Meet "Victor"...his mother gave him another name but for us, he's Victor.
According to him, he's the Grand Master of managing team meetings costs.
When he first told me this, I believed I new what he meant - no refreshments, not even water. You see, I'd seen this used as a meeting cost-cutting measure before.
We'll be looking at Victor's team meetings cost in a minute to see if they reveal his skill but before we do...
Let's be clear, team meetings are necessary. They are an essential part of team building, allowing people to share ideas and learn from each other. And if done correctly, they can serve as a non-threatening way to develop leadership skills and communication skills.
So what am I carrying on about?
Well, I also know they are notoriously unproductive, annoyingly time-wasting and consistently poorly planned. Too many of them, anyway.
But that's not all.
Team meetings are one of those things that wrack up significant costs that seldom appear on the radar, when you are looking for ways to cut costs. So I can forgive you if you make the mistake of ignoring them.
And I understand why.
If you cannot identify your team meetings costs, you cannot count them and if you cannot count them, you cannot cut them.
But why should you even be interested in reducing these costs at all?
Benefits of cutting team meetings costs
When you cut team meetings costs, 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 agony of the “increase revenue" hustle.
2. Some of the money you save by cutting team meetings costs can be used to give your team members better rewards for outstanding performances. This is a way of increasing productivity and providing motivation, some of the solutions you want for your business.
3. 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. It follows that if you're spending less time in meetings, you're reducing the money you shell out for meetings as well.
4. Involving staff in this cost-cutting effort can create a feeling of contribution to the business, beyond the work they are paid for.
5. Cutting the cost of your team meetings can be used to jump-start cost cutting measures throughout your business and this can lead to a culture of cost savings.
Now let's look inside Victor's business and show you how you can reduce your own staff meeting costs, like he did.
A business with high team meeting costs...
Remember Victor? He's the one who claimed he's a Grand Master of cutting meeting costs.
He runs a company in the Energy Savings Sector, with 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 3 hours and then he’s done! His teams are now free to go and execute as planned...
And then I had to go and spoil it for him.
"Do you realise that your team meetings represent a significant annual cost?" I asked him. And before he could answer, I went on, "and I can actually help you cut those costs by about 40%."
The man back-flipped through a straw...or so it seemed.
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 why I hired you?”
These were just a few of the printable thoughts he hurled at me!
And I understood his anger.
You see, it's hard for a successful male business owner, to feel pleased to hear that he was doing something, anything that caused his business to lose money.
But I have equal confidence in my capabilities and when you hire me to work for you, I call it as I see it. If you want blanket validation of your existing operations, that's one of the services I do not offer.
The good news is...
Eventually, Victor and I were able to work with him to cut his team meetings costs by more than 40%, as I promised.
But before you can cut costs, you really need to know where they are. So let's take a look at that next.
How the team meetings costs add up
Every decision you make in your business, or every action you take has a cost attached to it. The problem is, some of these costs are more obvious than others.
Ironically, the not-so-obvious group includes the very meetings you hold to make those decisions.
The problem is, you often have no idea of what makes up the direct cost of a meeting and how they add up. They are several calculators online to help you with this.
So stay with me as I unpack Victor's case, so you can see exactly what I mean.
First some relevant data from Victor's business
- Team Leaders work for $30 per hour and team members work for $20. Victor himself works for $50 per hour.
- Each of the 3 team holds their own preparatory meeting prior to the weekly management meeting and these take on average 2 hours.
- Meetings are held during 47 weeks out of the year.
Look at the details below for yourself.
These details mean that in Victor's business, they held 188 meetings, spent 423 hours in those meetings and incurred costs of $98,700, every year. For any small business, this is a significant sum of money.
Counting the opportunity cost of having these meetings
Now this is important.
Very simply, Opportunity cost is the "trade off" cost of what you give up to do something else.
Unfortunately, this is not a cost which is usually considered by small business owners (and many bigger businesses) but it is key to effective decision making. Let's look at it as it relates to Victor's Business.
It takes 8 hours to produce one of their energy saving devices which they can sell for $1,500, and they run the factory for 48 weeks a year.
Now let's assume that in the time spent in meetings each week (9 hours) they could have produced one device. Over the year, they would produce 47 devices, which they could sell at $1,500 each. That's $70,500!
In other words, the real cost of Victor's team meetings is (Direct cost $98,700 + $70,500 opportunity cost) $169,200!
Now, as they say, that's a whole other ball game! So much so, Victor asked me not to share the details of the comparison with the labour costs. Promise kept.
So what is the solution? how can these cost be reduced? Here are the answers to your questions:
Solutions for cutting team meetings costs by over 40%
Poor Victor! When he realised the true cost of his meetings, he was frantic and wanted them fixed NOW!
