1997 Autumn ACTE Quarterly: President's Message | Developing a Global Policy | Survey: The Business Traveler's Life

Your company’s global policy is the linchpin of your international travel management program. Putting it together requires patience, teamwork, and above all, diplomacy.

On the most basic level, a travel policy is a simple piece of paper outlining a simple process: the purchase of business travel products and services. It explains what travelers may and may not do, how much they can spend and where they can spend it, how they make decisions before they travel and document their decisions afterward. But on a more profound basis, a travel policy--well communicated and well enforced--is the key to a successful travel management program.

"The whole point of global travel management is really to standardize the travel purchasing process," says Carol Salcito, President of Management Alternatives, a consulting firm frequently brought in to help multinational corporations globalize their travel programs." The objective is to capture the purchasing power of the largest possible size group of travelers. You can’t utilize that power unless everyone knows what to do and how to do it, so you rely on policy to direct travelers to the correct purchasing behaviors."

That sounds simple enough, but as anyone who’s been through the exercise knows, globalizing anything is a lot easier than it sounds. Writing a nonglobal policy for the first time can take months of collaboration among corporate departments--travel, finance, HR, accounting. Besides the major decisions: whether (or how) a travel agency or agencies are used, selection of preferred vendors, and how to monitor and enforce policy, there are the human factors to consider: cultural sensitivities, buy-in by travelers, clarity, logic and accessibility of rules. When there are multiple cultures, vendors, languages, and business customs to consider, the complexity of the process multiplies exponentially.

In Some Regions, Starting From Scratch

The first hurdle for some multinational corporations isn’t to standardize policy, it’s to introduce the whole idea of corporate travel guidelines in the first place. A recent Carlson Wagonlit survey of 886 continental European corporate clients showed that only 40 percent of them had even a loose company travel guideline. That figure, experts estimate, is even lower in Asia and Latin America. For travelers used to having carte blanche when making travel arrangements, putting guidelines, even loose ones, in place may come as a rude shock.

"Many travelers look at business travel as a perquisite of position," explained consultant Steven Schoen of the Global Group. "They look at policy as a way to take away those benefits, and as a kind of rebuking of their independent decision-making ability. Unless the institution of any policy--global or not--is handled properly, travelers may rebel. If they don’t follow it, then you may as well not bother to go through the exercise."

Just how do you go through the exercise most efficiently? Travel management professionals advise the following:

Get your definitions straight.

"When I hear anyone--travel manager, CFO, or travel agency--talk about globalization, I always wonder what exactly they mean, because it does mean many different things to different people, even within the same company,Ó says Alberta Rozsay, travel manager for Unilever. "Superficially, people think you’re talking about travel patterns. Or they’re confusing travel policy with a travel program."

Therefore, be sensitive to nomenclature--especially for country-specific expressions or jargon. Be particularly careful when using expressions like ‘domestic,’ ‘transcontinental,’ ‘stateside,’ or, especially, ‘foreign,’ which has a pejorative ring to it. And when you’re talking about reimbursements for using a personal automobile for business, for example, don’t say the policy is to pay out 32 cents a mile, say it’s the mark or franc or lira equivalent of 32 US cents a mile.

Definitions can take on subtle--and often frustrating--variations, even within a single region. Management Alternative’s Salcito recently assisted one multinational corporation’s global policy development and found that the firm’s 15 different divisions all had different takes on U.S. air travel policy alone. "One division’s policy says ‘you must take the cheapest fare available,’ another says ‘you must take economy,’ the next one says ‘you must take the cheapest flight when available, except if it’s a penalty fare," and another says to ‘take the cheapest even if it’s a penalty fare."

In cases like this, Salcito suggests, the first step in developing a global policy is to build a matrix of all the policies that exist across divisions and subsidiaries. From there, determine "what works and what doesn’t, and where the process can be improved" before constructing the final, global document.

Consider global policy a document that can be greatly enhanced by collaboration.

"It’s a really good idea to bring in experience and expertise of travel managers around the world," said Steven Schoen. If there is no dedicated travel department in a region, solicit the feedback of other managers.

One thing a global policy isn’t, travel professionals agree, is, for instance, a U.S. or U.K. policy applied wholesale worldwide without any local adjustments or allowances. "You can take a policy element, like mandating the use of a corporate card, but you’ll run into a bit of a snag in developing nations where charge cards aren’t in broad use and there’s no such thing as central billing," Unilever’s Alberta Rozsay points out. "Let’s take the broad view: globalization is great in theory, but in practice we are working with countries where airline tickets are still written by hand. In some cultures, we run into a lot of problems because it’s frowned on to allow individual travelers to have their own charge cards." In those cases, she says, travel managers have no choice but to learn to live with the situation.

In other words, she says, "be patient. A global policy doesn’t get written or implemented overnight."

It may take form at travel manager councils, however, where best practices are shared and brainstorming sessions result in innovative policy enhancements. At Whirlpool, the company’s European operations applied the U.S. division’s concepts of travel agency consolidation and intercontinental vendor agreements. The U.S. operation found ways to save on travel costs by using teleconferencing to replace some trips and using automated expense report software. (The European policy mandates the use of teleconferencing as a "first method of communication for meetings of one day where people have already met," said Benton, Michigan-based travel manager Judy Steinke, a policy that may or may not have broader appeal.)

