Pulling Rank

Meetings & Conventions - Pulling Rank -July 2000

July 2000
Time management: Fortune Conference Division’s Suzanne O’Leary and Robert Hawkins plan meetings that keep pace with Time Warner’s digital evolution.

Pulling Rank

Faced with dizzying growth, planners at these Fortune 500 firms had to think fast and act faster

By Carla Benini and Martha Cooke

  To compete in today’s economy, corporations can’t afford to let growth occur naturally. Instead, they identify a need and quickly buy a company that will fill the niche. With the breakneck pace of mergers and acquisitions, and with technology quickening the product pipeline, meeting planning functions are being forced to evolve.

At Time Warner, UtiliCorp United, McKessonHBOC and Cisco Systems, planners weathered a year of dramatic change. And they didn’t just roll with it; they positioned themselves and their departments as proactive forces in shaping the new directions of their organizations. They planned more meetings, bolstered their staffs and adapted their objectives to evolving corporate cultures.

To thrive in such fast-changing environments, “Planners really need to understand the industry and the business they’re in,” says Rick Maurer, president of Maurer & Associates, an Arlington, Va.-based consulting firm. “They should be as worried about the challenges facing the company as the top people are.”

Here’s how planners at these Fortune 500 leaders are helping continue the upward spiral.

Time Warner
Fortune 500 rank: 45
Last year’s rank: 108
Industry: Entertainment
Headquarters: New York City
With a 63-point jump up this year’s Fortune 500 list, the corporation behind both Sports Illustrated and the hot television show Sex and the City is undeniably formidable. About 70,000 employees comprise five businesses that cover the entertainment spectrum. Within this behemoth, meeting planners at Time Warner have had to develop strategies to cope with the company’s rapid growth and the increasing influence of a new digital economy.

Time Warner’s businesses are cable networks, including CNN and HBO; record labels such as Atlantic and Elektra; movie studios, including Warner Bros. and New Line Cinema; Time Inc., the print publishing division that churns out titles as diverse as Teen People and Fortune; and cable systems, the segment that recently was embroiled in a highly publicized spat with Disney over broadcasting rights of Disney affiliates on Time Warner-owned cable systems.

Add to all of this a proposed merger with Internet giant America Online, and this company clearly has a lot on its plate. The merger that would create a single entity called AOL Time Warner actually would be a buyout of the media conglomerate by AOL. The $350 billion, all-stock transaction will be completed by the end of the year if the government OKs the deal.

Photo and video coverage of the merger announcement showed a surreal spin on the old-economy-meets-new paradigm. AOL’s fresh-faced CEO Steve Case faced the cameras in a suit and tie no flashy colors, no Jerry Garcia prints. Following the speech, he embraced Time Warner CEO Gerald Levin, who appeared in casual-Friday regalia, with nary a tie tack or Brooks Brothers logo in sight.

Merger aside, Time Warner planners have their work cut out for them. Fortune’s conference programs are challenged by a growing and changing consumer base, says Robert Hawkins, executive director of the Fortune Conference Division, an event-planning profit center run by Time Inc. Last month Fortune launched a sister publication, eCompany Now, which looks at the strategies businesses use when they go digital. Hawkins is planning eCompany Now’s launch “extravaganza,” which will take place later this year, with Yahoo founder (and top AOL competitor) Jerry Yang as a speaker.

Meanwhile, attendance figures for the Fortune Conference Division’s 15 annual events have roughly quadrupled in the past few years, with up to 400 people attending events that not long ago catered to 100 or fewer. No longer dominated by corporate executives, these events now draw a broad base of consumers who are increasingly interested in economics and the new digital media.

The team doing most of the legwork 18 staff members at New York headquarters makes up the majority of Time Warner’s 25 event planners. In addition to internal events, the division manages and cosponsors a few conferences a year for outside corporate clients.

Events manager for Fortune magazine Jennifer Mahran says with two to three months lead time, she often finds herself developing programs or creating brand images, aided by the division’s in-house marketing, program development and print production specialists. To handle the workload, Mahran outsources certain functions to independent planners. “We send them on-site to cut down on time spent out of the office.”

Another major initiative is the Time Warner Event Council, an effort to synergize the company’s various meeting planning departments by sharing information and maximizing negotiating clout. Improving communication is a primary objective of the council, says Suzanne O’Leary, associate director of customer services for the Fortune Conference Division. “I’ll be in a hotel and someone will say, ‘People [magazine] was here last month.’”

O’Leary hopes to establish a presence for the council on the company intranet by late summer. Plans call for quarterly meetings to foster discussion and information-sharing. Checklists for functions like hotel contracts will be provided, although the company has no plans to create a boilerplate contract, says O’Leary, since Time Warner’s events have such diverse criteria.

The first council meeting drew 18 Time Warner planners. O’Leary hopes all 25 eventually will take advantage of the council’s resources, although participation will not be mandatory.

