Category Archives: Governance

Tips for Chairing a Meeting

chairing a meetingThe primary role of a chair is to:

  1. Ensure the agenda is followed and completed on time
  2. Ensure the meeting stays on track
  3. Ensure both sides of a discussion are aired
  4. Ensure the necessary decisions are reached

Some tips for better-run meetings include:

  • Ensure clarity; explain the overall purpose at the start of the meeting, specific discussion items, identify action items, roles, responsibilities and timelines;
  • Create a balance between people, issues and time;
  • Talk less, listen and facilitate decision-making without imposing your position on the group;
  • Be impartial ensuring that your leadership position does not tilt the scales in favour of your position over others;
  • Ensure meetings are run in the spirit of fairness, equality and mutual respect;
  • Keep the meeting on track: remind people of the agenda items and intervene if they digress;
  • Manage the meeting time and work within the allotted timeframe. If more time is required, determine as a group whether it needs to allocate more time to the topic, reschedule another meeting or move to the next topic;
  • Encourage and manage participant contributions by creating a balance of speakers. Allow everyone to have an opportunity to speak and be part of the discussion;
  • Encourage members who oppose something to propose an alternative;
  • Follow up and review the agreed action points in between meetings; and
  • Review the effectiveness of the meeting to ensure future meetings are effective and efficient.
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What is a High Performance Organization and How Do We Get There?

< Use this link to view a 2-part webinar series on this topic: http://vimeo.com/111229759 and http://vimeo.com/113734754 >

A membership organization is an organization, typically not-for-profit, that collects fees from its members in return for services, and whose primary purpose for existence is to serve its members. A membership organization is a business and must be operated as one to be sustainable. At a minimum, this means that revenue must exceed costs and that the organization’s resources must be used effectively and efficiently to deliver a high level of service to members. More than ever before, members are questioning the ROI on their membership fees. Membership organizations must be seen to deliver value commensurate with their fees and in excess of alternative options. A high performing membership organization (HPO) delivers a highly efficient “back stage” and a highly valuable “front stage”. Back stage efficiency drives down costs and improves service delivery. Front stage value drives revenue. The back stage elements are the internal systems and processes that support the outward facing activities of the organization. Like plumbing and electricity, the back stage is invisible when it is working well and painfully visible when it is not. The front stage includes the elements that stakeholders and members see and interact with. They are highly visible and have a direct impact on the credibility and profile of the organization.

8 Elements of the High Performance Organization

There are 8 elements to the High Performance Membership Organization:

  1. Governance
  2. Planning
  3. Resource Management
  4. Human Resource Management
  5. Revenue diversification
  6. Member Value Proposition
  7. Sponsor Value Proposition
  8. Stakeholder relations and issues management

These 8 elements comprise the front-stage and back-stage elements that tie back to the Sustainability Model for membership organizations. Each of the eight elements plays a key role in the success of the membership organization. These eight elements map back to the Sustainability Model. The Sustainability Model has 5 pillars. We have observed that membership organizations that have all of these pillars in a healthy state are invariably sustainable. In practice however, many organization are not able to provide all five pillars. Therefore they must be particularly strong in the service areas they can provide – to balance their more limited scope.

5 Pillars of the Sustainability Model for Membership Organizations

  1. Regional Networks. The organization has grass-roots chapters or networks that connect directly with members in their local area.
  2. Stakeholder Relations and Issues Management. This is often referred to as advocacy or government relations. The organization has a program that builds and strengthens relationships and influence with stakeholders and proactively manages issues affecting its members.
  3. Knowledge Products and Communications. The organization publishes and/ or provides meaningful reference materials that help its members pursue their business, trade, profession or special interest.
  4. Events. The organization provides in-person events where members can network or learn, or both.
  5. Professional Development and Certification. The organization provides recognized and relevant learning opportunities and/ or certification that helps its members to become more proficient at their business, trade, profession or special interest.

HPO Back Stage Back Stage Efficiency = Lower Costs, Better Service

HPOGraph_1

(click to enlarge) 

HPO Front Stage

Front Stage Value = Higher Revenue

HPOGraph_2

(click to enlarge)

Higher Revenue + Lower Costs = Higher Sustainability

How to Become a High Performance Organization?

Find out where you are now and close the gap. We’ve taken the elements of the HPO Model and rolled them out into comprehensive action steps and processes that allow membership organizations at any level to identify the gap between their performance and that of the high performing organization. These action steps and processes are identified in an assessment template that can be used to identify areas of excellence and areas for improvement. Read more about the High Performance Transformation Program…

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10 Flaws on Boards

These are provided by Paul Tellier – a corporate director and the former president and CEO of Canadian National.

A few years ago he spoke to an audience of well-nourished diners at the Conference Board in Montreal and he delivered 10 zingers. These are 10 flaws that he has observed in corporate boards in Canada. At least 5 of them can be attributed to a lack of training (or perhaps willful ignorance).

These are equally applicable to non-profit organizations. I’ve seen every one of them –repeatedly. How many apply to your board?

Here are some excerpts from that presentation:

1. The chairman is not sufficiently inclusive. Some chairs tend to create two classes of directors and favour an inner circle without the equal involvement of all. This is a waste of talent which could eventually create tensions.

2. The dominating role of a strong CEO. On most subjects to be discussed, the CEO is usually the most knowledgeable. He also has the advantage of controlling, to a large extent, the information flowing to the board. The chair and all directors share the responsibility to ensure that the CEO does not control the agenda.

