Tuesday, December 30, 2014

Board Guidelines for Creating an Effective Global Strategy

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

It is common to find that boards of directors and their staff are out of step with each other on the topic of globalization. Here are two ways in which this happens.

Should a board’s responsibility stop at the national border? While the staff is usually the first to see market growth opportunities, boards rightfully see themselves as custodians of their association’s resources and representative of the interests of current members. As such it is sometimes difficult for boards of directors to allow association resources to be spent on developing markets outside the home base of most of their members. How can they justify to themselves, much less their members, a decision to spend time and money developing markets in other countries that may be their own rivals? In these times of chronic high unemployment this concern has to weigh heavy on everyone’s mind.

When a board makes globalization a priority, as many do, resources can be stretched to the breaking point! How does an organization with limited resources expand to meet the needs of a market that could literally encompass the globe? Some organizations have consciously made the decision to embrace globalization by creating a board of directors from different parts of the world who then feel obliged to include global expansion opportunities in everything that they do. And if this is not done in a business-like manner, the organizational stresses that this can create can lead to a whole host of problems, including high staff turnover, strained budgets, and weakened brands.

These complex issues can be rendered manageable if volunteer and professional leadership remember to focus first and foremost on meeting the needs and understanding the trends of the market(s) they serve. Here are some guidelines based on the hard-won experience of others!

  • Meeting the current needs of your members is absolutely a prerequisite—but don’t jump to conclusions, you might be surprised at how globally-attuned your “domestic” membership might actually be. Time and again associations with “national” or “American” in their name make the mistake of assuming that their base of operations should be confined to the home soil only to find their membership drifting away in favor of organizations that are more attuned to their growing global market needs. People, organizations and nations as a rule do best when they are free to interact with others like themselves. Confinement is not a natural state. So do your homework, study the interests of your members on a regular basis, track their trends, and be sure to be there where and when they need you.
  • There are over 190 countries in the world today and the number is growing. So where are the opportunities? Where should you be, if you can’t be everywhere at once? It is amazing how haphazardly some organizations make their decisions as to which markets they choose to expand into—their globalization “plan” is purely opportunistic, and as such is a recipe for failure! Here are seven measurements you should be making of each and every international market opportunity:
  1. The absolute size of the market
  2. Presence of competitors who are fulfilling the market needs as well or better than you could
  3. Presence of potential strategic partners who might be interested in collaboration
  4. Affinity with your home market in terms of culture, language, and trade relations
  5. Growth trends in your sector of their market
  6. Success of similar organizations in entering the market
  7. Expected ROI within a three-year time frame
Rank each of these seven criteria for each market on a scale of one to four and then average the whole (weighting those points that you deem are more important than others) and see how various national markets compare with each other. From this exercise you can prioritize markets and thereby ensure you are focusing your organization’s resources effectively.

  • Finally, think like a businessperson. Demand hard market data and make your decisions accordingly. Give your investments time to pay off but ensure that they do. If your organization is providing valuable resources to meet market need you will find buyers willing to pay fair market prices—a rule that is as true anywhere else in the world as it is in your home market.

Wednesday, December 24, 2014

Governance: A Source of Energy--or Dead Weight?

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

Does your volunteer leadership see its duty primarily to represent the interests of groups within your membership? Or does a significant portion of your leadership see their responsibility as ensuring the organization does not stray from its historic roots? I have been part of organizations where one or both have applied--perhaps you have too? When such tendencies dominate, it can be an energy-draining experience…..

This is not to say that governance bodies should not be representative—they should. Nor is it to say organizations should not be mindful of their origins and founding philosophies—this indeed can be a source of strength. But I have observed that organizations that are not called to achieve something that is greater than the sum of their parts can find themselves bogged down in numbing meetings rehashing and replaying roles from the past.

“Form follows function” of course; restructuring your governance apparatus (including sometimes sacrosanct committee structures) does not make sense unless you have a consensus on what your organization is all about and that this purpose is worthy of the time and energy and resources that are going into it. It is only when you have found or re-found this energizing purpose that you should ask if you have the proper structures for achieving it; and if you find they are no longer suitable, you should be merciless in changing them!

Too often organizations die of wounds inflicted by their own structures and mind-sets that were suitable for another time and other circumstances perhaps but not so much for the present. Economist Joseph Alois Schumpeter won the Noble Prize for his theory of “creative destruction”—that organizations that are ill-suited to a changing environment are inevitably destroyed, to be replaced by ones that are better able to respond to these new challenges and opportunities. But it is generally sad to see things die—particularly when you are on the inside!

Like people, some organizations are prematurely old while other organizations that may be a hundred years old or more are as vigorous and fresh as if they were created yesterday. In which category does your organization fall?

