When the Recession Ends, Will Associations Emerge Stronger, or Will They Fall Back Into the Same Old Habits?

By: Anna Caraveli and Hannes Combest, CAE

As we slowly emerge from the "Great Recession," association leaders are finding that returning to success will not equate to returning to business as usual. The many changes to the nature of association business wrought by these economic times have been both permanent and profound.

We're not out of the woods yet, but when the recession does end, it will be nice to finally be able to get back to normal, right? Not so fast. Four top minds in the association world say now is the time to prepare to lead your association for good times in the future, but getting there means accepting that some things will never be the same.

The Road Back to Business as Usual Is Closed

By Anna Caraveli

Crises can sometimes become springboards for dramatic change and innovation. Has the current recession resulted in major paradigm shifts for associations? To my knowledge, most of the innovations that took place have been limited to cost-cutting measures and process improvements, without challenging the basics of the association service model.

In fact, the danger of the recession may lie not only in derailing current business but also in masking bigger root problems and evading the solutions that are needed. An external crisis can lull one into complacency with the false sense of hope that things will improve when the economy improves, missing precious windows of opportunity. Association boards and other volunteer leaders can draw on their real-world experience and perspective to help associations ask the tough strategic questions they need to ask, beyond those presented by the recession itself.

A recession, after all, does not automatically spell a decline in business. In fact, some sectors and organizations have capitalized on it to increase their value to customers. For example, college enrollment is at an all-time high. Naturally, during recessions people want to learn new skills. Universities have responded to these needs strategically through continuing-education programs and delivery vehicles that cater to working adults.

The challenge before associations has more to do with value than price point. While many organizations are adversely affected by the economic downturn, more than 1,200 physicians visit the Sermo online community every week to discuss cases, collaborate on solutions, earn continuing-education credits, or access hard-to-find information. Every day, more than 500 active message-board discussions are ongoing among members of the Veterinary Information Network, a virtual membership organization for veterinarians.

Sermo and VIN assemble for members the precise mix of information, relationships, interactions, and 24/7  delivery that visitors absolutely need to be able to practice, recession or not. In the audiology market, providers such as Sonus and HearUSA offer practicing audiologists bundles of services that provide solutions to all the needs of their practices, such as forming buying groups, securing financing, receiving support in various areas of business administration, website development, and educational programs.

Here is the wake-up call for association leaders. Sermo, VIN, Sonus, HearUSA, and a growing number of other new competitors in the association market are all for-profit organizations. While most for profits lack the content, customer loyalty, market penetration, and agenda-free platforms that associations offer, they are not tied to restrictive membership, business, and governance models that sometimes take precedence over the customer. Their business is simply to provide maximum value to their customers' needs through whatever mix of products and delivery modes is most beneficial. 

With or without a recession, associations like yours must face the same question: How do you deliver value that is different from and better than that of your competitors? The associations for which the recession unleashed new thinking and enabled them to dramatically reconceptualize the businesses they are in will not return to business as usual once the economy is healthy.

Anna Caraveli is managing partner of the Strategic Connection Management Group in Washington, DC. Email: [email protected]

No Choice But Change

By Hannes Combest, CAE

In mid-June 2008, the National Auctioneers Association (NAA) was already feeling the effects of a declining membership and decreased participation in programs and services, notwithstanding the economic conditions that were setting in. Revenues were quickly dropping, and even though economists may not have called it a recession, we knew if things didn't change soon, the dipping economy would push us over the edge. It was a distinct possibility that there would no longer be an organization for professional auctioneers.

We had not planned for this to occur. We had no reserves. However, we did own our building, which gave us equity, if needed. Moreover, we had a committed staff and a forward-thinking board. Instead of bracing for the fall, we began to redesign the NAA of the future.

Historically, members joined NAA to gain access to information and education. Today, information is available on the internet, and education is offered locally through state organizations. So what could NAA offer that members couldn't get in other places?

Nothing.

But we could aggregate the information and publish it online, make obtaining education simpler by offering it online, and give members a place where they could come to meet other auctioneers (you got it) online. In the process, we made sure the information and education were  specific to growing their businesses. In other words, we became relevant again.

The board said our mission was about education and information. So we began reviewing what we were doing and how much money (including staff) we were spending. We simply quit doing things that cost us large sums of money that weren't providing benefits to large groups of members. We began using free or low-cost services to offer programs to our members. Most important, we told members what we were doing and why.

We were honest. We told them our challenges, we showed them our finances, and we showed them where we wanted to go. They didn't always agree with us, but they began to trust that what we were doing was being done to save the organization.

Eighteen months later, we are still in the process of remaking NAA. We are still losing members, but not at the rate we were, and we have planned for it. We have operated with a surplus in the last 18 months by keeping our expenses in check.

Not only are we saving the present NAA, we have repositioned NAA to be ready for the future. The economy was a wake-up call for us. We won't simply wait for the next economic catastrophe. We will be ready. We will be relevant.

