Strategies for Stretching Dollars – Part 1: Leveraging existing resources with managed services
Managed services are a new breed of resource-leveraging strategy for organizations with $1 to 3 million in revenue and typically fewer than 10 employees. The chief executive works long hours for a modest salary and is the go-to person for everything from strategic planning to accounts payable to HR.
These organizations are sufficiently well-established that their members have high expectations but the association can’t afford the infrastructure of a larger organization. They have hit the ceiling of complexity.
More than ever, members are demanding more. The demands on staff far outweigh their available time, and it is hard to grow in size, because the team has very little time to market to new members – they’re too busy serving the current ones. The challenge is to provide better programming to current members and also market successfully to prospective members, all the while answering the phone and dealing with a jammed printer, and don’t forget, there is no budget for more staff. Whew! Professional staff are spending a lot of time doing tasks that could and should be delegated – but there is no one to whom they can delegate.
As a result, team members struggle to do what they were really hired to do – like attracting and retaining members, designing and developing new programs and services, and managing stakeholder relations – all the things that help the sustainability of your organization. The things that help you attain the vision.
Organizations like this are at the stage where they don’t have the revenue to hire the talent that they need. Often there’s not enough activity to justify a full-time position in each category. Consultants and volunteers are an option, but it’s not the same as having someone there on a day-to-day basis.
A managed services contract is a highly cost effective method to acquire a team of professionals and administration staff for less than a single salary. Managed service companies fill in the staffing gaps and take care of the vacation coverage, the management and the grief. If you don’t have the budget for the resources that you need or you just want to do things more cost-effectively, managed services may be the secret to your future success.
Find out more about managed services. Join me at the CSAE Trillium Summer Summit in July…more…
Zzeem Partner presents at CSAE Trillium Conference
The Canadian Society of Association Executives (CSAE) Trillium Chapter is holding their Summer Summit in Collingwood, Ontario this year July12-13, 2012
If you’d like to find out how one organization successfully leveraged their resources, join Zzeem partner Erin Roberts at the Summit. Joy Nott, the President of I.E.Canada will join Erin and three other speakers on a strategy panel. You’ll find out how I.E. Canada ensured its scaleability and growth while simultaneously decreasing costs.
“We totally restructured our association in the past 24 months. Early in that process, I brought on Zzeem as a partner – that’s how I see Zzeem, as a partner, not a service provider… Now, we could comfortably double our membership size and not add any staff or infrastructure and still be fully functional. Zzeem has the right skill set, strong organizational skills, and the background in non-profits that we need. I can honestly say there is nothing I’d ask Zzeem to do differently.”
The Conference offers everything from Educational Seminars to Keynote Speakers and an excellent opportunity to network with your peers. If you are an executive or a director of a Canadian association you will want to attend this conference.
We look forward to seeing you there. For more details please click on the link: CSAE Trillium Summer Summit
Are you a chief executive who is finding it hard to make time for strategic work because the day-to-day activity sucks all the oxygen out of your tent?
My friend Larry is the CEO of an investment firm and he coined this term. He told me, “Every time I get out of the office to work on strategy I come back with these great ideas that I’m excited to implement. But as soon as I get back to the office my staff hang the kryptonite necklace on me. Right away I’m sucked into the vortex of day-to-day tasks and my strategic work doesn’t get done.
Whether you have one direct report or a hundred it’s hard to make time for the activities that move you ahead. One solution is planning your calendar to make it happen. Here’s an idea that works. One afternoon per month, make an appointment out of the office with a board member or senior staffer to work on a specific strategic exercise. Book off the entire afternoon and make the offsite far enough away that you’re not tempted to nip back to the office.
It means that you’ll spend at least a few hours every month working on the future and it helps to build your relationships with key board members and staffers.
IDEA: need more office staff but don’t have the budget? Consider outsourcing some of your administration tasks.
2012 Benchmark Survey Highlights
Is it really the end of membership as we know it?
Sarah Sladek’s book “The End of Membership As We Know It” has generated a lot of attention. And with good reason. The chief executives of membership organizations and their directors are concerned that the 2008-2009 downturn is not over. Although member numbers and revenues are improving, it’s happening more slowly than we hoped or planned for and this is putting strain on our resources.
