The world outside of the U.S. is rife with opportunities for associations that want to expand their reach. And there’s no better way to do that than expanding the organization’s events program to other countries, bringing in new revenues and members along the way.
At least, that’s how it’s supposed to work. Nancy Berg, CEO and executive director of the International Society for Pharmacoeconomics and Outcomes, shared a story from early in her career about an association that seemed to do everything right when it expanded its meeting program globally—but ended up having to pull back its events internationalization efforts after members revolted.
Here’s what happened—and the lessons learned along the way.
The 75-year-old professional engineering association had an extensive North American chapter network and a strong budget with ample reserves fed in large part by revenue from its exhibitions and training programs. The problem was that many companies that were employing its members at the time were moving their operations—and their jobs—to less expensive countries. The result of this offshoring was a steadily declining membership.
The board appointed a blue-ribbon committee to update the strategic plan to transition from a North American focus to a more global one. Chaired by the past president, the committee also included executive non-engineering members, non-members with global responsibilities, and a few core members as advisors.
The Business Plan
The committee thought that, given the declining North American membership and some problems with the chapters, the best growth opportunity would be to go global. It recommended that the society aggressively invest in global activities and technology while streamlining its North American operations.
“The committee’s approach was hailed as visionary,” Berg said, and the society immediately declared it was now a global organization.
The committee developed a business plan to make it happen, which the board approved. It entailed developing relationships with global thought leaders, developing North American pavilions at targeted international exhibitions to give its exhibitors exposure to new markets, forming chapters in certain global markets, and recruiting global board and committee members.
The plan’s recommendation for streamlining its North American operations and invest in technology included cutting some chapter, regional, and zone-level activities, reducing low-margin and subsidized North American events, reducing committee networks, and emphasizing new technologies and delivery channels in the society’s content strategy.
Initially, it looked like the plan was working pretty well. The new global events contributed $500,000 in new annual revenue while covering their direct costs, and global participation in its U.S. shows increased by $1 million as its events gained more visibility in non-North American markets.
But the members were not happy. Many who had lost their jobs were in no mood to see their association also becoming more interested in investing overseas than in their core North American markets—why should the society be subsidizing events in Singapore and not in St. Louis? Who are these blue-ribbon committee people anyway?
Also, while the growth in international revenue streams was impressive, it was outpaced by the unanticipated reduction in North American revenues, Berg said.
Vocal core members began putting pressure on the executive director to safeguard “the way we’ve always done things.” These members called for traditionalists with strong personalities to run for the board. They did, and they won seats at the next election.
The pullback began. The society canceled all exhibitions and conferences outside of North America, and pulled away from organizing the North American pavilions and delegations at global events. Instead it focused on recruiting more global company participation at its North American exhibitions so it could continue to brand itself as a global society. “They said it was OK to bring global to North America, but not to invest in global markets anymore,” said Berg.
The Lessons Learned
Among the takeaways Berg shared were:
• Societies with multiple stakeholder types have to recognize that they have many “core” constituents—and that they have to communicate with all of them and get all of their buy-in.
• Include representatives of all these stakeholders in the strategic planning process. They will have their say one way or another, and it’s best to have it be positive, not negative, as happened in this case.
• Understand that the cost and timelines involved in establishing presence and revenue streams in other countries is going to vary from what you’re used to. “It’s important to show the board the details, not just the bottom line,” so they understand as well, she said.
• Communicate and manage expectations, and make sure members understand how what you are doing will benefit them.
“I have since run hundreds of successful new market launches, led successful strategic planning processes and managed significant change,” said Berg. “It is possible to do it right!”