Melissa Van Dyke has been President of the Incentive Research Foundation for more than six years, during which time she has helped triple the organization’s research and education footprint. The IRF funds and promotes research to advance the science and enhance the awareness and appropriate application of motivation and incentives in business and industry globally.
Meeting and incentive planners spend months — or even years — researching, visioning, planning, scripting, scheduling and choreographing a flawless event. More and more, however, major event disruptions are becoming a very real and unavoidable part of doing business in the meetings and incentives industry. Almost 60 percent of planners estimate that one of their events in the last 12 months has experienced a major disruption.
But what counts as a major disruption to meetings and incentives? For purposes of the recent Incentive Research Foundation (IRF) Event Disruption Study, we looked at major challenges negatively impacting the attendee experience, event finances and company reputation. Disruptive incidents can include weather-related phenomena, public enemy occurrences such as wars and terrorism, business partners’ mistakes and even the client’s lack of cooperation.
The IRF’s 2016 Event Disruption Study examined these occurrences and confirmed that disruptions are occurring with greater frequency. The result? Planning for disruption and mitigating risk are now critical parts of the meeting planner’s job. Planners estimated they now spend up to 25 percent of their time planning for potential disruptions, and nearly 40 percent of the planners expected their time and effort spent planning for disruptions to increase somewhat in the next two years.
But these disruptions did not always come from the places one might expect. Although weather-related events and acts of God were reported by 38 percent of respondents, vendor failures were the second highest cause, cited by over one- quarter of planners. Of the available partners, airlines presented the most frequent frustrations (61 percent) for planners, through cancellations, delays and overbooking.
These disruptions were not just an issue for the participants, organizers or company brand either.
Over 40 percent of planners reported that one or more of their recent disruptions caused financial loss with the most frequent financial loss falling between $10,000 and $99,999.
So how are meeting planners preparing for the unexpected? The study pointed to proper planning measures such as risk evaluation, contingency planning and legal protection, but even more importantly, working with trusted partners. Planners listed vendor trust — strong relationships and cooperation with vendor partners — as the most needed resource for disruption planning. When evaluating what built trust within the vendor partner relationship, a vendor partner’s cooperative behavior had the strongest impact (64 percent), followed by the partner’s creativity (57 percent), resources (55 percent), and then financial capability (53 percent).
With an eye on potential disruptions, building partner trust starts earlier and requires heightened levels of planning, collaboration and negotiation. For example, over 90 percent of planners said their companies require contingency plans — with 54 percent requiring them for all events and 37 percent for some of their events.
The good news is that companies are providing support to planners. Over two-thirds of planners say their companies provide guidelines or assistance with contingency planning. This type of support takes on many forms.
Once the company requires inclusion of contingency plans for disruptions, the majority of them (68 percent) provide guidelines or assistance, although 21 percent of the companies still do not provide any contingency support. This planning takes on a myriad of styles and varies from company to company, as the condensed sample list shows (see box below).
Legal protection is of course key for organizations running modern meetings. While limitation of liabilities is the most frequently included legal protection in contracts, planners often or always required force majeure or indemnification in their vendor contracts as well. Roughly 70 percent of planners also requested waivers for attendees and guests.
Beyond vendor trust and legal protection, communication and switching partners are also key strategies. Nearly half (49 percent) of planning companies actively communicated potential disruption situations and suggested actions to their attendees. Organizations requiring vendor contingency plans are more likely to communicate about potential disruptions and suggested actions.
Likewise, almost half the planners (49 percent) said a partner’s poor disruption handling has caused them to switch at least one partner. Almost 70 percent of planners have switched the destination due to perceived risks or disruptions. Hotels were the most frequently switched partner (26 percent) for failure and poor disruption handling.
According to the study, previous disruption experiences seem to make planners even more careful in assessing disruption risks associated with the event venue and partners, perhaps because most disruptions were attributable to the venue or partner. Planners who had experienced disruptions in the past 12 months discussed potential disruptions and contingency plans with their business partners 14 percent more often than planners who had not experienced disruptions during the same time frame.
Before contracting, the planners who have experienced disruption in the past 12 months evaluated destination venue (16 percent greater) and potential program partners (13 percent greater) to a greater extent than planners who had not experienced disruptions. Not surprisingly, as the amount of financial loss an organization has experienced from a disrupted event increases, so does the organization’s tendency to readily switch vendor partners for perceived risks.
Most importantly, the 2016 Event Disruption Study revealed a crucial cycle: as disruption becomes more of a constant, the more planners must focus on disruption planning with their partners. When a planner experiences a disruption, those “lessons learned” raise new concerns that must be addressed with partners during the next cycle of contracting and planning. With this heightened awareness of potential disruptions, working with trusted (creative, cooperative and often patient) partners is more critical than ever. C&IT
The 2016 Event Disruption Study can be viewed and downloaded here: http:theirf.org/research/2016-event-disruption-study/2134/.