Membership Nexus by Pawlucy FSAE 11-13

Improving non-dues revenue streams serving a dynamic membership de-mographic and keeping associations relevant is at the heart of all organizations looking top increase member value.

On September 26th & 27th, 25 association executives sequestered themselves over one and a half days to examine these issues. This group o f thought leaders made significant progress in the following ways:

  • Identified 12 ways to create member value from “golden handcuffs” to subscription membership to creating member and prospect profiles from the universe of members. (We share one idea in this article and encourage you to visit www.fsae.org/Think- Tank to download the full white paper, which is a free benefit to members of FSAE.)
  • Identified four exciting new membership value-add items that you can use in your association. The one included in this article involves getting new ideas in motion.

One example of the member value discussion that we want to share includes both capturing new members and creating value for your vendor partners. The perceived lack of value from your suppliers and sponsors is the top reason they don’t return or sponsor your organization in the future. Limited resources force suppliers to make the most beneficial value decision for them. The question they most ask prior to sponsoring or joining is “will the dollars I spend with your association contribute to my company’s bottom line?” These ideas on Vendor Partner Engagement include multiple options for getting your vendor partners and sponsors more involved and more value for their membership.

 Vendor Partner Engagement Ideas

 

  1. Your vendor partners can help you stay in touch with your members and prospects. Who sees your members every day? Who collects data on a regular basis to improve their company sales? The vendor partners within your organization are already creating new interactions and actively collecting data within your industry and profession. Act ively engaging vendor partners to help you better understand your members and also help you “touch” your members more frequently in different ways is a golden opportunity. Negotiate ways in which your association can have access to their data so that you are better informed about not only current members but just as importantly, the prospects who you are not serving.
  2. Use your vendor partners to help you grow membership. Provide a succinct marketing piece about your association that speaks specifically to the needs of that industry or profession your vendor partner is touching. This could be more than one promotional piece depending on the supplier’s market. Make it specific so that you speak directly to the heart of your prospects through your vendor partner. Supplying vendor partners and sponsors with materials about your association that can be used as leave behinds is crucial — it makes it much easier to introduce yourself to the prospect association. Materials could be business cards, tri-fold brochures, etc., but should be something tangible as members and prospects are possibly seeing your vendor partners more than they are seeing you.
  3. Create a vendor-get-a-member referral campaign. For any new member brought on board by a vendor partners they receive either cash or promotional benefits within your association. Be creative in working with your vendor partners and the award system that is put in place. Also, don’t develop it on your own; get your vendor partners involved!

 The Association Kickstarter Program idea

Another example from the Think Tank session centers on association innovation and stimulating creativity in our members to generate new products and services in the industries/professions you serve: the Association Kickstarter Program idea. Every day our members work in their professions or industries and constantly strive to improve their workplaces, the industry or patient care. Every day they are imagining new tools and processes by which their job can be done better. How can we help them bring potentially profitable new products to market?

The Association Kickstarter Program idea allows members to submit new product improvements and inventions with a chance for your association to partially or fully fund the project while enjoying the revenue from product sales. It is a different way of  thinking and here are a few helpful tips that the Think Tank thought leaders brainstormed:

  • Market and promote the Association Kickstarter message that your association wants the members’ best ideas submitted and each year, the association will fund the top invention of a product or service.
  • Consider creating a separate for-profit company to act as a holding company for all of the new products and services that will be launched.
  • Consider partnering with organizations such as Edison Nation to help bring a new product to the launch stage if your resources are limited. Using an outside invention partner may also give you the ability to make it a turnkey reality much quicker than if you created it on your own. Sharing risk also means sharing profit.
  • Develop a Website to accommodate submissions from members on great ideas. Use Kickstarter as a model for your site. In addition, ensure all legal bases are covered and agreements are signed (i.e. ownership of product, licensing, use of your association’s brand, etc.)
  • Seek out a panel of entrepreneurs and potential co-investors to review the product (think Shark Tank ).
  • Select the winner at your annual event. Make it a big deal and a big splash celebrating a new product innovation.
  • Bring it to market with an expert in design and manufacturing. Use your association’s members as initial customers including you vendor partners that would carry your new product.

