(l) Barbara Ramsay Orr, (center) John H. Graham, IV, FASAE, CAE, (r) Russ Lemieux

One of the most important decisions an association must make is who will manage the organization and what will that management look like?

Will the management company provide the executive director or will the executive director come from within the organization or elsewhere? What, exactly, will the management company’s duties consist of? How many hours will the management company put in each week? How much can the association afford to pay for the work it wants and how much does the management company need for the work it performs?

It sounds straightforward enough. But the association-management relationship is a complex one, not only in terms of computing time and costs but also in terms of personalities on both sides and mutual understanding of expectations and goals.

Many Options

John H. Graham, IV, FASAE, CAE, president & CEO of ASAE, the association for association professionals and industry partners, emphasizes that there is no one right path to a successful relationship.

“There isn’t one formula. Rather, there are a number of management company models that work depending on the association,” he says. “Some association management companies (AMCs) are turnkey and run the whole thing. Sometimes the association board has a CEO or executive director and they want the AMC to do some things but not all things. The formula works when everyone is clear on expectations.”

Russ Lemieux, senior vice president with Kellen, an association management company, believes the best association/AMC relationships are characterized by two things: “First, a management team that listens carefully and is constantly attentive to the needs of association members and stakeholders, as well as the trends of the industry or profession represented. Second, a board of directors that provides strategic input and direction, works with management to establish priorities and clear expectations for results, and trusts management to execute the plans necessary for success.”

Given that a management company is likely a major line item in any association budget, it’s important for associations to fully understand what AMCs bring to the table.

Lemieux says AMCs typically provide three important things: strong leadership to keep the organization dedicated to its mission while working with elected leaders to establish and work toward a clear vision; flexibility to quickly adapt to an association’s evolving needs for programs, services and staffing in a dynamic world; and business acumen focused on organizational growth, prudent expenditures and operational efficiencies.

Graham points out that AMCs can benefit smaller associations in particular. “AMCs typically bring built-in expertise and experience,” he says. “They provide smaller associations with the ability to get high-quality staff even if the association’s budget wouldn’t support that if the association tried to hire on its own — bringing in a CFO rather than just a bookkeeper, for example. An association’s executive director (ED) may work full-time but maybe the finance and marketing people don’t. That’s the beauty of the model. AMCs allow smaller associations to hire a level of expertise available on a full-time basis that they could not otherwise afford.”

The Challenges

Issues related to time, money, communication and unforeseen developments could potentially derail the association-AMC relationship.

“What you run into is that you have boards that are knowledgeable about their industry or profession but have little knowledge about how to run an association,” Graham points out. “So they may expect more from the AMC than the AMC can deliver. It’s important for both parties to understand the roles, expectations and outcomes that everyone can achieve and at what cost.”

AMCs, Graham says, “want to provide the most of what they think the association can afford. Associations can pay a stand-alone staff rather than an AMC but they’ll get less. It’s really a matter of trading price for expertise and how much the association is willing to pay for that expertise. It becomes a question for the association volunteer group to decide how much they value expertise and how much they can pay. There’s a continuum of price/expertise and services,” Graham says.

There are also challenges with terminating and starting relationships. Barbara Ramsay Orr, president of the Society of American Travel Writers, which now works with Kellen, faced that challenge and learned hard lessons in the process.

“One of the dangers, and one our organization faced in the past, is relying too heavily on the management company. When we switched to Kellen as our new AMC, processes, history and backup never made the transition, and the new management team had to reconstruct and reinvent many of the mechanics of running the organization. Just being aware that professional relationships change and even terminate has been an eye opener. We have an excellent relationship with Kellen and there is a firm understanding that the fundamental building blocks of our society are clear, transferable and solid.”

Another issue is that the relationship might put too many cooks in the association kitchen, so to speak. “The more pure the relationship, the easier the relationship is to manage. If you have a CEO and a board and an AMC, that almost means two bosses, which is more challenging,” Graham notes. “If you have just a board and AMC, that’s purer and easier. The less pure the relationship, the more likelihood there is of miscommunication.”

It’s not enough just to communicate. The communication has to be consistent.

“Inconsistent communication between management and association boards and leaders can lead to lack of awareness and trust.”
— Russ Lemieux

Perhaps most important, everyone has to be on the same page. “A lack of mutual expectations related to priorities and success measurements can lead to frustration on the part of management and volunteers,” Lemieux says. “And lack of organizational focus, e.g., trying to be too many things for too many stakeholders, dilutes association resources, which hampers operations and program execution yielding less-than-desired results.”

