How Much Are You Really Spending on Meetings?

Before he retired, my father was the head of a large reinsurance broker. If you’ve never heard of reinsurance don’t worry, no one has—in an ironic twist, reinsurance companies sell insurance polices to insurance companies to protect them from a catastrophic loss.

Anyhow, he once told me a story about how part of his team had run amok with in-person meetings. It reached the point where every discussion, every decision—virtually any type of interaction—happened in the form a meeting, typically with a roster that included as many people as possible in shameless, ass-covering fashion.

My dad instituted a new policy: anyone organizing a meeting would provide the attendee list to HR, who would tally up the salaries of each employee and give an approximation of the hourly cost of the event. This number was to be posted on the outside of the meeting room door and shared in the meeting invite.

Suddenly, the number of meetings dropped by almost 80%.

Turns out that once the organizers understood how much money was being spent and knew their reputation was on the line, their priorities shifted. A couple $10,000 an hour meetings and people with P&L responsibilities got the message.

Still, it’s a common source of confusion: if a little communication between a few people is highly effective, then lots of communication between a bunch of people must be even better, right? Rainbows and unicorns and big year-end bonuses for everyone.

Right. Not so much.

The truth is that gratuitous, synchronous communication is expensive. At its worst, it’s corporate masturbation—usually a symptom of more insidious dysfunctions like empowerment failure, decision fatigue, or the busy trap.

But the cost of meetings is far greater than the sum of attendee hourly rates:

  • Hard costs. The collective cost of the humans in the room, the cost of the room itself, catered lunch for half the office, and so on.
  • Opportunity costs. When you pull the entire team into a meeting, they’re doing the work you hired them to do. This at least doubles your hard costs for extraneous human resources.
  • Human costs. Costs associated with disillusion, frustration, and turnover. High-performers unable to operate in their flow state aren’t going to stick around for very long, and everyone else will probably just spend the day trolling Facebook or cleaning bass.

Packed-in-the-conference-room type meetings aren’t the only culprit here. Conference calls, video conferences, and drive-by meetings all have the same effect, often with higher-frequency. Office space is now “designed” for collaboration using noisy, open space devoid of personal boundaries that’s plagued with a steady stream of walk-up “quick questions” (Flow? What the hell is that?)

So, what does a meeting really cost?

Let’s use a hypothetical example of a team building a non-trivial, custom web application for a really important client.

Our core team:

  • One technical project manager.
  • Two designers, one of which is an art director.
  • One UX engineer.
  • Three senior developers, one of which is a technical director.
  • Half a QA tester (I know, I know. But let’s be honest here.)

The team needs to plan the next production push, which is going to be late. The client knows this and is pissed, so this is a touchy situation. We had better invite some extra people:

  • The Account Manager, since she’s dealing directly with the angry client.
  • Operations, since they’ll ultimately deploy the website.
  • The Creative Director, who’s worried that a rushed build will look bad and may damage the reputation of the agency (he’s right, by the way).
  • VP of Development. Concerned about the developers being left holding a bag of flaming shit, she’s there purely to play defense.

The hour-long meeting is a working lunch and is set to start at noon. Everyone finally assembles by ten after, and another twenty minutes is spent getting the projector working. Things finally get rolling by about 12:30.

It doesn’t take long for the conversation to get heated. The developers and designers are complaining about last minute changes wrecking their estimates, operations is worried about the lack of release documentation, and QA has zip for test scripts. The account manager doesn’t care—she promised the release would be ready in time and it’s her ass on the line.

The meeting stops briefly while lunch is brought in, but chaos quickly resumes. Most of the team eat quietly while the account manager, creative director, and development VP duke it out. Eventually agreeing on delaying the release by a week, the meeting adjourns at 2PM.

Grand total: two hours. Using some quick math and reasonable average salaries (adjusted to account for benefits), here are the hard costs:

Project Manager:     $60/hr  * 2 hours = $120
Senior designer:     $50/hr  * 2 hours = $100
Art Director:        $60/hr  * 2 hours = $120
UX engineer:         $60/hr  * 2 hours = $120
Senior developers:   $60/hr  * 4 hours = $240
Operations engineer: $40/hr  * 2 hours = $80
QA engineer:         $60/hr  * 2 hours = $120
Technical Director:  $65/hr  * 2 hours = $130
Account Manager:     $50/hr  * 2 hours = $100
Creative Director:   $135/hr * 2 hours = $270
VP Development:      $90/hr  * 2 hours = $180
Lunch for 12:        $10/pp  * 12      = $120

That’s roughly $1700 total, or $850 per hour to run the meeting.

What about the opportunity costs? To calculate that, we’ll first need to figure out how many people were actually required for this meeting.

In this case, that’s easy: none.

This meeting never should have happened.

But let’s assume that it did. Armed with the right info, in the right format at the right time, sorting this all out would have at most only required five people for thirty minutes, tops:

Project Manager:     $60/hr * 0.5 hours = $30
Art Director:        $60/hr * 0.5 hours = $30
Operations engineer: $40/hr * 0.5 hours = $20
Account Manager:     $50/hr * 0.5 hours = $25
Technical Director:  $65/hr * 0.5 hours = $32

A paltry $137, or $68.50 per hour, a difference of $781.50 per hour.

If the original meeting was billable, then fantastic—hard costs versus opportunity costs will be a wash. Instead, we’d be mostly concerned with team morale and damage to the agency’s brand, both very real but more difficult to quantify.

Let’s say, however, that the meeting wasn’t billable. Maybe the project was already over budget, the team was working on bug fixes covered under the original statement of work, it’s an internal initiative, or something similar.

The opportunity cost would then be the sum of the profit margins for each resource, plus the cost of the meeting that did happen, minus the cost of the meeting that could’ve happened. Assuming a typical blended rate of $200 per hour, we’d be looking at something along these lines:

Project manager:     $200/hr * 2 hours - $150 = $250 loss
Senior designer:     $200/hr * 2 hours - $100 = $300 loss
Art director:        $200/hr * 2 hours - $150 = $250 loss
UX engineer:         $200/hr * 2 hours - $120 = $280 loss
Senior developers:   $200/hr * 4 hours - $240 = $560 loss
Operations engineer: $200/hr * 2 hours - $100 = $300 loss
QA engineer:         $200/hr * 2 hours - $120 = $280 loss
Technical Director:  $200/hr * 2 hours - $162 = $238 loss
Account Manager:     $200/hr * 2 hours - $125 = $275 loss
Creative Director:   $200/hr * 2 hours - $270 = $130 loss
VP Development:      $200/hr * 2 hours - $180 = $220 loss
Lunch for 12:        $10/pp  * 12             = $120 loss

So that’s $3200 in lost billable time (opportunity cost), plus $1700 for an unnecessary meeting (hard cost).

Someone just threw away $5000, or $2500 an hour. On one meeting. Whoops.

Where the head goes, the body follows.

Ben Balter sums it up perfectly in his blog post about communication at GitHub: “You could have the best tools in the world, but without the necessary social norms, you’re setting yourself up for failure.”

To paraphrase: you have to change your communication culture.

Technology is certainly a part of this, but without the right mindset, more technology will only magnify the problem. You need to take steps to fundamentally change the way your team thinks about communication.

If you’re in a position to mandate these type of changes, that’s great. If not, you’ll need to employ some guerrilla tactics (or find a new job). Either way, take it slow. Incremental change is hard for most folks, wholesale change is nearly impossible. People will need time to adjust and really see the benefits before they’ll embrace change.

Here are five initial steps you can take towards super-charging communication for your team. I’ve put these in order of least difficult (e.g. requires only a change to yourself) to most difficult (e.g. you’ll to influence or get buy-in from others). Otherwise, the order isn’t all that important. For all of these, you can lead by example—be gentle but assertive.

  1. Learn to say no. Almost everyone struggles with this, yet learning to say no will ultimately make you more successful. It’s basic human nature to avoid disappointing others or creating conflict—especially when we’ll be spending 30% of our life with them—but you can’t expect to spend every waking hour in meetings and to ever get anything done. It might seem counter-intuitive, but being a ruthless steward of your own time is highly infectious and will command mad respect.
  2. Do not attend/allow meetings without an agenda. If you’re in a position to mandate this one, do it now: all meeting invites must include an agenda that clearly outlines the goals for the meeting. If you’re not, you’ll need to introduce this one a little more clandestinely. Decline all meetings without an agenda attached, explaining that you’ll need one to make sure you can be adequately prepared (see #1, above). You can get yourself into hot water with your boss on this one, so be careful. And it goes without saying, always include an agenda in your own meeting invites.
  3. Create SOPs. Your team should be maintaining standard operating procedures (SOPs) for every non-trivial process it uses, including communication processes. Drawing up an SOP for scheduling a meeting or planning a deployment sounds ridiculous until you start writing. We frequently take for granted how complex even the simplest of processes are. Writing these down both removes risk associated with tribal knowledge and helps identify opportunities for optimizations. Plus, these SOPs will be critical to effectively onboarding new team members.
  4. Protect the sanctity of personal time with your life. Be mindful of your teammate’s need to focus and avoid interruption to achieve their flow state. Use asynchronous communication methods (see #5, below) and do not participate in drive-by meetings. This is critical (and exponentially more difficult) if you work in an open office or cubicle farm, so you’ll really need to become an advocate here. This means being assertive to retrain your coworkers to not interrupt you or your team (see #1, above). Try not to be an asshole, but don’t discount the idea if that’s ultimately what it takes.
  5. Prefer asynchronous communication. This one’s verbatim from Balter, and it aligns perfectly with #4. A potential catch here is that you might not have any effective asynchronous communication channels in place. This can be tricky, since you’ll need to evangelize for new tools, might need to get budgetary or legal approval, and so on. Start small and ask for forgiveness rather than permission (unless it will get you fired, incarcerated, or divorced). For example, check email on a schedule and refuse to use it like real-time chat, sign up for a free Slack account and invite your team, sign up for a free Trello account, start a team wiki, etc.

At the end of the day, what effective communication means for your team is a very personal thing. It’s impacted heavily by organizational culture, team dynamics, budgets, and a thousand other things. The key to finding your team’s flow is to experiment. Continue to improve on what works and quickly discard what doesn’t.

In the words of Tim Ferris, it’s fairly simple: “Focus on being productive instead of busy.”

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