Association Reorganization: Keeping Ahead of the Curve.

FRED WEBBER AND CHARLIE VAN VLACK

Does your association need a realignment to better serve its members? The Chemical Manufacturers Association found that nothing short of a major overhaul was in order.

Here's a pop quiz for those of you who feel that the very structure of your association is keeping you from serving your members in the most effective way. The key to running a successful association is

a. exceeding meeting attendance and booth sales at last year's annual meeting.

b. defining and maintaining brand identity.

c. eliminating departments and committees.

d. increasing membership and reducing attrition.

For the Chemical Manufacturers Association, Arlington, Virginia, the answer is "c." No, we didn't flunk Association 101. We did, however, break some of the rules--and bend others considerably--in the reorganization of our association, which we coined "CMA 2000" and which officially began in January 1998. We took a nontraditional approach to the restructuring, but so far the reorganized CMA, more than a year in place, is passing the test with our members.

"If it ain't broke, why fix it?"

Prior to the reorganization, CMA appeared--at first glance--to be running like a well-oiled machine. One of the oldest and largest trade associations in the country, we had high member satisfaction, a rock-solid reputation, and healthy finances on our side. Our diverse membership accounted for more than 90 percent of chemical production in the United States. We had succeeded in uniting the industry through our Responsible Care initiative, which makes continual improvement in safe manufacturing and handling practices a requirement of CMA membership.

While it seemed we were invincible, we found that our past success actually threatened our future. CMA's organization--more than 300 staff and 2,500 member volunteers--had evolved into a sprawling and increasingly complex system of committees, departments, and issue groups. It took too long to come to a consensus on a given issue, and our advocacy suffered from too strong an internal focus. We often required six or more different groups approvals before moving ahead with an issue--even the most time-sensitive one.

In the meantime, our member companies were changing their organizations as well, and our structure no longer mirrored theirs. Member companies that once had a monolithic view of issues and were organized around fundamental departments much like ours now had multiple business units with individual leaders. The managers of these business units, newly responsible for their own issues, budgets, and support staffs, began to question how their narrower businesses fit into CMA's system. We needed to improve the relevance of our operations to their business strategies and thereby demonstrate the value of their CMA investment. At the same time, we learned a valuable lesson in structure from our members' corporate models, which were organized into individual business units, with each unit accountable for its own business practices and finances. We wanted to run our association like a business.

Finally, it became clear that CMA was not in the best position to achieve our three strategic goals: earning the public's trust, improving CMA's advocacy impact, and creating member value. We were held back by both the cumbersome nature of our organization and the fact that we were not structured in the most effective and efficient way to address the pressing issues facing our industry. CMA was like a large house in which we had lived for many years, accumulating many possessions, and it was time to do a spring cleaning.

Plotting the course

As surely as we decided change was necessary and inevitable, we knew that the senior staff leadership at CMA had to be the drivers of that change. We had witnessed other reorganizations in which the leadership for change was imposed solely by discontented members. We believed we were in the best position to initiate and drive that change. We first worked on developing a partnership with our board officers--four member company leaders of our board of directors--for while we were mitigating the effort, the substance of the new organization had to be driven by a member-staff partnership. We spent time in the field with member companies that had recently reorganized themselves. We wanted early buy-in from our key customers on our ideas. This buy-in process extended to our existing committees and our staff. We wanted everyone to know early that something big was going to happen at CMA, and we wanted them to be an integral part of the process.

We knew we needed a ground-up review of our structure and processes, but we needed help getting there--specifically, the help of two different consultants. Why two? We deliberately planned to have a break between phases of the reorganization in order to keep control of the project firmly in our own hands, and not those of a consulting firm. We wanted to drive the change and to have the consultants facilitate it.

The research phase. For the first part of the reorganization, we deliberately hired an outside-the-Beltway consultant who did not specialize in associations: James Miller and Company of Houston. Jim Miller was in a good position to analyze our operations and compare them to a corporate example, which was our model. Hiring a "business" consultant, we believed, would send a strong message to our members that this would not be a typical association reorganization.

Miller's work involved two phases of research. Initially, the company conducted approximately 50 interviews with staff and individual members, determining what was working well at CMA and what areas could use improvement. Next, more than 200 staff and members were enlisted as part of an in-depth analysis of CMA's operating systems. During this part of the reorganization, all aspects of CMA were put on the proverbial table for examination, and nothing was spared.

