Philadelphia stakes

After attracting criticism over high prices and less than cutting edge service levels, Pennsylvania Convention Center took the bold decision to embark on a radical programme to shake up its offering from the ground up.

As president & CEO John McNichol puts it: “The city of Philadelphia was on an upward trajectory, but we were not”. CMW sat down with McNichol and GM Lorenz Hassenstein to discuss how rolling out an ambitious change programme has transformed the venue’s reputation.

McNichol’s journey began 10 years ago when he was appointed to the board of directors. “We had become out of date in comparison to our competitors. We’re a union town, a union facility. Other towns that were also union facilities had began listening more closely to the customer, and we were falling behind.”

In 2010, a US$789m expansion of the facility was announced, allowing the building to handle bigger, concurrent events, totalling more than 93,000sqm of event space. “We were growing the facility, but we hadn’t changed our business model to accommodate our customers or the changes. It was a ‘grow or die’ situation. We weren’t attracting the right sized events to the city, but we had adjacent land that could be used and would not be hard for us to acquire,” says McNichol.

City officials believed the build would allow the centre to reach its full potential, envisioned when it was built in 1993. McNichol and the board members agreed that it was time for some tough decisions, and together drew up a plan to bring the facility into the 21st Century, taking time to better understand the customer, and utilising best practices.

Public facilities manager SMG was chosen to handle daily operations because of its performance in 75 convention centres under management. “Almost overnight we saw changes, with Hassenstein bringing a greater understanding of show management, and how they make operating, rebooking and management choices,” says McNichol. “It was more of a free market shift. I’d liken it to a public and private partnership, you still have a public interest.”

SMG took on 85% of the convention centre’s previous employees and retrained and re-tasked them. The bigger impact was at leadership level. PCC were getting smarter about where the industry was headed, and renegotiated work rules, including a Customer Satisfaction Agreement, going into effect in May of 2014 after a five-month process.

The procedure culminated in two out of six unions declining to sign the agreement, resulting in PCC working with four unions. “Two of the unions baulked on the deal and organised a labour protest. What they did not count on was that the other union leaders had bought into the deal, and they actually crossed the picket line, which is almost unheard of in Philadelphia history,” adds McNichol.

The PCC redrew the union agreements with regards to jurisdictional alignment, this created buy-in on the way the convention centre was run and opportunities to discuss what they thought were best practices. “We elected to see the change in union jurisdictions as a positive because we can now do the work more efficiently for the customer,” says Hassenstein.

“It was really important for the customers to see that we were introspective about how we run the business. We had too complicated a mix of unions, and the negotiations were confusing to the customer or unnecessarily more expensive. There were also perceived behaviour issues where construction and hospitality didn’t necessarily mix.”

Jurisdictions were streamlined, giving  up to 30% greater efficiency for customers. “It was a lot of hard work but also a little bit of luck that resulted in fewer unions and a great Customer Satisfaction Agreement,” says McNichol.

Hassenstein added: “Prior to the new Customer Satisfaction Agreement, there was a lot of confusion about who was doing what among workers and customers, but today there’s no confusion. It’s a simplified coalition of four unions and simpler rules.

“The contractors have an open relationship with their contractors, but I can’t control who you buy from. We want contractors to make money to service the customers.

“In the customer continuum, we deal with exhibitors but also their customers. I’d say we’ve gone from a D minus to a solid B plus and we’re always looking for ways to improve.”

Hassenstein points to events including LIGHTFAIR International, a conference and exhibition due to return to Philadelphia in May 2017, after it was last staged in the city in 2013. “It acts as a great example of how we’ve changed customer perceptions. Their management had previously told us ‘don’t bother calling’, but having witnessed the changes and actions we bought in, they saw how their show could work far more efficiently. That to me is much more important than getting a new customer. We’ve gone on to have many others who’d said ‘never again’, now pledge to return.”

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