Get executive level buy-in.

That’s an essential step in developing any global policy, asserts Seagram’s Earl Foster. You need the support from up high for the policy to "have any credibility whatsoever," Foster said. Be aware, too, that in some companies your new global policy document may have to go through approval channels that differ from country to country. In Germany, Unilever’s Rozsay said, any global agreement has to be run through the German worker’s union to see whether the policy proscriptions violate workers’ negotiated rights. "It may be something simple, like not being allowed to have corporate access to home addresses,"she said. "The smartest thing to do is to work closely with the local companies before you finalize your global policy. Ask for their input, let them flag trouble areas. That’ll save you a lot of trouble after the fact."

Cultural awareness is paramount.

So too is taking an "if it ain’t broke, don’t fix it" approach. At Colgate-Palmolive, the global travel policy mirrors the way the corporation expands in worldwide markets: by acquiring companies and allowing them to run their businesses the way they know how.

"We’ve found that the best way to have subsidiaries join our corporate travel program is to set basic policy standards, and from there customize the document to let the local company or branch take care of it as well as they can," said Cyndi Perper, Director of Corporate Travel Services. "You’re often working in cultures where business relationships supercede price considerations," and resistance to change is strong. "Immediately coming in and mandating the use of a new travel agency that no one has ever heard of simply doesn’t work," she warned.

Travel management consultant Carol Salcito agrees. "A company that’s already operating wisely in its own community and environment won’t respond well to a global policy that says, ‘do this, this is a better way," she said. "It may not be a better way. In any case, an arrogant approach is doomed to failure."

Related to the cultural issue is the fact that countries differ dramatically in how business is conducted with travel vendors and what is and isn’t affected by local statutes. When it comes to car rental, for example, be aware of local variations, some mandated by law, on how liability insurance is purchased.

Be prepared for exceptions.

There are going to be those times when a global policy, no matter how well crafted, still doesn’t suit reality. That’s why companies like Seagram’s identify what travel manager Earl Foster calls "hardship countries," where deviations from policy are not only considered appropiate but are in a sense mandated. "If you’re flying from Hong Kong to Malaysia," Foster said, "you fly business class, even though it’s a relatively short route and even if you aren’t a senior executive. The reason is that those flights in coach are mostly filled with leisure travelers who are hauling back all sorts of things-gifts, live animals-so the economy class environment isn’t exactly-how do you say this?-conducive to getting work done."

Foster, like Whirlpool’s Judith Steinke, recommends working closely with country managers to discuss areas where flexibility is warranted. "Remember that policy isn’t just about saving money, he warns. "It’s also about staying true to the whole purpose of travel-and that’s to get a job done. Policy should always take into account issues like productivity. You may find that even on short intraeuropean flights, unlike domestic U.S. travel, it makes sense to allow people to travel in business class. That way travelers can use the lounges, where they can use phones, faxes, and printers, and even have a meeting if they want to."

Consider different ways to build in flexibility.

Travel managers suggest that you empower local managers to adjust policy when they deem it necessary. "Use the so-called global policy as a framework, and make refinements on a local basis," suggested one European travel manager. Some travel managers may find a particular policy element too lenient. The global policy may allow business class tickets on long haul flights but the departmental budget might not be able to handle the extra expense, for instance. Or you may need to double up travelers in a hotel room.

Flexibility also may mean empowering the traveler to make his or her own decisions within vague parameters. At Rhone-Poulenc, the French-owned pharmaceutical and chemical concern, Graham Rowe, the newly-appointed utilities and services purchasing manager, actually loosened controls to facilitate independent travel management decisions. "The culture in the company is not to take too much control of staff; it can be intrusive," he said. "People have their own reasons for choosing a certain hotel, and I want to make sure they can have the hotel they want, providing the costs are not out of line."

Make the safety of your travelers an important variable.

As companies expand globally, they’re often sending travelers into developing nations’coincidentally the ones with the worst safety records. Some travel managers sending employees to Russia make it a policy point to use any carrier except Aeroflot, which has one of the worst safety records of any scheduled airline in the world.

For travelers to Lagos, Nigeria, Colgate-Palmolive travel manager Cyndi Perper says that travelers are instructed not to use their corporate card-in fact, they’re told not to even bring it. "Someone from the local office will meet them at the airport and will supply them with local currency," she told ACTE Quarterly. "Travelers also are assigned a professional driver, so they never rent their own cars or take taxis, and we are very choosy about the hotels we put them in. We never lose sight of the fact that we are ultimately responsible for their well-being when they travel on company time."

Cart before the horse?

Ultimately, the value of the travel policy leads to advantageous purchasing. "A global policy with high compliance, coupled with clear, clean data, is essential when you attempt to formulate global deals," said Earl Foster. "Whether vendors are truly ready for global deals is another question. Until then," he said, "the best reason for a global policy is to institute a more consistent application and understanding of travel patterns and travel purchasing. Once that’s in place, cost control will follow." AQ

1997 Autumn ACTE Quarterly: President's Message | Developing a Global Policy | Survey: The Business Traveler's Life