Meet Victor. He runs a company in the Energy Savings Sector. Victor has 18 employees which he’s divided into 3 teams, each made up of one leader and 5 team members.
Victor runs a tight ship (according to him) - he meets with the teams collectively every week for about 2.5 hours and then he’s done! His teams are now free to go and execute as planned.
So you can imagine how Victor’s was ready to back flip through a straw when I told him that his meetings represent a significant annual cost and he can actually cut team meetings cost by over 60%.
“Where is the evidence? You are saying what I’m doing is not working? You expect me to pay you for this nonsense?” This is not why I hired you?” These were just a few of the printable thoughts he hurled at me!
Was I worried? No. Hey, I know the indomitable male ego when I see it and when you hire me to work with you, I call it as I see it. If you want blanket validation of your existing operations, please hire someone else.
Victor DID cut team meetings cost in his business by more than 60% and so can you! But why would you even want to do that?
Benefits of cutting team meetings cost by over 60%
When you cut team meetings cost as well as your regular business meetings, you can realize benefits that can actually lead to business growth.
Here are just some of them.
1. You reduce your overall costs which can lead to increased profit without the “increase revenue hustle”.
2. Your business decisions are more meaningful because now you have a more accurate indication of your costs.
3. You have the opportunity to make money by turning your opportunity cost into tangible goods and or services. See the example below.
4. Some of the extra money you make can be used to give your team members better rewards for outstanding performances.
5. Some can also be used to satisfy your corporate social responsibility (CSR). (This is not only for big business)
6. You get a good indication of the concept of “time is money.” Part of reducing the cost of meetings is reducing the time spent in meetings.
7. Involving staff in this cost cutting effort can lead to great team building.
8. Cutting the cost of your team meeting can be used to jump-start cost cutting measures throughout your business thus leading to a culture of cost saving.
9. Inherent in the process of cutting team meeting costs are some valuable business lessons and experiences.
A look at how the team meetings costs add up
Knowing the costs of all aspects of your business and of your decisions is very important. Attending and holding meetings is really a big leak and it is seldom on the radar of many small business persons.
I really want you to learn from Victor’s example so stay with me as I unpack it for you.
First some relevant data.
Team Leaders work for $25 per hour and team members work for $18. It takes 8 hours to produce one of their Energy Savings Widgets which they can sell for $1,500 and we will assume a 48-week year. Each team holds their own preparatory meeting prior to the management meeting and these take on average 2 hours. That means a total of 408 hours spent in team meetings every year.
Now let’s breakdown the direct costs of these weekly meetings:
Preparatory meetings (teams): ($230 per team x 3) = $690
Management meetings: ($345 per meeting x 2.5hrs) =$862.5
Victor’s costs: ($50 x 2.5hrs) = $125
That makes for annual direct costs of ($690 + 862.5 + 125)48 = $80,520
Now assume that in the time spent in meetings each week (8.5 hrs) they could have produced one widget. Over the year they would produce widgets worth (48 x $1,500) or $72,000. This represents opportunity costs.
I know you’re smart and you’ve already calculated that annually, the actual team meetings cost for Victor is ($80,520 + $72,000) a serious $152,520 at an hourly rate of $374.
Now $152,520 may not be a big deal to you but to me and Victor it is because in his case, the team meetings costs far outweighed the benefits.
Solutions for cutting team meetings costs by over 60%
So! What did Victor do to reduce his team meetings cost? Several things – here are the most significant and you can implement then in your business too.
1. Decide what type of meeting you’re having in advance. There are two types of meetings.
The first type of meeting is the information meeting. At this meeting, people report on aspects of their work or on the position of some project, etc. This meeting takes place on a regular basis –e.g. weekly, monthly, quarterly.
The second type of meeting is the situation meeting. This is about problem solving or outcomes and is called as needed. Ideally, a situation meeting brings together a small group or team (5 – 12 persons) each with a specific role in the meeting.
2. Based on the information above, you can then hold one of each of these meetings monthly. This would be more beneficial than doggedly holding fixed team meetings. In Victor’s case his decision immediately cut his number of meetings and those of his team in half and cut his costs by 50% or $76,260.
3. Devolve your decision-making down to the level where the problems occur and give your team the authority to make those decisions. Meetings will then be shorter and more focused. For Victor, this took 30 minutes off each meeting which is 24 hours or $8,976.
4. Plan for the meeting properly. Have an agenda, decide on things such as who will take notes or designate a “resident” note taker. This reduced Victor’s meetings by 15 minutes per meeting or 12 hours annually resulting in savings of $4,488
5. Ensure that team members are punctual and that whoever chairs the meeting remains on topic. Time saved in Victor’s meeting when the team adhered to this rule was 30 minutes or $8, 976 in annual costs.
Just by implementing the above measures, Victor ended up saving 65% off the team meetings cost or actual cash of $98,700. In the process he reaped all the benefits above and more.
Now go and look at your team meetings and see how you can cut the number of meetings, the time spent in the remaining meetings and become the next person who actually cut their team meetings cost by over 60%!
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