Imagine this Association Kickstarter as a program to generate non-dues revenue for the association through product sales. Innovation in the marketplace happens daily but members don’t know where to go to try to launch a new idea. Now they can look to your association. In addition to the great ideas generated during the session, we also concentrated on:

  • What a Think Tank is and providing FSAE members with the questions to lead Think Tanks within their organizations
  • Providing an overview related to optimal processes and results for associations
  • Economic, Societal and Generational issues
  • Universe” of members as a more realistic view of member profiles and needs
  • 2 Member Value areas
  • Four new potential products or services
Download the Think Tank White Paper

 

Coaching is not limited to:

Mission Drift: Does it always seem like the board is veering off course or forgetting the mission set by the organization during the strategic planning process? We help with course correction and a framework for the Board of Directors to continue on its mission path.

Governing Documents: As a Board member, have you seen your articles of incorporation? Have a working knowledge of the policies and bylaws? We provide an orientation program that speaks to important Board Roles and Governance.  Fulfilling your fiduciary and legal responsibilities is crucial to the success of your organizations.

Board Orientation: We provide a focused session with the Board around its legal and fiduciary responsibility.  We also review the roles of staff and the board, which makes for a better working relationship.

Authority: As a Board, do you understand your authority and the powers vested in you as a Board member? We clearly attack these issues and bring this information to the forefront.

One-on-one session: We serve as an independent ear to the Board President and also a coach to help him or her through their year as president. Even if you have a paid Executive Director, we work hand-in-hand with your staff and not only provide guidance and counsel to the volunteer leader, we provide the same service to the Executive Director.

Executive Director Coaching: An essential service that we provide is coaching for your association or nonprofit executive director. The following are reasons why you should consider Executive Director coaching:

  • New Executive Director – The Executive Director doesn’t have many years of experience leading organizations but has excellent potential
  • Industry Executive Director – Hired from your membership base and is not a career Executive Director but needs to develop the skills and expertise as a nonprofit/association Executive Director
  • Deputy/Assistant Executive Director – You have a capable number two within your organization that you just promoted they are still “green” in certain aras. We can help work with your Executive Director to build and hone missing skills through and assessment profile we conduct.

 

You have lost or about to lose your Executive Director, what do you do?  This is what we recommend:

Don’t Panic! – Panicking is a natural response, which then forces a rash decision. Step back and evaluate the issue in its entirety.

Assess – Assess the situation to determine the timeframe for the departure, the priorities that will need to be redirected and the communication that will need to be done.

Reassign – In the interim, if you have a larger staff, reassign key duties from the Executive Director to other members of staff. Determine which Board members will take over external communication (if necessary).

Hire an Interim Executive Director – Find a quality firm that can pick up the pieces on an interim basis until you can find your permanent replacement. An interim Executive Director can effectively lead the organization through key strategic areas while you search for a replacement.

Conduct a Search – The next step is to either conduct a search on your own or hire a professional executive recruitment firm. 

Transition – Typically it takes 90-150 days to bring on board your new Executive Director. Schedule a period of time (up to 14 days) with your interim Executive Director and new Executive Director to transition knowledge. This is highly important.

Association Options is skilled at picking up the “ball” and moving it forward while you worry about filling the position.  The most important element of hiring Association Options is that momentum on key issues can continue.  You can’t afford to lose progress.

Association Options has conducted several staffing assessments both within the association management company model as well as for those associations that employ their own staff. Key benefits are:

Management Models – Understand the various types of management models and their potential costs from an association management company to a hybrid (hired staff and an association management company) as well as a captive (your own) staff model.

Staff Time & FTE Review – Understand where your staff is spending their time and how many full-time equivalents are dedicated to your organization. We compare this to industry standards.

Site Visit – Association Options conducts site visits with a checklist to review technology in place, accounting methods and a staffing assessment. This report is provided to our clients confidentially.

Hourly Rate Comparison & Management Fee Review – If your association is managed by an association management company, we provide a custom service to review hourly rates and the management fee against industry benchmarks.  This helps to put at ease issues around management fees and allows the organization to focus on more strategic issues.

Operating Ratio Review – Association Options reviews an association’s operating ratios to determine if management expenses exceed the industry benchmarks and what options the association has to bring it in line or to understand why issues exists.  This is only one metric to review as there are others that factor into a management assessment.

