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What are presentations really costing you in your company?

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Some people complain to me that all they ever seem to do is sit though presentations. And more often than not they'll say that more of them are bad than good.

Ccalculationg the cost of poor presentations

Presentations that are boring, hard to follow, complex, poorly delivered and fail to achieve their objective (assuming, that is, the presenter had actually thought through what they were trying to achieve).

We tend to concentrate on the human cost of these. The "Why the hell am I here?" frustration. The "God, do me a favor and kill me now" boredom. The "What the hell is she going on about?" confusion.

But there's a more important cost, and that's the financial one. Sitting down with a customer a couple of weeks ago, we attempted to put a financial cost to the presentations delivered in her company. She had 1200 employees in her division, and the calculation (which I'll show you below) showed that presentations cost her at least $1.6 million every year (we actually agreed the figure was probably a conservative one). Over the top for a division that size? Not at all. The figure for your department, division or company will amaze you.

Let's look at how to do the calculation.

1. Estimate the number of presentations given each month in your organization. The number will probably surprise you and be bigger than you think. Remember that at a single full day meeting there might be 7 or 8 presentations. As I've already said, some people complain they do little else but attend meetings and listen to one presentation after another.

2. Calculate the number of man hours involved. There are several elements to this.

  • The number of hours involved during the actual presentations themselves (i.e. a 1-hour presentation with an audience of 9 and a single presenter equates to 10 man-hours).
  • The amount of preparation time involved. This might also surprise you. Sometimes 4 or 5 people can put in several hours work each just for one person to give a 1-hour presentation. A really big presentation to a major customer or the CEO's presentation at the annual staff conference can take 20-30 hours' preparation or even more.
  • The amount of follow-on work generated by poor presentations, such as further one-on-one discussions because something wasn't clear, the
  • reworking of financial figures, time spent re-reading complex documents, or extra research. Further meetings to discuss or represent what was said at the initial one should be included in the overall figure for the number of monthly meetings.

3. Multiply the number of hours by the average hourly salary cost. NOTE: This isn't simply the average annual salary divided by 2,000 (i.e. 50 working weeks, 5 days per week and 8 hours per day, so a $50,000 salary would equate to $25 per hour). Firstly you need to include things like federal security tax, federal unemployment tax, state unemployment tax, worker's compensation, pension plan, profit sharing, bonuses and incentives, medical and dental costs.

Secondly, you need to divide the revised total by a figure that accounts for sickness, maternity leave, and national and state holidays - Xmas, Easter, 4th July, Thanksgiving, Marin Luther King Day, etc. As a rough rule of thumb this will add about 50% to the hourly cost.

If there are major equipment costs involved (desk and office space, company car, IT equipment, etc.) it can be significantly higher. If you don't know the true figure for your department, division or company there are a variety of online calculators that will do this for you if you supply it with the relevant information; just Google 'real cost of employee' to find one.

4. Finally, multiply it by 12 to arrive at an annual figure.

So the calculation looks like this:

Number of monthly presentations
x
Number of man hours involved
x
Real hourly salary cost
x 12 months per year =
Annual financial cost of presentations
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