We found that although the current system had served CMA well through the years--especially in sharing information, involving members, and developing resources--we spent too much time talking among ourselves and not enough time talking to members of Congress, state agencies, international organizations, regulatory agencies, and other key public organizations and stakeholders. We needed a structure that kept the strong points that had become the hallmark of CMA, yet allowed us to move more quickly and effectively in our external relations.

Issue and program teams. Miller's hard-edged analysis helped us conceive of such an organization--the backbone of today's CMA 2000. Instead of being organized around disciplinary departments--such as communication, state affairs, and the like--the new operating system comprised issue and program teams made up of members and staff from various disciplines, devoted to particular issues such as public health and market access.

The issue and program teams are supported by what we call shared services, made up of CMA staff, which can provide additional functional support to an issue team when needed. We also have corporate service groups that handle the daily operations of CMA (such as accounting and human resources) that affect the entire organization.

By January 1998, the first phase of analysis and conceptual design was complete. Miller's findings and our preliminary design concepts were presented to CMA's board of directors, who gave us the go-ahead for the next phase of the reorganization.

"There's no way you're going to pull this off."

For the next phase, we hired a consultant well known to us, Mike Tate of Tate-Francesca Company, Arlington, Virginia. We knew that Tate, who was familiar with associations and CMA in particular, would understand what it would take to help build out the conceptual design. At the same time, Tate was objective, helped keep us on track, and constantly challenged us and kept us from backsliding into the "old CMA" way of doing things.

We set an aggressive timetable for putting the new design and budget in place--a mere three months. People outside the organization kept telling us that we would never be able to complete the work within the given time. With determination, we were able to prove them wrong.

From February to April 1998, the "design groups"--composed of both members and staff--worked at breakneck speed. Design groups were formed in several areas: member relations, issue and program management, external relations, information technology, human resources, business processes, and internal communication. While we asked some staff to make the new design work their first priority, others were asked to keep "CMA '98" on track--the "regular" work of the association being just as important an endeavor. We committed to the board that we would complete the design while still delivering on our program and issue priorities.

Creating business plans. Given a draft mission statement and some basic guidelines to work with, each design team was asked to write a business plan for the new team or shared service. The design groups were given the tasks of describing expected deliverables and milestones; identifying operating elements, including how and when processes should be done; establishing a business case for change; and defining key connection points to be made between groups. It took long hours and infinite patience from the members and staff; but we managed to deliver the overall framework of the new CMA, as well as the operating plans for each team and shared service, by our deadline.

The result is a completely new CMA, with more than 70 percent of the staff organized into issue and program teams that concentrate our resources on achieving specific goals. These teams are CMA's primary mechanism for issue advocacy and program delivery. The rest of the staff supports the issue and program teams. CMA's corporate services--executive services, human resources, information management and technology, member relations, finance, and legal--ensure that CMA can function as an organization. Shared services teams-such as external relations and state affairs--help provide necessary "surge" support to the teams.

New partnerships. Each of the issue and program teams has co-leaders, one from the membership and one from the CMA staff. The makeup of each team also reflects the new partnership between members and staff as they work together on a given issue. Members who belong to teams are selected based on their varied skills and experience with the issue. In selecting staff members for teams, we followed the same philosophy: fitting the right people in the right jobs. Depending on a team's particular needs, we staffed each team with federal, state, and international advocates; lawyers; communication professionals; and issue/policy specialists. Each team has a unique mix of skills and talents-- unlike our old committees that may have had only one kind of professional (e.g., all environmental specialists).

The result has been a cohesive group working on each issue we choose to tackle. For instance, instead of having to wait for a press release written by the communication department, a team can use its own communication specialist, saving time while also benefiting from the fact that someone most familiar with the subject matter is doing the writing. Of course, for those projects that require more resources or affect CMA at large, teams can turn to CMA's shared services, which can provide additional "flex" to meet peak demands.

We felt it was also crucial to maintain and cultivate outside groups who could advise the teams and thus improve our advocacy. We therefore set up what we call roundtables for our four key venues: state, federal legislative, federal regulatory, and international. These roundtables are made up of member company representatives and staff who work on fostering external relationships, counseling teams on strategy and representing CMA to policy makers. These groups ensure coordination among the teams as we deliver our advocacy and provide the foundation for our long-term success in each of these venues.