Association management companies and the associations they manage are in many ways different animals, so it’s easy to understand why so many challenges exist. From the association perspective, it’s a challenge that management companies often do not fully understand the association’s industry or culture.

“Another pitfall is the AMC’s potential lack of familiarity with the specific culture of your unique organization,” Orr says. “While they may manage other similar organizations, each one has its singular focus and style.”

Lemieux sees a benefit in becoming more knowledgeable about a client’s industry. “Clients want us to have an intimate understanding of their industries and professions — trends, challenges, opportunities. We take pride in not only becoming knowledgeable and informed but also taking a leadership role in representing client interests before the media, government bodies and other influencers.”

For Orr and her organization, that’s a positive. “As for becoming knowledgeable about our organization, Kellen has invested in getting to know us and we have gotten to know them. Our executive director has regular and frequent communication with the board, participates in monthly executive conference calls, attends our board meetings and conferences, and has forged personal and professional connections with both our board members and our society members. They know most of our quirks now!”

Value Propositions

From the AMC perspective, associations don’t always understand the value of what management companies provide, including how to drive success.

While it may be true that AMCs don’t always know every facet of an association’s industry, and that can be difficult for associations, Graham points out that what AMCs do know is the business of managing an association. The critical components of that are not specific to any one industry but rather to best practices in management and relationships.

“Powerful results in terms of delivering value to association members are best achieved with the mutual commitment of management and association leadership to a transparent relationship based on trust. Passion is critical to success, but useless without efficient and effective processes and procedures,” Lemieux notes.

Graham comes back to the paradigm of price vs. expertise and services as well as structure. “The AMC has to manage expectations and if I were an AMC, I might wish that the association board was more knowledgeable and better understood that paradigm. It becomes harder if the ED is not part of the management company but rather part of the association itself. The ED is acting as a filter so that could be a good filter or a bad filter.”

Regardless of an association’s particular quirks and challenges, Lemieux says a strong collaboration between management and the association leadership works across all industries. AMCs bring broad management knowledge and expertise to the collaboration.

“Tech sector, health care, transportation and other dynamic, fast-growing industries come with the challenges of rapidly changing environments and competition for stakeholder attention and resources. The need for programs and services, and effective marketing of these, is paramount,” he says.

“More mature and/or shrinking industries face the challenge of staying relevant and, in some cases, having a viable business proposition for the association. In these cases, prioritizing what’s most important to the industry and allocating resources appropriately is critical, as is providing leadership to help associations reinvent themselves to re-establish relevance.”

Graham points to the specific makeup of an association’s membership and how AMCs can help. “Industry and trade associations can be challenging when you have players at different levels. Think of homebuilders. You have the huge companies and then you have the guy who builds a few homes a year. That variance makes them harder to manage.”

Associations comprised of middle managers may be harder to manage because boards and members don’t yet have leadership and broad management experience. “Nursing associations are harder to manage than physician associations,” Graham notes. “A membership made up of human resources personnel is harder to manage than one comprised of industry executives.”

These associations, however, can benefit greatly from the leadership and broad experience of an AMC.

The Right Executive Director, the Right Board of Directors

What also helps is an experienced executive director, whether from within the association or the management company, with the right skill set.

A good ED has “leadership characteristics and is not egotistical but able to recognize that their job is to serve the organization,” Graham says. “Knowledge of how to manage the association and association experience from different organizations is important, as well as the ability to bring people together to reach a conclusion and the ability to communicate externally and internally, both orally and in writing.”

For Lemieux, it’s “leadership skills, experience, good judgment, intellectual curiosity, diplomacy and listening skills.”

But for true success, an association’s board must be tasked with bringing many of the same skills to the table along with a clear understanding of their role in the overall success of an organization. Because the specific makeup of boards, especially volunteer boards, changes often, maintaining consistency and focused purpose can be challenging for AMCs and executive directors.

Lemieux says that the best qualities for board members are, “business experience along with strategic thinking skills, collaborative skills and acceptance of the need to reach and publicly support decisions based on consensus — even for decisions that he or she did not support in the boardroom.”

Graham notes that board members must understand their duty of loyalty to the association rather than to themselves or one constituent group. “They must understand their fiduciary role, which is to be a good steward of the association’s assets. They have to understand how to provide adequate resources to do what the association needs to do. If fundraising is a goal, they need to help with that to accomplish the mission. If they’re a dues organization they need to have the right dues in place.”

Additionally, he says, “Onboarding is important for new board members and ongoing onboarding is important since most volunteers don’t do this type of work every day. Without good orientation and training, they don’t succeed because they only know what they know.”

