Since the early 1990s the naysayers have been warning that technology, the Internet, online search and compare tools, video-conferencing, social media and apps (roughly in this order of arrival) will make face-to-face business events obsolete. They were persistent in saying ‘this new thing’, whatever the disruptive technology of the day was, will be the end of the events business as we know it.
Well, they were wrong. None of those developments spelled the end of the events business. In their defence, advances in technology have transformed the business of organising events in so many ways, that for those who kept pace it is unrecognisable compared to only 20 years ago.
When looking at the landscape of today’s multinational, regional or even one- or two-show organisers, it is surprising to see many don’t yet recognise how the concept of innovation could be applied to the businesses they run and the shows they manage. Innovation is not an art better left only to artists. On the contrary, it is a capability based on tools and processes that can be learned. Of course, it is always a good time to think about innovation in business, but this misses the point. This article argues it is now essential, in some cases even business critical, to manage innovation in the trade fair business with more rigour and resource.
Why now more than before? Profitable print-media is vanishing before our very eyes, (how many of you are reading this article online?) and multiple technology waves amass to fundamentally change the economics of the events business. Historical margins are being squeezed out of many industries served by event organisers, be it by globalisation or an increased burden of taxes and regulations. Major growth markets have been captured and recently they are a source of volatility.
These shifts are happening now. New and innovative sources of revenue must be strengthened to help steady the ship.
Reflecting for a moment on your business career experiences, it should not be very difficult to relate to an old Chinese proverb: “I dreamed a thousand new paths... I woke and walked my old one”.
Why is this so? Perhaps what first comes to mind is risk. But that is not the whole story. It probably also has to do with things like habits and discipline. It might be counter-intuitive to think about dreams and discipline together, but consider this: At every stage it is essential for any business to be able to dream up visions, then make them a reality. If this is the case, then leadership needs to not only take care of the visions and dreams, but also discipline. It must ensure first that some old habits are done away with and second, that new ideas are captured and executed, carefully, to fruition.
This begs a question of those who write ‘innovation’ big on the cover of their plans and initiatives: Are there innovation-centric organisational structures in place? Are there effective innovation processes; are people aware of them and actually using them? Even more basic than all of this is the question: Are the right people in the organisation and are they able to interact in ways that foster innovation? (For innovation, read: culture).
The good news, as mentioned earlier, is innovation management is not elusive at all, and neither is it just for the big players. Let’s begin by looking at a simple approach for an event organiser that manages a portfolio of 20 to 30 shows.
Adapted from the IT industry, an event organiser’s medium- to long-term planning should begin by looking at the portfolio with the Run-Evolve-Innovate model (see below) in mind.
First an organiser should consider each show in the portfolio and determine, for the next two or three cycles, where does the event naturally fit? Can its size and the industry it serves put it in a position to be optimised for scale and efficiency? If so these are the events in the portfolio that must be run well.
This does not imply that no changes are needed. Tactics, processes, even team members may need to change. What made the show successful in the past is not necessarily what will sustain it well into the future. For shows at the ‘Run’ stage, focusing on unit cost improvements from year to year, while not losing sight of visitor and exhibitor satisfaction, is what will serve them best.
On a side but important note, events in ‘Run’ must be very data driven. Systems and tools to support shows in this phase of their lifecycle must provide rich and granular data. For example, think of tracking the booking cycle and budget variances for these shows. It is hard to imagine how this can be done without weekly – or even daily – actionable reporting outputs (i.e. a dashboard).
The next stage, ‘Evolve’, encompasses events that clearly need to undergo some fundamental change. The multitude of factors that could lead to this is beyond the scope of this article, but management needs to set clear internal thresholds (such as decline in visitor/exhibitor ratio, customer satisfaction trends, renewal rates, year-on-year key account retention etc) which provide a realistic view of a show’s health. Even if the metrics are all doing fine, external factors such as convergence or divergence of the industry being served, a new competitive event, decisions taken by associations and so on could firmly place a show on the ‘Evolve’ level. The focus should be on determining the directional changes to be implemented and the migration plans to be executed.
Typically, an event in the middle of an evolution will yield lower margin contributions than those in ‘Run’. An added benefit of this approach is the discipline it can bring. If a show is at the ‘Evolve’ level for more than a pre-defined number of cycles, it might be a good candidate for diversification. Unless an event brings a clear strategic asset to the entire portfolio of the organiser, why keep supporting it, interminably tying up key resources?
Becoming an innovator
Too often, established show organisers take innovation to be just another word for mergers and acquisitions. That is part of it; in some constellations it is an important part of a firm’s innovation strategy. However, if internal innovation is neglected, many opportunities will go untapped.
To take just one example, M&A is highly visible to the competition, providing lengthy advance warning to everyone involved in an organiser’s intent to enter or strengthen its position in a market.
In-house innovation teams must centre on recognising patterns early, anticipating changing boundaries and market transitions. They should be tasked with defining ways to take advantage of this knowledge in support of the organiser’s strategic direction. In practical terms, consider the organiser of a well-established toy fair. Irrespective of whether the show is in ‘Run’ or ‘Evolve’ mode, the market is shifting. Tough decisions are needed by the innovation team. Past shows were characterised by exhibitors like Mattel, Hasbro or Ravensburger. The show’s success depended on drawing purchasing-power-rich visitors with Toys-R-Us, Hamleys or Imaginarium on their business cards. Meanwhile ‘offline’ toys have begun to represent a declining portion of young people’s leisure time and a smaller portion of spend by parents and grandparents.
Starting with a vast number of possibilities, clearly the innovation challenge is to successfully create (or at least be part of) a new show or one that covers new or non-existent market constructs.
As this example goes to show, sometimes the shift is so fast and radical – away from traditional to electronic and online games – that capabilities and expertise in the new and emerging field must be developed very quickly or even hired.
In this article, we’ve highlighted process and discipline as key enablers of innovation. They are of course essential, but not sufficient. Like wine, the difference between good and great will come from subtle nuances in the environment and how things get done informally (i.e. culture). Inherent to the practice of innovation is failure. Without a culture able to deal well with failures, innovation will be restrained and poor results will follow – another good example of the statement attributed to Peter Drucker: “Culture eats strategy for breakfast”.
This was first published in the Issue 4 of 2012 for EW. Any comments? Email exhibitionworld@mashmedia.net
