Senior management support generally is among the most important criteria for any successful corporate initiative. Travel management and procurement professionals say it's particularly true in the context of travel policy adherence, where getting employees to behave as prescribed can be challenging. At Agilent Technologies, leaders have gone beyond merely approving travel management proposals: They are vocal in insisting that employees follow new policies, involved in both active and passive trip approvals, and generally practice what the company preaches, according to global travel sourcing director Cindy Message.
The company's CEO has been involved in Agilent's overall expense-control efforts since the aftermath of the 2001 dot-com downturn and with the travel program specifically from 2006, when "we really detailed the travel spend data," Message explained.
Agilent in March 2008 again perceived a softening in its market, Message said. The company's CEO, William Sullivan, requested a reduction in travel spending. Not seeing the results he had hoped for, Sullivan by July "started getting very concerned and he said, 'When I say stop, I mean stop. From now on, all travel has to be approved by either myself or the CFO,' " Message said of the firm's CEO.
"We put that policy in place with our travel management company [BCD Travel in the United States] pretty much overnight so that the people who were answering the phone and booking travel had to ask who approved this," Message said. She also noted that travelers were required to start including trip authorizations with their expense reports.
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A key component of a demand-management focus, the approvals strategy required collaboration with travel technology vendor Concur, which furnishes an online booking tool for Agilent's program. "We worked with [Concur's] Cliqbook to put in place approval levels and a page showing who is approving your travel," Message explained. "That was the way we put it into place without making a big announcement in the company."
Specifically, a pane within the Concur booking interface asks travelers why they are taking trips and includes a dropdown menu listing all Agilent managers authorized to approve travel. Travelers must select the applicable manager to proceed with the booking.
The active approvals strategy of requiring travelers to identify who has authorized a trip is augmented by a passive approvals process. Senior vice presidents "determine how much they are going to spend on a quarterly basis and get that approved in their budgets, and they monitor it," Message said. "They may tell someone that they are approved for these trips, or these types of trips, but then passive approvals [via e-mail] go to the manager, so they know what is happening and they can intercede if they need to. That has worked very effectively."
Message provided this hypothetical example: "If I book a trip today to go to Washington, and my manager already told me last month that I can take this trip but now he is looking at the numbers, needs that money somewhere else and decides this is not a critical trip, he might call me up when he sees it come across as an e-mail and tell me to cancel. If canceled right away, of course, it costs us nothing. That's where the passive comes in, and we always leave that in place."
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Message provided examples of how the most senior executives in the company have acted as role models for the rest of Agilent's travelers and used new processes to keep tabs on their division's expenses. She recounted how the CEO on one trip to London had stayed in a lower-tier hotel property and how his staffers back in headquarters expected the worst when he returned. "When he came back, the first thing he did when he walked in the room unannounced is he said, 'I've got to tell you about this great place I stayed in London. It was one-third the cost of anywhere else, had a clean room, hot shower and comfortable bed. I love our travel program,' " Message said. "He created a sense of mythology, which is very important in a company's culture. It shows that he absolutely follows the process." It also shows employees that no one gets special treatment.
Agilent a few years ago had adjusted its hotel program by "moving more toward business-class hotels and away from luxury-class hotels," Message said.
She noted another discussion with Sullivan during which "he was talking about how, frequently, when we travel, we are only in the hotel five or six hours. We get there late and get up the next morning to go to meetings. He reinforced that he's very happy with the choice of hotels that we have in the program and if people are not happy with them, we are willing to look at alternatives."
In another instance, according to Message, a senior vice president told the travel team, "I had to approve 12 people going to the East Coast for a one-hour meeting, which of course I didn't approve, but I wouldn't have known about that before. But now I know about it and can think about other ways that people can conduct their business."
In China, Message noted, "we had a real problem getting people onboard" with the travel program, and travel policy compliance had been at around 20 percent. "Our CFO took it seriously and went to the China country management committee and he said, 'I am asking [the travel department] to give me names of anyone who is staying [at hotels] out of compliance. When I come back, I want to review the list and we will take action that could include termination,' " she relayed. "As a result of that, our compliance is now 93 percent (with exceptions for things like conferences). That took six months. The fact that he was emphatic about it is what created a successful outcome."
Message noted that Agilent earlier in the decade had considered nonreimbursement for travelers breaking policy. The company's legal department, according to Message, said, " 'No, you can't do that. You can fire them, but you have to reimburse them if it is an expense to the business.' " [One caveat, she added, is that "anything you turn in on an expense report can be questioned" to determine if it actually is a valid business expense.]
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Therefore, "that became part of our new policy. If you stay outside the policy, you can be fired." Message explained that noncompliance to company policies now generally triggers "an investigation and corrective action, ranging from request for reimbursement to misconduct. If misconduct is the result, this can lead to termination."
Results
During Agilent's fiscal 2008 (started in November 2007), the company's travel spend "was much higher than it had been the previous year," Message said, and in March and April was about even with the same periods a year earlier. But by July--when the company's CEO demanded a better response to his travel reduction demand--"it dropped dramatically." Travel spending year over year was then down a lot in August 2008, marginally in September and noticeably in October, according to Message's presentation during an Association of Corporate Travel Executives conference in April. In the first three months of the current fiscal year (November 2008 to January 2009), "you can see a dramatic decline," she continued. "That is the kind of impact we have had from managing demand."
Message noted that senior vice presidents at first "absolutely hated it when we put the mandates in place, and I had complaints from them," but within a few months they came around.
Message suggested that gaining senior management buy-in is a platitude, "but I can't tell you what a difference it has made," she said. "And we do it through data--being very confident when talking to him about, 'If we make these changes, these are the results we are going to see.' And they all happened, and because of that he has been extremely supportive."