Monthly Archive: February 2009

Feb
26
2009

A Billion More Customers Coming to A Regional Market Near You

Data above collected by professor Roy Adler a Fulbright professor of marketing at Pepperdine University

For the first time in history more than half the world is middle-class-thanks to rapid growth in emerging countries.

The Economist, February 14, 2009

Sometime last year, the world we inhabit went from Civilization 2.0 to 3.0.  And if you are an association with an eye to serving a wider, more diverse audience beyond the shores of the United States, then this news is very compelling.   Every product or membership manager needs a customer, and for those of us who are in the business of finding new markets and customers for our products, the emerging market countries are building a powerful new customer base.

Here in American over 90% of our people are middle class or better.   Japan is 85%, UK and Italy 80%, France 78%, and Germany 75%.   Among the 30 most developed countries in the world, our societies have come to expect as a right the opportunity to pursue personal and professional wealth.

Get ready for “hundreds of millions” (see inset) more who will add their collective effort to improve themselves, their local communities and contribute to the great globalization of supply and demand that drives economic consumption around the world.

To reach this new demand, one must build business relationships in these regions to demonstrate local presence and a willingness to contribute “locally relevant” products and services.   In his new book  “The Second World Empires & Influence in the New Global Order,” Parag Khanna urges organizations that to succeed you must have good local relationships, a team who can execute sound local tactics, and a strategy that conveys value that can drive local needs be they personal professional or at an enterprise level.

At our products and services panel session on Friday during the ASAE IC09,  ASME, SHRM, and IMA shared an upbeat assessment.  Here is our presentation which includes non US business data as well as links to the Economist Special Report and Pew Research Study on the global middle class.

Get handout here.

In 2008, MCI conducted a study of US and EU based associations who were engaged around the world in growing a business presence.  The purpose was to understand the challenges and opportunities they experienced and what are the ingredients of a sustainable regional market. We learned that to succeed in growing your business globally you must have the:

  • Ability to scale your operations to market demand and this normally requires good local marketing, PR, and business development skills.
  • Capacity to deliver locally relevant products & services which means having the ability to adapt and manage increasingly large and complex transactions.

The biggest challenges facing these associations was a combination of a lack of local regional knowledge and experience combined with weak and immature volunteer leadership structure.

Meanwhile they remain optimistic about the next 12-24 months as many are executing plans to conduct regional meetings of various sizes, improve brand awareness, increase membership and locally relevant product sales, and find ways to grow participation in our local, regional, international activities.

What are the ingredients sought that can build a sustainable regional market?  The answers lie in four key areas:

1.      Proper infrastructure – being close to a good prospect base (corporate, academic, government), access to operational services with low barriers like voice over IP (VOIP) technology

2.      Fair regulatory and business environment – having your association’s purpose and mission recognized locally to benefit from tax, legal and social laws while being able to operate open and transparently

3.      Access quality local service providers – using local expertise to provide the scalability and capacity needed to create and sustain a business presence

4.      Proper staff resources – locating people with the right combination of technical industry knowledge and functional expertise in some combination

Profit now by positioning yourself by developing and executing your own global growth strategy:

  • Market Analysis and Business Plan:  There is no substitute for “in the field” market research collected directly from your customer and member segments in targeted regions.
  • Product Management:  Make sure local experts are involved in adapting your product or service to each region, and that you have the ability to scale your service delivery inside the region instead of from headquarters.
  • Membership:  Cultivate participation by giving your local leaders a say in how to create local activities.
  • Marketing Communications:  Rather than just translating your material, make the content relevant to local audiences.
  • Meetings:  Select partners with solid local knowledge and expertise in areas including marketing and promotion, sponsorship development, destination management, housing, currency risk, registration and meeting logistics.

Despite today’s economic challenges, meeting the needs and fulfilling the aspirations of members remain critical for the future of all associations.  At the same time, globalization trends point to opportunities for associations to maximize their growth and revenue potential.  Five years from now, the organizations that will be in the best position are those that – despite the challenges – have identified those opportunities and pursued them effectively.


Feb
16
2009

Inability to Scale Biggest Mistake in Trying to Grow Globally

As this recent story in Fast Company illustrates, globalization creates some fascinating challenges and opportunities for associations. Saw this first hand in 2006 while meeting software executives in Bangalore.

I’ll be presenting a session at the upcoming ASAE & The Center Great Ideas Conference on Sunday at 315pm entitled “Act Locally, Think Globally: Leveraging Opportunities.”

The biggest lesson I’ll share from our “in field” client research and case studies is that most associations fail to grow their regional business because they try to operate locally using underdeveloped operational models.  In other words, they cant scale to meet local demands that require better marketing, adapting product to market, or selling.

It isn’t hard to see if you think about this problem from a different point of view.

