Fasten your seatbelt

 By April Bridgeman, Managing Director

You know things are changing fast when, grandparents are the fastest growing users on Twitter, Facebook is the largest country, and video will overtake mobile usage by 2018.[1] We now live and work in a digital world where change takes place at tremendous speed, constant change is the new normal and the pace of change will exponentially increase in the future.

We’ve never before experienced this rate of change and there’s no indication that it will slow down soon. This means three things for you. Every company will transform into a digitally-driven company. Every industry is facing tremendous disruptive pressure. And, every travel program will be impacted by digital innovation – regardless if your company is now on a path of aggressive transformation, part of a slower, methodical shift or barely on the periphery of change.

Fasten your seatbelt! The pace of change is persistent, pervasive and demands new thinking about managed travel.

Digital is Like Your Program in Dog Years

No doubt you’ve heard the theory that one human year equates to seven dog years. This compression of time applies to our pets as well as in business as digital innovation acts as an accelerant to change. New digital technologies become established protocols in a fraction of the time it took for the internet to go mainstream. Mobile products and services that were revolutionary two years ago are rendered obsolete. Companies achieve a billion dollar valuation in a couple of years (e.g., Uber, Snapchat and Xiaomi) versus a couple of decades (for the average Fortune 500 company).[2] And, people now spend one-fourth of their day on digital versus 2.7 hours in 2008.[3]

The result will be, that by 2020, 25% of the world’s economy will be digital.[4] This indicates that the speed of technological change is both a strategic priority and the single greatest challenge facing companies.[5] Travel managers have no choice but to respond.

You Can’t Afford the Risks of the Status Quo

Digital transformation introduces entirely new opportunities to engage with suppliers, travelers, customers and partners. Forward-thinking travel managers move quickly, adapt rapidly, innovate continuously and test frequently. Less progressive travel managers recognize the need to adapt but revert to using the same legacy thinking, rules and practices that drove success in the past to current day dynamics. Unfortunately, most will not see much improvement. This is because they do not have a clear understanding of how using the “old” impedes a program’s future success and can actually be more risky to your company in today’s rapidly-changing environment.

It’s important to foresee how some of travel’s standard practices may be misaligned with the real-time changes happening in business and the industry. But beware, new thinking is required.

  • Annual sourcing cycles don’t track with today’s market dynamics. This legacy approach takes away your strategic advantage to optimize spend with new suppliers, dynamic pricing, emerging channels or beta test opportunities. Travel programs now operate in a cycle of continuous improvement and real-time data is your most powerful tool. Dynamically manage your portfolio of suppliers so you can anticipate shifts, assess potential options and help your company profit from changing conditions before next year’s negotiations.
  • Infrequent feedback takes your program off course. Annual traveler satisfaction surveys or quarterly reviews are rarely sufficient for today’s pace of change. The longer you wait to collect data and inform next steps, the higher the level of risk in your program. The cadence of feedback should match the uncertainty of the industry and markets your program supports. Switch gears and regularly pulse travelers for their insight and feedback to detect early warning signs, reveal blind spots in your thinking and allow for ongoing course correction.
  • Travel policies don’t mirror how the employee contract is changing. The growth of freelancers, contractors and unconventional work arrangements means workers increasingly function more like free agents than full-time equivalents. Travel policies that are out-of-step with the needs of today’s workforce impede the company’s ability to hire and retain top global talent. Innovate policies to support flexible work arrangements, new onboarding practices, shifting expectations about work and the travel and expense needs of a blended (traditional and non-permanent) workforce.
  • Managed programs assume travel is the driver and always in demand. You risk traveler productivity if your program exclusively focuses on physically bringing people together. Advances in digital and cloud technology now offer affordable and better quality virtual experiences and more communications options for on-demand collaborating. Empower people to work smarter and collaborate virtually to keep pace with business when travel is not essential, budgets don’t allow or time is of the essence.
  • Travel as a cost center decelerates your contribution to company growth. This model simply evaluates travel based on the more efficient use of funds. While cost savings will always be important, travel is more than an expense for profit. In fact, three-fourths of CEOs now define business success by more than financial profit.[6] Manage travel as an extension of the company’s brand, view your program as an internal platform to support what the brand stands for and measure its impact on business outcomes (not just KPIs). Otherwise, the cost savings will be irrelevant.

The End of 2016 and Old Thinking

The amount and pace of digital innovation and transformation is staggering. In this environment, the greatest damage to your program lies, not in inertia, but, in trying to protect current practices and preserve legacy models. This post marks the end of 2016, the status quo and the old way of thinking about managed travel.

Fasten your seatbelts because next year will be a ride like no other.

 

[1] Erik Qualman, author of Socialnomics, VRWorld.com, January 2016 and Cisco

[2] World Economic Forum

[3] PreCog Digital

[4] Accenture’s Technology Vision 2016 Overview

[5] 2016 Fortune 500 CEO Survey

[6] PwC’s CEO Survey