3 Takeaways
- Become a travel expert.
- Align with strategy.
- Present laser-focused data.
What does travel contribute to business strategy? That's the question travel managers need to ask themselves as they approach the most senior leadership in their organizations. Aside from that, nothing matters. As easy as that sounds, it isn't.
View From The Top
The partners, presidents and chief executives BTN spoke to instinctively viewed travel as a business enabler.
"Travel is definitely viewed as an investment as opposed to a cost," said chief executive of health and wellness startup Rendle Hans Roderich, who previously spent 10 years at venture capital firms in chief operating and chief finance roles. "Despite the emergence of great technologies, face-to-face encounters are important for establishing relationships. Tech is a great adjunct, and it's important when talking about a sustained business relationship. But nothing can replace in-person meetings to build trust."
Though Roderich leads a small startup, his perspective on travel as an integral business tool is magnified in the voice of Boston Consulting Group partner and global head of infrastructure Kathryn Bell. She spoke to BTN about the importance of traveling to meet clients and business partners, but also the critical nature of internal travel to build the firm's expertise and bring collaboration partners together.
"Being with our clients is a really important aspect of our business," said Bell. "BCG is a relationship business and whilst, of course, we can do some of that over video and phone, being with our clients the moment they need us is a fundamental element [of our business] and what stands us out from many players in our field. There is also an aspect of travel that is about getting people together to share and develop expertise, so they can bring it to bear the moment it is required. That also makes travel absolutely core to our business."
Even so, that doesn't mean CEOs and senior partners immediately connect the dots between travel and specific corporate strategies. That's the travel manager's job, if they choose to take it.
Be An Expert
Establishing strategic connections with leaders comes down to credibility and delivering laser-focused information, said BCG global head of travel Gehan Colliander.
"Why would senior leaders listen if you present something that is neither actionable for them nor critical, nor urgent?" she asked rhetorically. To engage, travel managers have to become experts in the business of travel and then match that business to the organization's strategy.
"A big issue in our industry is that we are still looking at [travel management] as a transactional function. Travel managers often are totally unaware of the environment outside [their industry] as well as their own [business] environment internally," said Colliander. She encouraged travel managers to leave that transactional mindset behind. "Understand your role as an expert in the industry: You have to be an expert in revenue management … an expert in technology and digital transformation … an expert in service and operations," she said. If travel managers can combine that expertise with a strategic view of their company's business "and act as if you are running the business, you will define a program that enables your organization to succeed."
Business Growth & Enablement
Travel is so central to BCG's culture that travel data, policy and tecnology decisions are regularly presented to an executive leadership team. Plus, Colliander has access to senior leaders on an informal basis. Bell described Colliander as "very well connected" in the organization. She is often the first to know when business growth is on the horizon because new office or project locations require travel enablement.
"We need to understand where our travelers are going and be one step ahead of them," said Bell. "Being aware of the constantly changing business dynamics, the different business units we have in the firm, the different price points that those [units] may have and who may need to be traveling where and when is core to the travel manager. We need travel to be ready as the business enabler we expect it to be."
Colliander's access is a sign of BCG's travel program maturity. Fundamentals like policy, travel management company consolidation and supplier relationships are global and fully operational. The business relies on her to pull the right levers to accomplish goals. Cost savings is no longer the program's main objective; minimizing productivity drag is clearly top of mind as is a quality experience for frequent travelers. That's become common for well-controlled programs.
S&P Global travel and events manager Ann Dery said her senior leadership wants digitization, automation and simplification for travelers, in addition to cost control. Accenture global mobility strategic partnership lead Cindy Neuenschwander said her leaders were "looking for innovation." Driving toward digital ecosystems streamlines processes for travelers but also generates booking and behavioral data needed to guide the business. "These are super bright people," said Dery. "The C-suite needs analytics that are actionable."
The Fight for Talent
The tight labor market has become a challenge for many companies. SAP Concur president Jim Lucier cited talent recruitment and retention among his top concerns during The Beat Live conference last month, and it's a refrain echoing through the corridors of numerous business sectors—consulting, finance, healthcare and technology, just to list a few.