Monday, December 22, 2014


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

Virtually every association membership survey our firm has undertaken over the past 17 years has shown that members most appreciate the local contacts they have with their association--as opposed to their relationship with the more distant national headquarters or even more distant international headquarters operations, if they have one. “Out of sight, out of mind” certainly holds true at this level. This means that in gathering and keeping members organizations that have an existing chapter network usually have a built-in advantage over organizations that do not.

But, having said this, we also know of many instances where either unruly or dormant chapters can cause mangers back in headquarters to pull their hair out in frustration. So which is it?—are chapters useful, or are they a management pain-in-the-neck?

The truthful answer is “both.” Chapters are an incredibly good tool for mobilizing the grassroots, and finding and keeping new members; but they are far from being maintenance-free. Those organizations that have the best chapter networks have understood that they are dependent on fallible, time-strapped, volunteers who mean well but who often lack the experience, knowledge and resources to do lead their chapters the way they might like; so headquarters has a big role to play if these well-meaning volunteers are not to end up embarrassed, harassed and bitter at their experience.

Well-run chapter networks have the following:

  • A team or at least a person back at headquarters dedicated to working with the chapters
  • A leadership recruitment plan for identifying and cultivating future chapter leaders
  • A leadership training program designed to equip chapter leaders with the skills and knowledge they will need to do their jobs effectively
  • A tracking mechanism through which chapters can compare their performance 
  • A list-serve through which chapter leaders can learn from each other
  • A “chapter starter’s kit” that includes “best practices” and answers to frequently asked questions as well as a list of dos and don’ts
  • Products and services developed at headquarters but offered through the chapters. (This might include ways in which distant chapters can participate remotely in association meetings and conferences in other parts of the globe.) 
Successful chapters have the additional advantage of keeping headquarters on their toes. It is not uncommon to see large and successful chapters out-shine headquarters on occasion!—but this is a good problem to have.

Monday, December 15, 2014

Stand-Alone or AMC? Or is there a third way?

By Douglas M. Kleine, CAE, Plexus Senior Advisor (this blog is a reprint from 2010 when Douglas was a Plexus client)

A 2010 study by the AMC Institute indicated that AMCs produce higher net income for their clients than staff-managed associations of similar size. The findings seem to hold for association budgets of up to $5 million. The study attributes the difference to what is called pride of independence on the part of staff-managed associations, and that independence coming with a hefty price tag, due to the inefficiencies and overhead burdens of smaller associations.

But is the choice really just between staff-managed stand-alone versus an association management company? Can overhead be reduced and inefficiencies be eliminated another way? Any association that has been a subtenant knows the savings of shared pubic spaces, mail/copy room and kitchen. Plexus Consulting has taken the simple concept of subleasing and enhanced it with the plusses of outsourcing, shared staff, and internal shared phone, data, and accounting systems. Those are the plusses of an AMC, with out the minuses of an AMC, which often entail diminishment of identity, fitting into schedules that have to accommodate other (bigger?) clients, and the enormous loss of institutional memory, relationship history and operational continuity that comes with the elimination of staff in the transition to AMC service.

Plexus’ Incubator Model, retains key association staff as association staff, so the organization can move seamlessly back out on its own with ease and at its own timing. During the incubation period, association employees are assisted by Plexus staff as needed. There need be no database conversion, phone line conversion or new personnel system. If financial management is needed, Plexus can operate in any of the major software systems from Quick Books to ??(Solomon?). Plexus can also step in on activities that are seasonally stressful to staff, such as conferences, calendar membership billings, annual reports and elections.

Stand-alone or AMC is a false choice when associations can choose a third way through the Plexus Incubator Model.

Monday, December 8, 2014

The Association Guide to Going Global: An Introduction

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


You know when you are global when:

  • Your organization feels as “at-home” in any one culture or in any one part of the globe as in another;
  • Your customers and stakeholders view your organization as “a local organization” wherever they and you may be in the world;
  • Your organization is able to sift through local trends and ways of doing things to identify what has potential on a global scale, and is able to apply global trends and strategies effectively at the local level everywhere in the world;
  • As markets rise and fall, you are able to shift resources fluently from one to another so that your overall organization continues to thrive and produce intellectual property that is wanted and needed throughout the world.

In other words, being global assures you act as and are perceived to be a citizen in every community of the world, that you are able to bring resources to bear when and where there are opportunities, and that you are adept at recognizing and addressing trends in customer needs and wants on a local as well as a global scale. Isn’t this the formula for any successful organization?

These qualities most certainly characterize successful organizations at the local or national level; so in one regard, globalization is mostly just a matter of scope--but what scope it is! When the world’s cultural, ethnic, linguistic, legal, and political differences are all thrown together on one playing board we have a game with moving parts that is more complex than playing three dimensional chess. Then, just to make it interesting, throw into the mix the differences in financial, educational, and technological means from one country to another—not to mention the challenges of distance and sheer geographical differences—and you have a very intimidating picture indeed!

