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I think that we all agree that companies who are receiving bailout money shouldn't squander it on unnecessary expenditures. 
Now, Northern Trust is in the news for their over the top series of events.
Agreed, Earth, Wind & Fire,  Chicago and Sheryl Crow don't come cheap. Admittedly hotels and hotel food and beverage don't come cheap either. However, an event like this was not scheduled and planned in the last three months and could possibly have been planned at least a year ago. The money to pay for this is pre-bailout money.
I'd love to know what the cancellation fees would have been if they had, indeed, cancelled these events. The answer is probably a large percentage if not all of the total.
Another factor is the affect that it would have on hard working middle management who were being rewarded for the good work that they did. Most likely they brought in a lot of money that was squandered by poor decision makers on the top.
Someone on a meeting planners list serv requested suggestions on how to best handle an awards event via webinar. As much as I love the Internet, web casting, ichats, Skype, etc., virtual meetings,  there is nothing like shaking a hand, seeing a smile, smelling the flowers, laughing with colleagues and standing in front of one's peers to be recognized.
The affect that canceling the series of events would have on the local community is devastating. The service people in the hotels, food outlets, etc. would probably be laid off. The retail shops that the attendees would patronize would not have the expected business. Sales people would be laid off. It goes on and on.These folks are not receiving bail out money to the best of my knowledge!
Now, this does not mean that Northern Trust couldn't have cut back.
Probably high end entertainment should not have been booked for each night, but that was booked and not much to do about it.
Savings, however, could be made in many ways. Perhaps raising the benchmarks to qualify to attend would reduce the numbers, not having any executives attend who have nothing to do with the incentive. The planners could work with food and beverage to reduce costs.
I would want to be careful to adjust to save money but not cause a lot of small businesses to go out of business or employees who are paid by the hour to lose their jobs.
I truly believe that all events and meetings people need to be smarter about how they go about their planning, but let's not "throw out the baby with the bath water."

Comments on this entry are closed.

  • Brian McGovern March 3, 2009, 9:25 pm

    Your point about cancellation fees is certainly valid. Add to that the cost of losing out on millions of dollars in new accounts by alienating your client base. We both know that special events like golf-outings can deliver a huge ROI. But, in hindsight it was a bad PR move.
    So, would the government be better off if TARP firms stopped trying to market themselves?
    Should banks just wait for more government bailouts instead of doing innovative event marketing?
    If NT had spent twice as much on junk mail and radio spots, would that be acceptable?
    As I wrote in today’s post back on my blog – we need to make Washington understand that discouraging event marketing will cost lots of blue-collar workers their jobs.

  • Serenity J. Knutson February 25, 2009, 12:41 pm

    In the case of Northern Trust, as opposed to the Wells Fargo and AIG incidents, I find it commendable that the company CEO has issued a prompt response to the criticism, and he has stuck to his guns without apology. According to an open letter from Northern Trust CEO Frederick Waddell, “no public purpose would be served” by canceling this event. The money was already spent, and unlike those of other companies who wavered in the face of bad PR, this event went on. Agree or disagree with the event in question, at least this company stands by its actions and does not let the media decide what it should and shouldn’t do.