Where are CEO’s planning to spend their time in 2016? According to a KPMG study of 400 Chief Executives, “34% spend more time with regulators or are considering doing so.” The same report notes the regulatory environment as the number one issue that can “impact a company”, and adapting to government regulation is ranked as CEO’s second most critical challenge. For companies, the spike in regulatory activity is real. In 2015, Thomson Reuters published its sixth annual Cost of Compliance Survey noting among other challenges “regulatory fatigue.” Is the increase in regulatory activity reshaping associations?
Data Fuels Active Innovation
In a growing trend, Association CEO’s and their Board Members are utilizing economic data as important context for their strategic deliberations. Jobs data, Housing Starts, Institute for Supply Management Index (ISM), Oil Prices, Consumer Spending, and U.S. Dollar Performance against other currencies is a more frequent topic at Association Strategic Planning Sessions. Although Strategic Plans cover 3 year windows, Boards encourage their CEO’s to be flexible and to use trend data to meet shifting demands to help their industries. In essence, economic data fuels active innovation at Associations.
Positive Association Disruption
Can positive association disruption reverse the fortunes for industry professionals and an organization? In a weak economic growth environment, it’s a daunting task. According to the 2016 PWC U.S. CEO Survey concerns “over volatility and over-regulation are rising.” What’s more, Reuters reported that retail sales slipped in a recent report and fourth quarter U.S. economic growth was only 1%. How can an Association overtake an economic cycle and put its members and itself in the driver’s seat? The answer is its possible and for one Association it yielded a $1 million turnaround in operating performance.
David J. Bonaparte
Case Study- Jewelers of America
Situation
With a membership of more than 8,000 jewelry retail storefronts and hundreds of supplier member jewelry firms, Jewelers of America represents every facet of the jewelry supply chain. Its large network of members includes the finest jewelry stores, jewelry designers and suppliers, manufacturers and businesses serving the fine jewelry marketplace.
Jewelers of America retained Potomac Core to help provide strategic guidance on aligning the association with member business outcomes, develop revenue generation opportunities, and to support creation of a 3-year roadmap to complete the integration of National Jeweler (Digital Magazine).
Outcome
Potomac Core utilized Board and Member Interviews, and Impact Survey Research to identify opportunities to align the association with member “Up-At-Night” issues. The Senior Management Team applied the research to develop strategies to drive member topline revenue, improve operating excellence, effectively integrating the National Jeweler acquisition, and grow association revenue.
A Board Task Force and the Board of Directors collaborated with staff leadership to agree upon final Member “business-outcome” priorities to include in the 3-Year Roadmap.
Disruptive Advocacy Strategies
Can Disruptive Advocacy Strategies unlock industry growth and cost saving opportunities for your members in a slow growth economy? While the possibility of a recession seems unlikely this year, growth remains a challenge for many industries. According to the Conference Board, U.S. growth in 2016 is forecast at 2.0% while Global growth is forecast slightly higher at 2.5%. As increasing regulatory oversight dominates the federal and global landscape, building an agency focused strategy on behalf of your members can pay dividends for the industry and for your association.
Joel Dandrea
Case Study – Specialized Carriers & Rigging Association
Situation
The Specialized Carriers & Riggers Association is a 68-year-old international trade association of more than 1,300 member companies from around the world, operating in the specialized transportation, crane rigging, or millwright industries representing more than 150,000 employees in 46 countries. The association retained Potomac Core to:
- Conduct high level research on the association’s financial practices and product offerings.
- Determine how global macro-economic challenges could determine the need for a strong cash reserve.
- Identify important considerations for association board and staff to consider on a go-forward basis.
Outcome
Potomac Core confirmed SC&RA’s strategic plan alignment with member business outcomes and mapped member engagement practices to the association’s programs, practices, and revenue streams. The association’s alignment and effective engagement strategies were validated in its strong financial standing. Extensive industry research surfaced business challenges that could adversely impact the industry and the association.
Board Leaders found the assessment and its strategic insights as an important context for current discussions on reserve policies and member dues. The review also positioned future discussions during its scheduled strategic planning update in 2017.
Funding Industry Innovation
Anemic economic performance is unfortunately becoming a mainstay in the U.S. economy. The release of the 3rd quarter GDP numbers where only 1.5% growth was reported is another reminder of how much the ground is shifting for associations. Companies will likely view membership through an even narrower prism of operating margins if economic conditions weaken further. Associations who are Funding Industry Innovation can position themselves as essential partners in helping members achieve business outcomes.
Innovative Workforce Solutions
Associations are increasingly well positioned to help members and industries build innovative workforce solutions through their professional development and certification products. As waves of innovation, millennials, and baby boomer retirements alter future workforce design, forward thinking organizations can transform themselves and become professional development partners for their members.
Here is What We Do for You
The Wall Street Journal recently reported that if the current trend continues, Data provider Dealogic estimates that Global Mergers and Acquisitions will climb to and exceed $4.58 trillion in 2015. In a low growth economic environment, corporations seeking growth are actively pursuing the best merger combinations. Although associations don’t control the external business environment, they do have the ability to move away from a “here is what we do for you “posture to a “together we succeed” posture.
Association Outside In Innovation
With so much new technology available, should associations develop an innovation strategy? Not necessarily. Your association might want to understand what strategic initiatives it should put in place in order to drive your organization’s impact on member business outcomes. If technology is a delivery mechanism to deliver impact on member business outcomes, then it’s an example of Association Outside In Innovation.