Zzeem conducted the second annual survey of Canadian membership organizations in the first quarter of 2012. The numbers tell an interesting story.
Members are no longer renewing their membership just because they always have. They’re assessing the member value proposition to find out if they are really getting value. Those who do renew are often less engaged that they were in previous years. It’s harder to find the time and the budget to attend conferences.
With fewer attendees it’s harder to make a successful pitch to sponsors. And they have troubles of their own. Many sponsors have pulled back or out of events that they have sponsored for years.
Although we seem to be through the trough in revenues it’s taking organizations longer than expected for revenue to return to “normal” levels.
Some organizations will not survive because they do not have the financial reserves to get through this. The membership organizations that will survive and thrive are those who have a compelling and well-articulated value proposition to their members – and to their sponsors.
2012 Benchmark Survey for Membership Organizations
By membership organizations we mean non-for-profit entities who have dues-paying members and whose primary activity is providing services to those members.
This is a specialized niche within the not-for-profit sector with its own unique characteristics. Membership organizations are typically self-sustaining, and cannot rely on government assistance or donations.
Just like service companies in the for profit sector, they need to provide value to the people that they serve or they will not survive.
A membership organization is a business and must be run as one to be sustainable.
There is very little data available for the membership organization niche. The purpose of this survey is to help to fill that void and to provide the sector with critical information about their peers and their competitors.
The Respondents
The respondents were either Canadian organizations or the Canadian arm of an international organization.
The membership organizations surveyed included entities of all sizes. Respondents’ annual revenue ranged from less than $10,000 to more than $20 million.
As was the case last year, the majority of the respondents are federally incorporated not-for-profit corporations.
Respondents included organizations whose members are primarily individuals, and those whose members are primarily corporate. The respondents were almost evenly split between these two types of organizations.
Survey Highlights
Financial Reserves
Membership Trends
Value Proposition to Members
Sponsors
Value Proposition to Sponsors
Staffing and Costs
But we’re planning to increase staff and costs…
Board Efficiency and Engagement
Planning for the Future
Looking forward
The 2012 Survey tells us that membership organizations are looking to improve business processes and retain and attract members. Respondents are doing a lot of things right. The focus for this year is to increase members and revenue.
The really good news is that membership organizations are paying a lot more attention to their member value proposition and trying to articulate in a way that resonates with their members. They are for the most part, aware of the necessity of revenue diversification and of the necessity of reserves.
The challenge for membership organizations this year is to build the systems they need to retain and attract members find the resources to execute them and at the same time, build up their reserves. No problem.
Do You Know the Life-Time Value of Your Members?
I am working with a membership organization and can’t figure out how they survive. Their membership fee is so low that it’s trivial and yet their service costs are high. At almost every touch point, significant human resources are expended to serve their members. How can they afford it?
Every time you sell a new membership it is not a single transaction. It is an annuity. This annuity is the life-time value of a member.
This calculation is an important input to making effective management and resource allocation decisions.
What can you afford to pay to attract a new member? To retain an existing member? What about how you serve them? Can you afford to provide personalized service for a membership that only costs $100?
It depends. How long does a typical member stay with you? How much do they typically pay the organization over that period? Is there a difference in the life-time value of one member versus another?
If you have different classes of membership, do the calculations separately for each class. If you have a certification program, calculate the life-time value of both certified and non-certified members. The latter will almost certainly be higher. That tells you what you can afford to spend to sell members on becoming certified.
In order to do this calculation you need to be able to track how long your members typically stay and you need to be able to track every expenditure they make with you. If your database doesn’t collect that information, then start tracking it.
QUESTION: How strong is your member value proposition? Are there some simple ways you can make your member value proposition stronger?
Are your events suffering a drop in attendance because members can’t get funding approval to pay for the conference or the travel or both?
In our discussions with membership organizations we’ve found that this has been an issue for several years. Even though membership numbers are recovering from their depths, conferences are still feeling the pinch because many employer budgets are still in the deep freeze when it comes to travel and continuing education.