McKessonHBOC Inc.
Fortune 500 rank: 38
Last year’s rank: 59
Industry: Health care
Headquarters: San Francisco, Calif.
In 1833, when John McKesson opened the doors to a storefront drugstore in New York City, few could have guessed the company would become a world leader in health care. Today, McKessonHBOC employs 22,000 people in some 150 offices and 11 countries. Many in the health-care industry consider the San Francisco-based firm the dominating force in supply management and health-care information technology, a force that became even more powerful when it acquired small but successful HBO & Company in January 1999.

The merger made headlines, mainly because Atlanta-based HBOC occupied different niches in the health-care industry. Experts applauded the partnership and forecasted success. Last year, revenues for the health-care powerhouse rose by more than 45 percent over 1998.

The meetings department is running in high gear. “The environment is so fast-paced that if I have more than a week to get together 90 managers, I’m feeling good,” says Evie Jett, executive director of the marketing department for Information Technology Business, a division of McKessonHBOC. Commonly referred to as ITB, Jett’s division is basically the old HBOC and still is based in Atlanta, while its parent remains in San Francisco. Jett, an 18-year veteran of HBOC, is responsible for all trade shows, marketing events, internal meetings and incentive programs for the division.

Surprisingly, the merger has barely been a bump in the professional road for Jett. Yet, she admits there is a chain of command to which she is still acclimating. “We used to be king of the hill,” says Jett. “I was the corporate marketing group. There was nobody else to approve and review my contracts. If I needed to do an executive meeting, I didn’t have to call out to California.”

Now an employee of McKessonHBOC, Jett has inherited a logistical support system for trade shows and meetings, run by San Francisco-based Susan Thompson, CMP, director of meeting services. Despite the need to check in, “it’s very helpful to have that support,” Jett acknowledges. “It’s almost like hiring a meeting planner.”

Thompson’s well-oiled department is in its infancy at McKessonHBOC; meeting planning was consolidated in June 1999. Before the merger, there was no central meetings department not at McKesson and not at HBOC.

“Planners were spread throughout the company, but there was no department,” says Ron Powell, vice president of travel and meeting services and a 10-year veteran of the company. Powell was concerned about the status quo, which had employees with various job functions negotiating and penning hotel contracts for meetings. “I don’t even know what practice they were using to review the contracts.”

“There was a definite need to have some consistency and control on the contract,” reiterates Thompson. “All businesses are in flux. You never know what will happen.” Recently, the firm had to cancel a $5 million event. But luckily that was post-consolidation, after an addendum was attached to all hotel contracts. “We were able to save the company $1.1 million in cancellation fees,” says Thompson. The addendum also requires hotels to call McKessonHBOC if one of its competitors is to be meeting there at the same time.

Now, all hotel and vendor contracts that involve more than a $2,000 outlay must be reviewed by Thompson’s department. From these, she can monitor and track spending and, ultimately, better leverage buying power.

The effort has taken considerable manpower. When Thompson joined McKessonHBOC seven years ago, she worked in the travel services department, handling some 75 annual meetings with the help of one other person. By 1998, she was planning about 150 meetings. This year, she’ll do close to 600. When the department was consolidated, she was able to hire two more planners. Another two heads could easily be kept busy, says Thompson.

The number of meetings Jett’s division plans also is on the rise. She attributes this to new, post-merger senior executives. “Their attitude is that we need more frequent communication,” says Jett, who describes her old bosses as more autocratic and less likely to invite the opinions of management.

Another cultural change: Jett has had to break a habit of planning budget- driven meetings. At HBOC, the bottom line was her starting line; she planned the meeting around a budget. Not so now, she says. “To me, it’s frightening. I would rather have someone tell me up front how much money I have.” While the number of meetings is on the rise, the company’s trade show presence has been scaled back, says Jett, who figures she will exhibit at 16 in 2000. Just two years ago, McKesson ITB participated in 30 national shows. “When you’re at a trade show, so are your competitors,” she points out.

Jett has seen her own responsibilities grow from planning logistics to plotting strategy, determining how best to deliver ITB’s message. That could come in the form of a trade show, ITB’s own client event, or what she calls “webinars” Internet-based seminars designed to entice potential clients who might not pay a personal visit to ITB.

UtiliCorp United
Fortune 500 rank: 90
Last year’s rank: 132
Industry: Utilities gas and electric
Headquarters: Kansas City, Mo.
“There’s not enough of me to go around,” complains Marge Leaders. That sentiment probably is shared by many in Corporate America, but Leaders’ predicament seems particularly dire. She is the manager of industry relations at UtiliCorp United, a Kansas City, Mo.-based utility company. While its industry is not making the headlines like biotechnology or computer software, UtiliCorp has soared into the international market since gas and energy suppliers were deregulated in the mid-1990s.

“Eight years ago, we started out with two trade shows and one customer event,” says Leaders, a 14-year veteran of the company. Now, she handles an annual average of 50 conferences and events.

Once a Midwest regional company, UtiliCorp has merged with or acquired nearly a dozen companies in the past few years and has international holdings in Germany, Scandinavia, Spain and the United Kingdom. Growth into new areas of the business has forced corporate planners like Leaders to refocus marketing efforts and to plan events that are better suited for Utilicorp’s new clients. For example, Aquila Energy, a subsidiary that handles most of Utilicorp’s trade shows and customer events, has drastically cut the firm’s presence at trade shows, where potential customers are exposed to competitors. Instead, Aquila, also based in Kansas City, is focusing on individual customer events where executives from one firm are invited to familiarize themselves with Aquila services.

