CEO Forum

Run it like a business?

By Terese (Terry) Penza, RCE, CAE

Run it like a business. What does that mean? Is it just another phrase like "thinking outside the box" or "weakest link?"

I have been a paid association executive for 25 years, and I volunteered for five years before that. I started with taking minutes at the directors meeting, then I managed mountains of committee meetings. Finally, I was leading the association. I have gone from servant/slave to leader. I have watched the association move from a social gathering with a little business sprinkled in, to business only and no social programs.

The issue is to watch the membership (your customers), know their needs, and try to institute changes before they know they need them. Simple. Sometimes I think the most valuable person we could have within our leadership is a good psychic!

One thing we do know is that the world is in transition. Technology and the Internet guarantee the future will look different. This means we all have to focus on two things: the transition period and the future. In the good old days all we had to do was look around and copy someone else. Now, we all have to create our own path to the future. And the most difficult part of that equation is that no one knows the future!

I have an extensive library in my office. I used to take comfort in knowing that I could find an answer to any question asked and any situation that came up in those library books. Not any more. Sometimes it is hard just to come up with the question, let alone the answer. The old way had specific rules. Now we question, "why?" My association just merged with another association and our territories are not contiguous! Unheard of only a few years ago.

A good business knows its customers. Does your organization? We must gather more information from our membership base than just names and addresses. Credible member tracking, target marketing, surveys, focus groups and other information gathering will assist you. If you do not have expertise in this area, hire it. It’s money well spent.

Streamlining the association

The days of massive, numerous committee meetings are a thing of the past. Time is too precious to the members to be wasted on non-productive meetings. Task forces with a single issue will keep the best and brightest volunteering. This also results in the real players in the industry participating instead of the association junkies who mean well but do not have the pulse of industry or its future. We can no longer just develop programs to keep members entertained while ignoring the leaders of the industry.

Be brutal with the budget. Try zero-based budgeting and see how many "traditional" line items fall by the way side. Does the association have to reside in the Taj Mahal? Know where you are going. Have a business plan that makes sense. Have a vision -- which is what you want to become and a mission -- which is what you are.

Staff-driven, volunteer-driven? Who cares? Who can get the job done is the issue. Empower the staff to take the business plan and run with it. Give the chief staff person the title along with the power to act. As CEO, you are a part of the board of directors, not a person to take minutes. You are a leader; now be one. Several years ago, the title "executive director" became "chief executive officer." This change brought with it new responsibilities. It also solidified the changes in the organization by the attitude of the leadership and the membership. It is not only important to talk in the directors meetings, it is imperative! Take your leadership role and be a part of the association direction. Be more than the hired help.

Innovative decision-making

If you are going to bring in a facilitator, why use the same person everyone else in your particular industry uses? Break the mold and get ideas from an industry world outside your own. Hire professional staff that will meet the business plan. Look over your existing staff. Do they have the skills to help you reach your goals? Partner with those who can help you reach your goal. Look both inside and outside your industry.

Decision-making must be fast and efficient. You can’t afford to have an idea, send to committee who then sends to the executive committee who sends to the board, who sends back to the committee to start the process all over again. You have a business plan with a budget attached. You should know the direction needed; if not, send an e-mail and get a consensus that day.

Use a consent agenda during board meeting for all committee actions, general approvals, etc. In the financial report go over areas of the business plan that have been accomplished since the last report. For my particular association, I have two boxes on the agenda reminding the directors of their duties:

First,

Never be afraid to try something new.
Remember, amateurs built the ark.
Professionals built the Titanic.

And second,

Duties of the directors:
Establish policy
Establish strategic directions
Approve annual budget
Monitor operating expenses
Establish fiscal reserves
Appoint COO
Read the entire director packet PRIOR to the meeting

Keep up your own skills. Read enough material to give you a well-rounded view of the world. Know your members’ business. Attend their conventions; hear their issues. From this foundation, you will lead your association to success.

Terese (Terry) Penza, RCE, CAE is president and chief operating officer of the North Shore -- Barrington Association of REALTORS®. She may be reached at (847) 480-7177 or at terry@terrypenza.com.