With his highly acclaimed book Living on the Fault Line, author Geoffrey A. Moore turned managers' assumptions about how they should be spending their time upside down. Moore explored the concept of “core” functions — those whose outcomes directly affect the fundamental value proposition of the company — versus “context,” which is basically everything else.
The litmus test: Any behavior that can raise a company's stock price is core. Trying to create a competitive advantage based on context, said Moore, is the single biggest waste of resources in Fortune 500 operations.
Moore's book did not go unread at networking technology leader Cisco Systems, especially by meeting executives Dan Morgan, director ofprograms, and Michele Snock, CMM, manager of global meeting services for Cisco's Americas operations. Cisco had just spent five years centralizing its meeting department to deliver comprehensive services as cost-efficiently as possible. Now they began asking if it made sense to provide complete logistical support for every small ad hoc meeting. (At the time, Cisco had three meeting planners working full-time just on small, “noncomplex” meetings.)
“Let's say our department saves $10 million a year in meeting spend, and of that savings, $2 million was attributable to noncomplex [small] meetings, but we had 40 percent of the department's resources applied to that 20 percent,” Morgan says. “That's not particularly well-aligned.”
A turnaround was in order.
First, There Was Centralization
In an era in which companies are increasingly catching the centralization bug, how unusual is Cisco's re-re-examination of its meeting management system?
Not very, says Morgan. “I've been at Cisco for nine years, and our approach has always been to go through a self-renewal process every three years or so.”
Six years ago, after the dot-com bust, the focus was on delivering meeting services as cost-efficiently as possible. The company embraced online registration and management tools, using both external and proprietary technologies.
The people putting meetings together at Cisco were almost too good at taking advantage of what the new technologies had to offer. At one point, it was estimated that more than 50 vendors had their hands in developing registration sites for different meetings throughout the company.
Not only was the use of these multiple systems costly and inefficient, but it was also bad at doing what online registration systems are supposed to do — collect data. So in 2001, Cisco made the move to centralize its meeting management using StarCite's RegWeb technology. The system was so successful that Cisco was able to save more than $4 million in 2001.
Snock was brought in as the centralized meeting department was getting established, and she says their original mandate was to save money by insourcing and avoiding the use of third parties. “We were perceived as a logistics department,” she says. “Through the years, we've built our reputation and increased our staffing.”
The meeting department's goal was to capture every meeting, from large to small. Meeting services lies within Cisco's finance division, reporting to the CFO. “We're essentially cousins to purchasing,” Snock says. This relationship came in handy as her department moved past seizing control of just the large meetings and began capturing the hundreds of smaller meetings held throughout the company.
“Accounts payable came to us and told us they were getting invoices from various departments for meetings that had already taken place,” Snock says. “They felt they couldn't handle this efficiently, and asked for our help. We said, ‘Sure, if anyone comes to you directly, let them know we'll pay the bill, we'll register their meeting, set up a pre-authorization on the dollar amount, and even source their meeting with a preferred supplier. We'll also negotiate and sign the, using our legal department's approved language for terms and conditions.”
None of it was mandated, Snock says, “but if they wanted to get the hotel bill paid, they had to come to us.” Her department has been able to capture just about all 700 or so small, ad hoc meetings — many of which have fewer than 25 attendees — held within Cisco.
The Seeds ofTake Root
When Cisco created its meeting department in 1998, it had about 10,000 employees. With the dot-com boom peaking in the late 1990s, its work force skyrocketed to 48,000 within two years. (That number has since dropped below 40,000.)
As Cisco grew, its corporate focus evolved. A turning point was reached three years ago when Cisco's CEO heard Living on the Fault Line's Geoffrey Moore speak at a meeting. Moore's message was so compelling, Snock says, that he was brought into the company as a consultant, and an outsourcing initiative began that would eventually spread throughout the company.
“The company began to outsource what it could, and to outsource quite a bit,” says Snock. “In that way, we were able to grow by adding engineers, or salespeople, instead of support services.”
In the case of meeting services, Morgan says that by virtue of its partnership with procurement, and because of its success using meeting management technology, the department was able to operate in alignment with Cisco's new goals, “even if we're not always the delivery organization.”
Cisco's outsourcing initiative took about two years to wind its way down to the meeting department, “but we saw it coming,” Snock recalls. “We knew what the company was trying to accomplish, and we didn't want to be outsourced. This is where Dan came in. He guided us, told us to write a business plan, so we could demonstrate where we added value to the company.”
“It was a question of seeing where we were and determining how we add value to Cisco,” Morgan says. “So I tried to ask the right questions, and they [Snock and her staff] provided the case for the department.”