Member services center. We wanted to make customer service one of our hallmarks. We created a member services center, which is designed to offer members "one-stop shopping" for their initial CMA questions. Staffed by four employees who are specifically trained to answer members' questions, the member services center is designed to handle everything from meeting registration to publications fulfillment to answering questions about general issues. For a member who has a concern that cannot be responded to immediately, the member services center will either find out the answer or put the member in touch with the appropriate CMA staff member on one of the teams.

Hiring executives from the industry

Taking member relations a step closer to our members--actually, to their doors--is another important element of CMA 2000. We have accomplished this goal through our four member relations executives (MREs), former senior executives from the industry we hired to work in the field. Unique in the association field, the MREs have an average of 25 years of experience in our industry. They speak the same language as our members and enjoy instant credibility with them. Each MRE is responsible for a region of the United States, traveling to our members' facilities, learning more about our members' needs, and communicating the value CMA provides. We felt it was crucial to have increased face-to-face interaction with our member companies at their facilities to stay in close and constant touch with a broader range of our members than would ever travel to Washington, D.C. Currently, they are in the process of profiling each member so that we know each of their businesses, what their interests are, and what resources they uniquely can bring to bear on our program and issue teams. The four MREs are also on-hand to take care of members' specific needs--adding a personal dimension to our customer service.

Creating member networks

We also needed ways in which to get regular feedback and involvement from the members, filling the gap left by our committees, which the board gave us permission to disband when we originally presented the plan for CMA 2000. Importantly, we wanted to keep the parts of CMA that the members most valued--the networking and information--while eliminating the burden of always having to travel to Washington, D.C. The solution was creating member networks--larger groups of individual members who could communicate about a given issue with the organization and with each other. Networks have been established in more than 20 areas. The network system is designed to improve CMA's advocacy clout as well as encourage peer interaction. Networks operate through our members-only extranet site and face-to-face meetings, driven by member demand. Some networks are directly aligned with teams, which decide the frequency of their meetings; others form on their own when members decide that an issue warrants a group gathering. In e ither case, all network meetings are designed to be break even, keeping in line with one of the goals of CMA 2000--to transfer many of our internally focused expenditures to external actions.

Another aspect of our new structure is the issue review team, which primarily assists in setting priorities and allocating resources for teams. The issue review team, which comprises senior member company representatives and CMA staff, makes recommendations to the board and CMA's finance and executive committees. Members who serve on the team represent a diverse mix: environmental health and safety professionals, lobbyists, communication professionals, and notably, a CEO and three business unit managers, who provide a unique corporate outlook. Using an advocacy scoring model developed by CMA, the team evaluates the advocacy potential and resource requirements for prospective issues. CMA's executive committee pursues or drops individual issues, based on the team's recommendations.

In April, we presented to the board the CMA 2000 design and the new budget to support it. It was a defining moment in CMA's history when the board unanimously approved the design and budget of CMA 2000. It was important for us to remember that we started CMA 2000 to become both a more effective and a more efficient organization. Our new budget reflected these twin goals. While the number of CMA staff members was reduced, the budget did not fluctuate much due to the specialized positions we created. What did change was the accountability for budgets, which now rests in the hands of the individual teams. Once the finance committee recommends our budget and the board approves it, the board considers the implementation of the budget a management authority.

We moved quickly from the final design to building the new CMA. By the end of May 1998, only five months after the board approved our initial concepts, and fewer than six weeks after approval of the final design and budget, CMA staff were informed of their team assignments. Within another month, they had begun work on their new teams. Staffing reorganization was necessarily as substantial as our structural reconfiguration, which we couldn't have implemented without parallel staffing changes.

The human element

Of course, having the proper structure in place is only one part of the equation. In order for things to add up properly, we needed to fill the association with the right people. We had to face the fact that not all of our staff fit into the new CMA. We had accumulated many mid-level generalists, and in most cases, what we needed were more senior specialists. We initiated a hiring freeze while the design was in progress to achieve maximum flexibility in filling our new team and shared service positions.

We started with a clean slate. In essence, we let go the entire staff and offered them the opportunity to apply for one or more of the newly created positions. Our human resources staff developed and implemented a competency-based measurement system so that CMA's staff would be focused on core competencies. Using this tool, we evaluated the applicants according to how they scored in each of these competencies, including how well they would work in a team environment and how receptive they would be to change.

We offered early retirement for qualifying employees. In some cases, we had to make the hard decision to involuntarily separate others who did not match our needs. We offered these individuals good separation packages and job counseling. By the end of the initial phase of the reorganization, there was a staff turnover of approximately 30 percent, including 26 positions that were eliminated entirely.

