Associations have endured downturns before, what’s different this time is the valuable lesson learned after the great recession, that Members hire relevant Associations. Boards and their CEOs aren’t interested  in hemorrhaging balance sheets that come from dues losses and shrinking Trade Show revenues. Regardless of the economic climate, organizations are committed to keeping their organizations relevant. From 2009 forward, leading Associations find ways to maintain their relevance and are perceived as the Industry or the Profession. If a global downturn occurs, Associations should prepare and conduct a rigorous and research driven relevance test.

Associations who want to pass the relevance test should initiate conversations with their Boards or Executive Committees to:

• Talk through and quantify the sources and the business impact of market challenges.
• Brainstorm with leaders on how the Association can be helpful in a strategic manner that benefits the entire Industry or Profession.
• Build nimble strategies to address new or critical Industry or Professional challenges and opportunities.
• Develop metrics and key performance indicators with Board leaders to measure how relevant your Association is to the member’s marketplace.
• Report back regularly on how aligned the Association is with these metrics and key performance indicators at Board meetings.
• Have ongoing strategic conversations about Industry or Professional challenges and opportunities.

Relevance is about being connected to the member marketplace with resources geared toward helping your members overcome challenges & achieve success. Associations who utilize this approach understand that Members hire relevant Associations, which means these organizations are built to withstand downturns and thrive during healthy economies. What makes these Associations especially relevant is how their strategies and products position them as either “Industry or Profession solution partners” with their Boards and members:

Heidi Biggs Brock

The Aluminum Association – Heidi Biggs Brock, President and CEO, works with her team to continually refine the organizations focus and stay connected with the Aluminum Industry’s evolving challenges and business outcomes. The Association utilizes actionable data to brainstorm with Executive Committee members about current emerging challenges to ensure that they are focused on quantifiable outcomes that move the needle for the Industry. The strategies that the organization develops have Key Performance Indicators and are reported through a Scorecard in the Aluminum Association’s Annual Report.

 Donna Orem

National Association of Independent Schools – Provides services to more than 1,800 schools and associations of schools in the United States and abroad, including more than 1,500 independent private K-12 schools in the U.S. In formulating its strategies, NAIS embraced an underlying premise that in today’s marketplace “people no longer buy products or services. Instead they hire them to make progress.” Based on the Clayton M. Christiansen “Jobs To Be Done” approach in his more recent book Competing Against Luck, the NAIS team utilized this approach to develop value propositions that addressed the struggles that heads of schools and administrators face and to understand how those struggles change as they progress through their careers. The Association is led by its President Donna Orem.

Melissa Hockstad

American Cleaning Institute – The organization is positioned to help its members overcome challenges and find pathways to business growth through each of the following Industry focused strategies:

• Thought leadership and Industry promotion.
• ACI Annual Convention that provides opportunities for the Industry to market and sell products. The most recent Convention had record setting attendance.
• Industry centered Advocacy to help members protect their intellectual property and product category reputation.

The organization’s President & CEO, Melissa Hockstad, engages members on a regular basis as part of an organizational “listen in” program and connects with her Board to surface any new opportunities to support Industry growth.

     Julia Hamm

The Smart Electric Power Alliance’s key focus is to bring all distributed energy resources to the conversation in order to develop, share, and build practical solutions for the entire Industry. The membership comprises utilities, large energy users, as well as for-profit and non-profit corporations and SEPA’s overall focus is on grid modernization. The Alliance conducts Industry focused Board meetings where executives share knowledge, address Industry challenges and devise solutions. In addition, the Alliance provides unbiased and actionable research and Advisory Services to Utilities to help them address the challenges of a clean energy landscape. Led by Julia Hamm, the organization’s President and CEO, the Alliance maintains its neutrality, does not advocate or take positions on issues, drive trends, or pick favorites.

Each organization’s Industry or Profession focused approached positioned them for a possible downturn because they understand that Members hire relevant Associations.

Members Hire Relevant Associations

As Associations think through a possible global slowdown, the 22^nd PWC Annual Global CEO survey provides insights that could be beneficial in the rigorous relevance test that you are about to conduct. The survey reveals that in 2019:

• Data about customers and clients needs and preferences is viewed as critically important in CEO decision making.
• 436% increase in the number of CEOs who expect global economic growth to decline.
• 16% decrease in CEOs who say they are “very confident” in revenue prospects for the next 12 months.
• Some of the top ten threats include: over regulation, policy uncertainty, availability of key skills, trade conflicts, cyber threats, geopolitical uncertainty, protectionism, populism, speed of technological change, and exchange rate volatility.
• CEOs seeking growth will pivot inward to drive revenue growth and focus on operational efficiencies, launch a new product or service, enter a new market, new mergers and acquisition opportunities, collaborate with entrepreneurs or startups, or sell a business.

