Acronym

Notes:

• Model based on Boston Consulting Group’s “Growth-Share Matrix”
• To use the model, analysts plot a scatter graph using net annual margin (green) or subsidy (red) to scale diameter of each program, product or service
• Programs illustrated are for example only & do not represent actual margin or performance
• 1=Stars (High investment brand leaders-surplus capital); 2=Questionable (requires major investment-low results); 3=Cash Cows (Low investments-surplus capital); 4=Retire (limited investment-limited results-beware expensive/risky turnarounds)

Some of you share my long-term interest in annual evaluation of association programs, products and services (PPS). The reason for an annual evaluation is simple: evaluation looks at PPS performance and life-cycles, and provides the basis for rational decision-making about which PPS should continue and which should be retired.

Annual evaluation is also important because it is one method to release precious resources and capabilities to support innovation and consistent annual new PPS development. The old association adage is true for many of our associations, “If something new is to be added to the wagon, then something old must be removed.” The adage is true because it’s not often that our associations have on hand substantial unused capacity that can be devoted to new PPS development. And our ability to simply go out and increase our capacity to meet new opportunities is generally limited. There’s little venture capital available for non-profits.

Now, one could argue that innovation will let an association do more and better. But there is a finite limit as to how much one can and should try to stuff into a 5-pound bag, if you get my point. Many of us are past our organizational bag limit, and innovation just to add more to an overloaded bag is not the answer.

Thus, annual evaluation is important. But it’s hardly simple. The challenge is that associations generally provide PPS in two very different categories: 1) Mission-focused activities which are often subsidized in whole or part; 2) Business operations that provide the net margin necessary to subsidize the mission-focused activities. Both categories of activities support the organization’s overall mission and both categories reinforce and strengthen one another. And as many of us have learned the hard way, there is no mission without a margin. Evaluation of these two different categories of activities, however, can be challenging, since they are often so different. Targets and measures used to measure subsidized activities, for example, often are not the same targets and measures used for margin-producing activities.

Mark Golden and I had an interesting discussion of PPS evaluation of these two categories of activities in the “Driven by Mission Not Money” thread on the ASAE & the Center iCohere Measures of Success Strategy Lab web site, in which we both concluded that annual evaluation should be based on how the PPS is actually performing. Mark rightly commented, “It isn’t good enough to have good, mission related intentions, (evaluation should be based on) how well it (PPS) achieves mission related ends.” Said differently, evaluation of all activities should be based on results.

This has led me to develop the chart above for comment and trampling action. It uses some typical ASME programs and hypothesized data to illustrate how the approach might (or might not) work. Would such an evaluation process work in your organization? Could it be refined and made more useful? Inquiring minds want to know…I look forward to your comments.