Often clients need to make a critical attitudinal adjustment as they adapt themselves to new markets.  This new mindset requires one to think like you are starting your association from scratch as any “start-up” business might. It requires running your operation with revenue in and expenses out so as to prove it can stand on its own over a realistic time table.

Thinking like a start-up means you need:

  • An active and visible local presence – that provides a platform to project in a region (especially underserved areas) and demonstrate your commitment to regional stakeholders that you are there not to “take out” value but to “invest” value that returns for everyone.
  • Management on the ground that is matrixed (or fully integrated) into international HQ – to drive local efforts in defining market opportunities, create strategy, implementing programs and relationship building.
  • Lower communication and cultural barriers – so your local people with the functional business and technical expertise can ensure that “Europeans talking to Europeans” can better fulfill the mission.
  • To integrate local volunteer leaders into your management process – not providing opportunities for “real” self-determination” or the ability for them to have a stake in building “locally relevant” products and services will create perceptions that you have no intention of truly serving the needs of the local community. Associations must create collaborative governance and product development models that will significantly benefit future international Board and staff decisions.
  • To treat the market as an investment with a tangible, measurable, locally relevant strategy and implementation plan - growth requires investment and measured effort to expect yields.  Focused and mandated personnel concentrating only on core market sizing, strategy, business development and relationship building without being cannibalized by other HQ projects or by other lines of businesses is critical.
  • Calculated risk management – you do that by keeping the costs to enter/exit a market manageable.  Scaling work load based on strategic priorities and local needs; revenues collected and expenses paid in local currency of that country to mitigate currency exposure.  Getting shielded from local personnel laws concerning hiring, discipline, or HR benefit costs by leveraging an existing WOFE status.
  • To accelerate time to market – Having scalability in serving a market will permit you to act on strategy and opportunity more quickly so that operational planning and implementation is faster.
  • Scalable operations – Having the ability to adapt resource needs quickly any where in the world by project or for other purposes with the proper expertise when needed.

As association executives we need to lead our volunteer leaders through a risk management exercise to help them appreciate the need for operations investment that can scale.  This requires good field research, a business plan with a financial and operations model that defines success using KPI’s over a three year period.

Here are the slides.

Feb
12
2009

Attracting International Members and Assessing Whether to Go Global

Peter Rush from Kellen and I are presenting a session at the AMC Institute here in Orlando tomorrow to help AMC executives understand the arguments for developing a global strategy and how to lead clients through the process.

Question:  What economies have been the leading drivers of economic growth since 2001?  Think you know the answer?  If you said BRIC countries you would be only partially right.  The correct answer is “emerging markets” including Asia and Central and Eastern European countries.

Amazing statistic from the Economist to illustrate the massive potential from emerging markets for the “right” knowledge-based products and services… for the first time in the history of the world over 50% of the total population have raised themselves to “middle class.”

From our session here are some key points.

24/7 Global Project Management – No matter where you are business is now a 24 hour/7 days a week effort with far flung team members collaborating on projects. This drives demand for more interoperable standards & procedures from bodies of knowledge to “generally accepted” practices. For many professional societies it becomes their single most important strategy and defines their value to their stakeholders.

Customer Service Expectation Is Global – On the customer side, 24/7 extends into the world of the “customer experience” where you can lose business if your service isn’t ubiquitous.

Knowledge Becomes More Diffuse – Experienced knowledge workers around the world are slowly increasing their share of IP authorship and ownership extending beyond traditional developed countries causing associations to improve their ability to serve and retain these valuable member contributors.

Outsourcing Spreads to White Collar – In their constant effort to reduce prices while maintaining quality, companies embrace the Business Process Outsourcing industry that has grown in emerging markets. But the challenge is finding a dependable “project-ready” workforce that can meet client KPI’s.

Emerging Market Skill “Gaps” in Knowledge Application – Many emerging markets find the challenge of delivering a sufficient supply of “immediately employable” knowledge workers who can apply current standards and practices for demanding global clients. The knowledge gap between what the best graduates know and their ability to apply in a modern business setting forces companies to spend millions on “private corporate universities” where the turnover rate of new hires can exceed 80% per year. This offers opportunities for the right association with the right certification and training programs.

Rising Demands from Emerging Market’s Growing Middle Class – As middle class ranks swell in emerging markets, demand for a host of new products and services grows. The notion of “non-formal” education (learning outside of universities) becomes a major new market offering certification, test preparation courses and other programs to satisfy the need for career development.
Massive Fluctuation in Young and Old Age Groups – Demographics are changing globally as those under 25 become the single largest age group in the world while what was the largest age group continues into retirement age creating new pressures, new consumer habits, modes of online learning and communication, and supply of labor.

Workforce Mobility & Diversity Acceleration – This massive demographic tide is fueling a dramatic rise in new flows of expats to locations where job opportunities are better causing new pressures of cultural assimilation.

Here are the slides.

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