But don't you panic, the fixes I suggested were not rocket science. They worked for victor and they can also work for you.
Here are the most important ones:
1. Decide what type of meeting you’re having in advance
There are two types of meetings you will find in business.
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.
What I noticed was that Victor was holding only information meetings. This was frustrating everybody because after every meeting, they still weren't sure what was decided and how to move forward with speed and focus.
Working with Victor, we decided that the weekly team information meetings would continue but he would hold a situation meeting once a month with the team leaders. Then he would only meet with the entire staff if special circumstances made it necessary.
This reduced the number of management meetings from 47 to 11, the number of participants from 19 to 4, reduced the the time for a meeting by an hour and slashed the cost of a meeting from $1,320 to $280.
Here are the details which made Victor oh so happy!
2. Allow your Managers to make as many decisions as possible
Many small business owners have this big problem - they have extreme difficulty delegating, far less doing so effectively.
When you can't hire talented people and then get out of their way and allow them to function, you spend too much time in meetings and putting out fires.
Unfortunately, this was Victor's problem.
I had the devil of a time convincing him to devolve more of the decision-making to the level where problems occur and give his team the authority to make those decisions to fix the problems.
When he finally relented and tried it, a lot of good things happened.
- Morale increased almost immediately because team leaders now felt like they were actually leading and not always waiting for their boss to tell them what to do.
- Both team and management meetings were shorter and more focused. For Victor, this took one whole hour off his management meeting and team leaders shaved 30 minutes off each team meeting.
- Managers were held to a higher level of accountability which in turn led them to demand the same from their team members.
3. Plan and conduct your meetings properly
You have probably been advised or you have heard the advice to cut the length of meetings. But I don't subscribe to that.
You want to know why?
Well, I know from experience that when you plan and conduct your meetings properly, they will end up being shorter.
But having shared my position, you have no idea how poorly many meetings are planned. And you also have no idea how much these badly planned meetings can cost you.
Fortunately, there're a number of simple steps you can take.
- Invite only those who should be at the meeting to the meeting. That's what I did for Victor when I encouraged him to hold situation meetings with his team leaders only. They were able to do more in a shorter time.
- Make sure you have an agenda. Yeah that's what I said. It doesn't have to be a formal document that wins the 'Agenda of the year" competition. But it must list exactly what the meeting will discus and the Chair must be able to use it as a tool for control and focus.
- Decide who will take notes in advance or assign a “resident” note-taker. You don't need to have formal minutes for informal meetings but a list of simple action item would do. However, that list must cover what must be done, by whom and by when.
- Ensure that team members are punctual and that whoever chairs the meeting remains on topic. Sometimes this is all it takes to have better, less costly meetings.
4. Know your outcomes before the meeting
I can't imagine going to a meeting, however informal, however brief, without being extremely clear about what I want out of that meeting.
Equally, I can't believe that you, busy you, would go to a meeting, any meeting, without knowing what outcome(s) you want from that meeting. But you do all the time.
And them you have the nerve to have an extra drink at the bar after work to compensate for another unproductive meeting. Tut...tut...
For team meetings, you're mostly looking for a solution to problem or clarity on how to go forward in the best interest of the business. Once you have decided on your goal, you can now focus the thoughts and discussion towards this outcome.
This approach was all part of what I implemented in Victor's business.
5. Serve food after the meeting
In my country and I daresay my region, there's something about food at a function that transform the personalities of the the people attending. I have my own views as to why this might be so but I'm not in the mind to deal with the backlash of sharing those views.
So moving on, if you have refreshments or a meal as part of your meeting, please do serve it after the meeting, unless it's an all day meeting.
And here's the big why:
When you serve food during the meeting, first of all, it increases the length of the meeting. Naturally, you can see how this can increase cost, especially if those attending the meeting are on the upper end of your salary scale.
But there's another less obvious way it increases cost.
Collecting and eating food changes the mindset of the participants in any meeting. In this reduced mental state , their input is poorer and by extension the quality of decisions, if you manage to make any at all.
What happens is, you end up holding another "quick" meeting to talk about something you forgot or because time ran out at the previous meeting.
And that's the hidden cost of serving food at meetings that you don't see coming.
Look forward to slashing your team meetings costs
Just by implementing the above measures, and ensuring that they were practiced throughout his business, Victor was able to slash team meetings cost by over $58,000 or 40% in his small business.
Is this something you can do in your business?
Of course it is!
I've taken you inside Victor's business and showed you his meeting costs before and after the cost cutting measures. I've shared with you most of what we did to reduce the expenses.
And did you notice anything interesting?
All the solutions can easily be implemented by your next meeting! How cool is that?
Now, all that's left for you to do is go and look at your team meetings and see how you can slash the cost of holding them by 40% or more. You can't afford not to.
To your meeting success...