Poorly conceived and badly run meetings can flush serious money down the drain. They can make or break a profit margin.
First let us examine what people’s time is actually worth from an organisational perspective?
Most calculations for business people convert time spent in work, or on business activity if you are self-employed, into an hourly rate.
The popular formula is to use time worked divided by salary to arrive at an hourly rate. This generally ignores the added costs of employment which an organisation might pay.
The problem is you will be way off base if you use this popular formula because I do not know anyone, myself included, in a professional business role who is fully productive for eight hours a day and I would bet money you are not either.
So how productive are you in the real world?
Consider all the demands on your time in an average day:
- Dealing with the email mountain
- Phone calls – important, mediocre and downright pointless
- People grabbing “Just five minutes of your time.”
- Meetings you have to attend
- Meetings you do not have to attend but you are there anyway
- Planning projects when you get a chance
- Chasing people for information they should have provided already
- Reading and writing reports
- Analysing and setting budgets
- HR issues – routine or otherwise
- Interviewing new employees
- Catching up with events in general
- Dealing with crises – minor and major
- Business events and business travel
- Meeting with supplier and speculative reps
- Meeting prospective clients
- Producing content, material or saleable items
- Doing what you are actually paid for
The list could go on and on and I bet you could add to it easily.
Be honest here, how much of your time is genuinely productive time which adds real value to your organisation or your own bottom line? Working on a very generous 25% productivity on average you can easily multiply your original rate by at least four to give you a still simple but far more accurate cost per hour.
Are you guilty of stealing the time of your staff or team by creating pointless and valueless activity for them? Are you wasting too much of your own time? If you are then stop it. Create more value opportunity.
Let us now look at meetings themselves and the value they can provide or the costs they incur.
Ask yourself, “Do my meetings return value or do they generate overhead?”
There are meetings which are capable of directly or indirectly generating positive value and growth for you or your organisation.
For example, effective and well run sales meetings, business strategy planning meetings and one to one staff development meetings are all generally a good use of time.
Then there are meetings which consistently cost you or your organisation money yet achieve little return value.
This second area is where the opportunity lies.
Consider the all too common monthly team catch-up meeting. Assume nine people in your department team besides yourself. Two hours are scheduled for this jolly meeting which is always held on the third Friday of the month at one o’clock in the afternoon and everyone brings cakes and biscuits. All very loose and chatty and often runs over time anyway. Because it is Friday and you all finish early no-one really gets going again before it is home time. No real harm done as the team will be energised and hit the ground running on Monday morning as always, right?
Get real here. If we look at a conservative and fully productive £30 an hour per employee and taking the extra lost Friday afternoon time into account this is three hours each at £30 per hour times ten people which equates to £900 in straight hourly rate wages alone. Twelve such meetings a year equates to £10.8k per year in simple wage overhead alone.
It gets worse because I have not even included the value of lost opportunity. If your sales staff are not selling because they are at a meeting that is costing more money.
Some revenue generating businesses, if they are profitable, could work within a profit margin range which could be as low as a few percent. Let us assume a hugely generous twenty percent profit margin for your incredibly efficient business. This means your organisation has to generate £54k of net profitable business output to cover the simple wage cost of your meetings. Wow! Are those meetings generating direct or indirect gains close to this? Is your profit margin as high as twenty percent? Is the bonding between team members worth at least this figure? If not then perhaps you might consider an alternative way to spend your Friday afternoon. Do you have a specific meeting budget or does the business in general have to bear this overhead?
What if ten or more departments are having similar meetings each month? There is half a million pounds of net business to cover before the business makes a single pound. How many unfocused, badly planned, poorly run and non-productive meetings are going on right now in your organisation? Work out the cash figures and the answers might horrify you.
If I have frightened you or made you think twice then this is a good thing.
Try accurately costing your meetings and measuring them against any demonstrable incoming return on investment or prevention of loss. If you cannot reasonably justify your meetings, financially or otherwise, then consider some other more cost-effective way of reaching consensus, distributing information or sharing ideas within your team or organisation.
To get the low-down on how to effectively design and run meetings for maximum use of time and value why not check out one of my latest books “Make Your Meetings Work For You” by Andrew D. Pope.
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