Calculating the Cost of Meetings

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Kaz Nejatian, Chief Operating Officer of Canadian e-commerce company Shopify, has created a meeting cost calculator for his organization. Nejatian developed the software program to calculate the cost of meetings during a company hack-a-thon. According to Nejatian, meetings per worker have declined by 14% this year, and productivity has risen.  Bloomberg's Matthew Boyle describes this innovative new approach to curtailing excessive meetings:

The Canadian e-commerce company has rolled out a calculator embedded in employees’ calendar app that estimates the cost of any meeting with three or more people. The tool uses average compensation data across roles and disciplines, along with meeting length and attendee count, to put a price tag on the event.

A typical 30 minute endeavor with three employees can run from $700 up to $1,600. Adding an executive — like Chief Operating Officer Kaz Nejatian, who built the program during a company-wide hack day — can shoot the cost above $2,000.

As I read about this article, I contemplated why excessive meetings sometimes take place.  Many reasons exist - positive and negative.  For example, sometimes leaders really are trying to give a range of people an opportunity to provide input, and they are involving others to build buy-in for a course of action.  On other occasions, though, leaders are simply engaging in what Michael Watkins calls the "charade of consultation." In other words, they hold the meeting to make it seem as though they are soliciting input, but in fact, they have already made up their mind.  It's all a show.  Another reason we have excessive meetings in many organizations is that managers want to avoid accountability and responsibility.   They call others to meetings so as to avoid being put on the spot if a plan goes awry.  They intentionally create a "when everyone is responsible, no one is responsible" culture.  Without a doubt, many unnecessary or unproductive meetings take place every day in organizations.  

Is there any danger though in trying to reduce the number of meetings?  First and foremost, some issues are better hashed out as a group, rather than in one-on-one conversations or email threads.   If we eliminate meetings, but simply replace them with a long set of email threads, we may not truly be increasing productivity.  In fact, we just be shifting our time from one form of communication to another, and one that is perhaps more inefficient.  Second, successful implementation of key initiatives requires a great deal of coordination.  Moreover, it requires a strong shared understanding of the plan, something that may not be achievable without critical meetings.  Third, employees may come to feel as though decision-making processes are not fair, if they are left out of the deliberation process.  If they don't feel as though they have been given voice, then they may not commit and buy into the plans being enacted.   Finally, plenty of learning can take place in meetings, as junior employees soak in knowledge from discussions and analysis undertaken.  Moreover, they watch how others conduct themselves, make presentations, and answer hard questions.  This on-the-spot learning may be lost if too many meetings are eliminated.  

In sum, the goal is admirable.  We all can identify many unproductive meetings we have attended.  However, we need to remember that most things we do require input, support, and collaboration with others.  We do few things alone in organizations.  Meetings serve as important coordination mechanisms in many cases. 

A Gen Z Board of Advisers at The Body Shop

Source: HR Exchange Network

What's the average age of the Board members of your company?  For many companies, that average is much higher than the average age of their customers, and higher than the employee population as well.  You can see where decisions made by the Board might not always be informed by up-to-date thinking about the values, goals, beliefs, and needs of Gen Z and Millennials.  What can companies do to bridge this gap?  Orianna Rosa Royle has written an interesting piece for Fortune about one firm's attempt to address this issue.   In her article, she describes The Body Shop's Youth Collective advisory board. 

Other companies have tried similar structures, but not always with as much success as anticipated.  In the worst cases, employees view these advisory boards as all for show, without any real substance.  The Body Shop has structured the board and its process in ways that increase the likelihood of securing valuable input and constructive criticism, while building trust with employees.   First, 50% of the members come from within the company, while the other half are from external organizations.  This balance seems very important.  The internal members have a strong vested interest in the organization's success.  Meanwhile, the external members provide a valuable outside perspective, and they perhaps feel safer speaking up with their concerns or feedback.  

Second, not every issue comes before the advisory board. Royle writes that The Body Shop "avoids drawing on their expertise unless a problem needs out-of-the-box thinking that the older leadership team can’t crack."  In other words, align the issues brought before the advisory board with the core purpose of that group.  Don't simply try to replicate the conversations that a board of directors might have.

Third, and perhaps most importantly, The Body Shop has outlined the ground rules and shared norms for this group in a very clear manner. Most importantly, everyone has a voice, and there's a commitment to listen and consider each opinion in a genuine manner.  That doesn't mean the group always gets their way.  The Body Shop executive and board of directors member Chris Davis notes, “Do we always listen? Yes. Do we always act? No. When we don’t, we explain why. When we do, we explain why—that’s part of the deal.  There will always be feedback and full transparency so it’s clear that everybody is heard.”  In short, The Body Shop has tried to create a fair and legitimate consultation process.  Fair process means giving people voice and considering their views genuinely, but not taking a vote and making decisions democratically.  In the end, creating a strong perception of procedural fairness means explaining decision rationale, and specifically why leaders acted on the group's recommendations or why they chose not to do so.  If you don't create this perception of a fair and legitimate process, people will stop offering their input.  Trust will be broken. 

Fairness and Leading Change

Eliane Bacha and Sandra Walker have published a new article in the Journal of Business Ethics.   The paper examines the relationship between perceptions of fairness and transformational leadership.  The scholars studied 100 European companies.   They found a relationship between certain types of fairness and the ability to inspire change.  In this article in The Guardian, Polly Courtice, director of the Cambridge Programme for Sustainable Leadership (CPSL), explains why perceptions of fairness matter:  "Fairness reflects an assumption about fundamental equality… about not putting your rank in front of other people's interests."   Co-author of the article Sandra Walker notes, "What they [employees] care about is whether they are active in decision-making and how they are treated by their boss." 

Fairness does not mean that everyone gets treated identically, of course.   There is a significant difference between outcome fairness and procedural fairness.  Leaders can't always make it such that all outcomes are equal or fair.  However, they can make the process of decision-making more fair.  They can invite input, demonstrate strong consideration of others' views, give others an opportunity to influence the final decision, and lead a transparent decision process.  If they create procedural fairness, then they can build commitment and buy-in even if all parties do not agree with the final decision.

Stop the Charade!

I continue to be amazed at how many executives get themselves into trouble with their teams by engaging in what my friend and colleague Michael Watkins calls the "charade of consultation."   The charade occurs when an executive makes a decision, and then goes to his team to "consult" them about the issue.   The executive might even entertain a discussion of multiple options, yet then steer the dialogue toward the alternative he or she preferred from the outset.  Naturally, team members see right through the charade.  Such leadership approaches actually diminish trust and commitment. 

Scholars have shown that people care about the procedural fairness of decision-making processes; they don't just care about the outcomes.   When leaders engage in the "charade of consultation," they create the perception of an unfair process.  The research clearly shows that perceptions of procedural fairness affect buy-in, trust, and commitment.