5 ways business travel fuels innovation and growth

Posted: 20 February 2020
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We live in a world that is dominated by digital connectivity. Yet now — more than ever — in-person, face-to-face connections are a competitive advantage in business.

A report from Harvard Business Review Analytic Services in association with Egencia shows that companies with a strong travel culture are better equipped to innovate —with faster speed to market — than those without. Download here.

A strong travel culture is defined as one in which the organization, its leadership, and its processes support the use of corporate travel as a form of strategic investment with business value.

The report found that to compete in this rapidly evolving customer-centric market, companies must build closer and deeper relationships with customers, suppliers, and partners. As well as forging strong bonds within their organizations around the world in order to innovate and grow.

Collaboration is key

Sixty percent of business leaders said that in-person collaboration is very important to innovation and delivering new products and services for their organization. “Innovation is typically more likely to happen when people are creating together,” Will Tate, partner with the corporate travel consultancy GoldSpring Consulting, said.

Yet for companies to benefit from in-person collaboration, they must cultivate a culture that supports and enables it through travel. This is borne out by the statistic that 67 percent of business leaders named increased collaboration as a benefit of a strong travel culture, while 32 percent called out increased innovation of products and services.

“[Employees] need to attend conferences, meet with others in the open-source community, and talk to customers in order to develop software and solutions,” Mary Jo Craft, senior global travel manager for the fast-growing open-source software company Red Hat, explained. “For us, innovation doesn’t happen in a lab or a manufacturing facility. It happens when our associates are out there collaborating with other folks and engaging in mind-share opportunities.”

Face-to-face interactions can improve sales

The report also highlighted the benefits of face-to-face, in-person interactions at all stages of the sales funnel, from identifying prospects to closing a sale. The report states that for many companies, particularly those in hyper-growth mode, investing in business travel and in the positive experience of that process is exceedingly important for the sales function.

Fifty-two percent of business leaders said that in-person meetings best facilitated a successful outcome in identifying new growth opportunities while 54 percent highlighted its importance in initiating discussions with mergers and acquisitions targets.

In addition, 89 percent said that sitting down face-to-face was the best option for meeting new clients, and 71 percent said it was the best option for negotiating contracts.

But it’s not just the top of the sales funnel that benefits from a strong travel culture. Client retention and satisfaction can be improved as well. Half of the respondents from companies with a strong travel culture reported significant improvements in customer loyalty.

The numbers bear out two explanations for that increased customer loyalty. Sixty-two percent of business leaders said the ability to build closer relationships with key customers was a benefit of a strong travel culture, and 51 percent said an increased understanding of customer needs was another. In addition, a whopping 82 percent of business leaders said that face-to-face was the best option for understanding and listening to important customers.

Empathy drives innovation

Empathy has been identified as a valuable factor in the innovation equation – for designing new products and services, processes and systems, and even new business models – and building a strong travel culture can be a powerful way to foster it.

The report states that business travel – whether to talk one-on-one with customers about how to solve their biggest pain points or meet with suppliers or strategic partners – is a proven empathy builder.

In fact, 81 percent of business leaders say that travel gives them greater awareness and empathy towards both customers and coworkers, which leads to a broader perspective and new ways of thinking.

“The best ideas never come from sitting in an office,” Caroline Strachan, managing partner with travel and meetings management consultancy Festive Road, explained. “They come when you’re in a different space or at an off-site or visiting a supplier – anything that gets you away from that daily work environment where you’re stuck thinking in a particular way.”

A vibrant travel culture can strengthen company culture and employee relationships

Sixty-six percent of business leaders named the ability to build stronger relationships within the organization as a benefit of a strong travel culture. For companies with global reach, the benefits were compounded. Fifty-five percent of business leaders said that a strong travel culture enabled better management of geographically dispersed teams, and 40 percent named the unification of business culture around the globe as a benefit.

We have a lot of global teams, and if we can get them together in person, that really changes the relationship among them going forward,” Joy Anzinger, senior manager of global travel for multinational analytics company Splunk, said. “Business travel is an enabler of globalization and growth,” Strachan added.

A strong travel culture drives better performance

 Those business leaders who said their organization has a strong travel culture have experienced significant improvements across the board.

Forty-seven percent of business leaders said that they’ve experienced improved profitability, 43 percent noted an increase in market share, 37 percent saw more new product introductions, and 35 percent were able to increase speed to market.

“Business travel is what drives business,” Anzinger said. “It’s what keeps our doors open. It’s what helps companies grow.”

No doubt business travel supports innovation by enabling in-person connections to flourish. But what about when things don’t go to plan? Working with a travel management company (TMC) that helps your travelers stay safe and your business provide a comprehensive duty of care is key. Traveler Tracker from Egencia for example, lets travel managers and arrangers find where their travelers are scheduled to be so they can help keep them safe in an emergency and contact them directly.

Top five roadblocks to a strong travel culture

According to the report, those organizations that fail to recognize business travel as a competitive differentiator may also fail to drive organic growth through the building of deeper relationships with customers, suppliers, partners, and employees around the world.

The majority of business leaders stated that a strong travel culture was very important to their organization’s performance. Despite that fact, less than a third of those business leaders said their organization actually has a strong travel culture.

Limited funding for travel was named as the top hurdle, with 55 percent of respondents whose company has a strong travel culture, and 66 percent of all other business leaders, naming it as one of the top three impediments. Inflexible travel policies followed at 25 percent and 36 percent respectively.

Inefficient processes, lack of leadership support, and difficult to use travel and expense systems –– the other three roadblocks –– were named twice as often in organizations without a strong travel culture as those with a strong travel culture.

So, while budget and travel policies may be tough to tackle, enlisting strong leadership support in finding a business travel solution that’s efficient and intuitive to use can go a long way towards nurturing a strong travel culture.

Keys to Success

While the top roadblock to success is universally shared, according to the report, so is the top factor for forging a strong travel culture.

Those companies whose leadership, processes, and technology support the use of corporate travel as a form of strategic investment are the ones who invest in enterprise travel management (TMC) solutions.

Three-quarters of those who said their organizations’ approach to managing business travel was very effective have a single TMC solution in place, versus 49 percent of all other business leaders. Likewise, 77 percent of those business leaders who said their organization has a strong travel culture have a single TMC solution versus half of all other respondents.

The report concludes that leaders who invest in travel and create the kinds of policies, processes, and systems that ensure that corporate travel is traveler-centric, help free their key employees to focus on what matters most: driving innovation and business performance.

Whether an organization’s growth is driven by sales, product innovation, or customer relations, in-person interactions facilitated by business travel can play a key role. Especially when partnered with the use of a simple-to-use, effective, single TMC solution.

 

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