Associations That Run As a Business Run More Effectively

By Jeanne Sheehy

Many association professionals and volunteers are of the opinion that, unlike their for-profit counterparts who are bottom-line focused, theirs is a loftier mission—like furthering the profession of its members and supporting the goals of its various stakeholders.

There is a growing body of evidence, however, that points to the fact that associations that run their organizations like a for-profit business do a better job of meeting their members’ needs, providing superior value and, in the long term, retaining members and their dues revenues than associations that do not. In a nutshell, they’re more successful because they’re more effective. So how can you change your model to one that emulates the management and operations techniques of the business community and lead to a more effective and successful organization? The following is a checklist of the most important business practices employed by today’s leading associations, addressed from the top down—in order of strategic importance.

KEYS TO AN EFFECTIVE ORGANIZATION

• Strategic Management (planning). The process of leading an organization through change and creating the best outcomes and benefits for members and other stakeholders lies in an enhanced approach to planning that we call strategic   management. In contrast to strategic planning, which is “event oriented,” strategic management begins with a plan but then puts special emphasis on managing, monitoring and enhancing the plan throughout the entire year. Because it incorporates change and ties back all organizational decisions to it, it becomes a living document and part of the fabric of the organization. There are five overlapping phases throughout the year, some board driven and some staff driven:

1. Conduct preliminary research and set planning goals

2. Create strategic direction: Set association’s vision and mission; agree on goals and objectives; create strategic alternatives; define success criteria

3. Develop a strategic action plan, including tactics that are needed to implement strategies (i.e., action steps, responsibilities, costs and timing.)

4. Implement, manage, and monitor the plan (i.e., plan and performance are tracked, progress is reviewed, concerns are addressed, the plan is revised.)

5. Evaluate and enhance the plan, annually The key to this planning approach is that it focuses all activities of the board and staff on the organization’s mission, while providing flexibility to adapt the plan throughout the year to meeting changing circumstances.

• Relentless Focus On Serving Members. One of the most important concepts to understand in planning the direction of your association is what the business world often refers to as the “marketing concept,” or that the customer is the focus of everything we do. This can be translated into association language as “member focus,” and that we want to provide benefits that add value to their businesses or practices and to their personal lives and passions.

The same logic can be applied to attracting and keeping other stakeholders of the association (i.e., volunteers, technology partners, sponsors and donors), including consideration of what benefits they are looking for by participating in your association

and how you can provide them with good value for their investment of time and resources.

In meeting member needs, don’t accept the status quo—the way its always been done. Use research to ask your members what they value and you’re more likely to be successful in meeting their needs.

• Providing Greater Value. Both the changing economic environment and changing member needs have put pressure on resources, and have forced associations to identify new resources that can help offset the current pressure on dues revenue and become better stewards of existing resources.

Associations are addressing these pressures in two key ways:

1. Focusing on what’s most important to members, thus demonstrating more value. Other activities that are less cost effective or do not directly add value to members are then handled differently. Outsourcing of mission-related activities or functions is one of the best ways of meeting this need. See related article, “Outsourcing Provides Resources, Capabilities and Focus,” in this issue.

2. Considering non-dues revenue sources, whether it’s traditional methods like advertising, sponsorships, etc. or new creative ideas like online auctions, high-end travel tours, etc. For every new revenue source, care must be taken to develop a business plan, conduct market testing and seek outside expertise (if outside your core competency) to make sure you’ll generate expected revenues and enhance members’ perception of value.

• Adopt Best Practices. There are countless examples of activities and functions conducted in the business community that have become the ‘gold standard’ of efficiency and effectiveness. All of these activities and functions can be adopted by an association, either by benchmarking a ‘best-in-class’ organization or by contracting for the services of an association management company. Some of the most common best practices available to the not-for-profit world include:

1. Process improvement and quality improvement techniques, like Six Sigma, ISO certification or the Malcolm Baldrige National Quality Award criteria

2. Financial standards, including compliance with the Sarbanes-Oxley Act

3. Outsourcing

4. Brand strategy management, including effective marketing and communication to various stakeholders.

SUMMARY

Associations that run their organizations like a for-profit business do a better job of meeting their members’ needs, providing superior value and, in the long-term, retaining members. It requires changing your model to one that emulates the management

and operations techniques used by the business community, including strategic management, relentless focus on your members, providing greater value and adopting best practices that lead to improved efficiency and effectiveness.

Jeanne Sheehy is Director of Marketing at Bostrom Corporation.