We last wrote on the ‘Complexity Tax’ - where more control is required as a business grows but if it’s implemented thoughtlessly it will lead to decreasing marginal performance and calcification.
Internal meetings, virtual or otherwise, are clearly an integral part of this Complexity question. More meetings equals more reporting up and down the chain - voila - more control. Fewer meetings means a possibility of less alignment and less opportunity to use them as a vector for company culture…contrast that with the benefit of less time spent in meetings that may otherwise be deployed elsewhere. This is a trade off.
So how do we assess how good the trade is?
In one of our favourite films, In The Loop, an MP has an aide explain to him that he wasn’t expected to speak at a meeting that he attends rather that he’s there as “meat in the room”. We will have all thought at some point in time that we’ve been ‘meat in the room’ or that a meeting could have been an email.
Different companies have varying approaches to meeting culture however we’re yet to see a straight cost - benefit (ie// is this meeting ‘worth it’ in $ terms) analysis used in practice. Why is this? After all, how many other uses of company time need to be costed up, budgeted, planned for, given revenue targets, etc.? Loads. Most of them in fact.
Here’s a very imperfect example of how it might work in practice in gCal, with this marketing team having a ‘sync’ and the cost of that synchronisation being $603 based on their compensation rates.
Very few companies have totally transparent salaries, an obvious problem here, however you can begin to see how easy something like this could be. An option would to only display the total cost and/or total cost based on median remuneration based on staff pay bands. It’s a technically simple, effective way of having a meeting organiser take ownership for the question “Is this meeting worth 600 bucks and any disruption caused, or should I do something else?”.
The scenario that we’ve outlined has some accrual-based inequality that we should recognise. Meetings often have a cost that is easily quantifiable today, where as any attributable financial benefits may be felt over time.
Much like the intangible costs of the meeting (disruption, etc.) there are intangible benefits too: team building, culture, synchronous communication. However, just because something is hard to attribute does not mean that we shouldn’t put some assumptions around it and give it a go. Indeed that’s what we see good managers doing.
When we look at investing into an SMEs we due diligence internal processes. If we see lots of time in the diary taken up with internal comms/meetings we regard that as an opportunity. The question we ask ourselves is roughly:
“This company has 25 employees and they all spend ~3 hours per week in internal meetings. If that could be shortened to 2 hours, we’d have 100-200 days of work freed up (4-8 days per person per year) . How could that be put to use?”
Amazon followed their “two-pizza-team-size” rule for many years to focus minds on the job at hand and to decrease administrative overhead. It worked pretty well for those guys: perhaps we could all do with a bit more meeting scepticism.
Tikto
At Tikto, we purchase majority stakes in EBITDA profitable businesses and follow that up with incremental growth capital. We bring our network of experienced operators to help execute a business plan for the next phase of our portfolio companies’ growth.
Get in touch: hello@tiktocapital.com
NB
Thanks to @andrewglynch who writes
. He has created a community of British Business Builders from where we've taken inspiration (and the screenshot above) for this post.