May 28, 2024

True value

Following a 'Eureka!' moment, tClara's Scott Gillespie reckons he's found a way to assess the value expected and achieved from a business trip

Many of us concerned about climate change see a need to reduce business travel. Let’s leave the extent of the reduction needed for another day. The question here is which business trips should be eliminated.

We do not want to eliminate trips that create high value, especially if the value cannot be achieved via a virtual meeting. Logically, we need to look first at trips that are expected to create the lowest value.

But who is to say what a low-value trip looks like? Some will argue that any trip without revenue potential qualifies; others would label all trips for internal meetings as low-value; a third group may say all one-day trips are unjustified—all great examples of lazy thinking, uninformed by any relevant facts or logical framework.

I’ve spent much of the last 12 months stewing over this question. The “Eureka!” moment happened four months ago. From there, analysing data from over 400 US-based business trips and drafting a white paper went smoothly. The Justified Business Trip – Less Travel, Better Results, tClara’s latest white paper, provides a compelling framework for assessing the value expected and achieved from business travel.

Fair warning, as this is a 48-page fluff-free report. Lots of data, of course, preceded by the argument in favour of evaluating the merits of any business trip before it is taken.

The centrepiece is the Justified Cost model, a surprisingly simple construct that reveals the value, e.g., £15,000 and return on investment, e.g., 270%, expected before the trip is taken. This works on any (any!) type of trip – be it for sales, account management, team-building, trade show, training, you name it. It works across the board and around the world.

Three findings from this paper stand out above the rest:

  1. Any trip’s expected value and ROI can be derived by asking the traveller or their manager three simple questions. Not one of them is “What do you think the value of this trip will be?”
  2. Between 25% and 30% of the trips analysed were rated by tClara as “low-value.” Worse, these trips showed little or no net expected value, meaning they may have wasted their travel budgets.
  3. Low-value trips can be predicted by asking the right questions before they are taken. tClara’s prediction model does so with a 75% accuracy rate; this will improve with more data.

Imagine if, for every prospective trip, the budget owner knew the trip’s expected ROI and risk for being a low-value trip. Pair this with an assessment of the trip’s projected carbon emissions and likely impact on the traveller’s wellbeing. We can now welcome the trip-approval process to the modern age.

Managers can now make well-informed decisions about which trips are most worth taking. CFOs will take great interest in seeing their travel budgets used more effectively. The climate will benefit from fewer emissions.

Now that identifying low-value trips is easy, the case against taking them should be clear.