Archive for category: Association Management

As member-driven, collaborative entities that produce a technical output, ‘technical associations’ operate differently than non-technical groups like homeowners’ associations.

How a technical association differs from other types of associations

According to the American Society of Association Executives™ (ASAE®), there are nearly two million associations in the United States¹. But these groups are not created equal. Ranging from charities and churches to professional trade associations and homeowners’ associations, it would be impossible to provide catch-all recommendations across all association types. This article limits its scope to technical associations that are comprised of members who work collaboratively to produce a technical output.

A technical association brings together competitors and industry partners with technical expertise who are seeking to achieve a technical objective for their industry. For example, USB and Bluetooth were adopted as standards for allowing information transfer, EMV “Chip” payment cards were conceived as a more secure way to pay at retail establishments, and various mobile technologies (e.g. 3G, 4G, 5G) have been deployed by companies throughout the telecommunications industry. What these technologies share is a groundswell of support from technical companies that realized the value to their entire industry of aligning on standard ways of doing things.

Technical associations’ outputs differ, but the participants, structure, and operational practices are similar, as is the basic process of starting one of these technical associations.

Determining whether a technical association is the right means to accomplish an industry’s technology needs—as well as how to implement that association to be as efficient and fair as possible—requires evaluating the following steps:

Step 1: Is an association right for your goals?

Starting an association to accomplish technology objectives is not something that should be undertaken lightly. It is first important to understand an industry and determine whether starting a technical association is the best course of action.

Understanding existing technologies and identifying unmet needs

Technical problems can be solved without a technical association; private companies do this every day. An association can be helpful in situations where an individual company’s technological innovation cannot meet an industry’s need, nor could it be addressed with a smaller collaboration. Starting a technical association is a substantial effort that should only be undertaken if other solutions are not available.

Evaluating market maturity

A key step in evaluating whether to start a new technical association is assessing market maturity. New industries often experience a proliferation of innovation, competing products do not work with one another, different systems cannot communicate, and solutions are rolled out independently of one another. As an industry evolves, there are points at which most participants conclude that “if only X were done the same way across the industry, everyone could sell more products and services.”

The decision to standardize or align is a mechanism that enables an industry to take the next step in its maturity. For example, the innovation of a USB port to transmit data meant that printers could be sold to a consumer who had purchased ANY brand of PC instead of having to make a different product for each consumer.

Safeguarding innovation

Before moving forward with an association, it is essential to ensure that there is a sufficient groundswell of support for the idea and that the industry is not still in the strictly competitive stage. Standards or best practices are valuable when there is an agreement throughout the industry that there is an aspect of the market that no longer benefits from competition and that aligning on a standard would allow the market size to grow. It should be noted that the technical characteristic that is being standardized should not prohibit market innovation; companies will still compete in the market, but in different ways.

Consider as one example the payments industry association, EMVCo: the “EMV Chip” card has standardized the communications protocol between the card and terminal so that any card issued according to the specifications can be used at any terminal built according to the specifications; however, banks and other companies still offer different types of credit products, interest rates, rewards programs, etc.

Generating industry consensus

Starting a new association requires involvement and buy-in from several key industry players (and often their legal teams). There needs to be a sufficient amount of buy-in from enough major parties to get the industry to agree to align; if too much of the market looks at the desired technical output as a threat to their business, the output might be unsuccessful. To propose a technical association is to ask potentially distrustful competitors to collaborate. There needs to be an overarching reason that is sufficient to counter that distrust, and the mission of the organization needs to be defined clearly enough that there will be confidence that working on that technical area is in everyone’s best interests. If that reason is adequate, establish a group of crucial participants, ensure that they support the idea, and build a consensus. Think about which key companies are going to be involved at the inception of the organization and which companies could be brought in over a period of time.

Step 2: Defining the mission and scope of a new association

Once it has been determined that an industry is being hampered by the lack of technical standards, specifications, or best practices—and that accomplishing these goals cannot be achieved through other means—it is time to define the mission of the organization.

A mission needs to be clear and focused. Something too broad (e.g. “we’re going to standardize all mobile phone products and services”) will naturally encroach on the competitive sphere and discourage participation, whereas something that seeks to expand the size of the market without encroaching on competitive efforts (e.g. “we’re interested in defining a communications protocol that can be universally used by any mobile phone, device, or app developer to transmit information between them”) is limited enough so that participants can conceive of the benefits without believing that the effort will prevent them from competing.

