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Association Bisnow
May 2, 2008



We had to find an extra-large roundtable at Il Mulino for our latest hot-topic chat, this time with four top association CEOs:

  • Todd Stottlemyer of the National Federation of Independent Business;
  • Harris Miller of the Career College Association;
  • Cris Collie of WorldWide ERC; and
  • Kyle McSlarrow of the National Cable & Telecommunications Association.    

To match wits with all these heavyweights, for moderator duty we conscripted Arent Fox Chairman Marc Fleischaker, who knows much more about associations than even our own Mark Bisnow (no offense, boss!).            


The gang’s all here: Todd and Harris on the left; Cris and Kyle on the right; and in between, Bisnow sponsors Marc, Denise Grant, association guru with executive search giant Russell Reynolds, and Ellen Herman, head of Staubach real estate’s global non-profit group. Our biggest confab yet made for a lively exchange . . . when our mouths weren’t full of Il Mulino’s pizza-sized chicken parm.   

Marc F: Any of you going through big changes at the moment?

I came to NFIB after 22 years in the tech industry, so I’m working to get our people to think of members like customers, which sounds simple but it’s not. You have to focus on the customer experience. We’re also focusing on organization-wide outcomes and results. That’s a change for us.   

Marc F: Do you do that with incentive pay?
Todd: We’ve created incentives for everyone. We tie them as much as possible to goals that are really moving the organization as a whole forward. If you’re a lobbyist, we want you pushing our members’ priorities. If you’re just interested in public policy for public policy’s sake, a think tank is probably a better place for you.
Cris: We’re a bit of the unusual animal since we’re actually a for-profit incorporated under not-for-profit regulations. We’re run like a business, and we’ve had variable compensation in place since the 1980s.
Marc F:

What percentage of compensation should associations devote to incentives?

Denise: In my experience, incentives at trade associations are a smaller part of the overall package than in the corporate world. So maybe a head of government affairs gets a $500,000 base salary with a 10-15% bonus opportunity.
Todd: We tie management-incentive compensation to overall organizational results, with bonus opportunities of between 20-40% of base salary.
Marc F: Are there any downsides to incentives?
Harris: I instituted a performance plan, and our board has gotten really enthusiastic about it. One of the issues, though, is that some employees, like our membership director, have tangible outcomes to shoot for but others have softer goals. So we’ve got a 360-degree evaluation, where we use external audiences and board members to gauge employee performance.
Kyle: You also don’t want incentives based too much on the bottom line. With that mindset, you start hoarding money. Members don’t want you running huge reserves. They think: Why is it in your bank account and not mine?
Harris: That’s right. We’re making some investments in operations right now, and we wouldn’t be doing it if we were focused just on the bottom line.
Kyle: We all say we want to run like a business, but I’m not sure that’s true. It’s more about setting the right goals and managing people to get them done.
Marc F: What should reserves be in terms of revenue?
Cris: Our annual goal is between 3.5 to 5% of our after-tax income.
Marc F: And how much of your revenue comes from dues?
Kyle: About 95% for us.
Todd: We’re at 80%.
Cris: Our dues are only about 17% of our revenue. Other revenue sources are our conferences – we have four annual meetings a year, two in the US, one in Asia and one in Europe.
Marc F: Since we have a real estate expert here, what’s a reasonable amount to devote to space?
Ellen: If you’re seeing your real estate expense exceed 25% of your budget, that’s probably not a good situation.

Our DC rent was scheduled to go to $65 per square foot, and we were able to find brand new space for $35 a square foot in Ballston.

Marc F: Did you lose anyone?
Cris: Our staff is split about equally between DC, Maryland, and Virginia. We tried to accommodate people who were inconvenienced with flexible schedules, and we didn’t lose a single employee out of 45. And we continue to say we’re headquartered in the national capital area!  
Arent Fox
Cardinal Bank
Intelligent Office
Congressional Schools of VA
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