Keep Your Friends Close, Keep Your Customers Closer

Three weeks ago, the National Restaurant Assn. announced it was effectively outsourcing management of its iconic National Restaurant Assn. Show

The following day, the Fashion Footwear Assn. of New York (FFANY), organizer of FFANY Market Week, and Informa, with FN Platform, said they would do a better job of coordinating dates for their respective footwear shoes.

Both are assuredly moves made for good reasons…that never would have been necessary if all of us hadn’t discovered digital tools that allow us to order meals to be delivered to us at home and to skip visits to the local shoe store.

A couple of weeks later, Sears, the veritable Amazon of its day, filed for Chapter 11 bankruptcy protection.

What have you done lately to assure that the disruptors sweeping the business world do not force you and your event to take desperate measures to survive?

Perhaps another example from another corner of the business world would be instructive: Two weeks ago, General Electric announced Larry Culp was its new CEO, the first time a person named to that position has not spent his entire career at the 126-year-old company.

Like the restaurant association, the footwear event organizers and Sears, GE has decided to do it another way in hopes that will be what it takes to survive. What they’re doing may offer lessons to event organizers.

Culp comes to GE from a much smaller, albeit highly successful company that indeed does things differently, the Danaher Corp.,  a manufacturing conglomerate with multiple businesses, just not as many as GE

A few days after starting his new job, Culp was on the road, visiting GE business units all over the country. You can be sure he was talking about how to incorporate the Danaher Business System, also known as DBS, into the larger, more rigid GE culture.

Unlike GE, Danaher does not operate as a corporate umbrella but, instead expects each business unit to take responsibility for itself, stay close to its customers, and be held accountable by way of metrics incorporated into DBS that are reviewed quarterly. There is no massive “GE Store” in which business units as different as power, aviation and healthcare share resources, research and technology.

Danaher executives are skeptical that economies of scale in the corporate world are meaningful. They believe the executives closest to their businesses know best how to sell products, cut inventories and improve manufacturing processes to benefit the bottom line.

Culp will be expected to incorporate the same culture at GE. What makes anybody think that will work?

Last year, GE’s revenue grew 0.8 percent; Danaher’s grew 8.6 percent. GE ended 2017 with a $5.8 billion loss in net income; Danaher’s bottom line for the year was $2.49 billion.

If you’d invested $10,000 in GE 20 years ago, you’d now have $8,690. The same amount of money invested at the same time in Danaher would give you $204,213.

What is the lesson an event organizer can take from all this? That bigger is not better, every attendee and every exhibitor matters, that you need to create business processes that make them both happy, constantly reevaluate your own performance, and stay close to your customers.

Michael Hart is an event consultant and conference content professional. He can be reached at michaelhart@michaelgenehart.com, @michaelgenehart or 323-441-9654.

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Michael Hart

I focus on helping companies and organizations associated with events, destination marketing and business travel create and market the best products and services possible. I can assist with project management services, providing content and strategic planning.

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