There is a lot of waste in associations, even though they have precious few resources to squander. The principles of lean processes, borrowed from the world of manufacturing, can be put to work to streamline the human workflows of associations, saving money, time, and energy and boosting member value. [Titled "Fix Your Flow" in the print edition.]
The pursuit of operational excellence may be a given in the for-profit environment, but it is often a stranger in the association community. Many associations are so focused on member services or value propositions that they don't take time to assess operational effectiveness. Consequently, it is a powerful strategy when applied to the nonprofit world. Associations burdened with slow, inefficient processes simply can't effectively battle more efficient, streamlined competitors.
One way to ensure operational excellence is to adapt lean production practices designed to maintain or improve value with less work. In lean thinking, waste is anything that does not contribute to value, a view that takes some time to sink in. Any activity that consumes time, resources, or space but does not add value to the product, service, or activity is considered waste.
To date, the lean movement has been primarily applied in manufacturing, so it might seem difficult to translate to service organizations. Yet, lean approaches are being adopted in areas as diverse as call centers, higher education, and software development, and there's plenty associations can learn to achieve operational excellence.
American Speech-Language-Hearing Association
ASHA began its lean efforts when members asked to receive their identification cards more quickly. As a result of lean processing, the association brought card production and mailing in house. Cards are now mailed within a day or two of receiving payments, and online renewals are up 50 percent since lean processes began. The cost savings have been significant, and ASHA is seeing what many associations see: increased savings and efficiencies in one area often spill over into others.
First, it's essential to understand waste. In the mid-20th century, Toyota engineer Taiichi Ohno identified seven wastes, which we've listed below, along with examples applicable to associations:
- overproduction: manufacturing items before they are needed (e.g., holding unnecessary inventory, such as books or directories)
- waiting: the time an initiative spends waiting for action, such as between committee and board meetings
- transportation: the time and cost to get volunteers to and from meetings
- motion: gathering inventory to deliver to members
- inventory: membership certificates waiting to be shipped, unsold learning tools, and so on
- overprocessing: when more work is done than required, such as when association staff overdoes an event because a volunteer leader thought it was important
- defects: a committee recommendation that the board sends back for modification or a committee that meets but produces no outcome
As lean thinking evolved and expanded beyond manufacturing, an eighth waste emerged: the waste of human capital—one easily applicable to trade associations, professional societies, and other nonprofits. Analyzing the waste of an association's human resources is straightforward. It happens in three ways:
- suboptimization: not using human capital to its full potential
- improper utilization: using human capital for work that has no value and should not be done or should be done by staff experts rather than volunteers
- no utilization: leaving human capital idle
Association for Corporate Growth
ACG tackled redundancy by building a robust suite of administrative, back-office, and consultative services to support and reduce burdens on its 58 chapters so that they can focus on delivering what matters most to more than 14,000 members: providing networking opportunities. This approach represents an opportunity for similar tripartite and federated associations. The concept is a win-win: Redundancies and costs are reduced, local activities are facilitated, and volunteers are supported administratively.
The micromanaging board is the most egregious form of suboptimization: a group of highly intelligent people—often with advanced degrees, decades of experience, and rare levels of expertise and knowledge—talking about what city should host a conference, whether a directory should be printed or digital, or what medium is best for an association initiative. It is a flagrant waste of human capital because it suboptimizes not only the board but also staff time and talent.
Another area of waste is in redundant systems. The best example of redundant systems in associations is in component or constituent associations in a federated structure. Many national associations, particularly individual membership organizations, have related regional, state, or local associations. But they all serve the same members and provide similar services. This results in massive duplication: accounting systems, database management, website maintenance, communication platforms. Would you develop a constituent structure with all these redundancies if you were starting from scratch? Absolutely not.
Also resulting from redundancy is waste in the functioning of boards and their executive committees. It is a colossal waste, squandering the association's most precious human capital: the CEO and volunteer leaders. The executive committee often convenes for a meeting the day before the board meeting. It reviews agenda items, examines the association's finances and membership and attendance figures, discusses issues of the day, and makes decisions to present to the board the next day. Then, the board meeting is 90 percent passive review by the directors and 90 percent repetition for the executive committee members and the CEO. Rare is the occasion when the board seriously challenges the executive committee's decisions.
The following four steps are the keys to eliminating waste and maximizing your association's resources.
Association of American Medical Colleges
AAMC started the lean process out of necessity. Changes in the healthcare environment brought on by the Affordable Care Act presented challenges to AAMC members, and the organization knew it had to better position itself to help members navigate them. To do these new things, AAMC leaders knew they would have to stop doing others. As a result of an organizationwide focus on lean processes, AAMC has saved more than $250,000, some of which came from discontinued licensing fees for unused software and tightened travel policies. In lean processing, small changes can add up to big savings.
1. Define value for the member today. This will require internal analysis and member feedback. It will require challenging long-held assumptions. It will require asking a lot of questions. It will require accepting that member value may have changed over the years. It will require honest answers and the courage to act on what you learn. And, sometimes, it will require helping members understand what's valuable in a changing marketplace.
2. Identify all the steps required to get from concept to delivery of a program, service, or activity that has member value. In lean terminology, this is called "value stream mapping." Drawing a diagram of all the steps that occur in the life of the product is almost always illuminating. Processes are often more complex than thought. Sometimes there are more steps along the stream than were apparent.
3. Remove or improve any steps in the process that do not add value to the final product. The initial mapping will almost always identify one or two major opportunities to eliminate waste or accelerate the process. This validates the approach and reinforces the value of lean thinking. And, when done with a team of staff or volunteers involved in the program or activity, it can double as a valuable team-building exercise.
4. Analyze the results and start the evaluation process over again to make continuous improvements. A challenge for associations that involve volunteers in the process is that volunteers come and go, while the approach must be continuous. It takes time, usually years, for organizations to fully embrace and incorporate lean thinking into the management of the enterprise. Just about the time a volunteer "gets it," he or she is likely to move on. Staff has to own lean thinking in an association, even if volunteers are involved.
Realizing and embracing the concept of continuous improvement represents a new horizon for associations. The benefits are numerous: reduced costs, increased effectiveness, accelerated turnaround time, decreased staff and member frustration, and, perhaps most important, enhanced value. As the competitive environment heats up, who wouldn't want to score in any or all of these areas?
Mary Byers, CAE, and Harrison Coerver are strategy and planning consultants and authors of Race for Relevance: 5 Radical Changes for Associations. This article is adapted from their new book, Road to Relevance: 5 Strategies for Associations. Email: [email protected], [email protected]
- Learning to See: Value Stream Mapping to Add Value and Eliminate MUDA, by Mike Rother and John Shook
- The Complete Lean Enterprise: Value Stream Mapping for Administrative and Office Processes, by Beau Keyte and Drew Locher
- The Deming Management Method, by Mary Walton
- “How Your Association Can Be More Human and Less Machine,” by Jamie Notter, Associations Now, October 2011
- “Creativity, Not Just Cost Cutting,” by Andrew S. Lang, FASAE, Associations Now, July 2011
- “Cut Costs, Not Value,” by Linda C. Chandler, Associations Now, November 2010
- “Save Money, Strengthen Staff,” by Mark Athitakis, Associations Now, August 2010