Driving Corporate Events Underground Won't Solve the "AIG Effect"
May 21, 2009 ‐ 2 comments
After hiking the splendid Bill Wallace Trail the other day, BrandCultureTalk stopped by the rather swanky Bacara resort in Santa Barbara.  Taking place among the customary cavorting of the smart set was a grand event reminiscent of more ebullient economic times -- say 2006.  In addition to the run of the resort and hosted parties, there were sybaritic activities galore -- golfing, sailing, riding, tours of Santa Barbara wine country . . . and more golfing -- on offer to those who were members of something cryptically captioned the "Santa Barbara Pinnacle Club."  Remarkably, no one involved with the event or on staff at Bacara would reveal anything about who or what the Santa Barbara Pinnacle Club was other than a "private organization."  No signage other than the words "Private Event" betrayed the existence of such a group.  This cone of silence naturally piqued our curiosity.  On one publicly accessible table we espied a stack of brochures listing events.  Although there was no identifying name, BrandCultureTalk's brand-centric eyes did notice a teeny, tiny: Yes indeed, the Santa Barbara Pinnacle Club was none other than a stealth version of the Motorola (NYSE: MOT) Pinnacle Club, renamed and rebranded.  To the uninitiated, the Motorola Pinnacle Club is a corporate retreat/award for select members of the top 5% company's top national and international two-way radio dealers. Although it is perfectly fine to keep outsiders away from a private event, the extreme cloak and dagger approach had the unintended effect of making it seem that Motorola had something it really wanted to sequester from public scrutiny.  Discretion is one thing, active concealment another.  Ever since AIG infamously spent over $440,000 to host an event at the St. Regis Monarch Beach Resort & Spa after accepting $85 Billion in taxpayer bailout, corporate events have gone clandestine, or simply gone.  Back in February, Wells Fargo canceled its employee recognition event in Las Vegas, inspiring its CEO John Stumpf to take out full page ads in the NY Times and Wall Street Journal defending the intent behind the event: Shortly thereafter, State Farm Insurance announced that it was canceling its 2009 sales meetings as well. In light of Motorola's 71% negative return to investors in 2008, it is understandable that the company would not want to be perceived as squandering corporate resources.  But Motorola is not AIG.  The company is not living off the public weal; it spent its own money on the Bacara Pinnacle event, not the taxpayers.  Motorola core businesses seem to be regaining solid footing and the market seems to agree:  MOT is up almost 70% in the last three months.  Placing a code of omerta over an event designed to honor the sources of revenue essential to improved financial performance puts those invited in the awkward position of feeling apologetic and guilty about their own success -- and can undermine the very reason for hosting the event in the first place.  Making business events and retreats the scapegoat moreover adds insult to injury to the hard-hit hospitality industry -- an industry that according to the US Travel Association supports 2.4 million jobs, $244 billion in spending and $39 billion in tax revenue though business travel each year in the US. These are tough times for virtually everyone, and no company relishes being pilloried for perceived profligacy.  BrandCultureTalk is heartened that a company like Motorola is not only selling two-way radios, but it is selling enough of them to bankroll a great multi-day party.  There is nothing wrong or shameful with celebrating success, particularly when it's so hard won these days.  And if past is prologue, invitations to corporate retreats will continue to provide powerful incentives for increased individual and corporate performance.  If all corporate travel and event sponsors act like Motorola and conduct their meetings and events on a clandestine basis, the current stigma toward events will only be reinforced when news inevitably leaks out, and delay the return to a more normal, sustainable business environment that rewards results. It's time to come clean.
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Incentive Travel: Reversing the AIG Effect « Incentive Travel Blog – Corporate Incentive Travel
February 16, 2010 1:12 am
[...] Driving Corporate Events Underground Won’t Solve the “AIG Effect” [...]
Immacula Bernstein
June 4, 2009 1:46 pm
That old BrandCulture blogger has hit the nail on the head yet again. This illustrates what happens when the unhappy human trait of lying becomes habitual. The individual lies even though no lie is needed. With lying comes concomitant guilt, or is it visa versa. Which comes first? If businesses come clean, will lying and guilt disappear? Why don't they give it a try? It can't hurt.

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