Reading Required: Novo Nordisk Ensures Employees Can't Claim Meetings Policy Ignorance - Business Travel News

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Reading Required: Novo Nordisk Ensures Employees Can't Claim Meetings Policy Ignorance

December 12, 2012 - 03:35 PM ET

By Chris Davis

Employees can't be expected to follow policies if they don't know what they are. It's why large companies, especially, spend countless hours and dollars devising multi-platform communication strategies to reach as many employees as possible to alert them to travel and meetings policies, preferred suppliers and possible alternatives.

Tom Tolvé took that concept a step further. As associate director of meeting management for the Princeton, N.J.-based U.S. operations of Danish pharmaceutical firm Novo Nordisk, Tolvé this year secured a mandate from senior management to include meetings policy details in the company's standard operating procedure—a list of company policies that is required reading for all new hires and employees in key roles.

The move ensured that the details of Novo Nordisk's mature, centralized U.S. meetings program, built from scratch during the past decade by Tolvé and his team, is presented in front of anyone who has or will have responsibility for spending company dollars on meetings and events.

Tom Tolve"Since it wasn't mandatory reading, unless you were smart enough to say, 'I want to do a meeting; Oh, I wonder if we have a policy on that,' or knew me or someone on our team," there was no guarantee the policy would be followed or even read, Tolvé said. "Working with our SOP enforcement group, we identified that anyone in an administrator role or who sits in a marketing, sales, training" or other associated role needed to acknowledge they had read the policy.

"One of the best wins came maybe two months after it became SOP," Tolvé said. "I was walking down the hall and there was a VP walking with her team members. Out of the blue, I heard her say, 'The policy is 30 rooms, and you have to register the meeting.' I thought, oh my God, people are reading the SOP and they're retaining it. And she's a VP, bringing it to her team. Just one moment when you realize people are getting it."

Securing senior management approval of the mandate wasn't a huge hurdle, given that the department had established internal credibility with the successful construction and rollout of Novo Nordisk's centralized meetings sourcing program.

Birth Of A Program 

After working at Bristol-Myers Squibb, a fellow pharmaceutical company that for years had operated a consolidated meetings management program, Tolvé in 2002 joined Novo Nordisk, a company then with no real meetings management strategy. "I came here with the mindset that this would happen for us here," he said.

Tolvé's first opportunity to begin construction came a few years later when, similar to the genesis of many corporate strategic meetings management programs, senior management asked questions about meetings volume that couldn't immediately be answered due to the lack of centralized spending data. Tolvé ran with the opportunity the unfulfilled request offered by assessing the meetings-management needs of the company, benchmarking practices with similar firms, analyzing tech products and eventually developing Novo Nordisk's first meetings policy.

"We wanted to start by establishing criteria for registration of a meeting," he explained. "We knew that we weren't capturing what people were doing. There was no consolidation, so whether it was a third-party agency booking a meeting on our behalf or someone booking internally, there were all these different contacts out there. Nobody knew who Novo Nordisk was and nobody really cared."

As a first step in determining who was planning and paying for meetings, Tolvé worked with Novo Nordisk's strategic sourcing and finance departments to search paid invoices for large hotel chains. With most stakeholders identified, Tolvé's department commissioned an internal pilot group to help construct the pillars of the policy and program. The company decided to introduce the program in phases, roughly to one of Novo Nordisk's nine main departments per month.

The first policy included what Tolvé called the "50-50-50" rule: Any Novo Nordisk meeting that included 50 attendees, 50 cumulative hotel room nights or a $50,000 budget had to be registered through the meetings department. A meeting request form, based on technology purchased from meetings technology firm StarCite, was installed on the company intranet. When a request was received, either through the intranet form or through offline channels, Tolvé's department would begin a sourcing process with all appropriate hotels in the requested destination.

But soon after the program debuted to wide acceptance, Tolvé noticed that high compliance came with a few unanticipated quirks: Some meetings were being registered that didn't really require much sourcing, but the high volume of those that did began to overwhelm Tolvé's seven-person department.