Board Interviews – This is an important element in any of our management assessments and that is overall satisfaction with staff and opportunities for improvement. Association Options has developed a survey document that is proprietary and used for this purpose only.  We also customize the survey to capture any additional important information.

Overall, if there is any question around the effectiveness of the management structure, including the leadership structure, conducting a management assessment is a good way to “right the ship” and strengthen the relationships with your staff and the leadership.  From experience, Association Options has been able to bring positive results in this process.

We are your advocate.

We will work to secure the right association management company for your organization.

Bill Pawlucy, M.P.A., CAE, IOM has more than 14 years of experience with association management companies and will work corroboratively to ensure a good fit while maximizing the negotiation process.

There are more than 800 association management companies, does the board leadership want to wade through 50 proposals and manage the entire process? Most boards will work with Association Options so they can maintain a strategic focus

A mistake selecting the wrong association management company will cost a $2MM budget association roughly an additional $200k

Using Association Options, a 5-15% savings in fees and extras can be saved during the process (i.e. on a three- year contract at $500k per year, that is a savings of between $75k – $225,000). We will make every effort to ensure that there is a fair agreement between both the association/nonprofit and the association management company

The Bottom Line

  • There are many variables to manage and to identify to ensure not only fit but a long-term mutually beneficial relationship
  • The board can maintain a strategic focus on the search while Association Options maintains a focus on hiring the best association management company for our client (in many instances it will be a specific association management company fit for each association/nonprofit)
  • The board can be confident that Association Options has performed a thorough scope of work analysis and the proposals received are fully in line with the needs of the association
  •  Association Options can provide a high-level of confidence that a thorough background check on references has been conducted
  •  Association Options will interview all the associations that have left the association management company
  •  Association Options will fully vet each association management company with its own rating and management tools
  • Association Options will ensure that the contract is charging the right fee and not a penny more so that the additional revenue dollars flow directly to the association’s bottom line
  • We are your advocate and will represent the association from the beginning of the process to the end and even during the relationship when the association management fee and scope of work are being discussed.

There are a lot of truths and misconceptions about association management companies. Deciding which association management company to choose could mean the difference between being a good nonprofit and a great one. The fit is critical and the time spent on the selection process invaluable. The following are some key items you should know as it relates to association management companies:

Types of Association Management Companies:
  • There are more than 800 association management companies
  •   Each association management company employees one individual to more than 500 professionals
  •   Every association management company has either a specialty (i.e. healthcare, agriculture, etc.) or provides services to all types of associations
  • One or several individuals own all but a handful of association management companies. A select few are involved in an employee stock option plan and the company is either entirely or mostly owned by individuals
How Association Management Companies Charge for Service:
  • A fee based upon hours after a review of the association/nonprofit’s scope of work is one common way to estimate a management fee
  •  A fixed fee management fee is one where the scope of work is reviewed and the fee is fixed for either one year or throughout the contract
  •  A mixed fee management fee is one where there is a base management fee with an hourly fee component built into the management fee (typically the fixed fee is billed monthly and the hourly fee is calculated monthly and billed monthly)
  •  A fee based upon the revenues of the association (for example, the first $1MM in revenues is billed at 25% anything above $1MM is then step-billed)
  •  A fee based upon net profit (for example, 50% of net profits are paid to the association management company)
  • Other variations exist but the most common are listed
What is the Best Association Management Fee Model?
  • There is no “best” model, it is based upon what the risk  tolerance level of the association/nonprofit is
  •   Hourly fee models tend to employ the highest level of risk as there is a tendency for associations to “spend” more hours than they have allocated
  •  Fixed fee model employees the lowest level of risk but at times can underestimate the resources necessary for the association/nonprofit’s scope of work
  • The mixed fee model is one that is gaining traction and has an appropriate level of risk for a association/nonprofit organization
  •   There is a difference in hourly billing that needs to be recognized and accounted for during the process (i.e. two management fees may look identical but the number of hours allocated is very different due to the association management company’s hourly rates)
  •  Hourly rate variations are healthy as long as the professional allocated meets the job’s needs
Why Hire Us!!

A strategic plan is only the beginning. Here are the elements you need to move from the drawing board to the dashboard and put your plan into action.