Strong U.S. economic performance shouldn’t shield concerns voiced by global CEOs who in many cases are Association dues decision makers. Reinforcing these results is the monthly Wall Street Journal Small Business Survey conducted by Vistage. Of those surveyed, 14%  expect the economy to improve while 36% expect it to worsen among owners of firms with revenues ranging between $1 and $20 million.  The PWC and Wall Street Journal surveys introduce new information that should be the impetus for your organization to conduct a rigorous relevance test soon.  Waiting only adds to your Association’s risk, the timing to transform your organization into an Industry or Professional Solution Partner is immediate. Note to self: Members hire relevant Associations.

To learn more about how your organization can become a relevant Association click here.

The challenge for Association CEO’s is to understand how Private Equity Hires Associations, Private Equity Fires Associations. Simply put, the new Private Equity owners are not necessarily maintaining their Association memberships. Following the company purchase, new owners use concrete strategies that improve operations, products, revenues, and market position. Utilizing proactive and innovative strategies will determine whether or not Private Equity Hires Associations, Private Equity Fires Associations.

Private Equity Investment is Exploding

U.S. investment in Private Equity skyrocketed to $57 billion in the first quarter of 2018 alone. In 2017 there were 3,283 transactions in the United States, totaling $511.66 billion. These numbers reflect a post great recession high. Associations who haven’t yet experienced membership losses yet should expect to see these challenges land at their front door soon. Bobby Franklin, President & CEO, National Venture Capital Association (NVCA) in Washington, DC indicates that PE has the resources it needs to continue acquiring companies. According to PitchBook 2017 Annual PE and VC Fundraising report, Private Equity funds have almost $1 trillion in dry powder (investment capital) and that could foretell more company acquisitions.

Private Equity Background and Their Objectives

Understanding the threat is the critical first step for Associations, notes Steve Caldeira, President & CEO of the Washington, DC based Household & Commercial Products Association (HCPA). Earlier in his career, Caldeira worked firsthand with Private Equity while at Dunkin’ Brands (2007-2009). The company was purchased by three PE Funds; Bain Capital, The Carlyle Group, and Thomas H. Lee Partners. It has been reported that each of the firms profited approximately $600 million upon sale of the company. Caldeira notes that these firms have a clear vision once they purchase companies:

• Maximize return to its investors – Through due diligence and strategic rigor, they vastly improve the company’s operational performance and brand marketing to enable revenue growth and measurable profits to maximize its exit position.
• Exit – Selling the company to a different firm or company or even possibly cashing out through an Initial Public offering.

Having this background is the starting point for the understanding of how and why Private Equity Hires Associations, Private Equity Fires Associations.

Private Equity Hires Associations, Private Equity Fires Associations: PE Too Has a Value Imperative

Nowadays executives don’t join anything without a direct connection to helping them achieve business outcomes. Busy executives will find other ways including starting their own coalitions or launching their own Associations to create an environment more conducive to business success. Private Equity is in many ways similar. Keep in mind that the key differences that define the Private Equity approach are highly disciplined strategies combined with a well established success formula for their investors. Understanding these differences will help Associations why Private Equity Hires Associations, Private Equity Fires Associations.

Two Steps to Engage Private Equity Owners

Steve Caldeira faced the Private Equity challenges as an Association Executive at two leading Trade organizations: International Franchise Association and now at the Household & Commercial Products Association. Understanding the Private Equity mandate, Caldeira applied a two step process that bridged critical gaps through an understanding of differences to work toward common goals:

1. Early Engagement – Meeting with the new Private Equity owners to understand the regulatory and tax impediments that keep them up at night. Then mapping these concerns to the Association’s federal and state advocacy teams.
2. Volunteer Leadership – Inviting new owners to participate on the Board of Directors (with a potential pathway to the Officer level) or to participate in key Association committees. These opportunities help the new owners leverage the Association as an extension of their firm’s business strategy. They also create understanding (as well as business to business opportunities) for promoting dialogue between Private Equity owed companies and other members of the Association.

