SMALL IS BEAUTIFUL
The title of E.F. Schumacher's book, written 30 years ago, defined a belief system for the huge generation of us who came of age in the 1960s and 1970s. I believed then in the grass-roots economic theory that Schumacher preached, and I still do. When I use canvas bags to carry groceries, or take the time to extend a kind word to a colleague who is dealing with a family illness, or donate turkeys and all the fixin's to my community food bank for Thanksgiving, I feel as if I'm making a difference. Just think of what would happen if more people believed in the power of such small actions.
But I've come to recognize that today a more complex world view is required to survive and thrive. We've seen nearly every successful home-grown business — even counterculture icons, such as Ben & Jerry's — swallowed up by the big guys. Consolidation is the driving force of business in the second millennium, and closing our eyes to this reality won't change it. Instead, we can become grass-roots agents for change within our own organizations to help ensure that bigger can be better.
OK, by now you're saying “What does this have to do with me?” Plenty. Meeting planners in the insurance and financial services industry have been dealing with the fallout from corporate consolidation for years, and there's no end in sight. The $11 billion merger of Toronto-based Manulife Financial Corp. and Boston-based John Hancock Financial Services Inc. that was announced in late September will result in a company that is the second-largest life insurer in North America. On the health insurance front, the $12 billion merger of Anthem Inc. and Wellpoint Health Networks announced in late October will create a managed-care behemoth that is one of the country's largest. And, as we go to press, Bank of America Corp. has agreed to buy FleetBoston Financial in an all-stock merger valued at $43 billion, creating the second-largest U.S. bank. With roughly 900 insurance companies still operating in the United States, consolidation is bound to continue. The economies of scale that ensue mean meeting planning jobs — sometimes entire departments — could be in jeopardy.
The threat is not confined to the huge mergers. Across the board, ICP readers tell us that they're concerned about departmental consolidation within their companies, particularly the growing role of procurement with vendor selection. “Our major concern is with purchasing taking over hotel negotiations,” says one high-level insurance planner. “We spend so much time developing relationships that we can often get a better deal than the pencil pushers. And they don't understand that saving money company-wide by just using one hotel chain isn't always the best choice.”
Ring a bell? While most of our readers don't want to attract attention to their plight by speaking on the record, what you're telling us off the record is that you're worried. Very worried.
Which brings me to our cover story by Alison Hall, starting on page 28. Alison explains how three meeting professionals — Karyn Evans at Allianz Life, Gary Pearson at Aon Service Corp., and Marianne Steckert at Marsh Inc. — are taking the bull by the horns and making corporate consolidation work for them. Their department structures and responsibilities differ, but each heads up a department that is proving its worth by showing the efficiency and negotiating muscle that meeting planners bring to the table.
Relationships still rule in this business. But the numbers are playing a bigger role. Like the planners featured in our cover story, you need to be part relationship-builder, part number-cruncher to succeed.
Warmest wishes for the holiday season.