Prevent Silos from Reducing Association Revenues

Prevent Silos from Reducing Association Revenues
4/9/2012 12:32:00 PM

Prevent Silos from Reducing Association Revenues

By Jim Elliott

Commercial publishing companies are in business primarily to make money, so they are highly motivated to find a way to package assets for sale. On the flip side, most associations exist to promote member interests, and many have untouchable assets that have never been sold. In some cases, associations have tried to monetize their assets and to carry advertising, only to be thwarted by managers, staff, or board members who resist the idea.

As executive directors try to find sources of revenue to serve their members without raising dues beyond the breaking point, selling advertising in their publications and websites is a logical place to start. Often, they have tried to find and monetize other assets, only to meet unexpected resistance when revenue enhancement is approached with a passive-aggressive attitude.

Historical reasons for the treatment of these assets as sacred cows may include reluctance to compromise the integrity of the association and fear of alienating members. However, even long after issues of integrity and privacy have been satisfactorily addressed, the prohibitions against monetizing them often continue because of a "silo" mentality.

A silo mentality may exist in an association's divisions, departments, teams, or even among individuals. What organizational silos have in common is that they are inwardly focused, and they do not share information well with their counterparts. Like agricultural storage silos, organizational silos are often sealed off from their surroundings.

Much has been written about silos, including stories in the last year in both Business Week and Forbes. At least one Business Week story emphasizes problems inherent in command-and-control-oriented cultures, where fear causes people to play it close to the vest and share information only when necessary. Forbes looks at the problem in a larger context, showing how silos can arise spontaneously among people of the same level located in close proximity. Both emphasize how damaging silos can be to the corporate mission.

In addition to all of the other problems silos cause in any organization, there is a special variant of the problem often seen in associations from staff who view with righteous indignation any attempt to break down silos in an effort to sell access to assets. They say, "Our members will never accept advertising in our publication." And yet, even if research reveals that many members either do not mind the presence of advertising or think their journals and websites already accept advertising, it often does not matter much to these individuals, who feel they know better than the members what is good for them.

When executive directors and boards decide to permit appropriate commercial relationships, or at least to explore the possibility of monetizing association assets, silos can spring up like mushrooms after rain. Some members of the old guard, who have internalized the old policies, will throw up obstacles to the new. They make it difficult to offer commercial access to assets they work on, such as websites, newsletters, periodicals, and even events. Sometimes, essential staff members at the national organization operate with the silo mentality, working under restrictive policies that are the opposite of those in effect at the local chapter level, where commercial activity is promoted.

The process of breaking down silos to discover and monetize assets can be assisted by folks who have experience with other associations. You can jump-start the process by enlisting their aid and asking questions like these:

  • What is the potential return? How much revenue can the effort generate?
  • What products can be monetized, and have they all been identified?
  • What assets can be packaged together to raise even more revenue?
  • Have issues of integrity and privacy been satisfactorily addressed?
  • How do we communicate the reasons for these changes to the members?
  • How do we manage our members (and do we even have to)?
  • What structures do we need to put in place to make the desired changes possible?

Even if you are uncertain whether or not monetizing specific assets is right for your association, it never hurts to go through the exercise of asking the right questions and exploring a new approach. You may be surprised to discover that breaking down silos and discovering how to monetize assets can actually benefit members by bringing interesting new vendor products and services into their radar and strengthening your association's bottom line along the way.

Jim Elliott is president of James G. Elliott, Co., Inc.

Posted by: Jim Elliott, James G. Elliott Co., Inc. | Submit comment | Tell a friend

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5 Comments
4/9/2012 7:17:40 PM
Jim, I enjoyed this post very much. I posted something about this on FB (see comment below), but I wanted to add:

As we all know, associations are not monolithic, and a decision to monetize shouldn't be the end of the conversation. So once the decision is made to monetize, care should be taken to protect those departments that are expending the resources to produce revenue-generating content. It is easy for other departments in the same organization to see the value and seek to appropriate it for themselves under the banner of "we're all one team." That's true, but you need Accounting on board to allocate a fair "charge" to the department that, say, wants to place an ad. Too few associations consider that issue when monetizing, and they find it hard to consider later, when unitemized "sharing" is part of the culture. Thanks again.

From FB: "True. Good post. But ... once an association decides to monetize (some) assets and succeeds, silos may help prevent the non-participating departments from undermining that success by trying to take/use/distribute those assets for free (for themselves or their distinct customers). So although I may not want to be a cheerleader for "silos," we should note that well-defined "borders" can be helpful! Thanks again."
4/11/2012 9:14:54 AM
I think fear of change can also create silos. Often the resistance to taking on advertising or modernizing a process to run more economically is actually a fear that they will now be asked to do something they don't know how to do or have their long-established processes critiqued as being outdated and inefficient.

It takes time to break down silos, and it takes effort within the siloed group as well as external influences to effect change. Within the group, it helps to enlist at least one team member who is willing to think creatively about new ways of doing things. Then get others to pursue professional development in the areas you're interested in changing-take a webinar, go to a conference, or get your vendors to come to you and present some new ideas.

A group book study can help everyone understand the inherent dangers of not changing with the times. Books like Race for Relevence and The End of Membership as We Know It show how other associations have adapted and reinvented themselves for new generations. They also reveal how some are no longer around because the group of members they've catered to all these years has retired and the younger folks in the profession don't see the value in the organization. Asking your group where they think your association is on that continuum of change can be a good step toward figuring out how you are going to break down the siloes that are preventing you from getting where you want to go.
4/11/2012 9:16:49 AM
Data is key to these types of discussions with the reluctant "old guard." If you can show benchmarked results from like associations' publications and give examples of how your member surveys show acceptance of advertising, you can win. Associations are no longer insulated from the open market in terms of competing with thousands of other sources of information. Where associations used to have a monopoly on delivering this info to their members, it's now become a numbers game, so you have to show that in stark relief to get traction.
4/11/2012 5:50:09 PM
Great article! I also found that by showing the board and staff members that other associations had incorporated advertising into their magazines and websites with no apparent harm went a long way in alleviating concerns--and silos.
4/12/2012 3:58:06 PM
Unfortunately, many organizations operate from a position of scarcity rather than one of abundance. When people believe that resources are scarce, silos thrive, and opportunities for growth and cooperation are often missed. Instead, if staff believe there are ultimately enough resources to go around, they are more open to working together to generate more opportunities for revenue growth.
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