This year, we published the TMC Partnership Performance study. The concept of the study was to understand the importance buyers placed on different aspects of their partnership with the TMC, because importance creates expectations.
We aimed to uncover any consistent gaps between importance and the assessment of delivery, which could then become areas for improvement within the TMC community.
For the most part, the results were as we’d anticipated, given our experience and roles within the travel industry. However, one area for us really stood out: Governance.
Governance was rated as being relatively high in importance (4th out of 10 capabilities), the assessment of the delivery by buyers was low, meaning the gap between the two was in the top 3 (alongside traveller experience and technology).
So, what’s is going on?
It’s our belief that the gap in expectation and delivery is very much down to the need for a clearer definition of what governance means to both parties in the first place.
What is Governance?
It’s one of those terms which is often bandied around. Like many business terms it will mean different things to different people in different sectors. When we think about governance, we think of it in two ways:
- Supplier Governance
- Programme Governance
Supplier governance is about creating a structure to manage your suppliers effectively. This is usually a collaborative situation, but you need to make sure that certain things are being adhered to. Governance feels like a harsh word to use – “you have to govern the relationship” – but in reality, it is about building a relationship and managing it to ensure it is functional and performing to defined expectations.
Here are some questions I recommend you ask yourself:
- What is their job, can you clearly define what it is and what it isn’t?
- Are they contributing fully to the reason you brought them in?
- Are you clear on who is responsible for what?
- Do they have clarity on your goals and objectives?
- What structure do you have in place to manage (or govern) that supplier relationship?
Programme Governance is a bit broader. It is relative to the organizational objectives, and how the travel programme is aligned to those objectives. You should regularly assess the programme needs against the organisation’s objectives – across suppliers, stakeholders, travellers and arrangers. You are tracking programme performance against those needs. And importantly,-those needs are ever changing.
The Inside Track on Governance
I’ve been working in business travel for many years now, and the challenge of getting governance right has been a consistent theme all this time.
Given the launch this year of the TMC Partner Performance study, our video series, and the fact that effective governance once again appears as a challenge, I thought it might be helpful to give you the inside track on some best practices I’ve seen in successful governance.
1. Be crystal clear
Both sides need to be crystal clear about what their objectives are.
Buyers – you must share your programme objectives with your strategic partners, and a TMC is most definitely a strategic partner. How can you hold them accountable and manage the relationship effectively if they don’t know what the expectations are in the first place?
TMCs – this isn’t a one-way street. This is a relationship. You need to share your priorities and objectives with your client as well. Then, you can both assess if there is a strong alignment.
Laying out what your priorities are over the next few years from both sides of the table allows you to assess alignment. If there isn’t alignment, then relationship governance will be fraught. Not sharing this information is a failure on both sides.
2. Broaden the conversation
More elements are at play in the successful governance of a programme and supplier relationship than just the corporate and the TMC. Hotels, airlines, ancillary services, tech providers – all of these suppliers within the programme need to be involved in a collective conversation.
We’re used to two-way discussions between TMC and Corporate. Still, I would argue that a shift in programme strategy towards different models means a need to re-focus those conversations and widen them to have all parties granted a seat at the table.
Collaboration gets discussed all the time in our industry, but ,we currently keep our conversations limited to the linear. To truly govern your supplier relationships and overall programme, every major participant must be involved.
3. Setting the right SLAs
Elements of programme governance will come down to granular supplier governance – and having service level agreements in place is a clear starting point.
All SLAs should be tied to the strategic priorities in your programme so that everything is linked. But they also need defining. For example, if your SLA is traveller satisfaction, how are you defining and measuring that? If it is just how quickly the phone is answered, does that address traveller satisfaction? What about other traveller touch points, such as proactive outreach in trip disruption?
An SLA is a broader indicator of that accurate metric that you’re looking for. There is a tendency to focus on the minutia, and there’s a lot of minutia. I’ve seen 20 SLAs on a programme before, and my challenge is: Why do you need 20? What are the five that will drive what you want out of this program and the rest, move into KPIs.
In my experience, five is the perfect number of SLAs, because you can really determine the behaviours you want out of your TMC. If you’ve got 20 behaviours, what are they supposed to focus on? If you’ve got five, it’s crystal clear what the relationship is going to be defined by.
4. Taking responsibility
This is crucial to effective relationship governance. If you don’t know where responsibility lies and with whom, then you can’t manage the programme or supplier relationships. Again, this isn’t a one-way street. Both sides need to know the answers to these questions – and ensure that they have the same answers as each other!
- Who is responsible for what?
- What is within the account manager’s responsibility and remit?
- What’s the regional responsibility for what they are deliver
This is crucial to understanding, which has been a common theme throughout this blog post.
Here my suggestion goes wider than just an online survey to your buyer / TMC. Let’s be honest – they’re not going to be 100% truthful or cover the hard topics.
The feedback I’m always interested in is what does best practice look like in that corporation. Both the TMC understanding of the corporate’s view and the Corporate’s understanding of theTMC’s view, will lead to much more effective communication and understanding. If you don’t know what good relationship governance looks like from their perspective it could get lost in translation, which means you may be performing lower (or higher) than expectations, and be completely unaware.
Benchmarking against other vendors in other sectors / categories is a great way to do this and see what is working particularly well, or not, in other areas of the business. Is there anything there that you can apply to your own relationship governance and strengthen the process?
And if all else fails....
There is an undeniable gap between the importance, expectation and reality of relationship governance from buyers. Hopefully, if your relationship is woefully lacking in governance, then the above provides a starting point on what governance is, and some actionable ways to strengthen the relationship governance within your business.
But sometimes we come across relationships where it’s clear that the governance has broken down. Sometimes corporations come to us looking to go out to tender for a new TMC supplier because the relationship isn’t working. So, we undertake an independent relationship assessment – couples counselling for TMCs and Buyers, if you will. It’s an opportunity for both sides to rate the relationship and to see where the issues lie.
Sometimes it is the TMC. Sometimes it is actually the buyer. But nearly always it is because the relationship governance has been neglected, and sometimes this insight acts as a stimulant to fix what is actually a good match, but just needed a little attention.
We create an environment where both sides know what matters most to each other and what they are going after – as partners. We combined with a cadence of 90-day objectives for momentum.
What this reminds us of every day, is that effective governance starts with listening and understanding.