2012 Association Globalization Trends Survey

Thank you for helping to understand how organizations are approaching globalization today!

As a survey contributer, you will receive the very first published reports of the collected data, including a customized report allowing you to compare and benchmark your organization.

By sharing your experience and knowledge, you are helping to unlock the opportunities and growth potential that our increasingly globalized world has to offer.

If you have any questions or would like more information, including free copies of previous reports and international white papers, please let us know.

Sincerely,

Terrance Barkan CAE

tbarkan@globalstrat.org

+1 202 294 5563

p.s. Check out our Global Growth Workshops in March! 

Associations and Emerging Markets

(ISBN 978-1-4221-6695-6)Associations and Emerging Markets

According to the IMF, the Economist and The Conference Board, emerging markets are forecast to grow on average by more than 6.0% annually through at least 2020.

Recently I read a fantastic book that has a number of important lessons for associations that want to grow, especially in new, emerging markets*.

"Winning in Emerging Markets" is written by Tarun Khanna and Krishna G. Palepu, and is published by Harvard Business Press. In their book, these two authors have helped to define what an "emerging market" is.

More importantly, they also define those key elements that are critical to business that we take for granted in advanced economies that are missing from many emerging markets. They have also provided a strategic framework to determine when and how an organization should approach an emerging market opportunity.

What follows is a short summary of key ideas put forth in their book and how these apply to associations.

Although the book is written primarily for corporations, almost all of the concepts and frameworks the authors put forward can be applied to professional and trade associations alike. I highly recommmend it to anyone in a senior leadership position that has an interest in global growth strategies.

How does "Winning in Emerging Markets" apply to associations?

Emerging markets have been and are slated to continue to be the greatest source of economic growth in the world. Emerging markets are also defined as much by what they are missing as for the opportunities that their rapid growth makes possible.

The lack of supporting services, institutions and structures in emerging markets represent serious obstacles. However, they also represent real opportunities for the associations that can fill certain of these strategic voids and unmet needs.

Common Emerging Market Voids and How Associations Can Benefit

Credibility enhancers - Emerging markets are often very fragmented and include numerous small players. The lack of reputable major brands make it difficult for the local market to identify quality products and services.  Associations are ideally suited to provide a level of quality assurance (real or implied) through one or more of it services including membership, credentials, standards or certification. In addition, local participants (individuals or companies) can raise their professional profile and credibility through volunteer roles, as speakers and authors, or by exhibiting at industry events.

Especially in emerging markets where the local participants struggle to differentiate themselves from one another, affiliation with a prestigous association is highly sought after as a real competitive advantage.

Information analyzers and advisers - Emerging markets suffer from a lack of readily available market data and information. Often it is difficult or impossible to know the size of markets or market segments because they are fragmented and there are no mature market data services.

Associations, by bringing market participants together help to bring a new and much needed level of transparency by identifying market players, measuring the size and scope of the market, and potentially conducting important market research.

Aggregators and distributers - The fragmented and chaotic nature of emerging markets makes it difficult and inefficient for buyers and sellers of services, information and goods to come together. This applies across all sectors, whether you are in the healthcare arena as a professional society or you are involved as a trade association in business to business transactions.

Associations help to facilitate buyers and sellers in a given market to more effectively and efficiently find one another through conferences and exhibitions, membership networks or directories, or through advertising and sponsorship opportunities. Associations have traditionally played the role of convenor for industry and professional sector participants. Emerging markets often lack this facility, providing a unique opportunity for associations.

Transaction facilitators - Traditionally, emerging markets are characterized by personal networks of buyers and sellers that have developed on a person to person basis over many years. These networks are neither transparent nor are they easy to access.

Associations have an opportunity to provide open and transparent platforms for buyers and sellers to find one another and to make the markets more efficient (buyers and sellers can represent professional individuals looking for new information and professional development for example). A simple example would be an online job market that is provided as a member benefit.

Adjudicators - The rule of law, and more importantly, the ability to enforce the laws that exist, are a key element of mature economies. Emerging markets are often characterized by weak, corrupt or bureaucratic legal systems.

Aletrnative dispute resolution mechanisms, such as arbitration or mediation, are a possible solution. An example that is commonly used is the arbitration facilities of the American Arbitration Association. Binding arbitration decisions have the advantage of being enforceable in a large number of countries making it easier to get satisfaction in case of a dispute. 

Regulators and policy makers - Although it is not feasible to expect associations to assume the role of regulator or policy maker (except in some extremely rare instances), associations can be major influencers and educators for policy makers and regulators.

Emerging markets typically are heavily involved in the development of new regulatory schemes in order to comply with free trade agreements or to gain access to Western markets. This regulatory change environment represents opportunities for associations to play a role as new regulations and policies are formed in these new markets.

Key questions for Associations and emerging markets?

When considering the opportunities in a particular emerging market, organizations have a number of options that they should consider regarding if and how to enter the market:

Replicate or Adapt?

Should you replicate your domestic business model and approach or do you need to adapt your business model for a given market? If you have to adapt, at what point do you start to lose the advantages of scale and efficiencies you have built in to your current business model?