Organizations, in addition to the International Franchise and Household & Commercial Products Association, are utilizing the board leadership opportunity in similar ways, with many PE owned companies sitting on Association Boards. Associations with PE owned companies sitting on Boards include:

• American Hotel & Lodging Association (AHLA) (Caesars Entertainment, Hilton, La Quinta)
• National Retail Federation (NRF) (The Container Store, Macy’s)
• American Beverage Association (ABA) ( Pepper Snapple Group)
• American Frozen Food Institute (AFFI) (Pinnacle Foods)

These two approaches are effective strategies in so much as they are determining factors as to whether or not Private Equity Hires Associations, Private Equity Fires Associations.

Private Equity Owners Also Insist Upon Clarity and Deliverables

Corey Rosenbusch, President & CEO, Global Cold Chain Alliance, Arlington, Virginia remains focused on the potential loss of dues and non-dues revenue as Private Equity companies consolidate memberships. Thanks to pro active strategies the Association has not lost a single private equity firm from membership when they entered the space.  Moreover, each of these companies have stayed engaged after they were purchased.

GCCA is delivering impressive results for Private Equity owned companies and overall membership through the mitigation of costs of regulatory compliance. For example, members achieved a decrease in the number of violations and OSHA fines per inspection.

The Association also identified two other high ROI opportunities to support the new Private Equity owners with:

• Technical resources – Helping reduce costs.
• Talent development initiatives – Assisting with workforce challenges.

Rosenbusch notes “GCCA continually identifies new and innovative opportunities to maximize the ROI for the organization and for our Private Equity owned members.”

Private Equity Hires Associations, Private Equity Fires Associations

Make no mistake about it, Private Equity is increasingly becoming a force to be reckoned with for all Associations. The high volume of available capital and Private Equity investors hungry for strong returns means Association CEO’s must create opportunities to engage their new Private Equity owners. Not doing so is risky and could result in considerable erosion of the membership base. Utilizing proactive and innovative strategies are the best tools that will determine whether Private Equity Hires Associations, Private Equity Fires Associations.

To learn more about how your organization can effectively work with Private Equity click here.

Members hire Associations, Members fire Associations is what the new mantra will be for Association Executives in 2018. The evolving external environment is continually redefining how member executives assess the impact of their memberships. At year end 2017, Association Executives would find it useful to see the world as their members do and understand what help they need to make progress in their Industry or Profession. While economists forecast a brighter global growth picture, your members still face a myriad of uncertainty. Cyber & nuclear threats, disruptive innovation, and increasing competition for market share will continue to reshape how members view their memberships. This means organizations will require new and different external research to understand what tools they must provide in order to help their members make progress.

Members Hire Associations, Members Fire Associations

Since the end of the great recession, Boards are helping their Associations see the world as they see it. Pushing an all you can eat buffet as your value proposition is now the dark ages. Even connectivity to business and professional challenges and providing immediate solutions represent a smaller fraction of evolving member expectations. In other words, if your Association is not perceived as a vehicle to help drive progress for your members and prospective members then your organization:

1. Will likely be fired by your members.
2. Will not be hired by your prospective members.

In 2018 the new mantra will be: Members hire Associations, Members fire Associations.

Research Keeps Associations Connected to Member Problems that Need to Be Solved

For organizational CEO’s embracing the new marketplace that Members hire Associations, Members fire Associations you’ve taken an important first step. As Boards insist upon more operational rigor at their Associations, they are turning to externally focused and segmented research. This data is playing an increasingly important role in strategic planning and product development. In several cases, Association CEO’s are assessing strategies, products, & services as for profit executives do at global enterprises.

The National Association of Independent Schools

NAIS is a nonprofit membership association that provides services to more than 1,800 schools and associations of schools in the United States and abroad, including more than 1,500 independent private K-12 schools in the U.S.

As the new NAIS President, Donna Orem, her Board, and her team set out to build a segmented research study to profile the market of Private Schools. Their research identified four segments in their marketplace. What they learned was how each segment differs in terms of goals they hope to achieve, professional needs, and demographic characteristics. While each segment presented different implications, NAIS leveraged Board guidance and took to address the differences in each member segment. This work only took them so far, however. After learning from a board member about the Jobs To Be Done framework, the board and leadership team agreed that this approach, which explores what causes someone to hire or fire a product or service, could provide even more actionable insights.

“Jobs to Be Done” Approach

Harvard Professor Clayton M. Christiansen has researched what makes businesses successful in his over twenty years of teaching at Harvard Business School.  He is most well known for creating the theory of Disruptive Innovation. He put forth the “Jobs To Be Done” Approach in his recent book Competing Against Luck.  The underlying premise is that in today’s marketplace “people no longer buy products or services. Instead they hire them to make progress.” The NAIS team utilized this approach to develop value propositions that addressed the struggles that heads of schools and administrators face and to understand how those struggles change as they progress through their careers.