"We had all these people who were asking to book a two-hour day meeting because the department had 55 people in it," Tolvé said. The company addressed the situation by shifting policy a few times to require registration of meetings with 50 people and at least 10 room nights. But the number of requests for sourcing necessitated a more comprehensive solution.

After conducting a formal request-for-proposal process to select a meetings management company, Novo Nordisk selected Robbinsville, N.J.-based Meeting Alliance. That company's director of sourcing, Mary Jo Kouch, is a "full-time person in the office, an employee of the agency but who sits in Princeton," Tolvé said.

SNAPSHOT

Organization: The U.S. operations of Danish pharmaceutical firm Novo Nordisk, a parent company with operations or affiliates in 89 countries and 2011 sales of 66.3 billion Danish kroner (US$11.5 billion)

Volume: $60 million in 2011 meetings volume for U.S. operations

Challenge: Boost compliance to registration requirements of mature U.S. meetings sourcing program

Approach: Ensure meetings policy reaches all applicable stakeholders

Solution: Include policy in a package of companywide documents that are required reading for administrators

Keyword: Flexibility 

Outside of sourcing, Novo Nordisk's meetings program isn't among the most rigid. There is neither a requirement to use the online meeting request form nor a role played by the meetings department to ensure meetings are approved. There also is no obligation for meetings to be placed in preferred transient hotels. (In fact, there's no link at all with the company's transient travel management program.) That's by design, befitting the culture of rapidly growing Novo Nordisk, Tolvé said.

"Our process is the same as five years ago, and the one motto we've always maintained is that we have to be flexible," he said, noting the policy further has been revised to now require registration of 30 attendees, 30 room nights or a $30,000 budget, to ensure all events with health care professional attendees are being captured.

Today, when a meeting request is received, Kouch and the Novo Nordisk sourcing team will present the stakeholder with a list of potential meeting sites, all pertinent rates and contract information. When a site is selected, one of four preferred meetings logistics management agencies sometimes will be retained to handle meeting details (including payment), and a contract is negotiated, routed to the company's legal department for approval and signed by the budget owner.

Even with the required-reading policy mandate, there are rare cases of noncompliance, though almost none are willful, Tolvé said, relating a story about a recent meeting that was placed outside of the department's purview at a local hotel by an inexperienced stakeholder. "Sure enough, for a 12-person meeting for three nights, the hotel had a $7,600 food and beverage minimum that the person didn't see in the contract, and Mary Jo caught it," he said. "Turns out the hotel cut and pasted from another contract, and it was an innocent mistake, but it's an example of the value of having someone do this for a living. This woman would have signed this contract holding her to the $7,600. So this minimized the risk, and here's one more person with a deeper allegiance to the program."

After successfully negotiating that clause to a $1,000 minimum, Tolvé's team can count that as $6,600 in cost avoidance, part of the formula he uses to determine the program's effectiveness. Tolvé compiles all hard-dollar negotiated savings from the hotel sourcing process with those negotiated in the logistical planning process (for services like ground transportation) and savings generated with master service agreements with other suppliers, like audiovisual vendors.

All told, the program in 2011 generated a savings rate of 19.4 percent on 220 meetings representing about $60 million in spend. This year, through the end of October, those figures are about 19.6 percent savings on 272 meetings.

Such figures are among those presented annually by Tolvé to senior management. "We used to do it monthly, then it was quarterly, then it was every six months, and now we just do an annual report of spending and savings, in different ways, by division, the average cost per person, etc.," he said. "We slice and dice it a lot of ways. But the message I received early on was, 'This information is great, but it's also overkill. Once a year, knowing that there's the ability to get it if we want it more, is enough for us to know that this program is working.' "

"But I'm still the one who slices and dices a lot more," Tolvé said, "for my own curiosity."

This report originally appeared in the November 2012 issue of Travel Procurement. 

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