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.