Associations love teams and committees. It seems like every day, I see association clients forming a new working group, team or committee for some special purpose. In a world where collaboration and shared wisdom are critical, it is often imperative to bring together a diverse group of brains that share a common goal.
Because we have started so many working groups, the natural reaction is to get to work and skip the boring process of hammering out our mandate and terms of reference. It’s really just process and adds no value, right? Wrong, establishing a clear mandate, scope, boundaries and powers before your team dives into content is the most worthwhile investment you can make in your group’s success. Getting the ground rules in place does not need to be fancy…it just needs to be formal. If you just want to cover the basics before you get started, answer these simple questions:
- What can this group do, that no other group or individual can do alone? (Hint: if you can’t answer this question, disband your group immediately)
- What powers and authority does this group actually have?
- What are the range of specific topics and issues that are in the scope of what we will discuss?
- What are the topics and issues that are out of our scope?
- How will we get work done between meetings?
- How will communication flow into and out of this group specifically? Who is accountable?
- What do we need to do specifically to ensure no of us are wasting our time attending meetings?
- How will we measure success of the work of this group specifically? What are the indications that the group is not working?
If these questions make you remotely nervous, don’t form the group.
At Association Hub, we love Association Management Companies. The model is excellent for so many of our clients that are making the move from purely volunteer associations to professionally managed organizations. While an AMC may not be the right solution for every association, the statistics speak for themselves. There has been good research over the years that looks at comparative bench-marking of staff run versus AMC run associations. Not surprisingly, a number of good studies can be found at the AMC Institute.
A full third of our clients are run by AMC’s and while we remain agnostic, we always encourage associations to consider all possible models for professional management. Our quandary lately though has been how to provide advice to client boards with good, long standing AMC relationships that want to ensure some degree of due diligence. Consider yourself in this situation:
- Well established, healthy association
- Long standing relationship with an AMC
- All staff are employees of the AMC
- Numbers are good, reserves are healthy, association is growing
- The board has no reason to be unhappy with their AMC
- They love the staff and love the growth and continual improvement of the conference and programs
But, the board has a duty of care to spend members’ money wisely and ensure they are getting value. More than half of the association’s total revenues are paid to the AMC. This is not an unusual situation. In fact, many associations with AMC’s are in a very similar position. So everything is fine. Everyone is happy and getting along, but there is a twinge of uncertainty. Is the board exercising reasonable due diligence about how all the money is spent? When the board usually has questions like this, they ask their management and staff…who are also the AMC. Who can they talk to about this? These questions generally arise when the AMC is negotiating their contract. The AMC is usually driving the conversation about fee increases based on increased services.
There is no reason to go to RFP…if not the nuclear option, this is at least like telling your spouse you want to see if there is anyone better out there. How can a board perform realand meaningful due diligence regarding the majority of association expenditures without metaphorically poking their best partner in the eye? Find out in the next blog…
Last blog we discussed the top 5 indicators your association board might be slacking…or at least lacking full engagement. We have had plenty of feedback on the blog and suggestions for 5 more indicators to round out a top 10 list.
- Active and effective committee leadership is critical to success for many associations. While there are many board members that step up and provide the leadership required, there are many other examples of board members that pay lip service to this role. Association managers are counting on board members to drive the mandate and work of important committees forward, but all too often low committee engagement just causes more work for staff.
- Active engagement in cultivating volunteers is something board members often see as the sole domain of association staff, but this is a critical space where we need board support. Board members are in the best position to turn regular members into volunteers and volunteers into super volunteers. Association management can help with a clear and disciplined process for volunteer engagement, but board members need to be prepared to take an active role.
- Active participation in board succession may be as obvious as attendance, but many board members pay mere lip service to their role. Any first time association board member will tell you that ensuring effective succession is central to association sustainability, but do they know what that means? Again, association management will provide a strong process, but we need every board member cultivating future directors and ensuring a full and strong slate every time.
- Director skill development is also given cursory and spotty attention by many board members. Beyond director orientation and initial board training, we need directors to constantly be honing their skills to really serve associations effectively. We may recruit directors for their specific skills, but we need them to learn the basics of the association. After one year on your board, can all your board members tell you your association’s annual budget, or reserves? What about board members that have served many years? From our experience, the vast majority cannot.
- AMC oversight is simply the most important function that many boards overlook. With an average of 50% of revenues going to their association management company, boards have an obligation to members to ensure they are getting full value year after year. While we do see boards that get obsessed with monitoring and squeezing their AMC, we also see boards that let the tail wag the dog.
Association board members are mostly tireless, passionate volunteers and we love them for it, but there are too many directors that are passive and disengaged. Imagine the success of your association if every board member was fully engaged in all the right areas.