Is anyone able to win at such a complex game? Yes, every day. In fact these are the organizations that touch every aspect of our lives, from the products we use and consume to the healthcare treatment we receive, the global flow of products and services and the ideas they contain are all the result of organizations that have been conceived to satisfy our wants and needs. If they are not global themselves they are linked in to organizations that are.

The global sharing of ideas and competition among people and organizations on a global scale can and do result in discoveries—including new cures for old diseases, and better products at less cost. Few energy sources are greater than those that can successfully harness the minds and creativity of the six billion human souls that inhabit our planet—or a portion thereof! But of course, globalization is not all sunshine and roses. If your particular product or service is not among the best then globalization can be a painful experience—as news about plant closings and business failures tell us every day. So the trek toward becoming a global organization can be seen to be as much defensive as it is progressive. If your organization does not find and fill its global niche then the chances are good that someone else, somewhere else will!

Textbooks typically point out that there are three types of transnational organizations: “International” organizations that operate across national boundaries because they buy or sell internationally, have international meetings or alliances, and/or serve stakeholders/members from other countries. In international organizations, there is little customization of goods and services for global customers, and the organization’s business and governance structures are highly concentrated on the domestic market. Customers, whether local or global are treated the same.

“Multinational” organizations that have a sustainable and on-going presence in more than one national market simultaneously. Goods and services may often be customized for a country by country market., and the operational and governance structures may be distributed among and within these targeted countries. Local customers, regardless of location, are the priority, but global customers outside of these markets may only be supported with difficulty. And “Global” organizations that fulfill all four of the characteristics noted above. Goods and services allow for major customization. The business and governance structures are highly networked and distributed. Customers are supported both locally and globally. Unless you have merged your organization into another to become global instantaneously, for most, becoming global is a gradual, stepby-step process in which a domestic organization becomes international, then multinational then global. It is a time-consuming, difficult process, but it is a challenge that this generation cannot refuse. Globalization is something this generation and every generation after us will have to incorporate into their education, mindset and day-to-day living. It is the trend that most defines our times. Those people and organizations that adapt to it best are the ones that will reap the most rewards.

Organizations based in smaller countries with advanced economies have a special advantage in that they are used to dealing with foreign languages and cultures. Cross border transactions are a daily occurrence for them. It is no wonder then that managers from the Netherlands who seem to be multilingual at birth are in much demand as managers in global organizations.

The old joke, told mostly by Europeans, that a person who speaks three languages is called trilingual, a person who speaks two languages is called bilingual and a person who speaks one language is called, you guessed it--an American—contains a sharp bit of truth. When one is born on a continent where well over 300 million people speak the same language and which constitutes the largest economic market in the world, it is easy to be parochial without seeming to be undereducated! Nevertheless for this reason Americans are at a disadvantage when it comes to understanding and operating successfully in a global environment. It is for this reason that this book focuses particularly on the challenges faced by US managers as they grapple with globalization.

This book of course also focuses on associations. While the management tactics and strategies that are discussed here could be and are applied to all sorts of organizations, associations have a particularly important role in globalization, for two reasons. First, associations—and that includes trade associations and professional societies (and other individual membership organizations) as well as chambers of commerce—have played a particularly important role by providing the networking contacts and market intelligence small and medium size enterprises (SMEs) have needed in order to expand as rapidly as they have into global markets. As is discussed in the first chapter SMEs have been the surprise winners in globalization, snatching the prize out from under the noses of the giant but lumbering multinational companies that have not been as nimble in taking advantage of new opportunities in new markets, and associations have a lot to do with this. The second reason why associations deserve special attention is because of the critical role they can and do play in addressing issues of social responsibility that all too often fall in the cracks between the secular interests of national governments and for profit undertakings. To a large extent associations are just now coming into their own; and their effectiveness in this current and future role will be largely defined by how well they have learned to navigate in a global environment.

This book is divided into eight chapters that correspond to those issues or problem areas that naturally crop up whenever a conversation turns to globalization. While sticking to the facts, I also attempt to use personal anecdotes and stories to liven up what some textbooks have turned into a dry topic. Globalization deserves better. It is about flesh and blood, dreams that have been dashed as well as dreams that have resulted in fabulous success. More importantly, it is about a topic that affects all of us. It defines our time, and how we cope with it will determine the quality of our future.

Here is how we will take this journey:

Chapter One: Why Go Global?
This chapter addresses the trends, opportunities and threats of globalization for associations and how successful associations have responded. It also addresses the emerging opportunities that are unique to the association community and what associations need to do to ready themselves for these roles.

