Ensuring Relevance and Financial Stability - Professional Body
Introduction
The recent convergence of changes in markets, member preferences and technology has given rise to unprecedented and relentless competition in a space that once belonged exclusively to non-competing associations and societies. The number of professional membership bodies serving industries and professions has grown dramatically, resulting in increased competition. Commercial competition has also increased for many associations’ offerings, from publications to trade shows to educational programmes.
The 'needs and wants' of members have also changed. The current model of many professional membership requires large time commitments from members whose working hours are increasing. Value expectations have also changed. Membership of a professional society or college was considered part of being a professional because it was 'the right thing to do'. No more. The pressure on associations to demonstrate value has increased, and it is not going away. Many professional associations and societies are increasingly finding it difficult to adjust to this new paradigm. They are struggling to remain relevant to their membership and establish a sustainable financial position in this challenging and fluid environment.
We have developed a proven approach that can assess and help associations and societies address these issues to ensure their long-term success and future.
Our client was a medical professional body. Its main aim is to advance the profession to secure the future of its members and to improve health outcomes for the benefit of the general public. It achieves this through professional development and support and the provision of quality information and advice.
Our client had been investing in new products and services and wanted to create further funds for investment. Part of the challenge was to ensure that the services were the ones members value most, so the objective was to increase the quality and value of their offering through an objective assessment.
We worked closely with the executive team to identify members’ shifting needs and wants, to re-orientate the organisation to serve its members better, to reduce operational costs and to enhance revenues – to achieve a sustainable long-term future.
Understanding and prioritising the members’ needs and wants
Not all services that are highly valued by members generate revenue. Our approach started by capturing the 'voice of the member' (VOM) to understand what they rated as most and least important. These data were captured and analysed and each requirement was quantitatively prioritised and given an 'importance rating'. The data were further analysed to understand different segments within the membership population. This allowed us to ask probing questions such as, do members in Scotland value Local Practice Forums more than people in England? Or do newly qualified members value development programmes more than experienced members?
The data were incorporated into a matrix. The VOM data (what the customer wants) were correlated with the services provided by the organisation to understand how well members’ needs were being satisfied. The costs of providing these services were then quantified.
We then determined the overall value of the client's products and services by plotting the relative importance against the relative cost. We then worked to formulate a 'new direction' for each product or service.
Realigning products and services the better to serve members
The 'voice of the member' analysis coupled with the cost and competitor analysis identified a broad spectrum of improvements, ranging from streamlining internal processes, improving services and products offered to members and making it easier for members to consume them.
Projects focused on raising standards and creating efficiencies under an overarching programme to raise revenues, reduce costs and increase value.
Restructuring the organisation to make it cost-effective
An organisational structure analysis (OSA) was conducted to understand how economic the organisational structure was. The organisation had a tendency to assign managers to relatively narrow groups of tasks, resulting in too deep a structure and very narrow spans of control.
We find excessive numbers of managers in many organisations, creating fertile conditions for an uncontrolled increase in the whole staff – a ballooning of the numbers employed – usually needlessly. In our experience, nearly all objective reviews of the organisational structure reveal managerial jobs that could be eliminated.
Following the OSA, we conducted an organisational process analysis (OPA) to find out what people do. OPA data were viewed in two ways – the functional view to show how the departments spend their time and the process view to show who works on each process and how this effort is distributed throughout the organisation.
This initial analysis determined revealed overlapping activities which allowed us to expose and challenge:
the assumptions about what needed to be done to run and develop the enterprise
the activities done out of habit (and comfort) rather than need
the activities that truly supported and promoted business performance.
In the subsequent detailed analysis, we quantified the effort being allocated to work that yields low value to the business and members, but which incurs high costs. The OSA and OPA analyses allowed the organisation to make informed decisions on how costs could be reduced without diminishing the overall performance of the business, revealing opportunities
to improve performance and productivity and to generate more value
to streamline the organisational structure – managerial layers, spans of control and costs
to reduce duplication and inefficiency
to standardise processes to comply with good practice.
The modelling also allowed us to examine 'what if' scenarios to explore how adding, subtracting, or modifying processes, products and services could improve operational and/or financial performance.
The outcomes of our work
The three separate streams of analysis were combined and triangulated to help realign services and to ensure the client remained relevant to its members, not to mention provide longer-term financial stability.
Three scenarios to restructure the organisation were set out: a 'downside case', a 'base case', and an 'upside case' to reflect the range of options available to the executive team. The 'downside' represented a cost reduction of 12%, the 'base' equated to 18%, and the 'upside' a 25% reduction.
The overall financial benefits, through raising revenues and reducing costs, were 14 times greater than the investment made in our consultancy services.