What is the REAL Cost of Poor Presentations?

We have all seen them – poor presentations. The ones where the PowerPoint slides were unreadable, the presenter stood facing the screen and read each slide as it was displayed and there was no clear message or point to the time spent. These presentations are frustrating to watch, but more importantly cost organizations a huge amount of money.

The costs of a poor sales presentation include a longer purchasing decision cycle, requests for more information before a purchase is made and ultimately a smaller sale or no sale at all. The costs of a poor internal presentation include delayed decisions, more meetings to clarify the issue, additional information requested, incorrect decisions and sometimes a negative impact on one’s career. The dollar cost of the poor sales presentation is easier to calculate because the largest component is the lost revenue.

The dollar cost of a poor internal presentation is harder to calculate because we don’t see it show up on a sales report. Even though it is harder to calculate, it is important to consider. The dollar costs of a poor internal presentation are primarily contained in the extra time that people spend because the message was not clear the first time. Examples of this extra time include the hours spent doing extra research, preparing additional documentation, more one-on-one discussions, more time spent in group meetings to clarify the original message and more time spent reviewing additional documentation. When we add up the number of staff hours spent on all of these tasks, it is not surprising to find that it is 10 or more hours for each poor presentation. At that rate, the dollar cost adds up quite quickly.

Let me use an organization I met with recently as an example. This is a medium-sized organization with approximately 800 full-time employees. When we sat down, I asked them about the problem and they estimated that there are at least 40-50 internal presentations each week and about 25% require additional work because the presentation was not done well. At the rate of 10 hours of extra staff time per poor presentation and a professional staff salary of $50,000 per year, the cost to this organization is over $133,000 per year!

You can easily calculate how much poor presentations are costing your own department or organization. Start by estimating the number of internal presentations that are done per week. Include management briefings, customer presentations, project updates, staff meetings and other presentations. This number is usually higher than we first think it would be. Then, estimate what percentage of those presentations are done poorly resulting in additional work. In most organizations this can be in the 25-40% range. Next, guesstimate the amount of staff time spent in clarifying the poor presentations. Include the hours spent on additional research, extra documentation, more meetings and reviews. It is not unusual to find this is 10-15 hours per poor presentation. Finally, find out what the average salary is of a staff member doing the extra work. Now, use the following formula to calculate the total cost to your organization of poor internal presentations.

Annual Cost of Poor Presentations
=
# of presentations per week
X
52 weeks per year
X
% of poor presentations
X
# hours extra work required
X
Hourly Salary Factor (see below)

Salary Factor table for use in above calculation

Average Annual Salary
$35,000
$40,000
$45,000
$50,000
$55,000

Hourly Salary Factor
$17.95
$20.51
$23.08
$25.64
$28.21

Here is the calculation for the organization I met with recently:

40 presentations per week X 52 weeks per year X 25% require more work X 10 extra hours required X $25.64 per hour = $133,328 per year

Here is a calculator you can use to calculate the cost of the rework due to poor presentations in your organization.

When you see the real cost to your organization of poor presentations, you will be much more willing to invest in training and materials to help reduce the number of poor presentations. But the question is this: What is the primary cause of these poor presentations?

The primary cause in my experience is a misuse of the PowerPoint tool. Too many people use it as a magical crutch that will somehow substitute for proper preparation of a presentation. Here are three tips to help improve presentations. First, define the goal of your presentation and plan how you will move the audience from where they are now to where you want them to be. Second, develop your PowerPoint slides so that they enhance your message, not detract from it. And finally, if you have prepared properly, you will know your material so well that you can deliver your presentation as a conversation instead of simply reading each slide as it is displayed.

Just imagine the productivity gain in your organization that is possible by reducing the number of poorly done internal presentations.

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