The process changed the way the organization and the Board develops and delivers value to their members, and redefined how the Association thinks from strategy through implementation.

NAIS is already utilizing their newly minted strategies to retain and acquire new members and accordingly Donna Orem notes, “We found the JTBD work to be transformational.”

Club Managers Association of America

The Club Managers Association of America (CMAA) is the professional Association for managers of membership clubs. CMAA has close to 6,700 members across all classifications.

For Jeff Morgan & his team, it’s imperative to have a business minded research systematic approach in product management and strategy. They utilize approaches developed management consulting firms including the Boston Consulting Group, McKinsey, Ansoff, and Blue Ocean Strategy. Their assessment process helps the CMAA team reach a “problems to be solved” determination on each of their products:

• Ensure the Association is serving its members (Mission)
• Make better (supportable) strategic decisions
• Help to prune portfolio of products to make room for new ones
• Improve internal resource allocation
• Product-lifecycle focus
• Strategy alignment (internally/externally)

These steps have helped CMAA deliver increased strategic and operational rigor to their product management approaches. The process has been “an integral part of how the organization delivers increasing value to Club Management Professionals at each stage of their careers.”

American Bakers Association

The American Bakers Association (ABA) is the Washington D.C. based voice of the wholesale baking industry. ABA represents the interests of bakers before the U.S. Congress, federal agencies, and international regulatory authorities. ABA advocates on behalf of more than 1,000 baking facilities and baking company suppliers.

Robb MacKie, President & CEO sees the Baking Industry experiencing unprecedented disruption and evolving consumer attitudes. Determined to identify a “problems to be solved approach,” they launched a research based strategic planning process. What’s different about it is how the process is geared toward an external perspective of business challenges and how ABA could accelerate its impact on all segments of the Baking Industry. The Association also seeks to determine how they can continually increase their alignment with the Industry they serve.

Similar to NAIS and CMAA, ABA’s business focus is drawn partially from leading business authors including Chris Zook, “Profit From The Core. Growth Strategy In An Era of Turbulence.”  Through this process Robb Mackie, the Board, and the Senior Team have surfaced & identified the core challenges and problems to be solved for the Industry today. Their focus is to build a new and more nimble strategy that continually aligns ABA with the Baking Industry.

Part of ABA’s Operational Rigor includes an evaluation and assessment planning process to ensure that the organization is best positioned to address & solve Industry problems for the members:

• Sunsetting process to identify their noncore products
• Operational Readiness Assessment on existing & New Core Products
• Developing Metrics to measure new product & service impact on Industry Business & Growth Challenges

Because of externally focused and segmented research, NAIS, CMAA, and ABA have greater understanding into what’s next for Associations,  Members Hire Associations, Members Fire Associations.

Ongoing Alignment Test: Members Hire Associations, Members Fire Associations 

Part of the next evolution of Association strategic planning and product development is how externally focused and segmented research is driving strategy and implementation to help members solve their problems.

Earlier this year, NPES launched an ambitious strategic plan to align and grow the global printing and imaging Industry. As part of its strategic overhaul Thayer Long, President, is focusing the organization to more quickly and readily adapt to emerging Industry challenges. He sees ongoing research as necessary to maintain ongoing alignment with the members. Through ongoing research NPES is increasing its understanding of why members hire/fire Associations. For example, the Association now:

• Maintains an Alignment dashboard focused on Industry performance.
• Conducts an annual Industry Alignment survey research to measure its impact on the problems that need to be solved.

Having this additional research will help NPES and other organizations who are embracing the new reality: Members hire Associations, Members fire Associations.

Members Hire Associations, Members Fire Associations

Strategic planning and product development are rapidly changing. These are not just one time exercises. Instead, its ongoing research that will continually help to identify member problems that need to be solved. It’s more comprehensive and it requires drilling down through segmented qualitative and quantitative research to surface the member problems that need to be solved.  This is a four step process that will position Associations to drive ongoing progress for its members:

As the curtain rises in 2018 the new reality is Members hire Associations, Members fire Associations.  Adjusting to the new reality requires externally focused and segmented research that helps your organization understand what help members need in order to make progress. Welcome to 2018: Members hire Associations, Members fire Associations.

To learn more about how your Association can build a potent pathway to progress click here.