Snock and Morgan realized that the company perception that her department “was a logistics department and not a strategic sourcing department,” could work against them and needed to be countered. Understanding that strategic sourcing was “in line with what Cisco was doing,” her business case pointed out how the meeting department had strong internal controls in place, making it well placed to comply with the recently passed Sarbanes-Oxley Act.
“We also showed how, through using tools such as StarCite, we've been able to increase productivity through technology, the kind of initiative that's very important to the company,” Snock says. “‘That's why you need us,’ we told them, and they agreed.”
Step by Step
The business plan also included an examination of whether, after six years, the complete insourcing of meeting services and the drive to realize cost savings was actually the best way to proceed — which, it was decided, it was not.
Since then, Snock has taken some initial steps to restructure the department. First, she divided it into four market segments: seminars, internal noncomplex meetings, internal complex meetings (major conferences), and anything external, regardless of size. The next step was to define tasks among the planners, determining how they would be completed and who would do them. She also reduced the number of full-time staffers and has begun assigning tactical work (logistics planning) to contractors. This, she says, will allow the operations managers [Cisco's term for planners] “to focus on the strategic value that we can bring.”
The newly reorganized department has seven full-time staffers and 12 full-time contractors. The reorganization process has not been without “some fallout,” Snock says, adding that some employees have left. But her key players “are extremely excited about the new organization — it's added more of a challenge to their daily work.”
The reorganization has also been accompanied by the introduction of a “self-service” initiative, which aims to return some of the responsibilities for smaller meetings to her internal clients, mostly administrative assistants.
The key, Snock says, is that her department continues to maintain control over what they consider to be the most critical processes. “That's where companies that completely outsource can get into trouble,” she says. “They aren't in control. That's not the case with us.
“Our strategic value is in providing the best in cost negotiations, managing internal controls, mitigating risk by reviewing all. We make sure we are providing end-to-end solutions for all of our internal clients.”
So for the smaller meetings, services such as ordering food and beverage or handling audiovisual are being handed back to the internal clients. For larger external and internal events, services such as on-site meeting management are being outsourced.
Picky About Partners
As far as who to outsource to, Snock says that Cisco is not particularly interested in bringing in large, full-service support companies. “The idea is just to buy what we need,” she says. “We don't need all the bells and whistles. Where we really need support is with on-site logistics management.”
To get that kind of support, Cisco decided to use the Professional Meeting Planners Network (www.pmpn.com), a nationwide network of meeting professionals. “They have about 650 people networked to them,” she says. “If we need someone in Atlanta for a day, or need three planners for two months, they have someone who's prescreened and can be on-site for us. But it's all managed within our chain, and that's how we're able to extend our staff.”
With the reorganization process at the end of its first year, the new self-service approach is slated to begin in February, and internalefforts should start in January.
“What we'll tell the [administrative] community is that we are going to be creating a self-service model,” she says. “Come into our system, register your meeting, and we'll let you work directly with the hotel.”
She is also planning to use e-mail blasts and brown bag lunches to educate and promote the internal meeting program. The big step, she says, will be implementing an online training program, which will provide education and training on aspects of the business ranging from F&B guarantees to meeting-planning ethics.
Snock believes that there will continue to be little resistance to returning some logistical responsibility to internal clients.
“If they understand what the company is trying to accomplish — and they should — then of course they'll do it,” Snock says. To help the process, prior to the rollout, she plans to hold five different focus groups to get feedback on, and more importantly, buy-in of the program. “When they come out of that room,” she says, “they'll be advocates for us.”
How does Snock see the reorganization playing out?
“We have a great foundation, a great team in place, great support from the executive level, and a value add to sell to the rest of our company,” she says. “We really believe in what we are doing.
“My dream is for our department and this company to be a leader — the model for other companies to look at and say: ‘We want to be doing exactly the same things.’”
Loosening the Reins — While Keeping Control
When Cisco's administrative assistants (or other employees) need to book a meeting, they begin by using Cisco's customized StarCite tool. They can access a URL, fill out a request form (name, location of meeting, agenda, room block information), and start the ball rolling. The meeting department, headed by Michele Snock, CMM, manager of global meeting services for Cisco's Americas operations, will review, send out RFPs (between three and 10, depending on the administrative assistant's requirements), gather the responses, and go back to the internal client with a recommendation.
Snock stresses that while her department controls the site-selection process, it is a collaborative process that gives the client the ultimate say in the final selection. Then, taking the agenda provided by the client, Snock builds a budget within the StarCite tool, which includes the room block, audiovisual, food and beverage, and other services. The client is forwarded the budget, which is approved by the division controller. Once that authorization is secured, the client can contact the hotel and start negotiating within the bounds of that budget, using a template contract that Snock's department provides. At the end of the process, Snock's department signs off on the contract.
“It's controlled empowerment,” says Snock. “We maintain control because we've set the process they're following.”