Leaders’ position was created last year specifically for these customer-focused events. The new responsibility required Leaders to learn fast. The challenge is even more “interesting,” she laughs, when her lead time is two months.

The dollars she deals with can be intimidating, too. For a recent golf gathering for 12 executive clients, Leaders’ budget topped that of most events she has planned throughout her career. She turned to the expertise of an outside planning firm that specializes in golf meetings to pull off touches like hiring chefs to cook at private homes that had been rented for the occasion.

Sheer volume will increasingly force Leaders to outsource functions like site inspections and on-site logistics. “I recognize my limitations,” says Leaders, but slowing down the growth in meetings is not an option. “With the emerging global marketplace for energy, I have to [take advantage] of this deregulation.”

Her new focus has enabled Leaders to play the role of consultant. She often finds herself recommending to executives the best clients to invite to various events. “I know the buzz in the industry,” she says. “I read the trades. I pay attention to mergers. I’ve got my finger on the pulse.”

Leaders also has set up an internal speakers bureau to “manage the intellectual capital” and assign internal experts to customer events and conferences.

Her mission is supported by UtiliCorp’s CEO, Richard C. Green Jr., who says meetings are the key to managing rapid growth. Says Green, “While technology offers significant gains in personal productivity, the direct human contact provided by in-person meetings and conferences will continue to be the heart and soul of successful business relationships.”

Cisco Systems Inc.
Fortune 500 rank: 146
Last year’s rank: 192
Industry: Network communications
Headquarters: San Jose, Calif.
At last count, Cisco Systems Inc. had acquired 59 companies in six years, but by the time you read this, the software giant surely will have snatched up a few more. A titan among its Silicon Valley brethren, Cisco has spent more than $31.2 billion in the past six years on acquisitions. It has announced another 10 for this year alone, “and it’s only May,” says Maryann McLaughlin, human resources manager for corporate acquisitions.

To call Cisco a fast-growth company is like calling Bill Gates “comfortable.” The firm doubled its employee count to about 30,000 in two years. Ralph Colunga, manager of global TMME (Travel Metro Meetings Events), predicts it will double again in 18 months. “Cisco hires 100 people a week,” says McLaughlin. “It’s pretty phenomenal.”

Perhaps even more incredible is that three years ago there was no meetings department to speak of, says Colunga, who was hired around that time to consolidate meetings, travel and expense management functions. “Meetings were happening, but there didn’t seem to be a consistency. We needed service standards, consistency and some accountability for providing management with reports,” says Colunga. He now heads up a team of 11 U.S.-based planners who will handle the logistics for an estimated 600 meetings and events this year.

The sheer number of meetings was the paramount reason for organizing the planning process. According to Laura Mann, manager of corporate events and meetings, the two conference centers on Cisco’s San Jose campus and one in Research Triangle Park, N.C., are running at 98 percent capacity. Many departments are booking after-hours time slots because it’s the only way they can get the internal meeting space.

While Cisco seems to do everything else almost overnight, the meetings consolidation process took a little longer. One of the first projects for Colunga and Mann (who at the time comprised the entire meetings department) was to leverage purchasing. “We went to a hotel down the street to ask about partnering,” says Mann. “The catering manager said, ‘I work with 250 administrative personnel within your company.’ We were shocked.”

Mann’s vendor consolidation project continues even today. “We have identified thousands of vendors, from hotels to theme parks to T-shirt companies.” She plans to approach each one individually to negotiate bulk deals. Already, Colunga estimates this year the department will have saved Cisco $3.3 million.

It wasn’t hard to convince management consolidation was the way to go. The greater challenge has been to market the service internally. Meetings and travel services are explained during Cisco’s Monday meetings for new hires.

“The company is moving so fast, the way to get information out is to get them as they’re coming through the front door,” says Mann. Colunga and McLaughlin also visit newly acquired firms to explain the department’s services and savings opportunities.

To communicate with the company’s massive administrative force who often are most resistant to consolidation Colunga holds brown bag lunches. “Sometimes they want to maintain control. They don’t want to feel left out,” he says. “We keep them informed so they feel a part of the planning process.”

The meetings department even prints magnets and spearheads a worldwide poster campaign, called Frugality Facts, touting its cost-saving services.

Frugality is a word Cisco employees can relate to: This is a no frills, no perks environment. Everyone flies coach, everywhere. “I just came back from a 17-hour flight from Tel Aviv,” says McLaughlin, who was there to present the Cisco culture to a newly acquired Israeli firm. “I lived the definition of frugality.” While the culture might be difficult for some corporate road warriors to embrace, every employee is a shareholder and ultimately benefits from such cost savings.

With a cohesive meetings department in place in the United States which is likely to double in size over the next two years Cisco is taking its meeting and travel policies overseas. Mann plans to meet with her European counterpart this summer to discuss ways to synergize. “We’ve only just started this,” says Mann. “We are at the very tip of the iceberg.”

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