How do you measure engagement of your association board? Aren’t volunteer boards engaged by their very definition? They aren’t paid, so isn’t it enough that they just show up most of the time?
A few weeks ago, we wrote about the role of boards in taking association strategy sessions more seriously. While we believe that making and actively stewarding effective strategy is one of the most critical areas requiring strong engagement, there are a number of other areas where we need our boards to be engaged. So much of our focus on association board performance is what happens in meetings that we neglect all the areas where we often need board assistance. Every board is different and so is every board member, but here are the first 5 of our top 10 where association boards generally have room for improvement. We will cover 6-10 in our next blog.
- Attendance is the obvious one and although we have actual bylaws setting out performance requirements, most boards are hesitant to take action when attendance goes off the rails. There are of course legitimate reasons why people cannot attend board meetings. If travel and other work obligations are in constant conflict with association board attendance, then give the spot to someone else.
- Assistance with local engagement is critical to many associations and a strong barometer of board engagement. For most smaller associations, board members are the only representatives of your association on the ground. Associations that don’t have strong chapters or staff that can fly across the country count on board members to build and maintain local engagement. How does your board measure up?
- Access to their personal network is a critical measure of board member engagement. Associations don’t just elect board members because of what they know…but who they know. Associations often need access to their own industry or practice area and the most direct path is usually through the board. If your board won’t make occasional introductions, are they engaged and effective?
- Active engagement in your conference seems easy enough but there are so many examples when board members are more of hindrance than a help at association conferences. Do your board members clump together or do they fan out and help members maximize their networking and overall conference experience? We need board members to take a very visible and active role across a range of important conference duties.
- Sponsorship support from their own company and others is one of the ultimate tests of board engagement. While this does not apply to every type of association, many of us need boards to tap networks to get us funding. Asking for money or just making an introduction to staff to ask for money takes a certain skill set and makes many volunteer board members uneasy. But isn’t this one area where we really need their active support?
Association Board Engagement. Are your board members slackers?
When associations become too large to be managed solely by volunteers they are left with a choice to hire staff or an Association Management Company (AMC). We know that the board’s objective is to deliver great value to members so should they hire staff or go with an AMC? Each association needs to take time to have a discussion about what is best for them.
Here are four essential questions your board should consider when choosing between hiring staff or an AMC.
- What is realistic for our budget?
- Are there people who are part of the association who can take on staff roles?
- Is there a clear goal that you hope to achieve by bringing in an AMC or Staff?
- Is that clear goal trackable and realistic?
When your board considers those four questions they will be able to make a better choice. By setting realistic goals your association can get the results they need from either an AMC or staff. What else would you consider before deciding between a staff model or AMC for your association? Let is know in the comments or on social media.
In the last blog we discussed the serious side of taking association board strategy sessions seriously. This blog will focus on the tactical tips to achieve the same goal. We have run nearly a thousand strategy sessions over the past 15 years and learned many valuable lessons…some the hard way.
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Here are a few basics to running a great strategy session:
- Hire a professional facilitator. While the wrong facilitator can backfire terribly, some due diligence can ensure success. This is simple: do not hire a facilitator for an important session without glowing references from another association.
- Take your meeting off site. You must separate your session both physically and mentally from day to day operations if you want to get strategic. Make sure the session doesn’t become all about the venue…just take it off site.
- Set ground rules up front. This is as simple as it sounds and yet almost never gets done: ask your planning team how they will conduct themselves and what they hope to accomplish before you start. For example, if you can’t get your group to agree to keep the discussion confidential, you have a low likelihood of real success.
- Conduct individual interviews in advance. Your facilitator should do this and it is critical to session success for many reasons. Many people don’t do well in a group setting and will provide a wealth of insight in a one-on-one phone call. The facilitator can use this to stoke the session. Volunteer board members have day jobs and just don’t give a lot of thought to your strategy, but interviews within 2 weeks of a session will get them thinking strategically and make them better participants.
- Use simple tricks to drive real participation. Some people think, speak and perform well in strategy sessions and some do not. Facilitation tricks need to ensure your strategy isn’t based entirely on the views of your eloquent board members. Give lots of time for thinking and list making individually, in pairs and in small groups before opening conversation up to the larger group. This will help keep people awake too.
- Use pre-reads for good not evil. Too many association managers use pre-reads and existing strategy documents to drive a predetermined conclusion…their conclusion. We also see irrelevant pre-read materials pushed just to appear effective. Use pre-reads only if necessary and then only to educate and prepare. Be open to the wisdom of your board.
