By Paul Waadevig
Senior Consultant, Unified Communications
Frost & Sullivan
August 2009
In a previous article, I mentioned that the current public perception that corporate travel was an unnecessary expense in tough economic times was the "third strike" for the travel industry (the first being the 9/11/01 attacks, second being the increase in fees when oil was over $100 per barrel). However, shortly after I wrote those words, there was even more bad news for the travel industry: the Mexican government announced they were experiencing an outbreak of a previously unknown strain of influenza. Within days, this spread outside Mexico and the head of the World Health Organization stated that "... a pandemic seems inevitable at this point." Travel was restricted to Mexico.
But, while these events may be even more nails in the coffin of corporate travel, the coffin itself is made of sustained trends in business culture and practice. One of the most telling indicators that corporate travel is not going to recover to post-2007 levels is the changing attitude toward "virtual" business. From the top of the management chain to the bottom, use of video, web and audio conferencing is becoming more accepted. Even in many Latin American countries, where years of practice implied deals must be made in person, the perception is changing.
If you are skeptical that we are in the midst of a virtual business evolution, it's important to remember that this is just one mega-trend within a societal "super-mega-trend." We are more receptive to virtual interaction than ever before. In less than a generation, we have transformed our human communications from spoken and written to electronic and video. Even ignoring the obvious revolutionary changes that technologies like email and instant messaging have had, some of our virtual interaction that 30 years ago would have seemed unthinkable by some industry experts is:
-
Retail banking and brokerage, such as eTrade, with no offices. THE OBJECTION: that no one would trust such an arrangement, and banking was "done with a handshake." THE REALITY: an ever increasing base of customers was willing to suspend potential trust issues for the sake of convenience and cost savings.
-
Virtual universities with no campus that connect expert instructors with students over the Internet. THE OBJECTION: that education quality would decrease and the potential for cheating would increase, etc. THE REALITY: Early trials showed that, through web sites and video and audio communications, the full impact of many classes can be delivered virtually. Fully accredited virtual universities appeared, and many traditional institutions began offering classes virtually.
-
In business, the idea of remote workers, flex time etc. was likewise dismissed by the status quo "experts." THE OBJECTION: How do you know if an employee is working unless they are here in their seat? THE REALITY: Overwhelmingly, the best employees are more productive when remote because their efficiency increases without having to commute to the office or deal with office distractions. (Of course, the bottom 20% of workers fall off a cliff when they go remote, but do you want your best practices based on the bottom 20%?)
The trend is clear. When technology increases productivity, decreases overall costs and improves overall efficiency, it will eventually trump objections based on antiquated thinking. So, when you hear someone say, "We will always have that (fill in the blank: convention, sales meeting, board meeting, etc.) face-to-face because it (fill in the blank: builds trust, increases teamwork, facilitates new relationship building)", remember that similar objections have been made and dismissed across our economy.
Will corporate travel disappear overnight? Of course it won't. Looking at the examples above: there are still thousands of retail banking and brokerage branches; the majority of students still attend university on a traditional campus; and the majority of workers report to a corporate office every morning. However, this is an evolution and not a revolution. The trends are all toward virtual interaction. The majority (over 50%) of all individual investors frequently use the web for investing, Internet based classes are increasing and the number of full time teleworkers in North America continues an upward trend.
Number of Teleworkers in North America
Source: Frost & Sullivan
Don't fall for the trap of thinking things will always stay the same. Even though this is a long term trend, it's easy to wake up one day and realize that your company is behind the curve when it comes to travel substitutes. For example, what happens when an industry convention at which you frequently exhibit says it's going virtual? Will you be ready with the video conferencing and other services required to continue to participate? No matter the size of your company, not preparing for these changes can be disastrous.