This mission should seek to encourage broad participation from across the industry, limit the scope of the technical activities, establish short-, medium-, and long-term goals, and create clarity for participants regarding how and when this mission would be changed.

Types of output

A primary purpose of technical associations is to produce an output that can be used throughout an industry. Identifying the outputs that an association aims to produce will help focus efforts. Consider the following common types of output:

• Standard – Will the technical association seek to establish a standard that it wishes to be ratified by ISO or another globally recognized standards body?
• Specification – Is the objective to produce specifications that define certain aspects of product development, with the aim of interoperability?
• Best Practices – If standards or specifications are impractical or impossible, perhaps there are simply guidelines that the industry could follow to improve interoperability.
• Requirements – Perhaps an industry would benefit from establishing clear requirements regarding certain features, communications protocols, etc.
• Certification/Compliance Program – Will the technical association seek to establish approval or evaluation programs that allow product developers to establish that their products conform to a standard or specification?
• Registry – Some technical bodies merely require a registry of products, services, or companies. This can take the form of a company or product ID that would be issued and serve as a universal identifier that can be implemented across the industry.

Scope of association activities

The association’s mission can also begin to establish the scope of activities that the association will and will not engage in. For example, many technical associations benefit from liaison agreements with other technical associations; some of these associations’ work product boils down to connecting the technical work of one association to that of another, with the objective being to resolve a different industry problem.

Only once a clearly defined mission is established—and key industry stakeholders agree that the organization’s mission will be an asset to the industry—is it time to start the association.

Step 3: Forming the association

To ensure that a new association will run effectively, founders should consider the following areas before a launch.

Governance

Founders should establish the governing structure of the association, including the following:

• Clearly defined bylaws – Comprehensively articulating the day-to-day rules for governing and running the organization will keep matters running smoothly and prevent future disputes. The bylaws must include a clear Intellectual Property Rights (IPR) policy.
• Board Structure – Different technical associations benefit from having different board structures. Some missions and industries justify preserving guaranteed board seats for larger and/or founding organizations. Other boards are comprised of 100% elected positions, whether by industry vertical, company size, or other. Founders need to establish how the board is comprised, how members and executive directors are elected, whether different rights or obligations accrue to different participants, whether founders have additional rights, term limits, and more.
• Funding – Careful thought must be given to how the technical association will be funded. Initially, it is common for founding members to contribute to the association’s bank account to pay for operating expenses, but how will funding be maintained? Some associations receive ongoing injections from founding members; others have per-member dues that vary based on company size or membership tier; other technical bodies generate revenues from products or services that they launch, such as a product certification or ID registry program.
• Committees or working groups – The bulk of a technical association’s work will be accomplished in committees and working groups, so it is important to clearly define how they will be established and governed, what their specialties will be, how new initiatives will be agreed upon, and how disputes will be resolved. Establish the rights and responsibilities of the groups’ chairperson or presiding officer to determine what they can do unilaterally and what will need group consensus and approval. Some associations benefit from larger committees working broadly on the organization’s mission, while others prefer smaller more specialized working groups dedicated to resolving specific technical matters

Operational considerations

Before launch, establish the operational processes of the organization and identify technology platforms that can facilitate the organization’s objectives. The following should be considered to establish how the work of the organization is realistically going to be accomplished:

