Upon arrival at Ikea Group three and a half years ago, meeting and travel manager Torbjörn Erling was tasked with slashing 50 percent of Ikea's travel costs in relation to sales by 2011; he managed to achieve that goal ahead of schedule by implementing a travel policy that directs employees to use videoconferencing. Speaking here at the Business Travel and Meetings Show, Erling told audience members that Ikea had a travel-focused culture, in which its 20,000 travelers--including 2,500 frequent travelers--traveled mainly because such other solutions as Web- and videoconferencing were not properly communicated.
Initially, Erling sought out the familiar methods of cutting travel costs: reevaluating supplier contracts and, in some cases, consolidating them. It quickly became evident that a more "radical" approach was necessary and converging travel with meetings was the solution.
"There was an increased need to meet more," Erling said. "[Ikea] was submitting to travel, but we asked ourselves if it would be possible to change the mindset of all the workers to not focus on travel but on meetings."
Ikea rapidly increased its global market share during the past decade, with total sales climbing from €19.8 million in 2007 to €21.5 billion in 2009. With pressure to stay ahead of the curve, Ikea employees believed face-to-face meetings were necessary to accomplish their goals. Two and a half years prior to Erling's arrival, Ikea's travel costs had been skyrocketing 20 percent each year, mainly because travelers abided by a corporate culture driven by travel, Erling said.
Erling and the travel team enacted a new travel policy that took focus away from the specifications of travel and instead asked travelers to consider less costly and less time-consuming means of meeting. The policy received full senior leadership support and was mandated, Erling said.
"We got the mandate and decided not to make the strategy about travel but meetings," said Erling, whose team reports directly to senior leadership and the CEO. "We decided to call it 'Meeting the Ikea Way' and obviously travel would still be part of it but the slogan was to find a way to meet more but to travel less."
Additionally, Erling began to calculate the return on investment of meetings to grab travelers' attention to cost cutting. If a trip would not produce what Ikea referred to as a "meeting profit" based upon the methodology of the ROI Institute, then travelers were directed to the travel alternatives, Erling said.
Going beyond the mandated policy, Erling and his team focused on educating travelers on the use of Web meetings and videoconferencing, with the eventual goal of reducing overall travel costs by shifting the corporate culture and traveler behavior.
To Erling's surprise, minimal cost and effort were needed in order to make videoconferencing a reality because Ikea already had installed equipment in its main offices in Asia, Europe and North America. Though that equipment had been available for years before the new travel and meetings policy was implemented, travelers did not know it existed.
"The equipment was hardly used at all, as the policy was not good enough, and, most importantly, there was no IT support," Erling said. By contracting with local IT companies to build out support and update the videoconferencing equipment in the top 10 "meeting-intensive sites," Erling was able to offer more attractive technology to employees to entice them away from travel.
By achieving a mandate from Ikea's senior leadership, Erling was able to get the attention of Ikea's travelers and communicate more efficiently to other travel organizers globally. Within each major meetings destination worldwide--mostly located in Europe and North America--Erling was able to appoint a point-person to inform local travelers about the new policy and to encourage use of webconferencing and other methods of meeting other than travel.
"We needed to straighten the organization in order to be successful with this," Erling said. "We realized we would need someone in each country that could take full responsibility of managing the program on the local level. We communicated with management in each country so that they could provide the coordinator with support."
In turn, Web meetings powered by the WebEx videoconferencing product became "the biggest success" in Ikea, according to Erling, as travelers booked around 300,000 meetings via the Internet in 2009. As such, the Ikea team reached its cost-cutting goal in 2009--just one year and two months after the WebEx launch. Along with cutting costs, Web meetings improved employees' work-life balance and reduced Ikea's carbon emissions from 45,500 tons in 2007 to 30,000 tons in 2009, which was tracked manually from data provided by Ikea's travel management company, boasted Erling.
"We used to have people traveling into the head office in Philadelphia to do sales training on a regular basis, and they would have to travel back to train staff secondhand. Now, instead of having these 30 people traveling, you can actually have 50 workers getting the information firsthand," Erling said. "By more employees receiving the information firsthand, they felt more a part of the global team and that was actual synergy that we didn’t predict happening."
The gradual increase in travel directly "impacted the stress levels of [Ikea] travelers," Erling admitted. Webconferencing, however, provides travelers with more work-life balance support and "provides them with the alternatives to spend more time in the office."
The travel department aims to work closely with human resources to better understand whether the new policy impacts travelers negatively and to obtain a better grasp on Ikea’s employees.
Much of Ikea's policy is geared toward small to medium-size meetings, as companywide conventions occur less often, Erling attested. Moving forward, the Ikea team will be more focused on strategic meetings management practices, ensuring cost control and quality to the larger meetings. Also, Ikea is "developing a training program for all the coordinators, equipping them with mandates so they can grow, learn and become more qualified in how they manage and coordinate the process," Erling said.