And the problem is that you’re relying on your members to be sufficiently tenacious and brilliant at sales to convince their managers to loosen the purse strings.
Why not make it easy for them?
Here’s an idea from the Canadian Payroll Association. So simple and so brilliant. In the conference section of their website they have a menu item “Getting Approval to Attend”.
The page is entitled “Getting Approval from Your Manager to Attend the CPA’s Conference and Trade Show”. Here’s the URL: http://bit.ly/AfQVQg
The content covers all the bases:
- Why You Should Attend
- Top benefits of Attendance
- Ideas on How to Overcome Objections to Your Request
- This conference is too expensive
- What will the organization gain from your attendance?
- The organization cannot afford to have you away from the office
- How to Create a Successful Proposal
And finally it includes a sample memo that the member can alter to suit. See the link at the bottom of the page.
Events are one of the five pillars of the Sustainability Model for membership organizations.
Why Board Training?
Just read an interesting article published by CompassPoint and the Meyer Foundation called “The Board Pardaox“. The gist of the article is that lackluster board performance is a significant contributor to E.D. burnout. While the report identifies that a majority of ED‘s are satisfied with the performance of their boards, about 1/3rd are not.
Now where the ED takes satisfaction with the actions of the board into consideration, generally the board provides support in financial oversite (73%) and ambassadorship (65%), but support slides downhill the closer we get to ED guidance (45%) and organization policy (32%). That is not really surprising as most directors have a strong financial understanding, (and it is easy to question hard numbers) while policy and direction are not so well defined. But that is where the organization needs help! Other governance coaches I have talked to identify this as a familiar problem.
The root of governance means to steer; to provide direction. The ED’s job is to execute; to DO! The board needs to make it easier on the organization and itself by creating policies on how the organization is to behave. This makes board meetings faster as the decision framework is already laid out. Does it fit? – Yes or no. Perhaps this hard nosed approach requires the policies to be reviewed, but that is all in the job of the board. It is NOT the job of the ED. The ED can suggest that this area or that needs to be reviewed, but the dirction to change or implement a policy needs to come from the board.
The article indicates three areas where the ED can contribute to the improved performance of the board:
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Recognize their own essential role in helping to improve the performance of the board.
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Invest time, in partnership with the board, in identifying and cultivating new board members.
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Build their own financial management skills, and provide information and context to help the board better fulfill its role in both financial oversight and ensuring financial sustainability.
Interesting, but where the article identifies 3 areas for the ED to focus on it also identifies 5 areas where the board should improve by implementing widely accepted best practices. So the onus really is on the board.
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Creating a job description or list of responsibilities for the board as a whole, and recruiting board members who have the skill sets needed to help the board fulfill those responsibilities.
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Creating a statement of expectations for individual board members, and conducting an annual or periodic assessment to determine whether board members are meeting those expectations.
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Conducting an annual performance review of the executive director.
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Conducting periodic training for board members on how to read the organization’s audit and financial reports.
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Engaging in inancial or business planning to better understand the organization’s finanal sustainability.
Zzeem provides training and facilitation services to assist non-profit boards to accomplish all these points. Contact us to help you work on your board training plan.
#Non-profit leaders. LinkedIn privacy policy has changed. Protect your online identity. Here’s how.
LinkedIn Privacy Settings
For those in the non-profit world, and any others using
social media be aware that LinkedIn has changed their privacy settings. By
default LinkedIn can use your image for promoting advertising on the site. Here
is a synopsis from the LinkedIn website:
“When LinkedIn members recommend people and services, follow
companies, or take other actions, their name/photo may show up in related ads
shown … to LinkedIn members.”
To change your personal settings:
- On LinkedIn, click your
account name and choose Settings. - Click the Account
tab. - Click Manage Social
Advertising. - Clear the checkbox for LinkedIn
may use my name, photo in social advertising and click Save.
LinkedIn claims they will not do this, but they do maintain the right to
do it.
Make your own decision
Want a More Engaged Membership?
Want more engaged membership? Learn the five pillars of sustainability. #tobeysheadliners http://su.pr/1YWO3N
