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Maritz Travel parent Maritz Inc. last month announced a
corporate restructuring that will allow more autonomy for its
subsidiaries—Maritz Research and Maritz Loyalty, along with Maritz Travel—but
included about 100 layoffs. BTN's Chris Davis last week spoke with Maritz
Travel CEO David Peckinpaugh, an industry veteran who joined Maritz in May
after serving as head of the San Diego Convention and Visitors Bureau and
stints with meetings industry firms HelmsBriscoe and Conferon. He discussed the
impact of the restructuring on Maritz Travel and his outlook for the meetings
industry in a shaky economy. An edited transcript follows.
Could you explain Maritz's restructuring and the impetus behind it?
It ties into a long-term vision that [Maritz Inc. chairman and CEO] Steve Maritz has for his businesses. The impetus is to create self-standing, autonomous business units that really are just that: in control of their own future, instigating a new leadership structure with a board structure and bringing clarity to the businesses. Businesses go through cycles and different models, and the last decade has been spent on a centralized services model. Steve has come to the conclusion that the long-term vision for the organization is best served by the creation and true establishment of these autonomous business units. So the timing for me is perfect. I was aware of that work prior to accepting this position, and I'm in full support of the strategy. It's the right move for us, long-term. Some of the changes were unfortunate, but in the grand scheme of things, it's fairly minor in the effort to get to the place Steve's vision is taking us.
How do the layoffs affect Maritz Travel?
It's across the enterprise, but we're not getting into
details about which specific businesses are affected. While it's unfortunate,
we have to keep it in the context of the long-term vision of where were heading
with our businesses.
How does the restructuring change things for Maritz Travel,
in terms of operations and autonomy?
For the general business, it's not a huge change. Some of
the governance changes are going to be significant for me and the leadership
team. Probably by the start of the next fiscal year, we'll have a board
governance structure in place. That is still being designed and worked on, but
that will be one of the biggest changes. Overall, because of this
now-autonomous business where we'll have full view into all of our costs and
revenues, we'll be able to have a completely holistic view of the business and
make the right long-term strategic decisions. In a centralized model, very
often those costs are either done through allocations or are hidden, and it's
tough to have a clear view into how your business is or is not performing. Our
ability to control our own destiny a little bit more is what the long-term
vision is. Obviously, there will still be some things tied to the overall
enterprise, but for the most part we'll be self-standing and operating as such.
You've been in the role for a few months now. How do you see
Maritz closing out the year, and what are your plans for 2012?
In a greater business sense, we're probably 85 to 90 percent
back to where we were pre-2008, and that's pretty much across all market
segments. We're in a very healthy position. For our fiscal year 2012 [ending
March 2012], we're very encouraged by the results. Into next year, we see that
growth curve continuing. We're living in a very volatile world, and market
conditions shift almost by the minute. We've certainly seen that over the past
30 days. Right now, we feel cautiously optimistic, we see good growth for next
year, and we don't see that changing—barring unforeseen circumstances that the
world may throw at us.
Organizationally, we're embarking now on a very stringent
strategic planning process. That work kicked off [Oct. 2] and will go for the
next 90 days. I'm very encouraged and anxious to get to the end of it,
because that will show what our path is moving forward. This company is very
sound, but I do think there are opportunities to evolve this business. We have
to look at the overall mix of markets and the opportunities the global economy
is presenting us, and make sure we are positioned to take advantage of them.
That's the structure I'm currently working to put into place, both our
organizational structure and our go-to-market strategy, and how we are going to
deliver new, unique, memorable event experiences to customers.
How do you see the mix of services you offer changing?
We're virtually 100 percent deployed against the corporate
market. We're very heavily penetrated into the Fortune 500 and 100, and that's
been very good and healthy for us, but I think we need to look at other
markets, whether it's the association or government market or different
segments of the overall corporate market. That's where our focus will be. There
are emerging opportunities across the board in the evolution of meetings,
events and incentives that we need to make sure we are primed to take advantage
What are those emerging possibilities?
I don't want to tip my hat to our competitive set, so I'll
dodge that question. But I do think there are some opportunities based on my
background and a new set of eyes looking at this business that I want to
leverage. Finding those opportunities are tough, but we definitely feel like
How heavily are you invested in strategic meetings
It's still a key focus area for us. We have our alliance with American Express, Maxvantage, and they are fully deployed and focused on
the strategic meetings management market. That's run by Steve O'Malley, who is
on my team and has done a phenomenal job in getting that initiative off the
ground. We're very bullish on long-term growth in that business.
How does Maxvantage work, operationally? Are there
Maritz-only SMM efforts, or does all that business go through Maxvantage?
It's all through Maxvantage. It's our sole engine. Out of
that comes individual business and meeting opportunities. Those for the most
part come to Maritz and we operate those in our meetings, events and incentives
part of the business.
Being nearly 100 percent corporate, you're at the mercy of
economic swings in the marketplace, and things today look different than they
did in June. How has that changed your outlook?
It's increased our focus on those kinds of environmental
effects, but it has had absolutely no impact on business. We've had no
cancellations or postponements because of what's gone on this summer. That's
the good news. But we are definitely keeping a very close eye on that, spending
a lot of time with the sales organization to make sure they're in tune with
their customers so we get any leading indicators on changes that may be afoot.
So far, we really haven't seen an impact, and results right now for 2013 are
very encouraging. We do have to keep an eye on it, though.
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