Those who have the insight and ability to sift through the cacophony of day-to-day living and focus on such history-making developments are the sages of our time. If they happen to be association managers, they also are likely to be the ones whose organizations will be best positioned to thrive in the years to come.

By Steven M. Worth

EDITOR’S NOTE: Working with Foresight International, an international market survey and research firm, and Plexus Consulting Group, GWSAE undertook a survey of ASSOCIATION CEOS IN GREATER WASHINGTON to determine how their associations are responding to the challenges of a global economy. This article is part of a series in Executive Update on this topic.

Fashions ebb and flow, but some generations experience trends that have deeper and more long-lasting significance. Few would dismiss globalization as a passing fashion. Although many would and do debate whether globalization is a threat or an opportunity, virtually all agree that this is one of those history-changing phenomena that is here to stay. The question is not whether to accept it but rather how to adapt to it.

Association managers do recognize this as an important issue. According to an international business survey conducted by the Greater Washington Society of Association Executives (GWSAE) and Plexus Consulting Group, more than 50 percent of associations polled reported that globalization was a top priority. Furthermore, 61 percent of the responding associations have or are planning to have an international presence.

The regions outside North America where associations saw the most active membership presence were Europe (the region named by the highest number of association executives), Asia (the second highest), then Latin America.

Why shouldn’t association executives see globalization as an opportunity for their organizations? U.S. Department of Commerce figures show that the international portion of the U.S. economy (exports and imports) has grown at least two to three times faster than the domestic over the past four decades. These figures for the national economy are reflected in U.S. association membership growth patterns where overseas membership growth for most associations is twice to three times greater than what they are seeing domestically.

When the notorious bank robber Willie Sutton was captured, a reporter asked him why he chose to live his life robbing banks. His response: "Because that is where the money is!" In this regard, "international" seems to be "where the money is" for associations.

The GWSAE/Plexus international business survey shows that after membership dues, conferences and trade shows made up the second and third sources of revenues for most associations. Given these findings, it is perhaps predictable that the areas of greatest interest for associations when they think of global expansion are membership development, conferences, and trade shows. Certification, education, training, and publications rank lower in this hierarchy — presumably because they offer fewer direct revenue benefits. For most associations then, the interest in globalization appears to be driven by revenue considerations.

What are associations doing to adapt to or position themselves to take advantage of the historic changes brought about by globalization? Apart from translating conference and trade show materials, most associations appear to be set on just making their domestic programs, products, and services available to anyone outside the country that wants to pay for them. In short, they are cashing in on an opportunity to make easy money. But while associations are rounding off their end-of-year finances in this way, many seem oblivious to the opportunities that are passing them by.

As much as a decade before globalization became the subject of street riots in Seattle and Prague, insightful policymakers gave early warning of the problems and opportunities that were coming. The technological advancements and the treaties and subsequent legal and regulatory changes that have facilitated the global exchange of people, ideas, finances, durable goods, and services have created a rising tide for all the world’s economies. But while these developments have propelled the world’s economy through historic changes and growth, the ride has been rough. Protected or less-than-competitive industries and whole national economies have floundered and are suffering. "Quaint" but inefficient ways of doing things are disappearing. And many have wondered about the fairness of it all. At least one economist has archly noted that in this rising tide "the yachts seem to be rising faster than the row boats!"

Those who vent their frustrations over these issues by bulldozing a McDonald’s restaurant or throwing bricks through the windows of a Starbucks like to place blame on the international bureaucrats and financiers. But they are not listening to what these same bureaucrats and financiers are saying.

The issue of globalization, United Nations Secretary General Kofi Annan said in a recent speech, "is primarily one of governance (at all levels) — how the international community of sovereign states and multilateral organizations copes with global challenges, and how individual nations manage their own affairs so as to play their part, pull their weight and serve their peoples."

"It is in our enlightened self-interest to make sure that the losers in this global system — and right now there are billions of them — get a chance to participate," said global financier George Soros.

Michel Camdessus, the former director of the International Monetary Fund, expressed similar thoughts in a talk in which he pointed out that the problem in thinking globally and acting locally is to "sow the universal at the local level, to plant the universal everywhere…. It is in our cities, towns, and residential communities that the global village needs to be built…. In this, nongovernmental organizations play an essential role…."

In a white paper developed by the U.S. Agency for International Development (USAID) several years ago, the need to work with and use private, nongovernmental organizations to train, educate, and create lasting infrastructures at the grassroots level in developing and new market economies was identified as being of primary importance.

The World Health Organization (WHO) has appealed to private groups representing healthcare professionals to work with them in developing and implementing programs that will lead to the eradication of whole categories of diseases.

The International Standards Organization (ISO) actively seeks nongovernmental organizations to work with them in setting fair and workable standards for virtually every sector of the world’s economies.

Camdessus probably said it best when he pointed out that "the principal challenge of globalization is not to move things around at the top…but to develop and solidify its anchor at the local level." And he points out that this linkage, between global decision-making bodies and the grassroots, is best made not by governments but by nonprofit associations.

However, the GWSAE/Plexus survey reveals that standards development, policy development, and education and training do not appear anywhere near the top of the list of what most associations are doing internationally. Why are associations not taking the outreached hand that is being extended to them? There appear to be at least three reasons.

First, there is a lack of self-evident financial interest. If prospective members from overseas wish to join or participate in an association’s activities, so much the better — this increases revenues. But the foresighted see that these overseas members may represent the thin edge of a wedge. First they want to participate, then they will want products and services tailored to meet their special needs! But overseas members pay no more — and oftentimes less — in membership dues than their American counterparts; so who is going to pay for the extra costs involved in tailoring products and services to meet these "special" needs?

