Turn revolution into evolution.

Restructuring requires that new organizational and communication skills become second nature - before your association becomes an endangered species.

Do we really know who our members are? Have we identified the key decision makers within the membership we have traditionally represented? Are the traditional forms of governance that have served us well for many decades still relevant for the year 2000 and beyond? Are the skills of our staff going to be sufficient to provide services that will be demanded by our members 5 and 10 years from now?

If your own environment is evolving with the dizzying speed buffeting the Tempe-based Arizona Hospital and Healthcare Association (AZHHA), the answer to most of these questions is a resounding no.

As I look at the revolutionary changes that have occurred during the past decade in the fields of telecommunication, transportation, interstate banking and financial services, and similar services, it is clear that rapid change is forcing us to rethink the basics. Like many associations, AZHHA is not immune to these contagious and pervasive common elements that are transforming the environment in which we live and operate.

Most industries have unique challenges as well. In our case, providing health care services has been and continues to be essentially a personal encounter between a patient and a provider of services. The way in which those services are organized, financed, and delivered, however, is fundamentally transforming AZHHA's members. No matter what type of association you represent, you are probably feeling the undertow of currents that will pull you into unchartered organizational waters. As a result, you are undoubtedly also finding that the most fundamental aspects of your business are being laid bare under your membership's microscope.

Evaluating symptoms

Member dissatisfaction with the way we had assessed dues since our establishment in 1939 was the particular ailment whose demand for treatment provided the primary catalyst for restructuring AZHHA, an association of 89 members and 21 staff. It soon became clear, however, that a reassessment of our dues structure could not take place without considering other interrelated factors. It was time for self-scrutiny in terms of these basics:

* How would we redefine dues assessment practices without knowing who our members are?

* How were we to determine our members without reexamining our mission and governance structure?

* How could we represent our members successfully when we were dealing with them as institutions without responding to the new realities transforming our members into delivery systems?

Because some of the major components of any trade association - namely membership, dues, governance, and mission - are interrelated, scrutiny of one automatically triggers an examination of all the other elements.

We put AZHHA through a complete physical examination. We soon found that we needed to reexamine some of the most critical tests. It was time for some therapeutic action - and time to encourage the organism to evolve to its next logical phase.

Prescribing an organizational retrofit 

The first step in AZHHA's restructuring was to assemble a group of members to develop the framework for our "new" association. Two groups were essential to this decision-making process: the members of our executive committee and other key members who absolutely had to buy into the new structure by virtue of their size and clout if the effort were to have any possibility of success. These two groups became the members of a task force on membership issues.

We used the services of a facilitator during our first meeting. Several unnerving but important questions were put on the table.

* Do we need an association at all?

* Does the membership of the current association believe that it is getting sufficient value for the dues paid?

* What are the levels of satisfaction or dissatisfaction with the current structure of the association?

All questions were fair game, and there were no sacred cows. Although this arrangement made for some anxious moments during the restructuring deliberations, these discussions were essential if the members were to believe that AZHHA was really their association and their plan for the future.

The restructuring of AZHHA was based on the fundamental premise that our members were transforming themselves from institutions into delivery systems, and that the mission, membership structure, dues structure, and governance of the association needed to reflect the inherent changes. That is what drove the decision to change the name of the association from the Arizona Hospital Association to the Arizona Hospital and Healthcare Association, representing hospitals and hospital-based integrated delivery systems. In addition to creating a membership constituency that mirrors future realities, we also altered our governance structure to reflect primarily the stake-holders in the industry we represent. The key was to define those people within our membership ranks who are empowered to make the decision to pay membership dues and whose judgments about value for dues are critical to the association's viability.