3. Too much focus on projects may be to the detriment of discussing the broad strategy and neglecting risk management. Directors should leave the day to day management of the enterprise to the executives. Directors should instead consider where the corporation should be in the next five years and focus on how to get there.

4. The role of consultants can be too pervasive and intrusive. This is especially true when directors are dealing with issues of human resources (such as compensation) and of mergers and acquisitions. Consultants should tender their advice and then leave the field to the directors.

5. Power Point presentations take too much time, to the detriment of greater dialogue and discussion.

6. Directors should not limit themselves to the boardroom. They should take every opportunity to get to understand the underlying realities of the company they oversee.

7. Directors may stay on too long, I stayed on the boards of Bell Canada/ BCE for 14 years- this was too long. British guidelines refer to six years as a director: in exceptional circumstances, up to nine.

8. The chair is reluctant or too slow to get rid of non-performing directors. A chair must have the conviction to approach a board director to inform them that he or she is not adequately performing the job.

9. There are still too few female directors and progress has been too slow. Among Canada’s top 500 private and public sector companies, only 13 per cent of directors are women. Canadian corporate governance will not live up to its potential so long as we find excuses to exclude the available talent.

10. Neglecting the creation of shareholder value. Directors may lose sight that their prime fiduciary responsibility is to create value for the shareholders. Beyond the effect of the recent financial crisis, there are some companies where shareholders would have been better off over the years to invest in Canada Savings bonds rather than shares in these corporations. Many of the problems were the result of bad decisions made by some boards.

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Financial Reserves- How much should an association have?

I had a great question today from one of my favourite clients. They are a membership organization of about 1,000 members. They are in the fortunate position of being well-endowed with cash and their finance committee is trying to decide how much to set aside in reserves. Here’s what the CEO told me. “The committee is proposing 2 years of operating expenses, which I think seems really large – even 1 year of operating reserves seems like a lot to me. What is the norm?”

Personally I agree with her finance committee. Two years is a good, prudent amount of reserves. I have seen organizations go through 2 years of reserves so quickly it would make your head spin. It’s not as much as it seems when you run into difficulty or have a large investment to make. However, this amount of reserves is rare for a membership organization. Most just can’t do it.

The vast majority of Canadian membership organizations have less than a year in reserves. We do a benchmark survey every year and the typical range of reserves is 3-6 months of operating expenses with the average nearer the 3 month mark. The survey highlights for 2012 are on this page – scroll down to the section entitled Financial Reserves. http://www.zzeem.com/BenchmarkSurveyforMembershipOrganizations.aspx.

So if you want to be “normal” you could have 3 months of reserves and be part of the majority. But if you want to be safe- have a least a year in reserves. Also, to ensure you’re on the right side of the CRA, make sure you have documented what you have planned for the reserved cash (e.g. operating reserve, investment in new software, staff, marketing, PR, etc.) so it doesn’t look like you’re simply stockpiling it.

Some accountants will tell you that the CRA “does not allow” NFPs to have more than 6 months of reserves. This is bunk. However, if the CRA audits you, they will expect to see that you have a plan for your reserves and this must not include any plan to return it to members- either directly, in the form of cash, or indirectly, as a reduction in membership fees or services.

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“Do national membership organizations conduct board business in both official languages?”

I was asked a great question the other day by the CEO of a national membership organization. “Do most national organizations conduct their board meetings in English? Do they provide translation at all? Is there a requirement that national directors have to be bilingual? Is there a requirement that they have to be able to function in English?”

The answer is interesting. I cannot speak for all organizations in Canada, but here is what I have observed. In terms of member services, all but the very small organizations provide member materials and communications in both official languages and they have bilingual staffers who can communicate in French.

However, it’s different for board meetings. I have never met an organization with a “policy” that they will not provide French language services at board meetings but the fact is that although many have francophone board members, they all seem to conduct board business in English. I’m also not aware of any organizations that have an explicit rule that national directors must be fluent in English but if they were not, they could not function at board meetings. The general feeling is that they all would like to have more involvement and leadership from francophone members, but the cost of translation services is prohibitive for all but the largest organizations.

The AGM is a different matter. Although board meetings seem to be exclusively in English, the larger associations provide more on the translation side at the AGM. Again, resources are an issue. The smaller organizations simply can’t afford it.

Here are a few representative examples in terms of how the AGM is handled by national membership organizations. These are all “officially” bilingual:

Association “A”. Revenue is $10-15 million·

  • They conduct all the AGM business in English ·
  • The PowerPoint slides presented  at the meeting are provided in both official languages·
  • If the AGM is in Quebec or Ottawa they provide simultaneous translation of the proceedings·
  • If they have francophone officers those individuals deliver their reports in both languages·
  • They provide all printed materials in both official languages

Association “B”. Revenue is $400-600k·

  • They conduct all the AGM business in English ·
  • They provide all printed materials in both official languages

Association “C”. Revenue is $100-250k·

  • They conduct all the AGM business in English·
  • Printed materials are provided only in English

In summary:·

  • Member services are typically provided in both languages·
  • The AGM may have some elements translated into French but only for those who are large enough to have the budget·
  • Board meetings are typically in English with no translation

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Conquer the Kryptonite Necklace – How can a CEO find time for strategic activity?

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.

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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

This is a danger zone…

Membership Trends

We’re less optimisitic…

Value Proposition to Members

We’re getting better…

Sponsors

We’re less optimistic…

Value Proposition to Sponsors

We’re not selling it well…

Staffing and Costs

But we’re planning to increase staff and costs…

Board Efficiency and Engagement

This needs work…

Planning for the Future

We’re getting better…

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.

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