We also felt that CMA needed an infusion of new blood and energy. To obtain that, we hired some people from outside of our industry. It took us more than eight months to fill all the vacancies, but in the end we believed it was worth the extra time to get the right people.

One of the most unconventional human resources changes we made was hiring a CMA communication professional--who for years had developed media messages and written speeches for executives and board members--to head up our information management and technology area. We wanted someone in this position who was a true expert at managing information--and translating the technology into manageable content. A key design element of CMA 2000 was to achieve state-of-the-art technology and the technical expertise to support it. However, we felt it was less important to get a person who could understand the "gigabyte" side of information technology than it was to place one of our best communicators in the leadership role to use the technology to link our members, reach our external stakeholders, and communicate our positions.

Measuring performance

One of our goals in the reorganization was to stay nimble and be flexible with changing times and circumstances. To do so, we must constantly evaluate ourselves with a new CMA 2000 yardstick. The measurement tools have changed.

We have moved toward a 360-degree review in which all team members (members and staff) participate. Staff are evaluated by not only their supervisors but also by those who work for them, as well as, in some cases, members who are in a position to appraise their work. In addition to individual evaluations, the issue review team will evaluate teams on how they have met their performance goals detailed in their business plans. Staff will be evaluated on their team performance as well as on their individual performance.

Aside from our human resources measurements, we have adopted the "Balanced Scorecard"--which focuses on financial performance, customer knowledge, internal business processes, and learning and growth--to evaluate team and shared service performance. How knowledgeable and up-to-date is our staff? To what degree do our internal business processes support our missions? How satisfied are our members? How healthy are our financial reports? In some cases, we don't know the answers to these questions yet.

We do know the success and speed with which we have been able to move forward on a number of key issues since the reorganization. At the old CMA, we had to work on an issue with our efforts dispersed throughout the organization, with different departments working on different parts of the issue. Now, each team is directly accountable and has the resources it needs, and is able to progress more quickly and to attack issues head-on. For instance, within a short period of time, we were able to launch a voluntary testing program for more than 2,800 high-production-volume chemicals, and we are establishing consortia to sponsor the testing in a cost-efficient manner for our members. In another example, CMA's distribution team is addressing the issue of rail competitiveness, using its member network to contact Congress, conduct a survey of rail service problems, and improve CMA's advocacy. In the old CMA, both of these efforts would have been hindered by multiple clearances and checkpoints, competition for resource s among the departments, and the inability to move quickly enough to have the needed impact on legislative and regulatory affairs.

Speed bumps 

We have had some early successes, but we are still fine-tuning our efforts. The work of CMA 2000 did not stop with the overall design-we are constantly looking to be better. The member networks, for instance, while a crucial element of CMA's new structure, are one of the least understood elements of the association. We are launching a new campaign to reintroduce the members to the advantages of networks, and hope to bolster their participation in this valuable associadon resource. We found that our members associate the concept of a network with computers only, and we need to assure them that member networks offer face-to-face meetings as well as instant electronic access and research tools. We want to be sure that all members feel they have a voice within a network--whether their participation is via electronic means or in person.

The networks illustrate that we have a long way to go in certain areas, and our Web site and members-only extranet site were no exceptions. The members-only site offered vast resources of up-to-date information, but we had not engaged enough members to take advantage of this tool. We have relaunched the site, giving it a user-friendly name, "MemberExchange" (we had a staff contest to name the site), and organized the content in a more usable format.

We met with some resistance when we scrapped our committee structure in favor of member-staff teams. Since the number of member slots available on the teams was much smaller than the number of members serving on the committees, some ex-committee members were disgruntled and felt there was no longer a place for their input. Although we have not resolved this issue totally, we are trying our best to encourage ex-committee members--and all members, for that matter--to participate in the member networks.

Believe it or not, we received complaints for moving too quickly on some issues. Although the multiple layers and clearances in the old CMA sometimes slowed operations down to the point of ineffectiveness, the swiftness of the streamlined CMA 2000 upset others who were comfortable with the old pace. The chemical testing program is one good example: Although we were proud of our ability to respond quickly and initiate a program that could potentially save our association members millions of dollars, some members felt that they were not given enough time to provide input before the decision was made. We are doing our best to keep the membership duly informed, yet want them to know that the organization has changed to become more nimble and quick.

