Updated: Jan 22, 2020
Let's take an opportunity to have a meeting on meetings
How We Measure Value
Let's squelch something immediately. One argument as to why we should have meetings is that some may find them valuable. While we agree that meetings can provide value, seldom are things really that straightforward. Opportunity cost is putting yourself in the position of the greatest value. So when understanding the value of a meeting we should value it against the opportunity cost.
Why We're Not Fans of Meetings
We chose to look into meetings in this article because of how common and widely used the practice is. Despite the many foibles that are blatantly present with meetings, particularly regularly scheduled ones, we still partake in them.
How many times have we all been a part of a meeting that was one person talking to another while six members are sitting and doing nothing? How about the times where we realized the whole meeting could have been accomplished by email, or that half of it is efficient and the second half is simply socializing? It seems like when meetings find their way into an organization they spread like wildfire, Seeing the opportunity cost will help you to decide the value of the meeting. In other words, if you see how much potential gain is lost from a meeting, it becomes clear to see if we would pay that money again for that meeting. That way we can determine if we should limit or dissolve the practice.
Show Me The Money
Opportunity cost is the return on the best forgone option minus our option. Therefore to find the metric to compete our meetings with we should take the opportunity cost and decide if we'd pay that to have the meeting.
We created a fake work group above. First we examine that we paid employees to be in a meeting. In this example, this is $100 total. We then examine the return on the best forgone option. In other words, if the employees were not in the meeting they could have done work for the company. This totals to $150. The opportunity cost is $250 per one hour meeting. We could ask ourselves was it worth $250 more value to have that meeting?
You Might Be Saying
You might have thought by now that without the meeting how could we possibly align our focus, or share thoughts, ask for help, and the like? Well that's a very good argument to which we humbly can't unilaterally lay out because every organization functions differently. What we do know is that the company that can creatively accomplish those tasks and continue to adapt and provide what we think meetings provide without meetings are going to be the victor. It'll take great leadership to challenge different methods until it works but once it does and as we already know, "to the victor goes the spoils."
And You Thought The Opportunity Cost Thing Was Done
As it turns out we weren't quite done with the opportunity cost because we have to also evaluate the long-term compounding effect of the two options. Our example will feature a company that practices a 1 hour "All Hands Meeting" that happens once a month (this is very common). This company also has the opportunity to invest this money back into the business at a 7% APY. Therefore, after 50 years, the compounded opportunity cost becomes:
The Expansion of Opportunity Costs
As a last aside, the philosophy of what is opportunity cost should also be explored. Not only do we have to look at the dollars that could have been made or lost through working or meeting but we must also explore the possibilities of other invaluable opportunity costs. Think about how in the time meetings happened a business could be spending that time expanding an employees skills, meeting new clients, reading, searching for opportunities, automating, getting tasks done faster for a client, that extra quality check, and the list goes on. We also have to demonstrate the risks with meetings like how meetings cause other meetings which snowball ineffectiveness, rushing to finish work before a meeting, and so many simple details which seem trivial but are irrefutably real.
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