Kicking Sacred Cows To The Curb

Sacred Cows. We all have them in our organizations.

What do we call programs that lose money? A member benefit! Do not get caught in that cycle.

I speak with chamber execs all the time that share their frustration of that new project initiated by the new chairman. We’ve all been there.

When we add new programs, do we delete a program? No. Use these economic times to shed those losers.

I wrote about scorecards in a previous post. Creating a scorecard can be very effective in sun-setting those programs, products or services that: don’t make money; members don’t value anymore, or have become a sacred cow of the organization.

A scorecard to measure the value of your programs, products or services should track at least the following items as a starting point:

• Revenue
• Costs - direct and indirect (i.e., staffing costs)
• Stated goal of program, product or service
• Evaluation of program, product or service by members
• Measure the results

As a sidebar, we should be reminded of the “Hedgehog Theory” stated by Jim Collins in his book titled, Good to Great, and include the theories’ three criteria in the final analysis:

1. Do we have passion for this program, product, or service?
2. Are we, or can we be the best in delivering this program, product or service?
3. Do we make money on this program, product or service?

After you’ve implemented this assessment tool in your yearly review process, it should provide a strong argument on whether to continue a program, product, or service in the coming years – or kick that sacred cow to the curb!

For a previous blog post on program based budgeting go HERE.

Delivering Value

In today’s economic times, it is more important then ever to deliver the core good to your members.

I’d like to refer to a book I read on the restaurant business recently. The author is Anthony Bourdain, his book is titled, Kitchen Confidential.

In the book the author suggests that we go to the same restaurant year after year after year and order the same meal for one simple reason, we know what we’re going to get and we love it! The restaurant is delivering a core good.

What is your core good?

As chamber leaders it’s important that we continue to push the envelop of innovation. Our members expect us to be cutting edge. It’s ok to fail. In fact, I know of one organization that has a line item in their budget for “new projects.”

Many chambers have incubators for entrepreneurs to get a start on their business idea. This is your little slush fund for you to be innovative for your members and potential members.

Having said all that, it is important to note that while you are allowed to try new things and fail, you must never stop delivery the core good that Mr. Bourdain talks about in his book. That’s why your members renew their membership.

Are you on the cutting edge while continuing to deliver your core good?

Scorecards: Do You Have One For Your Board of Directors?

Do you have a scorecard for your Board?

If not, you should.

We all know our Boards are supposed to be the biggest supporters of our organizations.

What better way to showcase that by creating a scorecard for your Board of Directors!

The scorecard should be prominently displayed at every Board Meeting. It should be in every Board book produced. Peer pressure is a wonderful thing. No one wants to be a slacker.

Yes, peer pressure works!

At the very least, the following items should be included in any scorecard:

• Board Terms
• Attendance Record for Board Meetings
• Membership Level (Platinum, Gold, Silver, Bronze, etc.)
• Number of Members Recruited
• PAC Contribution (if you have one)

These are just a few examples of what you might want to include in your scorecard. While some board members may push back, get the backing of your current chair, incoming chair and membership chair. Let them lead the charge.

Part of your annual “Board Orientation” should include the scorecard and set the expectation up front of their role as leaders of the organization. If all your board members are on the same page, you will have a stronger chamber.

Start that scorecard today!

For a sample scorecard go HERE.

Golden Handcuff: Do You Have One?

If you’re not familiar with the term, a “Golden Handcuff” is essentially a program, product or service that your member can’t do without.

It compels them to send in their dues check year after year after year.

If you are familiar with the term, the attached list is nothing new.

What program, product or service are you providing that is your golden handcuff?

• Insurance Programs (Workman’s Comp, D&O, etc)
• Credit Cards
• Certification
• Affinity deals with office supply stores
• Etc.

Let me give you one that you’ve probably never thought of – “Your Board of Directors.”

By show of hands, how many of your board members are non-dues paying members. That’s right, they’re all dues paying members. That goes for all your volunteers – committees, task forces, etc.

So the next time you’re asked if you have a "Golden Handcuff" – you can proudly say, YES, we have one, it’s my board.

Lifetime Value of a Member

In my previous post I asked the question "are all members important?" Are some members more important than others?

Let’s all say out loud “Lifetime Value of a Member."

You know the Lifetime Value equation:

(Average Dues + Average Non-Dues) x Average Number of Years of Membership

If you’re a numbers person, you’ll want to track this number on a regular basis. It’s all about retention. The better your retention rate the bigger the ROI will be when it comes to your lifetime value.

Are you incorporating engagement campaigns, especially for 1st year members, to raise your retention rate? We all have the challenge of a low first year retention rates vs. our base members.

If you don’t have a strategy in place to improve your retention rate, now is the time to start.

For a previous blog post on membership equations go HERE.

Members: Are They All Equal?

Are all members important? Are some members more important than others?

The answer to both of those questions is yes.

When I make this statement, I get push back. The argument I hear, all members are important. They’re all equal.

From my vantage point, I don’t think so! That’s just trying to be nice.

Let me give you a few examples of what I mean.

1. Is your chairman of the board more important then a first year member?
2. Do all your members pay the same dues point?
3. You get 10 phone messages from 10 members while your were on business travel. I bet you prioritize that list before you make your first call.

I’ve said it before, your board members should be your biggest supporters financially and the leaders in the community.

And yes, these members are more important than your first year members.

Let me put it another way, lifetime value of a member!

More on that later…

Governance: Owners, Managers, and Customers

What a unique business we are in. Our members are our owners, our managers and our customers.

• Owners: That’s right, members own the organization. It belongs to the members, not the staff. That’s why they’re called membership organizations. Sometimes we forget that.

• Managers: Your volunteer structure ensures that the members are involved in managing the organization. Task Forces, Committees and ultimately the Board of Directors. The Board has fiduciary responsibility for the organization in setting policy and making sure the organization is financially stable.

• Customers: That’s right again! Who buys the Chamber’s products? Membership, monthly luncheon registrations, after hours networking events, sponsorships, annual meeting registrations, and the list goes on.

The key to successful organizations, in my opinion, is to have a strong working relationship with your Board of Directors. A level of trust must always be present. If you don’t have it, you have nothing.

As CEO, you were hired by the Board to implement the policies that were decided by the Board. Take that charge seriously.

That’s your responsibility!