Like any self-respecting consultant, I’m going to start our 2019 monthly blog series, From My Seat at the Bar, with predictions on what associations will face in 2019.
Unlike other firms, though, Association Laboratory is blessed with a wealth of association environmental scanning data.
Research, collected from you the association executive reader, on what you expect your members to face in 2019.
In November/December 2018, Association Laboratory conducted the 8th annual environmental scan of the association strategy environment, Looking Forward™. This study, the most comprehensive of its kind in the association sector, will be published in March. You can check out our compendium of futures research HERE.
We have not yet published the results but lucky for you, I get to look at the data behind the scenes. All secret like and such.
More than 200 CEOs responded this year out of more than 400 association leaders in total. They represent members in more than 20 sectors. They lead everything from local to global trade and professional associations.
In addition, yours truly, has reviewed the historical data to see if there are big trends that stand out. This “CEO Respondent Meta Study” looks at Looking Forward™ data from 2014 – 2019.
Here’s four predictions on what will impact association members based on the
response to Looking Forward™ from association CEOs.
Technology Investment Will Shift from Infrastructure Development to Use and Protection
What good is your new, fancy technology if nobody knows how to use it? Zip, zero, zilch, zed.
Four years ago, association members were concerned about developing the technical infrastructure to be successful. The accompanying graph highlights the trend in top technology issues identified by association CEOs that impact their members.
It clearly shows association members are moving from technology infrastructure development to use (competency) and data protection.
It doesn’t help your members to have leading edge technology if nobody knows how to use it. In addition, members’ concerns about the safety of their customers’ data are becoming paramount.
associations will be those that can support their members in a digital world
and sustain credibility with members about data protection and privacy.
Merger and Acquisition Activity Will Change the Nature of the Association Value Proposition
Mergers, acquisitions and industry consolidation create companies that are larger and more resource intensive.
Larger organizations have different needs and their employees need different competencies.
In addition, larger companies are more capable of meeting their own needs ranging from lobbyists pushing their agenda to internal training and professional development.
The accompanying chart from the Looking Forward Meta Analysis shows the percentage of association CEOs who have identified M & A activity over the years. The 3-year moving average (dotted line) clearly moves upward.
In Looking Forward™ 2019, 55% of trade association CEOs say that M & A activity will impact their members this year.
For trade associations, industry consolidation will continue to cause challenges for governance as buyer and seller sit across the Board room table from each other.
In addition, in some industries, the disparity in needs and power between large firms and small firms may force many trade associations to go through a painful discussion about who they are designing themselves to serve.
For professional associations, M & A activity means that association leaders will need to identify, understand and accommodate a company value proposition, not just the individual value proposition.
If employees can’t justify the external expense of membership or membership participation, they are less likely to have association activity supported by their employer. Successful associations will be those that understand how changing company and industry structure influence member needs and create value propositions that take these changing needs into account.
Workforce Shortages Will Create Professional Disruption
You read about it every day: low unemployment, hiring needs, workforce participation rates. These are all metrics highlighting the need for more, and more qualified, workers.
In 2019, 78% of trade association CEOs say their members will struggle to identify, recruit or retain qualified staff.
The accompanying graph shows the percentage of CEOs of trade and professional associations who identified identifying, recruiting and retaining qualified staff as an issue facing their members.
They believe their company members, or the employers of their professional members, are struggling with workforce issues.
What are the implications of workforce challenges?
- Companies search for people from other sectors. For example, a person with training as a data scientist may be able to fulfill many of the analytical functions of an actuary.
- Companies seek technological solutions. If you’ve ever seen a McDonalds with a kiosk to take your order, you know what this looks like.
- Companies seek strategic providers to provide competencies and capacity for key needs. You buy the support of a company, not hire a staff person.
- Companies expand the competencies of their existing staff through training or development.
- Companies in highly regulated industries, like healthcare, seek government expansion of scope of practice for licensure.
For associations, this means
understanding where the workforce issues are most acute and understanding how
employers (and thus employees) are adapting.
associations will be those understand the nature of the workforce challenges,
the changes these challenges are forcing on employers and who devise strategies
to help members adapt.
The Government Affairs Battleground is Shifting
Just for fun, imagine all the time, money and energy you spend on key contact programs, legislative policy updates, PAC fundraising, policy research, “Hill Day” for Congress, etc. Keep this in mind as you read the following.
First, association CEOs believe that substantial policy changes are unlikely.
The accompanying chart shows the percentage of CEOs who identified various forms of policy or regulatory change as asked over the years.
From 2017 to 2019 the percentage of association CEOs who believe that there will be substantial changes in laws or regulations in their sector declined substantially.
Second, CEOs anticipate less legislative inaction, particularly at the federal level. 33% of national association CEOs believe there will be government inaction or deadlocks on key policy issues.
Unfortunately, this doesn’t mean companies (and their employees) will be left alone by our friends in government.
While substantial policy change is unlikely, association CEOs are substantially concerned about the likelihood of increase regulatory or compliance costs on their members.
This activity can be directed by
regulatory agencies independently of legislative action.
Regulators gotta regulate!
55% of trade association CEOs believe regulatory and compliance costs will increase for their members. The accompanying graph shows the trend in perceived regulatory and compliance costs over the last six years.
Here’s the problem for associations.
Many associations are organized to influence federal or state policy but have devoted less resources to influencing regulatory policy.
The battle ground is shifting from the legislative arena to the regulatory arena because of policy deadlock. Now think of all the resources devoted to federal policy work relative to federal regulatory agencies.
Resources devoted to policy advocacy will be less effective influencing regulators.
Associations Will Need to Rethink How They Organize to Delivery Value
In summary, the world in which associations need to be successful is substantially changing. We are moving to a digital driven world; industry structures are changing; workforce challenges are forcing solutions outside traditional association support and the policy battleground isn’t where we’ve fought it for years.
Tune in for the February 2019 Blog where I go through the specific implications on association strategy including membership, meetings and content strategies.
Good luck from my seat at the bar.