L&M concludes a highly successful six-year engagement providing executive management to the California Association of Flower Growers & Shippers (CalFlowers). It’s been an honor and privilege to serve the CalFlowers board of directors and membership. We are grateful for the new friends we made and to have learned about the fascinating cut flower industry.
This paper reports the results of a study examining the rates of change in the length of chief staff executive tenure and of turnover in office locations of membership-based organizations for the period 2009 to 2015. The study sample was 396 randomly selected associations from 9 of the most populous states and the District of Columbia.
The results of each case were surprising. They revealed much higher frequency of turnover in standalone organizations compared to organizations managed by Association Management Companies (AMCs). As the chart above shows, standalone organizations changed their chief staff executives more than 10-times more often than AMC-managed organizations. This study may finally reveal evidence explaining why AMC-managed organizations outperform standalone organizations in key performance indicators. Download full report.
SAN FRANCISCO – Feb. 20, 2019 – PRLog — LoBue and Majdalany Association Management (L&M) has been awarded its fifth accreditation by the AMC Institute, the global trade association representing the Association Management industry.
Only 81 of more than 500 Association Management Companies (AMCs) worldwide have achieved AMC Institute Accreditation, demonstrating the commitment and ability to deliver the highest level of professional management services to associations and not-for-profit organization (NPO) clients. These AMCs are the recognized choice of associations and NPOs.
There are two components to the AMC-model that delivers the performance and value for organizations: economies of scale; and economies of scope. The AMC value proposition is strongest when these are combined.
The first, economies of scale, is self-explanatory. It’s the sharing of certain infrastructure and operational costs across numerous client organizations. Such costs include:
The release of the third study report in as many years comparing the performance of associations managed under the two dominant management models (e.g., standalone and AMC-managed), caused me to reflect on what I was originally looking for when I undertook comparing the operating ratios of associations based on these two models.
My initial goal was to find a credible set of data that would debunk the many myths about AMCs and AMC-managed organizations.
The following is a comment to the article entitled “In-House Association Management Services Checklist” published in the Component Relations section of the ASAE. If you’re an ASAE member you can read the entire article here.
This is an excellent article, for as far as it goes. At first I was taken back and as an AMC owner thinking: ‘this market is competitive enough without a whole new class of competitors….’ But as I thought about the risks not identified in the article, I quickly realized three things.
CONCLUSION: Based on a comparative analysis of two parallel operating ratio studies of AMC-managed and standalone organizations, AMC-managed organizations reap considerable qualitative and quantitative advantages for membership-based organizations up to $5M in annual revenue. These results are likely valid for organizations above $5M in annual revenue, however, there was not a sufficient number of organizations above $5M in the study of AMC-managed organizations to draw any conclusions about those organizations.
IMPLICATION: Standalone organizations up to $5M in annual operating revenue should answer one question: “Are we receiving the return on our management model investment, given that on average, we may be spending 50% more for the resources to manage our organization than if we were managed by an AMC?”
Michael LoBue writes: As the study results comparing the impact of the start of the recession on standalone and AMC-managed organizations gains attention, there seems to be a general criticism of the study by executives of standalone organizations. The criticism is that the results are not valid because the study samples were not randomly selected. This post responds to that criticism, pointing out how the criticism itself is both short-sighted and (intentionally?) misleading.
Here’s the punch line —true the samples were not randomly drawn, but it’s just as likely the stellar results produced by the AMC-model vs. the standalone model would be even greater (as opposed to less — as implied by the critics) if the study is repeated on randomly drawn groups.
Select the following link to read the entire response to that criticism.
Michael LoBue writes: I returned today from the 2010 ASAE Annual Meeting in Los Angeles. Another good meeting and conference. It appears that there’s a growing interest among small staff organizations to abandon the main office (or any leased office space) and have employees work from their homes. This trends seems like an exercise in tossing a few chairs off the deck and rearranging a few other chairs on the deck. It also seems driven by the desire for cost savings and not a desire for improvements, although direct cost savings can be achieved and some productivity gains can be realized under the right circumstances.
Clearly, there are benefits if the situations and the personnel are right for such an arrangement. However, it just seems short-sighted. As I listened to a presentation some questions came to mind:
- What happens when you bring the first new staff person into the virtual office arrangement? It’s one thing to ask a group of staff members who comfortable with their jobs and who know one another after sharing an office, to work from home than it is to recruitment and orient new staff into a virtual office arrangement.
- While the organization is no longer writing rent and utility checks, the list of employer concerns (see Figure 1) remain. How do these concerns change and might there be new employer concerns resulting from the arrangement?
- How does working from home enhance the staff’s professional development in this isolated arrangement?
- Where is the organization or their membership in these issues raised in the presentation? (Not a single slide in this excellent presentation contained the word “member”, or discussed how this arrangement adds value to the members of an organization.
Based on yesterday’s presentation it’s clear that this notion about “going virtual” is aimed at saving costs. Clearly a worthwhile objective, but this new piecemeal approach cannot touch the benefits delivered by the AMC-model:
Michael LoBue writes: In the two recent comparing organizations based on their management models — AMC-managed vs. standalone — a number of uncomfortable truths emerged. The discomfort appears to be with some standalone organizations.
The second of these two studies completed last month, compared deficit operations over 2006, 2007 and 2008 was mentioned in the April 2010 issue of Association Trends magazine. The reference to the study was based on complaints from an unspecified number of standalone organizations because I sent letters to selected officers of those organizations sharing the results and suggesting that they might want to consider the AMC model.