Another successful calendar year in the books for the association community and, from our vantage point at McKinley, another year to be grateful for the opportunity to support our clients’ mission-critical activities.
As we profiled in our 2018 Economic Impact on Associations Study (EIA), most organizations have continued to benefit from better than expected economic conditions and are generally operating from a solid position across their core business lines. However, even with this foundation in place, there are issues that merit our close attention in the years ahead, including three “imperatives” that I see emerging for our sector.
2018 was a year of unanticipated, and some may say unprecedented, changes in our operating environment. A range of unpredictable geopolitical events, far-reaching societal movements, and increased calls for transparency and accountability in business were never far from the headlines.
Nonprofit organizations are not exempt from these trends, and as such associations are increasingly being asked by their members and stakeholders to define their core values, promote transparency, and foster diversity, equity and inclusion in their words and deeds. In a hyper-connected world, public sentiment can turn on a dime and association boards must be prepared to lead with agility.
I think it’s fair to say that traditional modes and methods of association governance seem ill-equipped to address these high-stakes issues and opportunities in a timely and transparent fashion. But with a vibrant social media presence, association leaders can tap into the thoughts and perspectives of members outside the usual prospects and engage new generations of members in consequential directions and decisions.
Going forward, association leaders will need to work together to build the capacity to anticipate and respond to an external environment that will certainly continue to shift in the years ahead without sacrificing essential tenets of consensus-based decision-making and member representation.
Many associations are finding that the annual growth rates of their legacy business lines (e.g., membership, events, publishing) are insufficient to cover rising costs, particularly in a tight job market where attracting and retaining top talent is becoming increasingly expensive. It is therefore no surprise that developing new sources of non-dues revenue topped our list of association priorities in this year’s EIA study.
The urgency to find new sources of growth, coupled with a seemingly never-ending appetite for new program development, has left many associations with an untenably large portfolio of programs, products and services, many of which operate in the red.
Economist Michael Porter has offered that “the essence of strategy is choosing what not to do,” but associations still struggle mightily with developing their own “stop doing” lists. Our work at McKinley is increasingly focused on identifying more promising methods of prioritization and evaluation, as Liz Williamson explored in her recent blog post about ASAE’s new pricing strategy. As expenses and appetite for new initiatives both continue to grow, associations will increasingly need to apply a data-driven, rational framework during their quest to focus on essential offerings that drive the most value to their audiences.
Speaking of value, members continue to seek more of it from their associations! While historically we may have been able to rely on goodwill and a sense of obligation, we find that the associations that are performing above trend focus their efforts on delivering offerings that solve a specific, meaningful challenge.
We also are waking up to the fact that the definition of a value proposition must be adapted over time. Gone are the days in which membership directors could create a bulleted list of member benefits and never revisit them. Today, leading consumer brands like Amazon, American Express, Netflix and others are conditioning their members to expect regular increases in value from their memberships, typically without us even having to ask for it. We’re seeing successful associations embrace this approach – refining and repurposing resources such as on-demand education and specialized knowledge sharing groups and embedding them into their membership value propositions.
Applying this dynamic, rather than a static view of membership value, should serve associations well as we adapt to an environment in which we all expect to “surprise and delight” our customer and member relationships.
As we reflect on 2018 and look to the future, one constant truth is this – as association leaders, we must continue seizing the opportunities to learn, progress, and adapt with the ever-changing world around us in order to fulfill our greater missions.