Association management companies (“AMC”s) provide operational support for small membership organizations– typically with an all volunteer board, no office and no full-time staff. These firms manage the day-to-day operations of the organization on behalf of the board.
When it’s done well, it’s a seamless service. Members call or email the organization and they have no idea they’re speaking to a third party. The AMC’s staff know the organization and its members and build a personal bond with them. The events get organized, the revenue gets collected and the bills get paid. The board can focus on governing and can delegate the back office activities with confidence that everything is running smoothly.
When hiring an AMC, organizations often make the mistake of assuming they are buying a commodity. This can be a costly and painful mistake. You’re not buying a yard of gravel. You are hiring a key employee. What would you consider in making a hiring decision? You’d look at skills, experience, personality, knowledge and salary expectations. If you’ve only got the budget for an administrator, you would not post the position asking for the attributes of a senior manager. You would put all of the relevant information in the job posting– including the salary range, so you get the right applicants.
You would certainly ask for a C.V. from all your applicants to create a short list but you would not make your decision based on the C.V. alone. You’d interview at least the three top candidates to assess their attributes, knowledge and judgement and to get an idea of how well their personality would fit with your team.
Here are a few common hiring mistakes and how to avoid them.
1. COMMON MISTAKE: Ask for a proposal from every AMC on the planet and don’t follow up.
Many AMCs will not respond to an unsolicited proposal request from an organization they don’t know. Why? Proposal requests are often a “tire-kicking” exercise with no real intent to award an engagement. It’s time-consuming and expensive for an AMC to prepare a proposal so they want to know that you’re serious.
SOLUTION: If you want a proposal from a reputable firm then make a personal connection. Phone them, introduce your organization and tell them why you would like them to respond.
2. COMMON MISTAKE: Keep your budget a secret. Ask for your entire wish list into and see what comes back.
What if you were hiring an employee? Would you keep the salary range a secret and ask for the attributes of an executive when you have the budget for an office manager? The result would be a host of applicants that you can’t afford. If you’re asking for proposals, be upfront about your budget and solicit ideas for the best package for that budget.
SOLUTION: If you have a tight budget, some AMCs will opt out and that’s OK. It saves you time because you only have to focus on the firms who are genuinely interested in serving you at the price you can afford.
Prioritize your needs so that respondents can give one price for your “must-haves” and a second price for your “nice-to-haves”.
3. COMMON MISTAKE: Ask for separate pricing for every item.
Some organizations do this because they want to compare each AMC’s pricing on an item by item basis. Trust me– even if an AMC gives you this information it’s worthless. Every job, including that of an AMC is a holistic undertaking. The greater the number of tasks an AMC does for you, the less expensive it is for them to take on an additional task because parts of that task are probably already included in another activity.
Like an employee, every AMC does some tasks faster and more effectively than others. What you really need to know is how well each AMC’s areas of strength coincide with your “must-haves”. Line-by-line pricing doesn’t answer this question and it will reduce the willingness of many AMCs to provide a proposal.
4. COMMON MISTAKE: Don’t be specific. Use ambiguous phrases like “assist with” and “support as required”.
If your needs are ambiguous then the proposal pricing will be useless.
SOLUTION: Make the effort to be specific. If you’re not sure, then include these needs in a separate section and leave them out of the pricing. Ask the AMC what services they suggest to meet these needs. This is a good way to assess the ability of the AMC to anticipate your needs and provide solutions.
5. COMMON MISTAKE: Create your own RFP from scratch
This is a waste of your valuable time. There are many things you can overlook that are critical to the hiring process and let’s face it– it’s really time– consuming to create an RFP from scratch.
SOLUTION: Start with a template
6. COMMON MISTAKE: Take the lowest bid.
Would you hire an employee simply because they have the lowest salary expectations? The relationship with your AMC is going to last at least 2 years and hopefully longer. They will be the first point of contact with your members and they will be a deciding factor in your sustainability.
SOLUTION: Choose the best AMC you can afford.