Avoid or Attack Market Voids?

Given the numerous voids typical in an emerging market, do you try to navigate around them and avoid the obstacles, or do these voids represent opportunities that your association is well suited to fill?

Should I stay or Should I go?

Many markets are simply not ready to be exploited in a sustainable or profitable manner. Associations should consider if the time is right or if it is premature to enter certain markets given the current conditions. Also, how long do you stay in a market if your strategy is not working?

Compete or collaborate?

Associations quite often opt to partner with a local association or institution when entering a new market but does it make more sense to enter as a more direct competitor? There is no "right or wrong" answer to this question but instead a series of trade-offs to consider. Partnering gives you access to local knowledge but you might also be educating your future competitor. Competing on your own can lead to market dominance but also requires more resources and entails higher risk.

Conclusion

There are many more insights that can be taken from this excellent book. For me, it offers another view point to consider strategic issues when developing an international growth strategy and opens up a way of identifying market opportunities for associations that heretofore, were viewed only as obstacles.

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*The FTSE (a financial markets firm jointly owned by The Financial Times and the London Stock Exchange) maintains a list of "Advanced Emerging Markets" and "Secondary Emerging Markets", taking into consideration transparency of financial reporting and controls, economic development and political stability. As of late 2011, the "Advanced Emerging Markets" and "Secondary Emerging Markets" were listed as...

Advanced Emerging Economy Countries: 

Brazil, Czech Republic, Hungary, Malaysia, Mexico, Poland, South Africa, Taiwan, Turkey

Secondary Emerging Economy Countries:

Chile, China, Colombia, Egypt, India, Indonesia, Morocco, Pakistan, Peru, Philippines, Russia, Thailand, UAE

What does it mean for an association to be "Global"?

For an Association to be "Global", it means that;

1. The organization has a meaningful presence in each major region of the world, i.e. on each continent (except Antarctica) and the major sub regions such as the Middle East and the Indian sub-continent.

2. The organization appears to its customers to be a national champion or local entity more than a foreign entity, and that it is not immediately obvious where "Headquarters" is. It is most important that the organization has strong local or regional relevance to the member/customer. (The food company Nestle is a great example. Most of its brands are assumed to be local companies but are part of this Swiss food giant's portfolio).

3. The organization maintains universal core values and an agreed Body of Knowledge or an Intellectual Property core that is intelligently and appropriately modified as necessary and relevant for regional or national requirements. 

For example when credentialing, the credential should maintain global equivalence (based on a core Body of Knowledge) but still have real meaning nationally i.e. comply with local law and practice. (Includes things like language, law, currency, time, metric v. imperial measures etc.)

4. The organization does not derive more than 50% of its gross revenues from any one single country or market.

5. The Governance structure reflects the global footprint of the organization.

6. The leadership thinks constantly in terms of how decisions will affect the entire membership regardless of where they are located and anticipates the need to respect the complexity of being a global organization.

7. Communication systems and practices are put in place to support global collaboration including telephone formats ("+" and then the Country Code followed by the number ex. +1 202 294 5563), date formats (a format that leaves no guesswork: 25 DEC 2008), the use of military or 24 hour time (23:00 is 11pm). Organizations must be careful to use shorter, less complicated sentences and remove jargon, political or sport references, etc.  Many non-English native speakers can more easily understand and express themselves in written form than orally but the communication must be clear and un-complicated.

8. The staff and leadership must travel. Globalization is not a spectator sport. There is no substitute for putting oneself in the scene where you do not understand the local language, do not recognize what people are eating, cannot find an English newspaper, attend dinners where you do not understand the jokes, etc. Then it is clear how important being sensitive to local issues is to really succeed internationally.

These are the clear characteristics of a "Global" organization.

The Arab Spring - New Opportunities for Associations in the Middle East and North Africa

Mr. Hisham Fahmy, CEO of the American Chamber of Commerce in EgyptI had the chance to speak recently with Mr. Hisham Fahmy, the CEO of the American Chamber of Commerce in Egypt. Mr. Fahmy is also a Member of the Board of Advisors at the American University of Cairo Business School and is a former Chairman of the Egyptian Society of Association Executives.

Today, there are 85 million Egyptian citizens, busy at work defining their new constitution, a democratic government and a market economy. All across North Africa, in countries like Tunisia, Morocco and Libya, there are new and exciting opportunities for associations and other civil society organizations to make a real difference. 

The political process in Egypt is evolving with a resoltion expected by end of February 2012 when a new President and Parlament is expected to be elected and installed. It is hoped that this process will continue peacefully. 

At present, despite the political vacuum, business is moving ahead. The financial and banking sectors are functioning and it is only now in the public sector where there are calls for better pay and working conditions. Public sector employees have been paid very low wages for decades and see the political changes as an opportunity to gain parity with the private sector.