• Meetings – How should the organization’s working groups and board of directors meet? Biannual face-to-face plenaries are common for technical associations, can help give the organization’s output a defined schedule, and are beneficial for productivity. Outside of face-to-face events, working groups will frequently need to meet remotely using secure virtual meeting platforms like GoToMeeting, and establish organizational guidelines for meeting times, length, frequency, participation, etc.
• Facilitation – To facilitate both types of meetings, the association must determine the processes and obligations for detailed record-keeping, like minute-taking, writing and distributing agendas, scheduling meetings, tracking action items, and balloting, as well as event planning if the meetings are face-to-face. The association should define roles within the meetings for participants like Chair, Vice-Chair, Secretary, etc., as well as their associated responsibilities.
• Association Management Software (AMS) – AMS platforms serve as the central hub for all of an association’s operations. A good AMS provides complete management of memberships, groups, and permissions down to the individual level. It facilitates member signups, partitions information for appropriate access by groups, defines working groups, facilitates group or broader email distribution, sets meeting invitations, allows individuals to access all the resources and groups for which they have permission, and more. Many AMS solutions also issue invoices, collect payments, and manage the flow of finances (membership dues, event tickets, etc.) from front-end to QuickBooks or other back office financial software. Some AMS solutions, via Open APIs, can also tie in with third-party vendors and provide solutions for all aspects of an association’s business, such as the following:
  • Email campaigns (e.g. Mailchimp or Constant Contact)
  • Document life cycle management (e.g. Documentum or Tizra)
  • Video storage and management (e.g. YouTube, Venmo or Twitch)
  • Balloting (e.g. SurveyMonkey)
  • Action items and project management (e.g. Asana)
  • Single Sign On (SSO) support to existing WordPress sites

A final, important operational consideration involves who will be responsible for overseeing the association’s operational functions. Whether an association management company is tapped to manage operations or the functions are assigned to a member of the organization, it is essential that these procedures are properly defined in advance of the launch.

Creating and managing technical output

To determine the process of actually creating technical output, the following considerations should be examined:

• Technical expertise – Establish what types of technical experts are needed to accomplish the organization’s technical output and decide how to use these experts. This expertise may come from within member companies, or outside technical help may be needed. Once these experts create the organization’s work, they will then likely need to put that output down on paper (or code, multimedia, or other, depending on the output).
• Technical writing – If the organization produces technical writing, decide whether it is practical to enlist volunteer members or whether outside technical writers are needed to help hone the documentation. Many new organizations start with donated specifications from members and later begin creating their own.
• Access control – As the documentation is being created, determine how members wishing to review it will have access to it at different times in the process (through the AMS). To encourage paid membership, ensure that certain kinds of technical output are shared solely with members rather than shared publicly.

Legal considerations

Starting and maintaining an association raises several legal matters. While the nature and relevance of these will vary by organization, here are a few key considerations.

• Formation & Governance Agreement(s) – Critical legal documents that would be required in order to form an association would include an LLC Agreement (if incorporated) and Bylaws. An LLC Agreement should outline the governance structure, liabilities, intellectual property rights and obligations, and member eligibility and obligations.
• Website: Terms of Use & Privacy – The organization will likely have a website on which technology standards or specifications will be published. Legal Terms of Use governing use of these documents should be crafted with legal counsel. A Privacy Policy will also be required for the organization, as well as an ongoing assessment of privacy policies and compliance for the organization.
• Participation Agreement(s) – Aside from the formation-related legal documents, an organization should also consider what terms will apply to the persons or organizations that participate in the work of the association. These agreements may or may not contemplate various participation levels, which could each have their own rights and obligations related to intellectual property licensing, fees, terms, and confidentiality.
• Certification or Approval Agreement(s) – Many technology associations publish standards or specifications to which vendors may seek product certification/approval. Agreements are needed in order for a vendor to obtain, and for the organization to provide, the certification or approval services. Other related agreements may be required for labs or auditors.
• Trademark(s) – The organization may also own a host of trademarks to be associated with the organization and its specifications or standards. This suite of trademarks will require legal counsel to help obtain, maintain, and enforce. For marks that should be licensed for use by third parties, Trademark License Agreements will also be required.
• Governmental Regulations & Compliance – Technical bodies may commonly find they are subject to a host of governmental regulations, such as privacy, antitrust, export control, and communications, to name a few. Depending on the precise mission and scope of the technology association, competent legal advice should be obtained to ensure the organization does not run afoul of these regulations. Antitrust regulations in particular are especially relevant to such organizations. It is common for the stakeholders in technology specifications or standards to be competitors. For this reason, technology standard organizations must be critically mindful of the antitrust implications of their work and should obtain appropriate legal advice to ensure the organization develops and enforces strong practices to avoid anticompetitive pitfalls.
• Consultant or Master Services Agreements – Depending on the structure of the organization, it may require the services of a third party to provide various operational or consultant services to support the functioning of the organization. Agreements governing those relationships will be required.
• Human Resources – If the organization will have its own employees, legal advice related to human resources, and all its associated rights and obligations governing the workplace environment should be sought.

