Northstar Meetings Group
✕

Incentive's 17th Annual Industry Roundtable: Navigating Uncertainty and Measuring ROI

Industry leaders discuss their approach to ROI and how it’s evolving in an uncertain economy. 
by Leo Jakobson
November 16, 2018

Every year, Incentive brings together a group of industry thought leaders from all segments of the incentive, engagement, motivation and recognition business to talk about the state of the industry. This year, 11 participants gathered at the Lotte New York Palace on Madison Avenue and 50th Street in Manhattan to discuss topics that ranged from the C-suite's growing focus on retaining and engaging top people to the difficulty of retaining Millennials to the importance of ROI, as well as what's happening in the merchandise, gift card and travel award categories. What follows is an extended version of the transcript of that conversation.

To view video interviews of each Roundtable participant, head here.

PARTICIPANTS
Milllennials

PAUL GORDON: I think the reason why the conversation changed dramatically is the Millennials are these magical unicorns that somehow no one knows what to do with, and it made everybody sit back and go, are we doing it right? Are we doing it wrong? What do they need? I think that’s where the conversation has become elevated. I literally have had people leave the company to go someplace else because the other company has beer Thursday and it’s like, what? That was the driver? I think that’s why these companies and the consultants are looking at it, because it’s somewhat of a concern.

I think that the reason the conversation has been elevated is that people are really scratching their heads, and the problem is that when we finally solve the Millennial thing, isn’t like Generation Z around the corner?

BOB MILLER: [One10 bought a company, Aimia, that had] very much embraced the modern office look. It’s a renovated warehouse, it’s standup beanbag chairs, you can walk on the treadmill, all those kinds of things. I think it does have a halo effect — if someone will invest in the offices that way, they’ll do other nice things.

Mike Ryan, Hugo Slimbrouck, and Lynn Pavony


But when we actually did surveys of Millennial workers, they actually liked it less. It was completely contrary to what we thought. They were like, "we don’t want to hang out in coffee shops. We’ve been doing that. We were hoping to get an [office] door when we got a job." One of the most profound things we do as a company is a concept called Work Your Way, which means as long as you work it out with your manager, you work wherever you want in the world, every day, at any time, on your mobile or whatever. It just can’t be frontline customer service people. I think that’s the kind of benefit that — we could never put that genie back in the lamp. There’s a fair amount of debate about whether it’s great for productivity or not, but I can tell you for morale, boy do young people love that.

ALLAN SCHWEYER: The research shows that when you do things like that, it's not so much the beer on Thursdays as that people attribute to employers like that an aura of caring for employers. They almost take the beer as a proxy for an employer who's going to do other nice things for them. And so, they leave, and not necessarily just for the beer. Some of the research shows they will leave for a lower salary in return for an organization that’s perceived to care more.

GORDON: Some of these tech companies create a fun environment, right? They can go in there and they've got three different restaurants they can choose from, dry cleaning is done for them, they can do their food shopping. But what the employee doesn’t realize is that now they're working 12 hours a day.

So, they've lost the quality of life part of it, but they're induced by that environment. And there's a burnout rate, and then there's a turnover rate on it too.

LINDA NUSS: After a year or two, I’ve had people turn over, not because they were dissatisfied with their jobs, but because in New York, it’s so easy to get another job after a year, year and a half, so what do you do as a company to retain them, because it’s perfectly normal. It’s not necessarily looked down upon anymore, at least not in New York, that you only have a year or two under your belt in each position before moving along. So how do you get them to stay on board a little bit longer, because onboarding is so expensive?

MIKE RYAN: The other side of connection that I think sometimes gets overlooked fundamentally but is a big part of what we all do is the social connection. When you talk about a Millennial who’s been in a company for six months and is looking to leave in New York City, chances are they wouldn’t be doing that if they really had strong social connections with their coworkers. I think that when you look at what motivates workforces, it’s a lot more compact than companies think. You know, employee engagement is always talked about being intellectually committed to the organization and its values, et cetera. It’s really about being committed, as well, to the people on your right or your left.

You also need to look at the power that can have on a very tangible business attribute, which is the leadership side. When you talk about talent management and you break it down, it’s not just about acquiring people. It’s about building for the future, and companies are more worried about who’s going to lead in 10 years. We hiring somebody right now who is 25, 26, 27. Will they be a front-line manager when they’re 35 or will they be elsewhere?

Uncertainty

GORDON: I think risk aversion is always the No. 1 thing that we face, whether it’s a good economy or it’s a soft economy. From the client standpoint, what does it take to actually carry this off, what are the moving parts? What kind of time do I have to commit, what’s the investment, those sorts of things. So, risk aversion is always top of mind.

What’s become even more important is it’s very, very, hard to get talent right now. It really is. Four percent unemployment is an issue. Not only is it an issue from the standpoint of there aren’t a lot of bodies, but there aren’t a lot of good bodies. I get people who come in and they want to make $300,000 a year. They can make $300,000 a year if they sell to make $300,000 a year, but we’re not out of the goodness of our heart. I think the perception of what their value is in the marketplace to where their role is, is an issue right now.