"Recruitment is huge for EY," said global head of travel, meetings and events Karen Hutchings, whose quarterly audience with EY's most senior leadership, she said, has driven purpose through the company's travel program. "People join organizations based on the experiences they expect to get there, so our travel program has to reflect that. We not only need to support their well-being, but we also need to provide social networks and enable them to meet up with other travelers while on the road. We've created gamification around donating to charity through the travel program and enabling employees to give back. With all these, the travel program becomes more than a cost management tool; it opens the doors to senior leadership and relates to the objectives of the organization."
Smaller companies, too, are fighting for the best workers, and even without mature program infrastructure, travel policies become a sticking point, said Roderich. "Nothing [frustrates] employees more than a dumb travel policy," he said. "Organizations run very lean these days, and we put more burdens on employees than we did in the past. There are fewer executive assistant roles to arrange travel and other tasks. As employees take on more, travel policies mean more. We have to be clear that employees' private lives matter and make travel less burdensome, otherwise employees are turned off."
Demand Management
The focus on employee satisfaction doesn't mean travel programs are immune from cost-savings directives coming down from the CEO. When senior leaders at German industrial manufacturing and automation giant Siemens pushed an initiative in 2018 to reduce internal travel, the focus on travel data changed dramatically. "I had been presenting the same data twice a year for a long time," said Siemens senior director of mobility services for the Americas Steven Schoen. "It was good data, and [the C-suite] found it interesting. But when the focus changed, it was great data. They couldn't get enough."
It's worth noting that the Siemens directive was to reduce travel. Cuts into travel experience and downgrading services are unlikely to be the first target for senior executives. "We aren't going to change our policy to drive spend," said Aon global travel director Hillary Dallas, emphasizing that Aon travelers need to arrive ready to perform. "Our leadership wants to know if the trip is necessary—the first job is to manage demand."
That approach resonated with several senior travel leaders who spoke to BTN. "Especially in a mature program, there's not a lot of blood left in the stone," said EAB VP of business solutions Steven Mandelbaum. "Every cut there is painful, and I haven't seen leaders have a real appetite for that."
"We had a pretty big push for savings levers this year," said Dallas. "We put recommendations forward; one was around class of service. It presented $8 million to $10 million in savings, but we also provided guidance on what our peer set was doing. Our leaders turned it down because of the concern of people leaving. Anything that affected experience was turned down."
Demand management isn't always about reducing travel, noted Roderich. "Companies I work with tend to look at travel spend relative to business generation. There's a high correlation there. If you compare across peer groups and the revenue is low, you can also look at their travel volume. Maybe they're not traveling enough."
Analysts, Shareholders & Beyond
When it comes to thinking strategically about how senior leaders consume travel data, ITW global travel and expense director Cathy Sharpe has a simple rule of thumb. "Consider whether the data can be repeated to analysts," she said. That's an astute observation because earnings calls, shareholder meetings and other high-level conclaves tend to crystalize an organization's priorities. Competition is a key interest.
"There are three other companies like ITW. The most critical questions from our senior leadership are about how we benchmark against those," said Sharpe. Other themes, she said, included digitization, simplification and sustainability. The latter was a thread running through many travel departments as CEOs have begun to place social, political and environmental issues among their business pillars.
JPMorgan Chase CEO Jamie Dimon leads the Business Roundtable, a powerful group of CEOs from some of the largest companies in the world, including Amazon, Bank of New York Mellon, BlackRock, Goldman Sachs and many others. After months of making various comments as individual company leaders on the role of corporations in communities and society, the group issued a joint statement in August. As a group, they were abandoning the view that investor interests come first. Rather, they argued, companies must broaden the scope of accountability to all stakeholders, including employees, customers, shareholders and society at large. "While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders," the group said in the statement.
As a CEO, himself, Roderich saw travel management figuring into this movement in several ways: from employee well-being to carbon footprint. "We are just at the beginning of this in the U.S. It's more of the European model, but I believe we will start to see it evolve," he said.
Senior travel managers—several among the Business Roundtable companies—said they were feeling the effects already, particularly on environmental impact, which is considerable with travel. "Sustainability is huge from the top down," said one. "We have to be fully ready," said another. "To get federal business outside the U.S., companies have to be very focused on sustainability because it will mean winning or losing."
— Additional reporting by Amon Cohen