Financial management

To ensure that the organization’s money is well-managed and to establish proper oversight, the organization needs a set of financial controls and approval processes. A well-written financial control manual establishes the rights, privileges, and restrictions of each member in order to facilitate day to day transactions, ensure timely payments, and prevent fraud.

Note that a good AMS will facilitate much of the association’s day to day financial needs. It will collect member dues upon signup, manage renewals, generate invoices, interface with accounting software, and more. While these automated processes enable the association to be more efficient, financial controls establish who is allowed to process which transactions and when.

The most important objectives of a Financial Control Manual include the following:

• Who is a signatory on the association’s bank accounts, credit cards, and other financial systems? Because these individuals may rotate as new members join, it is also important to establish clearly-defined mechanisms with these financial entities for how to change signatories or access rights.
• Who is responsible for approving distribution of the association’s money? Organizations with a financial controller or relatively few outbound payments may wish to funnel all approvals through a single individual, in which case it is important to establish a backup plan to ensure that the association can function effectively when this individual is on vacation or ill. Other associations will benefit from allowing the respective Chairs of working groups to approve payments related to their work—perhaps only in accordance with Board-approved budgetary items and only up to a maximum amount (with a higher amount requiring a secondary organizational approval).
• Which other members or service providers have access to which information? Associations with broad member insight into operations will need to prepare reports to ensure that membership remains informed about the association’s financial health. Associations that work with an association management company will need to establish rules within their systems and financial institutions to define which individual(s) at the association management company are allowed to do what on behalf of the association.
• How does the association do its budgeting? Forecasting is one step in a broader budgeting process. Associations should define how and when forecasts are created, how frequently they are reviewed, and when budgets are reviewed and approved, i.e. monthly, quarterly, or annually. The Financial Control Manual should also establish if and when anyone within the organization is authorized to spend any money that has not been previously budgeted. For example, should a President or Chair be allowed to spend $500 on something related to a group’s overall mission, or should the Board first be consulted and the budget amended?
• How are the association’s books maintained and reviewed? Associations should have established processes for keeping and reviewing financial statements. While the AMS may automate most invoice issuance and collection of funds, there should be independent review of an association’s finances to ensure not only that there is not fraud, but also that current operations are meeting expectations and that the organization’s future looks sustainable. Furthermore, the manual should establish parameters for when and how the budget can be amended.

Step 4: Launching and maintaining the association

Launching an association should be part of a well-defined strategy for how the organization will become successful and accomplish its long-term objectives. Plan for subsequent successes, announcements, or releases that will follow the organization’s launch to create a cycle of accomplishment in the following ways:

• Execution Strategy – While this has been discussed throughout the document, there needs to be an understanding of the organization’s roadmap (e.g. when specs or updates will be released). This can also include the target date to add new members, when to spin up new objectives, etc.
• Marketing / Promotion Roadmap – The organization must have a plan to demonstrate to the industry that progress is being made. This includes publicity, but it needs to be meaningful publicity that revolves around actual, relevant accomplishments.
• Operational Checkpoints – This is the notion that an association’s leadership needs to adapt to what is currently evolving in the association. A strategy and roadmap are great, but a number of factors can lead responsible leadership to pivot, like new industry developments, new technologies, financial difficulty (or being flush with cash), etc.

The launch process needs to be a component of the overall strategy for the organization’s ongoing successful initiatives. The launch does not stop on launch day; it is a constant process of continuous output and evolving strategies.

Conclusion

Setting up, launching, and running a new technical association will involve extensive planning and forethought. From analyzing existing technologies to setting up financial controls and launching the organization, this article has aimed to provide insights that can guide a new organization’s formation and prevent any oversights or snags.

An association management company can help a new organization navigate the countless details that inevitably arise during this process. Alliances Management is a strategic consulting company that specializes in managing international technical associations.

Contributors:
Ted Archer, COO
Frankie Commans Jr., IT Manager
Danielle Mattison, Technical Writer
Julie Peterson, Director of Legal Operations

 

Contact Alliances Management for more information.

 

 

 

¹ How Associations Power America. The Power of A & ASAE.  https://www.thepowerofa.org/facts/.  Accessed 2 April 2020.