The Technology Factor

If there’s one element in today’s market and economy that can make a difference for associations, whether they’re struggling with relevance or thriving, it’s technology and the associated ROI it helps deliver.

The very reason members join associations has shifted in recent years, and associations have to react and adjust. With their broad perspective across multiple industries, AMCs can help associations do just that.

“Members no longer join associations merely to ‘support the industry’ and socialize with industry peers. They join in order to receive clear value that will help them as professionals,” Lemieux says. “It started well before five years ago, but the biggest evolution has been a significantly increased and healthy focus on ROI for the individual member, and establishing and tracking metrics to continuously measure an association’s delivery of value to its members and to the industry/professions it represents.”

In today’s world, that delivery of value is very much tied to technology. “Today’s association members need information that is accurate and timely to support their companies and careers. Investing in robust technology solutions, and the resources to manage them, that meet this demand is a must for all associations today,” Lemieux says.

In part, it’s about engagement, which impacts an association’s relevance and can affect membership numbers. Technology changes the dynamic between an association and its members.

“You need to have up-to-date technology,” Graham says. “You can’t be relevant without the systems in place that allow members to engage. Most associations are organized to provide benefits to members. Technology changes the equation. It allows the member to create the experience he or she wants to create with the association and not the other way around. Technology allows more of a cafeteria model so people can pick and choose when and how they want to engage.”

Graham sees information at the center of this change. “In the old model, members joined associations largely to have access to information critical to their industry, which they couldn’t get any other way,” he says. “Thirty years ago, associations had the information and you had to join to get it. Now, information is free all over the place. What associations can do is package that information in a way that’s more valuable to members. The only price tag is how fast they can get it and aggregate it.”

Associations today, he says, must be able to provide what members want faster than they can get it themselves and all in one place. “That’s the value proposition for associations — the right architecture for their website, the right taxonomy, the right content management system and content distribution system. Every day. Not just at the annual meeting. Smaller organizations might be challenged to provide what’s needed at an affordable cost, but that’s where an AMC can help. It can provide it because it’s doing so for multiple clients.”

That’s not to say it’s easy. “Technology is probably the most difficult aspect of managing an association these days. It’s expensive and most associations have to put a lot of resources into technology, which is evolving all the time. What’s current today won’t be current tomorrow,” Graham notes. “You maybe don’t want the first iPhone that came out and you may not yet need the X, but you should have the 7 or 8.”

Generational preferences play a role, too. “Millennials for sure expect their association to be as technologically savvy as they are. They expect you to have a good website,” Graham says. “But you have to play in both camps. It’s not mass customization. What boomers and millennials want is different and both groups need the technology to customize it the way they want to.”

In the old model, Graham says, everyone paid the same and got the same services but only 15 to 20 percent of members would ever use the services. “Today, that number goes way up because people can use technology to engage. Now it’s less expensive for members to engage with their association because they do it on their phone. That means you need PD (professional development) on video, you need webinars and you need these available on multiple platforms.”

One thing that hasn’t changed: Associations are still about connecting and networking. “They’re more about community than education,” Graham says. “We used to think the opposite. Certainly one byproduct of the community is education. But you don’t have to attend a meeting to get educated. On the other hand, you can’t network online as well. Millennials want that face-to-face connecting as much as any other member.”

Creating Positive Outcomes

Another thing that hasn’t changed is what a successful association-management relationship looks like and can achieve.

“At the end of the day,” Graham says, “the most successful relationship is when outcomes all want are achieved at the right price. That’s the sweet spot. The association believes it’s getting great results for a price it can afford and isn’t being overcharge. The AMC believes it’s achieving what the client wants and is getting the price it needs for the services provided.”

For Lemieux, perspective plays a role. “When association leaders view their AMCs and management teams merely as vendors of commoditized services, many opportunities are lost. With our association partners, where there is truly a strategic partnership between management and leadership, we’ve together advanced — and in some cases even saved — industries. With the core fundamentals of strong communication, mutual commitment and trust in place, these relationships literally last decades and transcend changes to industries, evolving staffs and leaders.”

To build the best possible relationship and create positive outcomes, Orr offers this advice to association leadership: “Ensure that the lines of communication are clear so that your executive director knows who to contact for membership questions or who to speak to for financial ones. Invest in building a close relationship between the executive board and the primary employees in the management firm who deal with the business of your organization. And be self sufficient so that should you have to move to a new AMC, you can do so without losing your organizational history or having to rebuild your processes anew.” AC&F