This concern is most often expressed by boards of directors who are and must be mindful of their association’s financial viability. But the professional staffs usually have related concerns. Most association staffs are stretched pretty thin and do not have a lot of extra time on their hands. So without additional income with which to hire more specialized staff to do this extra work, how are they going to cope?

Given boards’ concern about finances and staff concerns about serving the needs of a highly diversified membership spread across many time zones, the idea of global expansion usually does not go much further. The association’s position then becomes: "We are an American organization. If prospective members want to participate in our activities and programs they need to do so on our terms."

The second reason for the apparent disengagement of associations from globalization has to do with governance. As an association’s foreign membership grows, staff time and other association resources are necessarily drawn in this direction. This in turn leads to two problems: an American membership that begins to wonder why they are not receiving as much time and attention as they believe they should have and an overseas membership that, realizing the strength of their growing numbers, begin to question why this "American" organization cannot be more responsive to their needs. In this scenario the staff is caught in the middle.

Finally, the third reason relates to what one association executive calls the disconnect between an association’s mission and its member services. This comment may seem surprising at first but it refers to the way members identify with their association. The late Speaker of the U.S. House of Representatives, Thomas (Tip) O’Neill, once observed that all politics is local. The same is true for associations. Membership surveys of professional societies, trade associations, coalitions, and other types of special interest groups consistently reveal that members most identify with their respective groups at the local level. Local chapters are more meaningful to members than national headquarters, and international issues are still more removed from members’ practical concerns.

So what is an association executive to do when members say they want to have their association concentrate on matters close to home, and the global economy is pulling in the opposite direction? Some associations are resorting to technology — delivering and exchanging information internationally through the Internet — and to strategic partnering with sister organizations abroad. These tactics allow associations to respond to the increasing demand for information and services across national boundaries without siphoning off thinly stretched staff and financial resources from their domestic operations.

The demand for these types of services is coming mostly from new market (such as the Central and Eastern European countries) or developing market (such as many of the countries in Latin America and Southeast Asia) economies where trade associations and professional societies are scarce and, where they do exist, under-financed and under-staffed.

Apart from the concerns noted above, once into the international arena, most associations are finding themselves faced with four other sorts of issues or challenges: 1) protecting their intellectual property — from both a qualitative and financial point of view; 2) coping with the inevitable demand for tailoring products to meet local linguistic, cultural, and professional needs; 3) relating to sister organizations in the more developed national markets that consider themselves equal to the U.S. in sophistication and that may be leery of a growing American presence in their back yard; and 4) trying not to tread on or otherwise offend the interests of the existing international organizations in their field.

The response of many organizations, to withdraw behind the flag and say "we are American — the world will just have to deal with us on our terms" — is not an effective answer. For example, the concept of intellectual property is more often winked at than respected in the developing world. Furthermore, it is often reasoned that if the Americans insist on being American, why should the Americans care what is done with their products outside of their own country? The products and services of U.S. associations may be admired for their professional polish and sophistication but many outside the United States feel they should not have to pay to tailor those products to fit local needs and then still have to pay a fee to the United States to use them. Enforcement of intellectual property claims in such cases is difficult and at the very least is a cause of hard feelings.

And what to do about those sister organizations in the more developed markets — like Canada, Western Europe, and Japan? Organizations in many of these markets frown when their U.S. counterparts become overly active in what they consider to be their turf. Furthermore, many have products and services which might be every bit as sophisticated as the U.S. products. When differences occur, as is often the case, the question then becomes whose products, services, and standards will dominate the global marketplace? With Canada more often joining the United States, and Japan remaining discretely on the sidelines, transatlantic tugs of war are becoming common for virtually every economic sector. Inward looking U.S. associations tend not to do so well in this competition.

Finally there is a clear reason to feel awkward when dealing with international bodies that are more often than not under-funded and under-staffed. And when U.S. organizations participate in such bodies they feel like Gulliver in the land of the Lilliputians! Moreover, most of these organizations have U.N.-like governance structures that promote the concept of one country/one vote. In such cases, the U.S. member organizations often find themselves the only ones able to finance the initiatives that come out of these deliberative bodies. Too often their mandate from the membership is: "please pay, but keep your opinions to yourself!"

Association staff members see all of this close up. They are usually very much aware of the problems and possibilities of globalization. More often than not professional staffs see the global mission of their organizations but feel restrained by their U.S. roots.

From a global perspective, it may seem trite to affirm that the world needs the participation of U.S. organizations — but it is nonetheless true. U.S. science and industry are on the cutting edge of sophistication. U.S. organizations are generally well run and have the financing and staff to produce products and services that are the envy of the world. But does this mean that U.S. organizations can sit back to wait for the world to come to them, on their terms? Most definitely not. In a dismaying but growing number of cases, U.S. organizations are being by-passed by organizations from other nations that have mastered the ability to form and to lead global initiatives. These are the organizations with which the U.N., the World Bank, ISO, WHO, and the other global policy-making bodies are working. But there should be no illusions, individual Americans are participating in such initiatives — it is just that they are not doing so by means of their own, U.S.-based organizations.

It used to be that the brain drain always worked in the United States’ favor. But if U.S. associations are to retain their best and brightest members and to play a meaningful role in the new global economy, their professional managers are going to have to develop ways of grappling successfully with the dilemma of globalization — implementing global concepts at the local level while fostering an appreciation of the importance of local concerns on a global basis.