially within corporate boundaries. While useful, this is ultimately a diminishing returns game on multiple levels. The greatest economic value will come from finding ways to connecting relevant yet diverse people, both within the firm and outside it, to create new knowledge. They do this best by addressing challenging performance requirements that motivate them to get out of their comfort zone and come up with creative new approaches that generate more value with fewer resources.

This correlates well with the experiences that we have using action learning as our primary developmental tool in helping managers and organizations tackle the changes that they are in. It is not our job to teach but to help them learn – and that is a very different story.

But I urge you to read the full unfolding of this thinking here under the following headlines:

From knowledge stocks to knowledge flows.

From knowledge transfer to knowledge creation.

From explicit knowledge to tacit knowledge.

From transactions to relationships.

From zero sum to positive sum mindsets.

From push programs to pull platforms.

From stable environments to dynamic environments.

Lots of food for thought, and now I realize that my gut was telling me something important and I shall continue to pursue this investigation.

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

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 significant 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.

—-
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

The Magazine FastCompnay has launched a series on the 100 most creative business profiles. Here is their take on who are the top 10 creative Foodies.

1. Jean-Georges Vongerichten, Jean-Georges Management
The Alsace-born celebrity chef has built a multimillion-dollar, multi-Michelin-starred empire without slapping his face on a frying pan or frozen pizza. Vongerichten’s unprecedented partnership with Starwood Hotels has given him license to unleash his creativity — and his take on Asian flavors — in 50 new restaurants over the next five years. “If I could have my dream,” he has said, “I would open a new restaurant every month.”

2. Dan Barber, Blue Hill restaurants
Barber is foodies’ latest locavore darling, the driving spirit behind the two acclaimed Blue Hill restaurants, and a passionate advocate for regional farm networks. The winner of the 2009 Outstanding Chef award from the James Beard Foundation, he practices what he preaches at his family’s farm and at the nonprofit Stone Barns Center for Food and Agriculture.

3. Will Allen, Growing Power
Since he used his life savings to buy the last working farm in Milwaukee, Allen has been dedicated to creating a more just food system. Growing Power’s network of urban teaching farms raises vegetables, fish, livestock, and honeybees; supplies local restaurants; creates sustainable cafeteria programs for corporations; and distributes food to more than 100,000 families. “We’re not just growing food, we’re growing people too,” he says.

4. Dan Cutforth and Jane Lispitz, Magical Elves Productions
Top Chef creators and executive producers Cutforth and Lispitz –”the elves,” as they’re known – have used reality television, of all things, to lift up serious cooking rather than reduce it to farce (we’re looking at you, Gordon Ramsey). In the process, Top Chef has become a pillar of the Bravo network’s urban-sophisticate strategy, spawning a popular Web site, cookbooks, and merchandise — making it an example of the 21st century integrated media brand.

5. Floyd Zaiger, Zaiger Genetics
The father of the pluot, 83-year-old Zaiger, has developed — by hand pollination, not genetic manipulation — some 200 new and improved fruits, from low-acid peaches to cherries that grow in warm climates to the golden red apricot-plum cross known as an aprium. “Developing a new cross takes 12 to 15 years,” says Zaiger’s daughter, Leith Gardner. “You need a little patience.” Coming next: a blue-skinned aprium.

6. Ed Kaczmarek, Kraft
Pay for an ad? Only if it’s extra cheesy. Director of innovation Kaczmarek’s Kraft iFood Assistant, which offers Kraft devotees with iPhones, thousands of recipes and more, proves not only that brands can create meaningful mobile experiences but also that customers will pay for them. Kraft’s cooking app ($0.99) cracked the iPhone’s top 100 apps list, rising at one point to the No. 2 slot in the lifestyle section, and helped the $42 billion company better understand its customers and what they’re shopping for.

7. Temple Grandin, Associate professor, Colorado State University
“There are similarities between my autistic mind and animal thinking,” Grandin says. The Woman Who Thinks Like a Cow, the title of her video bio on YouTube, has relied on that understanding to develop more humane ways of treating cattle destined for slaughter. She has no fans in the animal-rights blogosphere, but the walled, curved chutes she has designed and the handling standards she has set up for companies like Swift and McDonald’s — no flapping objects, no shadows, no spraying in the face — reduce stress in the animals and improve the efficiency of the operation as well as the quality of the meat.

8. Becky Frankiewicz, VP of portfolio marketing for Frito-Lay North America
Who says good for you has to mean “tastes like cardboard”? Frankiewicz is leading the shift for Frito-Lay’s Smartfood and Baked Lays brands to appeal to women, using design and taste to communicate that healthy snacking isn’t an oxymoron. New packaging is more elegant, appealing, and signals health benefits, and new technology lets flavor be baked into each crisp.

9. Jeff Jordan, CEO of OpenTable
Jordan, an eBay vet, has helped make restaurant reservations fun, adding features such as detailed users reviews and clever lists to help restaurant fans make better decisions in the same place they make their reservations. Perhaps his neatest trick has been to take OpenTable public in the current market climate — and get a 1999-style response. OpenTable stock hit a high of $35.50 on its opening day in late May, a nice bump from its initial price of $20 a share.

10. David Chang, Momofuku
The intense, award-winning chef launched his quirky downtown Manhattan mini-kingdom with inventive takes on Asian noodles and pork buns. Besides producing great food, Chang hits all the stylish notes — local produce, cool staff, lots and lots of pork. Plus, his latest (and priciest) venture, Ko, is the only restaurant we know that takes reservations only online.

Read more about the 100 Most Creative People in Business