Business momentsStrategic planning is the first step in the execution of an overall plan. The strategic plan establishes a key process approach to begin thinking about the future of the organization. If the strategic plan is a process, then what is a logical approach to monitoring and tracking results? The results of a strategic plan live in a dashboard that is customized by the organization executing the strategic plan.

The strategic planning dashboard is a tool that provides a snapshot of the organization’s progress to its strategic plan at a certain point in time. It monitors execution from the first day that the strategic plan is deployed within the organization. The dashboard is important in that it does the following:

  1. Keeps staff on track and focused on the plan
  2. Provides the volunteer leaders that are champions of the plan’s actions a dashboard to monitor progress to the plan
  3. Provides the board with a tool that succinctly sums up progress and allows the board to concentrate on a path moving forward rather than wading through report after report on each strategic item

What is in a dashboard? The following are key items that are essential in any organization’s dashboard.

Measurable objectives. List each strategic objective with a measure that makes sense. For example, “achieve 90 percent overall member satisfaction.” This makes it clear, measurable and achievable.

Core competencies. List the organization’s core competencies related to that strategic goal. These are core competencies that were identified during the strategic planning session. Tying goals to core competencies brings resources that are currently in place to achieve that specific goal.

Long-term and short-term goals. List out and identify that specific goal’s short-term and long-term action plans. For example, “short-term: establish training on member needs and expectations” and “long-term: reinforce member focus at each level of the organization.”

Human-resource plans. What is it going to take in terms of staff time and consultants to achieve the goals and objectives set? For example, “improve staff training on members’ needs, requirements, and expectations.”

Key performance indicators. List your actual and future KPIs. For example, “in 2012, achieve a 90 percent customer satisfaction score; in 2013, achieve a 92 percent customer satisfaction score; and in 2016, achieve a 94 percent customer satisfaction score.” Listing your KPIs and progressively improving them enables the organization to achieve levels on a year-by-year or even quarter-by-quarter basis.

Outcomes, measures, and results. Finally, list your outcomes, measures, and results in your last column. What this means is that there are supporting charts and graphs that support your progress to the plan in each area. This visual approach allows an at-a-glance view of progress to the goals.

Taking your strategic plan from the drawing board to the dashboard is very doable and required in order to achieve the goals and objectives set during the strategic planning session. Make it simple to start and build on it every year. There are plenty of dashboard samples online and from your colleagues. There is no need to recreate the wheel when samples already exist. As the English cleric Charles Caleb Colton once said, “imitation is the sincerest form of flattery.” Flatter a colleague today.

Bill Pawlucy, MPA, CAE, is founder of Association Options, Inc. a company that focuses on practical strategic planning (corporate and nonprofit), management assessments, Baldrige Award process implementation, AMC search and evaluation, facilitation, and governance modeling. He is also the executive director of the International Association of Interviewers and is an appointee to the U.S. Department of Commerce Board of Examiners for the Baldrige Presidential Award. Website: www.associationmanagementcompanysearchconsultant.com

For William D. Pawlucy, MPA, IOM, CAE, the Chairman and CEO of Association Options in St. Paul, Minnesota, leadership means constant learning. –

Learning never ends.

In a five-year period, I was elected president of a state society, earned my master’s degree, and earned my CAE. But I knew I wasn’t done. Today, I’m in my second year as an examiner for the Malcolm Baldrige National Quality Award, and I’ve gained a tremendous amount of education and experience in this position. I’ve kept digging and learning to ensure that I provide value while maximizing my portability in my career.

You’ll have to fight stereotypes.

In my first executive director position at an association, I worked with older and “wiser” professionals who attacked my credibility because of my age. They didn’t know I had significant business experience in Asia and Europe. You cannot fight or argue the fact that you are a younger professional, but you can arm yourself with education.

Leadership builds on itself.

Leadership has brought me to where I am today as a successful owner of a company dedicated to addressing nonprofit issues. That work has led me to increasingly complex projects with complex demands. I have gone beyond the corner office to a global office. But my goal has remained the same: Lead with humility and follow with urgency.

– See more at: http://associationsnow.com/2013/04/3-lessons-continuing-education/#sthash.iqueJyVI.dpuf