Another ingredient in the therapeutic mix was the decision to change the way in which we assess membership dues. In the future, dues will be based not on the operating expenses of the acute care hospital but on the net operating revenue of the integrated delivery system. For example, last year our association included eight institutional members that were a part of the Samaritan Health System. Each of those hospital members paid dues based on its own operating expenses. Under the new association structure, however, there is only one Samaritan member: Samaritan Health System. Our advocacy, communication, education, and other programs will be directed at meeting the needs of the entire system instead of focusing solely on its individual acute care components. Dues for the hospital system will be based on the net operating revenue for the entire system, less claims expenses associated with its managed care division.

Although some associations might fear this approach because it demonstrates more dramatically the cost of membership to a large organizational member, our experience has been that the chief executives of these large organizations are well aware of the total cost of the dues they are now paying to the association. We are kidding ourselves if we think we are camouflaging the way dues are actually assessed. Having said that, however, in 1995 when we sent dues invoices to the chief executives of these large organizational members, in at least three instances the transparent dues structure triggered systemwide reviews of the total dues being paid by that system to all other associations to which it belonged. Even though the chief executives had always been aware of the total cost of paying dues, this new approach dramatized that perception. Clearly, associations must be prepared for a closer level of scrutiny of dues paid by their members in a restructured environment.

Evolutionary realities of restructuring

Once the task force on membership issues completed its work, we went through a six-month process of discussing its recommendations with every conceivable membership group. The Arizona Hospital and Healthcare Association's regional councils were deeply involved in providing input. Though six months of discussion may seem like overkill, the process resulted in true member ownership of the finished product.

Obviously, a critical part in the process was the firm commitment to see it through. At the same time, one of the key lessons learned was that we will never really be finished with restructuring. Maintaining the relevance of an association is a dynamic and continual process. As long as the membership changes to stay relevant in the world in which it operates, the association, too, must change.

Once the membership discussion was completed and the final recommendations were approved by our general assembly, we began a nearly yearlong process of developing the business plan to make the restructured association operational. Certain phases of implementation ran concurrently with the development of the business plan, but it has turned out to be a lengthier process than most of us envisioned. Although the change in our name has drawn the most interest and attention from our external audiences, those on the staff level, involved in daily restructuring realities, know that the name change is the least important and least time-consuming factor in the process of restructuring. As you begin developing the business plan, the real issues that preoccupy you and your staff are these:

* How do you provide legislative advocacy to your new members?

* What are their information needs?

* How are these needs different from those of your previous, more traditional members?

* What kinds of services must you provide to your new members?

* What kinds of staff expertise are you going to need?

To facilitate the development of the business plan, we established five pilot projects with representatives of our membership - large and small, rural and urban. We conducted intensive one-on-one meetings with the top staff of those organizations to discuss the questions raised by the restructuring process. Out of that exercise grew the specifics of our business plan.

Despite the time and effort spent in ongoing communication with members and staff, the major cost of restructuring is the in-kind cost associated with the work performed by you and your staff. I have spent time with every employee of the association on this matter. It is essential that each staff member understand what you are doing and why, or the effort is doomed to fail.

Making transition your mission

Our restructuring process has provided many lessons, such as:

* You can never do too much staff education about the restructuring.

* You can never have too much discussion with your members on the issue of change and its perpetual nature.

* Transition must be viewed as a fact of life and thereby be a permanent part of your association's annual strategic planning process.

Our primary objective throughout this process has simply been to stay relevant for the future. But there has been another fallout. An association in transition tends to attract a lot of attention from other trade associations that are significant players within the same industry. Some may accuse you of trying to encroach on their turf. Others will be paranoid about everything you do. Despite being viewed as a potential threat, AZHHA's restructuring was initiated with the sole purpose of ensuring that we're able to provide services that are of value to our membership for the long term.

One of the most exciting realities of the process of restructuring is that the process never really ends, at least if it is done well. It has been said that one of the few certainties in life is change. If that is the case, it is a certainty that change will remain the permanent centerpiece of AZHHA's culture, programs, and services.

John R. Rivers is president and chief executive officer, Arizona Hospital and Healthcare Association, Tempe, Arizona.