Finding the Right Growth Opportunities
The U.S. economy, as measured by gross domestic product (GDP), is in the midst of a historic run, with growth every quarter for nearly 10 years. While not every industry in every sector has experienced growth during that span, the larger trends suggest that it has been strong overall. But one has to only look back a decade to know that things can change rapidly. That’s one reason why, considering the economic environment, it may be a good time for association boards to consider investing in opportunities to sustain the organization now and into the future. “There is no perfect time to think about growth,” says Shelley Sanner, senior vice president, industry relations at McKinley Advisors. “But given the generally strong economic environment, it might be time for some associations to take advantage of the conditions with the understanding that the economy could turn again.” That leads to the questions: What does growth mean for associations — specifically, your association? And how do you find the right growth opportunities?
Optimism is High
McKinley Advisors’ “2019 Economic Impact on Associations Study” that comes out this month shows that association leaders were significantly more optimistic about their associations and their industries compared to the previous year. Further, 88 percent were positive or very positive about the direction of their association. “Economic and association optimism is high, despite other societal and political uncertainties experienced in the U.S. market. Yet it is not just the U.S. economy that contributes to association optimism; it is also confidence in organizational strategy and leadership. More specifically, associations are prioritizing member value and engagement as a mechanism for growth and relevance,” the report says. Further, says Sanner, more associations are expanding horizons beyond traditional recruitment and retention to a more innovative approach to growth. Trends show increased focus on expanding programs and generating non-dues revenue, developing new methods for member engagement, and increasing branding awareness.
While the environment is generally good for growth, association boards need to be focused when looking for the right opportunities, explains Stephanie Kusibab, who leads SmithBucklin’s Consulting Services team. “The key is to identify what growth means for your association,” says Kusibab. In many associations, that could mean focusing on membership growth. But it may be necessary to drill down deeper than that and identify which segments of the membership offer the best growth opportunities. Does it mean expanding into new member segments? For some associations, the focus might be on meetings and event growth. Others might find the best opportunities in developing new products and programs, refreshing those that already exist, or repackaging them for non-member audiences. In some cases, growth could mean increasing the association’s influence or reputation.
Kusibab recently led a consulting session with an association where they sought to answer those questions. She asked each board member to write down how they would define growth for the association. Each board member wrote down one or more responses and shared it with the group. This led to a discussion to identify the most important and impactful ways the association could pursue growth and why. Further, it led to conversations with staff on the best ways to pursue growth in those areas. “Growth can mean many different things, so it’s critical for everyone to get on the same page,” Kusibab says. This type of session, whether it’s facilitated by an outside party or led by the board, can serve as a starting point to develop strategies and goals for growth.
Keys to a Growth Strategy
When developing a growth strategy, there are some key points for boards to consider:
Examine the Data. Determining where to find growth opportunities should be informed by data. Identify the trends in internal and external data – surveys, usage rates, member satisfaction data, attendance and revenue trends, industry research, or other information. And don’t forget to ask what is the cost relative to the value? Also, look at benchmarking. What does the market look like? What are competitors doing? Are there gaps in the market that could be filled by a new or improved program? The data is not the final answer, but it provides direction and informs the conversation.
Set and Define Expectations. In an industry that’s booming, the growth expectations might be higher than in an industry that is struggling. For some associations, growth might mean getting back to previous levels or staying steady, Kusibab says. “It’s important to know your industry and trends in your industry to establish the right expectations.” Define what growth means with established goals and objectives over time.
Diversify. The adage “don’t put all your eggs in one basket” applies to association growth. If there is one area that’s driving the most revenue growth, look to diversify that with other areas in case there is a downturn in one area, says Sanner. For example, if there is already strong growth coming from member dues or a certification program, develop other areas to create additional reliable revenue streams.
Assess and Prioritize: Boards may find it useful to work with staff or direct staff to assess existing products and services to discover which ones are working and which ones are not. This may reveal opportunities to re-position some products or services, or invest in others that could be successful with the right amount of marketing or other resources. It may also show which are no longer useful and should be discontinued. Shedding makes way for the new. But continually adding new programs without pruning mature products and services causes a strain on the limited resources any association has to drive growth.
A recent McKinley study titled the “DNA of Top Performing Member Organizations” looked at the common attributes of successful associations. One discussed being more proactive in thinking about future growth. After the Great Recession a decade ago, many leading associations got leaner and more focused on long-range planning for sustainable growth. “It’s important to think about growth opportunities before it’s a necessity,” says Sanner. “You don’t want to be in the position of thinking about growth from a place of duress or emergency.”
JUNE 2019 EDITION
| Board Forward is published 10 times a year by SmithBucklin, the association management and services company more organizations turn to than any other. SmithBucklin has served volunteer board members for 70 years.