Although the many political changes have had an impact on businesses, they have also produced some great opportunities. The fundamentals of Egypt: a large domestic market, trade agreements with the EU, Africa (COMESA) and the other Middle Eastern countries, and its position as a commercial and cultural hub in the region are all very favorable for businesses and associations.  

Egyptians are also very positive toward Americans and American institutions despite the serious differences regarding politics in the region. Companies like Coca Cola, Proctor and Gamble and General Motors are thriving and expanding in the region from their base in Egypt.

Today there approximately 30k NGO's of which half are active and the vast majority of those are in the charity and relief sector. There are only a small number of very active or effective business and professional societies in Egypt due to the formerly negative environment under the previous government. This means that there is a serious gap for associations to fill regarding education, professional development, standards and certification in all professional sectors.

It is expected that the number of civil society organizations, including trade and professional associations, will expand rapidly, especially after the political situation has been defined and stabilised.

Egypt is also a great base to develop opportunities in other parts of the region including the other North African countries of Tunisia and Libya which are going through their own democratization phases as well.

If your organization is interested in developing a stronger presence in the fast growing MENA region, Mr. Fahmy is someone you will want to speak with.

Contact him directly at: 

Hisham Fahmy, CEO

American Chamber of Commerce in Egypt

33 Soliman Abaza Street, Dokki - Giza, Egypt

Tel: +20 2 3338 1050   |   Fax: +20 2 3338 1060 

Health Volunteers Overseas - A model for international capacity building and outreach

25 Years ago, a group of orthopaedic physicians saw the need to help resource poor international communities through education, training and capacity building.

Today, Health Volunteers Overseas (HVO) facilitates and manages the delivery of nearly 500 volunteers annually through 90 projects in 25 countries world-wide.

Working in partnership with professional medical associations like the American Dental Association (ADA) and the American Academy of Dermatology (AAD), HVO helps partner organizations have a much more effective impact when meeting their capacity building objectives.

It is also a very smart option from the resource allocation perspective, both in terms of staff and financial commitments. At present, an annual $5,000 membership fee from partner associations is all that is required to have HVO organize and administer international teaching programs.

For associations that are trying to make an impact through the sharing of knowledge and skills with lessor developed communities around the world, partnering with HVO is a smart and valuable option.

Most associations in the health care field (and many associations outside of health care) have an element of international outreach and capacity building as part of their mission, vision and business plans. However, many also struggle to maintain effective long term programs for a variety of reasons.

Challenges to effective, long term humanitarian projects

Making a real, measurable difference through capacity building projects is notoriously hard to achieve and sustain over the long haul. All associations face one or more major obstacles at some point, including:

Inadequate resources - Capacity building and outreach requires people, time and money. Even with all volunteer efforts, staff are still required to dedicate some time to international outreach. From a finacial perspective, volunteers usually require their travel and related expenses to be covered, at a minimum.

Because most outreach efforts do not generate any revenue, they are one of the first areas to be cut when budgets get tight. Real capacity building cannot be achieved by one week a year or ad hoc assignments. It needs a dependable, long term and sustained effort.

Changing priorities - Many outreach efforts are well intentioned projects initiated after a board member has visited a lessor developed region or a request has been made from a developing country organization. Over time, boards and leadership change. Priorities then shift as the board may elect to pursue other altruistic projects or the efforts are dropped altogether.

Lack of experience - Sending association volunteers overseas requires a significant amount of knowledge and experience to master the logistical and programmatic obstacles. Nothing that involves international training and education programs is straight forward; from the visa and entry requirements to health and safety issues to understanding the true needs and abilities of your target communities.

In most cases, staff that work on an association's outreach and international capacity building efforts also have other responsibilities. This makes it that much more challenging to apply the time and attention needed to these important but non-revenue generating activities.

Why should associations partner with HVO?

Associations, like the American Academy of Dermatology (AAD) work together with HVO to deliver much needed education and training programs. AAD uses the services of HVO to enable willing volunteer dermatologists to participate in important long term training programs.

Jessica Kirk, MD is an AAD member and HVO volunteerBy working with HVO in this way, AAD saves an enormous amount of valuable staff time that can be applied to other, equally important projects, while still meeting its humanitarian goals.

In collaboration with its partner organizations, like AAD, HVO screens recipient communities, making sure that the people and institutions that receive training are true not-for-profit organizations and that they will have the capacity to implement their new skills and knowledge.

In addition, HVO has a very mature and well thought-out process to help prepare qualified volunteers to make sure they will be successful when they deliver a training and education project.

For partner associations, this model is not only extremely cost effective (associations pay only a $5,000 annual membership fee as an HVO partner), but it saves staff time (worth well in excess of the membership fee) and helps guarantee that the association's volunteers are as well prepared as they can be to succeed.

For partner associations, this is a unique and highly valuable alternative when it comes to delivering important humanitarian projects. 

For all associations that are active internationally, it serves as a model of how leveraging the skills and capabilities of a partner organization can not only save you time and money but can actually increase your chances of success in the process. 

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HVO is currently looking for partner organizations in the nursing, medical sub-specialty and oncology fields. For more information how to partner with HVO, please click the link below: