We’ve all been there. We’ve all been sitting in that pointless long meeting, and we don’t know why we’re there. Unfortunately, poorly organized meetings happen all the time. But aside from being annoying, have you ever considered what the real cost of these meetings is?
It’s also important to note that great meetings deliver serious value for organizations. Unfortunately, meetings have earned somewhat of a negative name throughout business culture, but that’s not really the fault of the meetings themselves. A bad meeting is always “user error”, meaning one or more of the following:
- It never should have been a meeting
- The meeting was not well prepared for
- The meeting was not well executed (usually related to 1 or 2)
- The action items or next steps were not clear
But is this really a big problem? What is the real impact of bad meetings?
Let’s dive in.
1) The Real Cost Of Bad Meetings
In order to determine the real cost of bad meetings you first need to add up the salaries of every person in the room and determine what their rough hourly rate might be. Every hour that a person spends in a room cost the business that much money in labor. Layer in overhead like meeting space, catered lunches, the time it takes to prepare for a meeting, and all the other costs that are associated with the act of holding a meeting.
Let’s say you have a weekly meeting that is two hours long. This meeting is attended by seven people and the average salary of everyone in the room is $75,000 per year. For the sake of keeping things easy we will exclude benefits costs, but realize that the total cost of employment is actually higher. At 40 hours per week and 52 weeks per year, that means the equivalent hourly wage is $36.06. So for seven employees in a two hour meeting, that’s a total real cost of $504.84, or $72.12 per employee.
Again that’s without benefits or other overhead included.
On an annual basis, this one meeting costs the business $26,251.68 in salary alone.
Just. This. One. Meeting.
When you add all that up across your entire business and across the entire year, the annual real cost of meetings is likely astronomical. So then the question becomes what is your business getting for this cost. Or rather, we should be thinking of it as an investment.
Is this investment in your business turning into positive ROI? Is it ultimately driving revenue in the most efficient way possible or is the cost of the meetings disproportionately high compared to the net benefit to the business?
A recent study from determined that employees in the US self report that they spend at least 2 hours per week in pointless meetings. Some businesses report higher than that — and no where does the study account for meetings that are somewhat valuable but could be improved or shortened.
Whatever the exact numbers are, the point is this — meetings are a financial investment. There is real money at stake every time you add a meeting to someone’s calendar. And if we truly embrace the fact that it is indeed an investment, how might that change your approach to the way that meeting is prepared for and executed?
While the real cost of a meeting can be extremely high, the cost gets even more out of control as we start to analyze the opportunity cost.
2) Opportunity Cost Compounds The Financial Impact Of Bad Meetings
Okay, so we’ve hashed out the real cost of meetings. Now let’s talk about the opportunity cost.
For anyone who’s taken an economics class, the concept of opportunity cost should be familiar. In the context of meetings, it’s very simple. The opportunity cost is everything someone could be working on during the time they are sitting in a meeting.
There is a price and value associated with every action we take. Meaning if an employee is sitting in a meeting, it is only financially responsible if the value realized during that meeting is higher than the value of whatever else they could be doing at that time.
Here’s an example. How many times have you heard a teammate say something similar to this:
“Wow! I was so productive today. I had like no meetings. Like, I actually got some work done!”
Why is it that we sometimes feel more productive when we aren’t in any meetings at all? Is the enemy really meetings?
Meetings evolved for a reason. And contrary to the above statement, everyone has walked out of a meeting at one point or another feeling energized, united, clear on next steps, and ready to make an impact.
Unfortunately, in this day and age, that appears to be the exception and not the norm.
The opportunity cost of bad meetings is probably incalculable. But try this. Next time you find yourself in a meeting that is inconceivably pointless, try to imagine what else productive you could be doing. Then, assign a rough dollar value.
Bad Meeting Cultures Exponentially Increase ALL Costs Associated With Meetings
Now imagine beyond the cost of just one meeting. Imagine the real opportunity costs of many bad meetings compounded over a year. What about multiple years? Imagine what happens as your employees start to believe that all meetings are a waste of time. They trudge from pointless meeting to pointless meeting, not getting any real work done. They don’t prepare and they don’t expect others to prepare. And now, a large part of your workforce simply doesn’t care about or get value from meetings.
Yes, I’m painting a grim picture. And yes, it’s a bit dramatic. But rest assured, there are many companies operating right now, today, where this is closer to reality than fiction.
And certainly, when was the last time you heard someone say, “Oh my goodness I LOVE meetings!”
While some companies may be negatively affected by meeting culture more so than others, most companies experience it to some degree. Maybe it isn’t company-wide, but it can certainly exist within some teams and managers.
Few would argue that the general sentiment towards meetings is largely negative. And has a drastic impact on a company’s bottom line — though it might not be as easily identifiable as other financial woes. The more prevalent a bad meeting culture gets, the higher the financial impact.
And as that bleeds across your organization, the ability to host an effective meeting becomes even more difficult. People don’t go into meetings with an open mind. People don’t go into meetings expecting good results.
People go into meetings expecting to be bored, expecting to be unproductive, and expecting to get behind on their day.
Meetings can be awesome! There’s a reason why they exist. It’s a chance to bring groups together, solve cross functional problems, and ultimately drive business results. Focusing on meetings through a lens of costs and value is a good first step towards making the most out of every time you meet. You can learn more about having great meetings on the Docket blog.