In a crazy economy. crazy measures on recovery come to the fore it seems. New York Times writer Jack Healy wrote a terrific piece Men’s Underwear as an Economic Indicator in which he explores the range of ersatz economic indicators we use to assess the status of the American economy. Healy recalls that “in the 1970s, when Alan Greenspan, the former chairman of the Federal Reserve was still running his own economic consulting firm, he said that he looked at sales of men’s underwear as an economic indicator. Sales rose steadily in normal times, the theory went, but tended to dip when men had less money, or were trying to cut back on their spending. Nowadays its everything from uncut grass to mosquito populations that inform the notion of economic recovery.
So where do Associations stand amidst the myriad economic indicators? Are our traditional indicators still a valid measure of where we stand and what’s to come? For trade associations whose dues structure are based on the revenues of their member firms a rude awakening likely awaits as the sales declines of 2009 come home to roost in the dues assessments of 2010. Likewise participation levels in conference programs, events and seminars which have slowed for many membership groups may not be a reliable indicator as new forms of program participation—think webinars, audio conferences and distance learning tools—take hold. Even the veritable National PTA is fending off membership defections as parents view social media as the better way to organize and inform parent decisions.
Gazing into the future in today’s environment is daunting at best but Associations looking for leading indicators will find them in membership satisfaction, membership conversion–that is how many prospects buy your value proposition–and join, the association’s rate of innovation, diversity, and measures of ethical behavior by members all stand as strong indicators in today’s environment of future sustainability. Our more traditional tools of member retention, financial statements and event evaluations each a lagging indicator do little to help us anticipate the future.
So what are your measures? What are the new metrics essential to measuring your succeed? How will we know when the economy is in an upturn for your profession or industry? Finding new meterics is an exercise in both innovation and creativity with a significant pay-off for your Association. Don’t take the process lightly, but if you haven’t already begun to look now might be the right time. Sure it’s hard to know what works, but just in case you’re wondering, underwear sales will fall 2.3% this year. Where are your sales headed?
In the shadow of today’s economic climate it is inevitable that questions about and pressure to make sudden shifts in strategy, business plans, and direction will be brought to bear on association leaders. Rushing off in a new direction at this particular juncture would be a mistake. There are simply too many unknowns—even in the face of the smartest people in the room with good intention at hand—this lack of clarity more often fuels disaster rather than success. Organizations looking for success and business strengthening activities in the face of the current downturn can thrive by doing three things really well:
1. Stick to the knitting. Associations thrive in downturns and uncertainty not by veering off to some new unexplored terrain, but rather by reassuring and shoring up services to members. Knowing where your organization excels, revisiting your core competencies and making sure you are executing on plan are more important than ever in difficult financial times. Force a strong focus on the needs and concerns of the membership. Call them directly. Ask how they are managing in these tough times. Ask how the association can help. The answers will surprise you.
2. Resist the urge to merge. Typically in economic chaos, the call to partner or merge with a related industry or professional group will arise either from your own Board or membership or from those of other similarly situated group like your own. To be sure, there’s nothing wrong with mergers when they strengthen your core capabilities and when there is sufficient opportunity and resources to assess the potential fit. Be wary. The empirical data is clear—most mergers fail to deliver value to the membership and divert management’s attention from the real work at hand. Even the talk of a merger will spike the levels of uncertainty among staff and members, the exact opposite of what’s needed in the moment.
3. Don’t Confuse Vision and Strategy. It’s easy to lose sight of the organization’s goals when you and everyone around you is feeling pressured. This is where experience and perspective can be enormously helpful and healthy for your enterprise. Depending on the demographics of your organization there may be some (many?) people on the Board, committees and staff who have never experienced a downturn economy or at least not one of these proportions. As a leader, it’s your job to provide the greatest degree of confidence and certainty as you can. If you don’t have a perspective on the current economy, get one from a friend, trusted advisor or a financial professional. Weird economic times heighten the need for communications from the top and folks will look to your for their cues. Getting your team focused on execution, moving the association’s plan forward and watching for the unexpected bumps along the way will go a long way toward serving members and making the best of a truly challenging economic time.
In the words of former Secretary of State and US Army General Colin Powell (Ret), “people want to share your confidence however thin, not your turmoil however real.” As a leader can you offer less? I don’t think so.