Kellen Company
10 Keys to Success:
A Guide to Evaluating Association Management Companies
On paper, association management firms may appear similar. They all provide varied staff capabilities and cost effectiveness through shared resources. Many offer a variety of services but the similarities between association management firms typically end there. To differentiate management companies, it is necessary to evaluate the quality, value and depth of services that are provided to client associations. The following are 10 critical characteristics to consider when searching for a management company that will meet and exceed your expectations.
Effective leadership by a management firm allows elected association leaders to devote more time to policy, strategy and creativity. However, leadership is not a given in any industry. The nature of associations require active, aggressive leadership not "caretaker" service. Executives must become fully knowledgeable in the industries or professions they represent in order to act quickly and decisively on association matters as well as represent the industry on critical issues.
Effectively forecasting, strategizing and planning an association's future require a broad-based experience in association management. Strategic thinking and creativity are strong suits of association executives. Experience leading associations in times of adversity and prosperity contribute to this ability to see past the current storm and lead into the future. Annual and multi-year plans are essential to almost all associations as they assist an organization's elected leadership and staff in establishing common goals and expectations and provide a benchmark for measuring accomplishments.
Effective, stable management is vital to any organization's long-term success. Executive turnover at associations can lead to costly downtime and interruptions to vital operations. Likewise, inefficient or non-existent board development can hamstring an organization’s long term goals. Management teams that include an executive director, a senior-level "back-up executive," who actively serves the client, and far-sighted board training are all benchmarks of a stable organization.
Meeting the special needs of a Board of Directors and committees, members at-large, prospective members, as well as other publics targeted by the association requires a level of service found only in dedicated association professionals. Furthermore, a staff that is motivated by their personal stake in their management company's future provides superior, motivated services.
5. Internal Resources / Responsiveness
In addition to management and administrative services, associations frequently require expertise in other disciplines such as: meeting and exhibition management, crisis and issues management, public relations and communications, government and media relations, member development, creative services, technical and scientific research, market research and product promotion. A management company that provides these services in-house offer superior flexibility and cohesiveness to their clients.
Client history and success in the industry are both excellent gauges of how much association members value their management company's services.
7. Results Orientation / Cost Effectiveness
Achieving exemplary results within an agreed upon budget requires a hands-on approach by the association's manager. Before selecting a management firm, evaluate the company's management philosophy and ability to get things done cost effectively. Executives with both business and association backgrounds are well suited to develop and implement successful, cost-efficient operations. Financial staff should include CPAs to assist executive directors in assuring effective financial control within approved budgets.
It is common to find "association management firms" whose core business is in another field (e.g., law, public relations). Although hiring such a firm does not preclude effective management of an association, it is important to determine the firm's priorities and commitment to the association management segment of its business.
Some association management firms can offer significant added value to clients due to expertise in specific related areas. The clients of strong management companies benefit from the synergies created by credible and productive relationships with Congress, regulatory agencies, the media, health and scientific groups and other opinion leaders. Professionals in association management also should have extensive experience working with federal and state agencies on a variety of issues.
When comparing fees and cost estimates from different management firms, be sure to identify all the components used in preparing the estimates. What is included can vary greatly from company to company. Consequently, quoted fees are not always comparable. Most firms bill clients in one of two ways: 1) a fixed fee covering all personnel and services with direct expenses (e.g., postage, telephone, fax, travel) billed separately, or 2) a fixed fee for management services, a variable support fee based on the use of various specialists and administrative staff, and direct expenses billed separately. There are other methods used by management firms to "bill" the client which may not be apparent in their management proposals. These include mark-ups on pass-through expenses and agreements with vendors to secure commissions on association projects and programs (e.g., commissions on convention hotel sleeping rooms - funds that should be passed on to the client).