Association boards love to make strategy, but they are often reluctant to adequately invest in those strategies when the time comes. Even after a rough patch, associations in North America are sitting on bigger financial reserves than in any time in history. Yet, the hangover of a few lean years has many association boards in cost cutting mode. It is the obligation of association boards to:
- Make decisions that will grow organizations and sustain their mandates
- Make decisions that will bind future boards
- Invest their members’ money (because that’s what reserves are) on their behalf
We have seen many association clients shrink themselves to irrelevance while they watch their reserves dwindle over a painful decade or more. Like a cycle of death, association boards see a decline in attendance or an increase in competition for example for their conference or professional development. Instead of investing in future innovation, growth or alternate revenue sources they cut expenses to make up for revenue shortfalls. The result is that the conference or PD becomes less valuable to members and revenue drops further. Next comes the decision to drop prices because the board no longer trusts their value proposition…and the cycle continues.
Association board members: your paid staff need you to make and invest in big strategic decisions. They need your leadership to take real, but calculated, risks for the long term sustainability of your organization.
Association Board Risk Taking
Often, association boards pride themselves on openness and accessibility. Smaller organizations, in particular, want to show confidence in their members by gathering as much input as possible. But there are times when this is not feasible. That’s where the practice of executive session comes into play.
An association board executive session is a portion of a meeting when attendance and discussion is temporarily closed to certain members. As is often the case, all but members of the board of directors are asked to leave so sensitive matters can be discussed, such as the act of dismissing certain staff members.
The Center for Association Leadership recently featured a blog post about how this can prove to be a more difficult practice than one might expect. It all comes down to how they are viewed by different members of the organization. Board members see them as an opportunity to speak frankly about the issue at hand, without worrying about offending others in the organization. However, other members might view them as a sign that the association does not trust their input on certain matters.
There are some ways that boards can mitigate this response, however. They can take care to adequately communicate the nature of the executive session, so that others understand why they must be excluded. During the session itself, they should ensure that proper minutes are kept so that the substance of the meeting can eventually be spread to the association when necessary.
It is not always easy to balance the desires of all association members when going into executive session. However, training programs area available for those who need more guidance.
To help promote common understanding of and adherence to what constitutes acceptable or required behavior, many boards adopt an explicit code of conduct that define the standards to which directors must adhere. Unfortunately, a compliance-based approach to board culture does not necessarily engender constructive group dynamics and respectful relationships.
Codes of conduct and other rules-based approaches to influencing director behavior cannot address the common cultural ailments faced by many boards:
- discussion that is based on opinion rather than factual data;
- long and protracted discussions that lose focus on the original topic;
- the frequent introduction of “wildcard” issues not originally on the meeting agenda;
- an inability to explain or strong defend a Board’s decision;
- a lack of support by every director of the collective decision of the Board; and,
- a nagging feeling that decisions do not represent the best thinking of the Board.
Evidence of a healthy board culture most often shows up in the decision-making process. Once a board has reached a decision, all directors need to take ownership for and support the outcome, regardless of personal views. Individual directors need to respect the collective nature of board decision-making, recognizing that there is rarely one right answer or approach to addressing a particular issue or opportunity. While good debate and deliberation are hallmarks of a healthy board within the confines of the boardroom, director solidarity in public is also a critical requirement.
As much as board structure and governance processes play a critical role in the decision-making process, it is really the boardroom culture that will determine the quality of those decisions, the health and effectiveness of the board and an organization’s success in achieving its vision.
At the heart of a healthy boardroom behavior is the degree of candor between the association Board and Management. By candor, I mean that freedom with which directors are able to raise issues and speak out. A lack of candor slows down decision-making and represents one of the most significant obstacles to board success. A lack of candor blocks smart ideas, fast action, and directors from effectively using their skills and experience.
Candor helps to ensure all views and issues are put forward for consideration so that directors are equipped to make the best decision possible relative to organizational strategy and other corporate considerations. This inherently means that a healthy board culture exists when contrarian views, various options and constructive challenging or testing of conventional thinking and the status quo are welcomed, encouraged and expected.
Poor performance in the boardroom is usually indicative of a failure to appropriately recruit, orient, and integrate new board members. Without being properly equipped, board members may not understand their fiduciary responsibilities and individual directors may not embrace board work as teamwork. Many boards, though properly structured and supported with governance best practices, still encounter troublesome behaviors that point to poor people skills on the part of individual directors.
If a good defense against director liability is a good offense, boards put themselves at risk if they don’t take responsibility for their own performance. Key to this is adopting lead governance processes and practices, implementing them effectively, and assessing whether they are contributing to the board’s performance in meaningful ways – all with a high degree of candor.