How much of this is being taught in business schools? How many business schools are teaching incentive travel as a motivation tool, as a solution?
Hugo Slimbrouck


RYAN: We need to position what we do as a solution in the context of what business is worried about. Talk about uncertainty. I think one of the biggest things that they’re uncertain about relative to what’s happening in their world is the cost of labor. There is labor inflation on the horizon, no question about it, the supply and demand is just out of kilter. What we need to do as an industry is we need to talk about what we do as a legitimate and proven form of compensation.

It’s that simple. We talk a lot about the motivational side, we talk about trophy value, we talk about all the things that have been ingrained in the conversation of our industry, but what executives are tuned in to hearing is, okay, this is another form of compensation. And then you can have the conversation of, it’s more effective and, in comparison, it’s cheaper then cash. Then you can have conversations about how it can also be used from a communications point of view to distribute information about what your company stands for, and to socialize what that means.

So, I think when we talk about uncertainty, we talk about opportunity, and I think that’s one thing that we as an industry need to see and recognize and not be fearful of.

MILLER: I think your point about being part of compensation is a good one. We used to try to avoid that 30 years ago in the business. I think it goes even further, it’s not just compensation, it’s this whole total rewards concept of what’s the total value proposition of being an employee for that organization.

We need to help companies not just with the old-school thinking of I’m going to on-board an employee and motivate them, but how am I going to create a culture that attracts talent throughout my ecosphere — everything that is about people wanting to work with me as suppliers, people wanting to work for the company, and in the channel. How do you create that compelling, high-performance culture is what it’s all about, and it’s harder today.

HUGO SLIMBROUCK: But how much of this is being taught in business schools? How many business schools are teaching incentive travel as a motivation tool, as a solution?

RYAN: I have an MBA, and I think what business schools teach you to do is to think about business in a way that is beyond what the stated approach of business is. I think that if you’re creative and you’re consultative and you’re proactive and you understand basic sales — which is to speak in the context of what the buyer’s agenda is and not yours — the conversation will quickly move in that direction.

ROI 

MILLER: One of the greatest services we can provide is helping a client think through, what is the business objective, because you can’t measure how successfully you’ve addressed it if you don’t really define it. I think that’s still really hard for companies to do. The bigger, the more complex an organization, the more challenging that is. It tends to be well, we’re a president’s club. We do it every year. If you know why you’re doing it, you know whether it worked, but otherwise, it’s sort of anecdotal feedback by people that they had a good experience and might come back, but it’s really hard to do true ROI.

You've got to speak the language of the chief financial officers. That's one thing I think we as an industry don't do very well.
Mike Ryan


RYAN: ROI is important, more so now than ever. It’s a great opportunity for our industry, because of the impact it can have on talent, but at the same time, there are competitors surfacing from other parts of the talent management equation that don’t do what we do, that are more communications oriented, that are more consultative oriented, that are going to build a compelling business case, and one of the things that they do, where our industry’s credibility gets bruised a little bit, is that they really begin to understand what the numbers mean.

I think our industry talks in generalities and not numbers, but I think when you really work hard to understand what’s the true forecast on an issue, what’s the true expectation of incremental growth, then you can present numbers that are legitimate and credible. You can present them using the math that they use. You’ve got to speak the language of the chief financial officers. That’s one thing I think we as an industry don’t do very well.

We also should be more aggressive in taking credit for something that we wouldn’t normally take. When you look at the sales incentive, for example, and you talk about improving sales in a particular period of time, what’s the value of that customer over the next two, three, four years? And can you bring that number back into your program? You have to discount it, obviously, but bring it back because it is real revenue.

MILLER: I think one of the real dichotomies when we talk about this is, one side talks about the science and analytics and ROI analysis, all those kind of things, all those credible, academic sort of financially driven things, but the flip side of that is, companies don’t just share their innermost objectives, their numbers, unless there’s a high degree of trust. So, the dichotomy of our business is, it remains a relationship-driven business because unless your client-interfacing people have the trust of the right people within the client, you never get the right information in order to apply the academics.

GORDON: I think as an industry, we need to be more proactive in talking about just how valuable what we do is to the overall culture and productivity and imagination and innovation and all that. That’s what we do. The results are very tangible and proven over and over again about what works, what doesn’t work and if it’s structure is right and it’s the best return on their investment because it should be self-liquidating and not only self-liquidating, it should be profitable because they’re getting a lift from what their desire is.

RYAN: And more profitable over other options.

LYNN PAVONY: ROI is what we’re all looking for, and we are getting there, but what are your objectives? We should all be speaking return on objectives. One, it’s retention of top talent, easily measurable. When you can see what the metrics are, what their numbers are each year when you have a well-run program, those people are making it year after year and their goals are going up and so your revenues are going up as well, but again I really emphasize, at least from a travel perspective, we’re talking about connections in an office space, connections on a trip. The connections that you make with leadership and your colleagues is truly magical. 

Go back to part one of the Roundtable, "The State of the Industry," or continue on to part three, "Travel Spotlight"

More From Northstar Meetings Group

More from Northstar Meetings Group