Managing Meetings At: Weyerhaeuser Co.--Co. Mandates Mtgs. Registration, Saves Millions
Two years after implementing a mandated meetings policy, including the potential nonreimbursement of meeting expenses as a consequence of noncompliance, major forestry firm Weyerhaeuser Co. in 2003 saved and avoided millions of dollars in group and meeting travel expenditures.
That policy, enacted in December 2001, directs internal sponsors to register each of the 950-plus meetings the Federal Way, Wash.-based company stages per year with Weyerhaeuser's travel and meetings department. The department has the authority to negotiate and sign contracts and drive meetings to the company's preferred transient destinations and hotels. In addition, Weyerhaeuser in late 2002 introduced a MasterCard-branded meetings card, which is used by the company's meeting planners for all corporate meeting expenses.
As a result of the policy changes, about 95 percent of all Weyerhaeuser meetings are appropriately registered, said director of travel and meetings Suzanne Fletcher, with the remainder typically a result of meeting sponsors unaware of the policy.
One key to the success of the policy is the provision that threatens nonreimbursement. Though a part of many corporations' transient travel policies, including Weyerhaeuser's, far fewer have incorporated such a penalty in their meeting policies, largely due to the amount of money involved in a given event.
While Weyerhaeuser officials declined to directly address whether the nonreimbursement penalty has ever been assessed, that the possibility exists apparently is motivation enough for sponsors to comply.
"I can't tell you whether we've issued a cease-and-desist order, but we do use that behavior in corporate travel," Fletcher said. "We will not reimburse noncompliant behavior in transient travel, so they take it seriously on the meetings side as well."
Once meeting sponsors register their events with the travel and meetings department—comprised of Fletcher and four meeting planners—site selection evaluation begins. "We have a meeting request template on the intranet," according to Fletcher. "We will run an analysis of air expenditures upon request, and we will make recommendations to drive the meeting to our transient preferred hotels."
Weyerhaeuser does not have a roster of preferred meeting hotels, and the company uses its negotiated transient discounts for attendee air travel, though Fletcher noted that the changing landscape of airline negotiating eventually may necessitate use of zone fares or other airline meeting products.
The travel and meetings department has the authority to compel site selection, though it's rarely necessary. "The policy says that we have as much directive to do that as we need, because we want to go wherever is the most cost effective," said Weyerhaeuser meeting planner Kristin Wilson. "But most everyone follows our recommendation."
The department does not charge back for its services, unless a meeting requires one of the planners to work onsite during the event. All meeting expenses, though, are paid with a MasterCard meetings card. "We introduced that in October 2002," Fletcher said. "It's a T&E card in the planners' names on which all costs go. We will use the sponsor's chargeback number for the general ledger."
Once data is collected on the meetings card, the department manually logs the figures onto a spreadsheet and conducts extensive analysis to determine the levels of cost savings and avoidance achieved. Weyerhaeuser uses several metrics in its reviews.
"We track every meeting," Wilson said. "We track how much we were able to reduce cancellation penalties, or rates or food and beverage. Those are hard numbers, and we break them out separately."
Weyerhaeuser also tracks cost avoidance, based generally on a presumed amount the company would have spent were a given event planned without the meetings department's imprimatur. Given that the company's high level of meetings policy compliance leaves Fletcher's department with few internal examples of the effects of noncompliant planning, the company uses benchmarks from industry organizations and travel and meeting management companies.
"We look at industry benchmarks for the effects of sleeping room no-shows on rooming lists and attrition and cancellation fees," Wilson said. "We've been able to negotiate a clause rebooking canceled space in our contracts, and that has been huge. We're trying to pinpoint things that are easy to understand, tangible and trackable."
The result, Fletcher said, is about a 20 percent savings and avoidance of Weyerhaeuser's meeting expenditures last year.
Fletcher noted much of the credit for the implementation and success of the company's meetings policy should be awarded to Weyerhaeuser's senior management. "The credit must go there for their support of the mandate," she said. "We've had incredible support from our CFO. I went to him, told him we were losing a ton of money because of unauthorized people signing contracts. They gave us the go-ahead for a functional policy."
As is the case in many corporations that have instituted strict meetings policies, there was resistance from Weyerhaeuser meeting sponsors, Fletcher said, but it is waning. "The typical cycle is that first they fight it, then they acquiesce, then they realize we're good and then they give us the whole meeting," she said. "We've come full circle."
With the meetings policy fully implemented and widely communicated throughout the company, Fletcher has turned her attention to further developments. Though she said she sees little need, as of now, for a full-service meetings technology tool given the confines of Weyerhaeuser's program, the company earlier this year purchased Register123, an online registration tool offered by San Francisco-based Certain Software, to streamline that specific function. "It's a low priority for us," she said. "We're not a pharmaceutical company. It's tough to justify spending for a full technological option."
More importantly, Fletcher said, the travel and meetings department soon will embark upon an extensive project designed to smooth the meeting planning process among sponsors, planners and vendors. Though the project still is in the review and analysis stage, Fletcher said it will be the department's top priority through the end of 2005.