Hannes Combest, CAE, is CEO of the National Auctioneers Association in Overland Park, Kansas. Email: [email protected]

Five Demands of the New Normal

By Deborah Sexton

The recession we are currently experiencing will cause long-lasting changes in the way associations do business. There's a phrase that's now being used which, though perhaps a bit trite, has some truth to it: Many of us expect to see a "new normal."

This new normal will include:

Communication with members. Many people have thought that electronic communication could replace other forms, but we've found we still need direct mail and, especially, personal outreach. The advent of new social media tools and going out to members where they live online is crucial to how we communicate moving forward. I may not be a major LinkedIn, Facebook, Twitter, Flickr, or blog user, but many of our members are—and likely yours, too. This is especially important for engaging the younger generation, which is always a struggle for associations.

Value delivery. At the Professional Convention Management Association, we've planned a much tighter 2010 in terms of consolidating events, adding weight and value to individual events, and increasing the likelihood that our members will take the time to get out of the office and attend. Being very respectful of members' time and budgets will not only serve members but associations as well. Moreover, delivering "need to know" versus "nice to know" information on a timely basis will be crucial.

Collaboration. Working with other industry organizations—even stark competitors—will make more and more sense in the future. Some merging will occur, and we should see more strategic alliances. This doesn't mean giving away all of your secrets, but whether it's collaborating on research, advocacy, standards, or meetings, all of these and more should always have been done. In meetings and conventions, we need to develop new ways to measure success—for example, quality of attendees versus quantity—in collaboration with our stakeholders. This economic environment now makes collaboration a must.

Technology as a supplement to face-to-face meetings. From webinars and teleconferences to virtual meetings, we need to find ways to appropriately serve members' needs in the manner of their choice, when they need the information. While all of this will have a large influence on meetings, it won't replace face-to-face events. However, the opportunity to supplement meetings with technology to deliver meaningful professional development will be key to associations' success.

Strategic meetings management. This isn't just for corporations, nor is it just about procurement. It's about determining the goals, objectives, and outcomes for meetings in concert with stakeholders before events and delivering ROI on the outcomes during and after the event, all while strictly managing costs and delivering an exceptional experience for members. Associations are perfectly positioned to do all of these things through thoughtful engagement with their members.

Deborah Sexton is president and CEO of the Professional Convention Management Association in Chicago. Email: [email protected]

2010: The Year of the "Reset" Economy

By Jeff De Cagna

There is simply no question about it: 2009 was a terrible year for the vast majority of U.S. associations. In associations of all shapes and sizes, sharply lower revenues led to deep budget reductions, drastic product and service cutbacks, and painful staff layoffs. But even as the economic data suggest we're near the end of this awful recession, the emerging challenges of the so-called "reset economy" are upon us. If we're going to make 2010 a year in which our organizations have an opportunity to thrive—and not merely survive—volunteer leaders will need to work in genuine partnership with their staff colleagues to learn the lessons of the year just ended.

Value creation cannot be the same. In the reset economy, the traditional value proposition of association membership will no longer suffice. Your stakeholders are busier than ever before, and they will allocate their limited discretionary time and attention based on what is most meaningful to them. In this new context, your association must nurture a deeper connection to an inspiring organizational purpose and support your stakeholders' efforts to make meaning and co-create value around issues and concerns of personal and professional significance.

Strategy development cannot be the same. In the reset economy, strategy will be enormously important, but not in the declining form of strategic planning, which failed to help associations find new success during the recent economic crisis. Over the next 10 years, associations can expect increased volatility, uncertainty, complexity, and ambiguity in the operating environment. This "VUCA world," as futurists describe it, will require clear and simple strategic intent focused on discovery and learning rather than command and control.

Governing cannot be the same. In the reset economy, the intelligent, long-term stewardship of associations must supplant shortsighted decision making grounded in the self-interest of the core group that holds power. Every association is a commons, and it is a primary duty of boards to ensure that all stakeholders have a meaningful voice in the effective management of the association's cocreated and commonly held assets. Effective governing is about nurturing a mindset of interdependence and building a robust culture of shared responsibility.

This year can be different from last year, but only if association leaders are willing to think differently about what comes next. This challenge must be confronted with openness to questioning old assumptions, a commitment to original thinking, and the passionate embrace of genuine innovation.

This leaves only one final question: Are you ready to answer the call to 21st century leadership?

Jeff De Cagna is chief strategist and founder of Principled Innovation LLC, located in Reston, Virginia. Email: [email protected]

Get the Volunteer Leadership Issue for Your Board

Every January, Associations Now publishes The Volunteer Leadership Issue, full of in-depth features like this one that examine the unique challenges of serving as an association board member or volunteer leader.

The Volunteer Leadership Issue also offers the 20+ page Board Primer on all the essential knowledge and information that every association or nonprofit board member should know.

To view other Volunteer Leadership Issue articles online and to order copies in print for your board or staff, visit www.asaecenter.org/leadershipissue.