Company CEO Keeps Handle On Travel Program

<I>Phoenix</I> - It's not always easy to get the much-needed input and support of senior-level executives when creating a corporate travel management program. But in some cases, it's the senior executives who understand that even if a company spends a relatively small amount on travel, managing the program makes sense.

Such is the case of Peter Woog, president and chief executive officer of Cable Systems International, a privately held manufacturer whose approximately 200 travelers purchase $3 million in travel services each year to support its $400 million in sales.

Phoenix-based CSI, now the world's largest copper cable manufacturer, was spun off from AT&T in 1995, with Woog's help. Woog then gave logistics manager Bert Bialek free reign to implement the company's own travel policy. Since then, Bialek has created a travel policy committee; negotiated preferred deals and instituted strict service requirements with America West, Delta, Avis, a number of hotels and new agency American Express; recently mandated a two-hour window for lowest logical airfare; and is now exploring new ventures with automated expense reporting.

The company realizes an impressive compliance rate of more than 95 percent, and instances of breakage are rare. CSI has saved $1.2 million through the program so far, and employees understand that their travel decisions affect the bottom line, as well as their profit-sharing plan, Woog said.

Perhaps the best indication of Woog's attitude toward travel management can be found in his explanation of how he contributes to maintaining policy compliance: "I don't want to be treated differently than anyone else in our group," he said. "Some people think I should fly first class, but I get there the same whether I'm in the back of the plane or the front."

In its air policy, CSI allows coach seating for domestic travel and business class for international; it does not pay for airport club memberships. Although the travel program's overall goals are similar to those of AT&T, travel policy is a bit tighter than what employees were used to when the company was part of the telephone giant.

Beyond leading by example, Woog is closely involved with the enforcement of policy. Asked what happens when someone breaks policy, Woog said, "First they get a valentine from our CFO asking what they're doing to correct the problem. If it happens a second time, that means they're trying to test you." In that case, said Woog, the traveler will be invited to "take a little walk" with him, and he could even have his rights to travel removed. "If folks aren't going to take this seriously, it reflects on what else they might not take seriously. I don't think the rules are all that tough," Woog added.

Despite this focus on compliance, Woog remains sensitive to business needs. He said the policy "reflects our basic trust in employees to make decisions--we don't want our guidelines to be onerous to the time concerns of the individual. Our needs are threefold: to have the lowest cost, to meet all business objectives and to ensure convenience and safety." For example, CSI's policy requires acceptance of advance tickets and penalty fares only when plans are "reasonably firm," Bialek said.

CSI has various metrics in place to measure supplier service levels. Like many companies, there is a provision in CSI's contract with American Express to ensure quick telephone response. Not only does the company "make Bert's life miserable" when required levels are not achieved, said Woog, but "we don't fool around very long when we're not happy."

Woog meets weekly with Bialek, who also manages some of the firm's other needs, such as freight. "He's in charge of a lot of money," said Woog. "And he has taken significant costs out of that program."

Meanwhile, the travel policy committee, chaired by chief financial officer Bruce Burkett, meets every three months. The committee also include Bialek, Woog's secretary and people from security, sales and product management.

Woog keeps a close eye on travel costs through management reports, particularly "benchmarking absolute dollars versus results." Although travel costs as a percentage of sales is a figure the company watches, it's a secondary tracking device, Woog said.

While Bialek handles negotiating with suppliers, Woog gets involved "when it's appropriate--Bert's got the ball and he's running with it."

But Bialek said he wouldn't be getting very far without Woog's support. "People ask, 'does your CEO listen?' and I can answer yes, and he's very conscientious about travel," Bialek said. "Without his mandate, our travel spend would be splintered.