Would we do it again? In a heartbeat. However, there would be a few things we would do differently. For instance, we would avoid the hassle of preparing two separate budgets. Since our CMA 2000 work was concurrent with our normal budget development, our original plan was to develop a "placeholder" budget for our last fiscal year while we worked on the association redesign. We believed that once the CMA 2000 plan was approved, we would then reconfigure the budget. Our finance committee had other ideas, and in March asked us to redesign not only the association, but the association's budget as well--with both deliverables due in fewer than four weeks. Although we may have been able to avoid the additional workload by communicating with the finance committee earlier, this setback was a minor one.

The transition into CMA 2000, while not seamless, has been well worth the hard work. We are proud of the successes CMA 2000 has fostered in recent months. We have an excited, motivated staff and members who are responding to the new energy CMA 2000 is creating. Now we are in the habit of looking ahead, challenging ourselves rather than maintaining status quo. Our goal is to maintain this foresight and to keep looking for ways in which to serve our members better.

Fred Webber is president and CEO of the Chemical Manufacturers Association, Arlington, Virginia. Charlie Van Vlack is executive vice president and COO of CMA.

Change Innovations

These actions were instrumental in the success of our reorganization:

* Improved relevance of operations to members' business strategies.

* Spent time with member companies that had reorganized themselves.

* Planned for a break between phases of the reorganization in order to retain control.

* Shifted to an external focus.

* Planned new organizational structure.

* Put business plans at the heart of the project.

* Created a staff-volunteer partnership.

* Set up advisory roundtables.

* Created a member services center.

* Assigned member relations executives to different regions to communicate with members.

* Eliminated committees.

* Fired staff and invited them to re-apply.

* Hired a communication professional to manage information and technology.

* Initiated all-staff performance review.

* Adopted "balanced scorecard" as measurement tool.

Keeping Communication Flowing

Early on during the reorganization, CMA began an all-out communication campaign to several key audiences: members; staff; and other stakeholders, including coalitions, associations, key contractor and supplier companies, and the trade press. We communicated to our membership through traditional vehicles, such as our membership magazine and our weekly electronic newsletter. We also held regular, informal briefings for groups of members visiting our headquarters, and took the show on the road whenever there was an opportunity.

The staff received frequent e-mails from us, detailing each step of the process. We also held occasional brown bag lunches to give the staff insight into different aspects of the reorganization. Periodically, we held town hall meetings in which the staff could ask questions and air concerns. We developed a "CMA 2000 Communication Room" where staff could post questions anonymously on our internal e-mail system. We also devised an electronic bulletin board as part of the communication effort so that staff would have easy access to information.

Some tips for keeping the lines of communication open during a major reorganization:

* Communicate early and often. For staff members, internal e-mail updates are an excellent way to get the word out and make them understand that senior management has not forgotten about them. Walk around and let the staff ask you personally about what direction the association is taking--and let them give you their ideas about possible directions. For members, try a variety of media, since different members read different publications. Regular updates on the association Web site and in the member magazine, perhaps via a regular column, will ensure that members do not feel left in the dark.

* Ask for input and help. If members and staff feel they can make a difference in the reorganization process, they are more likely to support it. If you get early input from your stakeholders, the resulting reorganization is more likely to be successful because the change comes from within rather than from the top.

* Acknowledge the downside. With every reorganization, there are sacrifices to be made, and it's best not to sugarcoat them. Win the respect of your stakeholders by being straightforward about the side effects of the reorganization--which could include challenging demands and changes for the staff, the difficulty of adapting to a new style of work, or the start-up time required for new member groups. Make sure that every process enacted is transparent and that you have nothing to hide.

* Emphasize the positive. While there may be temporary setbacks during any reorganization, they will be outweighed by benefits reaped in the future. Remind your stakeholders that the long-term prospects are bright indeed--whether they are increased opportunities and responsibilities for your staff or more effective lobbying for your members. At CMA we actually experienced less staff turnover immediately after the reorganization was announced than at any other time of the year because employees were interested and excited to find their niche in the new CMA.

CMA 2000: A Breakneck Pace

* June 1997. Reorganization efforts begin. James Miller and Company engaged.

* January 1998. James Miller and Company work complete. CMA board approves CMA 2000 concept.

* February 1998. Design groups formed. Tate-Francesca Company engaged.

* February-April 1998. Design completed for issue teams and shared and corporate services.

* April 1998. CMA board approves CMA 2000 design and revised budget.

* May 1998. Staff team reassignments completed.

* July 1998. Staff began working on new teams.

* August-September 1998. Members appointed to teams.

* February 1999. Last of four member relations executives in place.