Monday, November 3, 2014

Opportunities in the Face of Declining Membership How to Survive While Dealing with Industry Consolidation

By Steven M. Worth, President at Plexus Consulting Group, LLC

Like the animated cartoon figures that keep on running on thin air over and past a cliff, until they suddenly realize there is no longer any ground underneath them, assns often continue functioning in a "business as usual" mode until they realize their traditional membership support is not coming back.

While it is funny watching the expression on cartoon figures' faces change the instant before they drop like rocks, it is not so funny watching the decline and fall of assns. As an assn leader who might be faced with declining membership due to mergers and acquisitions, what, if anything, can you do to avoid this fate?

First you should be reassured that your assn is far from being alone when it comes to declining membership. This nearly universal decline in membership, for trade assns and professional societies alike, is due to four overriding trends:

1. Over the past two decades, a globalizing economy has led to increased levels of mergers and acquisitions in virtually every economic sector. Companies are seeking increased efficiencies and are trying to better position themselves to serve and compete in new markets.

2. Technology is changing at an ever-increasing rate causing whole industries to disappear.
Computer leasing is one industry that was thriving in the 1960s, ¹70s and ¹80s when computers were huge and expensive. Now that computers are pocket-sized and affordable this multimilliondollar subsector of the leasing industry disappeared virtually overnight. However, technology is also creating new industries (such as in healthcare with the MRI and PET scan equipment manufacturers and users).

3. As a communications vehicle, the easy to use, inexpensive, and instantaneous Internet has made networking, education and training, business transactions, marketing, and the exchange of ideas affordable and available to virtually everyone. Faced with this reality it is not unusual that the value and relevance of traditional assn membership should be increasingly called into question.

4. A generational aversion to "joining" borne of watching the upward and downward ties of loyalty dissolve between employer and employee. Many younger staffers believe that loyalty does not pay and financial security is based on networking and having and maintaining the skills set and credentials needed to be relevant in a rapidly changing economy. Among many in the younger generation there is perceived to be no intrinsic value in joining an assn; you buy what you want and move on, even if it means paying a nonmember price.

These trends have certainly created a changed scenario for the assn world, but not a totally bleak one. Despite what is happening to the majority, some assns are actually seeing their membership grow. Some assns have indeed benefited from these trends and increased their membership by pursuing niche strategies. Others seem to have resisted the laws of physics and have grown their programs, publications and finances despite declines in membership.

The niche approach includes growth through acquisition - picking off competing assns that have fallen on hard times - or by creating a new assn to serve the needs of a new growth sector in the economy. This approach is not long-term focused - tactical, not strategic. A strategic perspective is needed if an assn is to enjoy any sort of security beyond the next few years.

Managers must realize that while the four long-term trends present undeniable challenges, each also present "critical opportunities" (I use the word "critical" because, to adapt a phrase from "The Godfather," these are opportunities you can't refuse!):

1. Business consolidation is a reality that will continue for the foreseeable future. Rather than pinning their futures on diminishing membership numbers, assns that are thriving are seeking to make themselves indispensable for what they can do that for-profits cannot.
Assns can serve as liaisons between government or the public-at-large and private sector interests; compile industrywide statistics on business, social, human resource, and other economic trends; design and promote professional and manufacturing credentials; and serve as a resource for continuing education and training.
Some assns, seeing declines in their traditional US market, are designing globalization strategies of their own - taking their considerable store of intellectual and financial resources into fast growth markets abroad where sister societies have yet to take root.

2. The pace of technological change will only continue to increase, as will its impact on business and professions. Assns that have adapted best to this have made the change part of their culture.
They annually undertake top to bottom strategic planning, and identify emerging trends.

3. The Internet's impact simply cannot be underestimated. Assn publications are now available through the Internet. Education and training programs, virtual conferences, and networking through listservers and chat rooms are also important services assns can provide. Online testing and certification services are likely to follow. If your assn is not on this train, it should be!

4. Assns that are growing the fastest are measuring growth by users/consumers of products and services and not members. Rather than trying to fight this trend of declining membership loyalty, successful assns have defined themselves according to the market they serve and taken steps to ensure they serve it well.

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