Chapter Two: Common Problems that are Encountered
There is enough of a track record now to be able to learn from the successes and failures of others. This chapter attempts to catalogue the lessons that have bee learned so that others may build on them.

Chapter Three: The Structure of the Globalized Association
This chapter addresses the different stages in cross border transactions from international to multinational to global. It also addresses the different structures that have found to be suitable for organizations of varying means and missions. There are as many variations in globalization as there are organizations, but there are some broad models and lessons that have been learned that might serve to structure and inspire others that have faced or are facing similar challenges.

Chapter Four: Funding and Financing
Even the most altruistic associations need funding to fuel global operations. This chapter focuses on those considerations and how successful associations have addressed them.

Chapter Five: Language and Culture
These are the most obvious differences among international markets, yet language and cultural differences continue to be stumbling blocks for individuals and organizations operating across national borders. This chapter discusses some of the gaffs that can happen and how successful managers avoid making them!

Chapter Six: Endeavors in Specific Countries
This chapter discusses the differences between lesser developed, developing and developed economies and how each pose a different set of challenges and opportunities. It also discusses BEMS (Big Emerging Markets) and the BRIC countries (Brazil, Russia, India and China) and the dos and don’ts of entering those markets.

Chapter Seven: Successes and Failures—Other Case Studies
This chapter discusses successful strategies and models that have been used by associations that have expanded globally.

Chapter Eight: Some Final Thoughts on Truly Becoming “Global”
This chapter discusses the nature of the globalization challenge for association managers and why it is a challenge that no manager can ignore.

Monday, December 1, 2014

How to Get your Nonprofit through the Recession: A Checklist for Managers

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

Sometimes when in a storm it is useful to have a checklist at hand that serves as a reminder not to forget certain fundamentals. With information overload and all your senses screaming at you, it is easy to lose track of things that in normal circumstances would be “no-brainers” for veteran managers. So to that end I have this handy check list that is divided between “strategic” and “operational” things that a manager needs to keep in mind in the midst of this “Great Recession.”

Re-check your bearings—focus--The world in 2008 when the Great Recession first hit. Maybe you saw it coming, but if so you were pretty much on your own. Few saw the greatest economic crisis since the Great Depression coming before it hit. And then, like a tsunami, it just kept hitting. Every quarter that has gone by has brought more bad news…..

So, why is it so many organizations are using strategic business plans from before all this happened? This is like using a map of Washington, DC to find your way around the streets of Paris! Alright, maybe not quite that bad, but still. If you have not done strategic planning in the past year then it is high time to do so. Assess the changes in your strategic environment and adapt your organization’s course accordingly. The direction you were headed in may not be where you should be headed now. Or, at the very least, the ways in which you will get there will have changed. 

Wouldn’t it be nice for you and your stakeholders all to know what that is before you bump into something? Are you operating effectively? Are you hitting your benchmarks—or has your market changed so fundamentally that you need to rethink your approaches? Think of it as aiming at moving targets. Check and recheck and ask yourself fundamental questions—are we doing what we need to do in the most effective way possible? Are we aiming at where the target will be or are we aiming at where it used to be?

Are you operating efficiently? Resources are scarce in the best of times. Waste is always a luxury that no one can afford, but this is particularly true now. Test out your operations, where can you squeeze out more efficiency? Be prepared to see things in a different way—maybe there is a whole new way of doing things that you have never before tried. If so, try it. Now is the time. Too many managers assume a death grip on the steering wheel…staying the course, afraid to try anything new. Try it.

Internal and external communications. Probably the single most important operational function in times of a crisis is communications. Are you communicating effectively with all those shareholders and stakeholders who are critical to you? This includes prospective members and members as well as your board. And it especially includes your staff and any consultants and partners you may have. Don’t assume that just because you are sending them a newsletter that they are receiving the message that you think they are. Communications is a two way street—it takes listeners at both ends, not just one person talking, to achieve it. Communications can be turned into intelligence, and this is always a good thing to have in a crisis.

Reducing expenses
The two biggest items in your budget are salaries and rent. Which activities can be outsourced and which must be handled by staff? Outsourcing almost always reduces expenses while accessing greater expertise. It also provides greater flexibility if you think you may need to change course later. Office rent is a particularly grievous problem now that commercial real estate has actually declined in value this past year. So if you are stuck with a costly pre-recessionary lease—work with a reputable realtor to find ways to reduce this cost.

Are you spending your marketing dollars in the best way possible? Have you trained your staff in the things they could be doing to help market through their own personal and professional networking? DO NOT consider marketing to be an expendable overhead item. It is your organization’s oxygen. Cut that off and you slowly suffocate!

Are there items on your checklist that you think should be included here?