Sound the retreat: although the dollars that companies spend on retreats have fallen with the weakened economy, some organizations still sign up for off-site meetings that involve physical challenges. But there's considerable debate about whether you can really rev up leadership skills or build a team through fire-walking, rock-climbing or whitewater rafting

Workforce, Sept, 2003 by Douglas P. Shuit

DECKED OUT IN T-SHIRT and tennis shorts, Howard Atkins, the chief financial officer for Wells Fargo & Co., balances precariously on two wobbly wooden planks stretched between two boxes. If he and the dozen other corporate honchos gathered on a sun-splashed lawn at a luxury hotel in Sonoma, California, successfully have worked as a team, Atkins will make it across the jerrybuilt bridge without falling off. With a final lunge, he triumphantly makes it to the other side. His team of senior financial execs clap and cheer.

The banking leaders are part of a larger group of 73 financial executives, risk managers, accountants and group presidents that Atkins has pulled together for team-building exercises daring a three day retreat that also included more conventional business meetings with reports and presentations. The top company players are participating in seemingly silly activities for a serious purpose: improving teamwork to achieve better business results. Atkins describes them as "very high-powered, very capable, very technically skilled, very competitive people."

Although they are top performers, the CFO says he wants an even higher level of performance. "They are very individualistic in their approach to their work," he says. "What I have been trying to do is get them to see the power of acting more like a team." By the end of the day, Atkins is clearly pleased. "It's really a terrific success," he says, adding that Wells Fargo in recent quarters is showing double-digit gains in income and earnings, which he credits in large part to the bank's people programs. "Success more often than not is a function of execution, and execution is really about people, so we invest pretty heavily in our people."

WHEN BUSINESS IS DOWN

While Atkins chose relatively low-stress challenges involving activities such as balancing on planks, building tents blindfolded and stepping through complex webs of ropes, other companies use whitewater rivers, rock walls, treetop rope bridges and even fire pits as metaphors for the business world. The idea is to get people out of the office, stretch their boundaries and create some fun, all the while reinforcing serious messages like the value of team-building and pushing personal limits. But the value of off-site retreats and physically challenging exercises is a source of considerable debate, particularly in a weak economy that puts extra scrutiny on every discretionary program that can't show solid ROI. Retreats are billed as leadership training, brainstorming or strategic thinking, but can those really be accomplished on a mountain climb, a fire walk or a whitewater rafting trip? Are companies building loyalty? Or lawsuits over seared soles and dunked human-resources directors?

Retreat reputations were also called into question last month with the resignation of U.S. Postal Service Inspector General Karla Corcoran. She was accused of wasting public money on $1 million-a-year retreats at which employees dressed in costume, participated in mock trials and recorded testimonials to Corcoran.

Although some companies like Wells Fargo continue to invest in team-building events, other companies are backing away. Break-out numbers on how much is spent on team-building are not available--they get thrown into training and development budgets, which are down. A study by the American Society for Training & Development published earlier this year said that training expenditures dropped from 2 percent of payroll in 2000 to 1.9 percent in 2001, reversing an upward trend between 1999 and 2000. Susan Harper, a business psychologist who runs rock-climbing programs for corporations through her company, Synergy Consulting, is one of those who feels the pinch. While other parts of her consulting business remain strong, "team-building has definitely gone down," she says. "People are reluctant to spend money on what they think is not an absolute necessity." With a recent uptick in the economy, her business has improved.

Harper charges rock-climbing clients from $2,000 to $4,000 or more a day, depending on the size of the group. Other events can cost from $500 for a few hours with a stand-up comic at a corporate meeting to $10,000 and up for a team of professional facilitators pushing executives through physical challenges. Atkins estimates it cost Wells Fargo about $50,000 for three days and two nights at the Sonoma Mission Inn & Spa. That included a fee of $13,000 for Adventure Associates, which brought in six professional facilitators to organize the half-day program that had the CFO walking the plank. Atkins does not try to guess what kind of dollar return Wells Fargo might expect on this people investment. For one thing, the financial managers are not directly accountable for producing revenue for the company. But the CFO is convinced that teamwork can help other parts of the company make money. "I know intuitively the payback here is huge," he says. "It's a very small investment to make for the payback we are going to get."