| Plexus Consulting Group | Success Stories | ||
The American Society of Mechanical Engineers |
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Plexus Consulting Group, LLC |
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Introduction The American Society of Mechanical Engineers (ASME) is an organization that offers quality programs and activities in mechanical engineering enabling its practitioners to contribute to the well being of humankind. It conducts conferences, exhibits and regular meetings of local chapters to keep practicing mechanical engineers up to date on new technology while also publishing 19 technical journals, numerous books, technical reports and magazines on mechanical engineering. In addition, ASME facilitates the development and application of technology in areas of interest to ASME members and the mechanical engineering profession while maintaining and distributing 600 codes and standards for the design, manufacturing and installation of mechanical devices. Another aspect of ASME provides short courses on current technical developments and advises federal and state government on technology-related public policies. Last but not least, ASME disseminates information about mechanical engineering and technology to elementary and high school students and the general public.
Situation ASME’s total membership declined from 99,188 in 1999 to 91,861 in 2003. During this time US membership had declined from 89,324 to 82,245—in other words most of ASME’s overall membership decline came from the US. The percentage of ASME’s membership outside the US had grown consistently—87% growth from 1989 to 2003. At that time, corporate engineering jobs were moving offshore and the three biggest recipient countries were China, Russia, and India. However, while ASME saw international growth relative to the US—its overall growth abroad was modest and may had been more an indication of lost opportunity than failed programs Given the changing dynamics of the domestic and international spheres, the American Society of Mechanical Engineers retained Plexus Consulting Group to conduct an organizational restructuring that would allow ASME to be a global organization serving the needs of a member and customer constituency that had although declined in recent years, had the potential to grow further.
Action Plexus Consulting Group undertook a study to provide the data that would enable ASME International’s Board of Governors to develop and implement a strategic marketing plan for the Society. Plexus administered both quantitative and qualitative surveys to a wide cross-section of both ASME International members and non-members from several mechanical engineering sub-disciplines that were experiencing, or were likely to experience, growth in the near future: bioengineering; defense; energy, and, transportation. Plexus also supplemented the surveys with demographic research, an environmental scan, competitor intelligence and discussions with both the ASME International BOG Task Force and professional staff. Survey respondents were selected to ensure representation across function (i.e., corporate and industry, consulting, academia and government) and geographic location (i.e., U.S., Asia and Europe). When compared to the Society’s membership demographics, certain groups of respondents (i.e., academia, persons under the age of 45 years, managers and persons residing outside of the U.S.) were relatively over-represented as they represented a valuable strategic potential to ASME International. For this same reason, the survey focused more intently on persons who were not members of ASME International but who were otherwise qualified to belong to the Society, including stakeholders who had purchased ASME International products and services. The surveys found that ASME International was perceived to be among the strongest of the discipline-based engineering societies. It was also perceived to be fragile with regard to changing global economic and social trends. Its strength was based on history, but its future could prove perilous if the Society did not adapt itself to these changes according to the respondents. The growing importance of global standards, the growing need for education, training courses and job referral databases and services, emerging needs in new engineering fields and trans-disciplinary fields, and need for an organization that can bridge differences between industry, academia and government and between the various engineering disciplines themselves all represented opportunities for ASME International. However, if ASME International failed to seize these opportunities, other organizations would fill the vacuum. Indeed, some had already begun to do so. Global trends from the prevalence of ISO generated standards for
professions and industries throughout the world to global outsourcing
of high tech jobs were developments that had immediate and long-term
implications (representing both challenges and opportunities) for
ASME International and the traditional place it has occupied.
Key Findings - At that time, the primary focus of ASME International was on members
and prospective members. The following conclusions were based on the Key Findings: - Needed to develop a market-based culture The methodology used for this study was a two-step process: - Step One: Develop a solid factual framework from which to make
decisions. Within this process, Plexus Consulting Group followed a four-phased approach: - Phase One: Quantitative Questionnaire. Working with the Board
of Governors Strategic Marketing Task Force and ASME International
staff, Plexus identified four sub-sectors of the mechanical engineering
profession that were experiencing, or were like to experience, the
rapid growth in the near future. Those sub-sectors were bioengineering,
defense, energy and transportation. A quantitative questionnaire was
created by Plexus to identify and quantify the most important strategic
areas of interest and concern for ASME International, as reflected
by the voice of the audience group. ASME’s objectives, strategies, and tactics outlined in the first two phases were: (1) To develop strategic alliances with sister societies and other strategically important associations in the world’s developed, developing, and emerging market economies; (2) To adapt ASME’s use of the Internet to build technology linked global networks to key government and private sector groups around the globe and to create electronic discussion centers that capture cutting edge thinking in the global engineering community; and (3) To position itself to participate in government funded programs designed to transfer professional standards and technological know-how to the world’s least developed countries. Each of these considerations can and should be incorporated into ASME’s current programs and objectives with minimum cost impact. However, for ASME’s globalization strategy to fully succeed, there were five cost items that were recommended the BOG approve. Four of these cost items focus on four key markets outside of North America: ASME’s second largest consumer of its products and services outside of the US- the European Union; Southeast Asia- ASME’s fastest growing market; and India and the People’s Republic of China- the largest recipients of corporate capital investments and the two largest and fastest growing sources of engineers in the world. The fifth cost item had to do with globalization as a “horizontal initiative” for ASME and the fact that it needs to be driven or coordinated by a dedicated staff person in the proposed Strategic Management organization. ASME’s various divisions were structured to produce and deliver the kind and quality of products and services that ASME members had come to expect; but they do not had the resources to develop new markets- especially when it may mean tailoring products and services to meet new needs of new markets. In this regard, the global function of ASME’s Strategic Management organization should be seen as a kind of sales arm dedicated to fulfilling this need. The globalization objective for ASME is, of necessity, a “high-altitude” objective. Any Society-wide strategy would also be very general, with more specific strategic goals, tactics and initiatives focused for the various components of the Engineering & Technology Enterprises. The integration of a cohesive globalization strategy, including leveraging of enterprise unit activities, was a key role for the new Strategic Management organization.
Results National markets outside North America were a critical component of ASME’s future. Due to a global economic trend that leading corporations to seek engineering talent in less expensive markets around the world, the traditional pull of mechanical engineers in the United States was not only shrinking but also fundamentally changing to emphasize more technologically advanced fields such as nanotechnology and biotechnology as well as fields in which traditional engineering disciplines were combined. While this trend presented serious challenges for ASME to maintain its relevance and presence in the US market it also represented immediate opportunities for ASME to expand into those developing markets that were the first line beneficiaries of this global transfer of capital. These markets, represented by the developing economies of Asia and Latin America, had an immediate need for the type and sophistication of products and services that ASME was equipped to provide. And of these developing economies, there were at least two that because of their immense size and growth potential merit special consideration – India and the People’s Republic of China. But apart from this trend that was fundamentally dictated by the competitive needs of the private sector there were two other global trends, also critical to ASME, that were being driven not by private corporations but by multilateral and international public sector interests: (1) The trend towards global harmonization of professional and manufacturing standards; (2) a trend market by the newly urgent priority (at least since the events of September 11, 2001) of the governments of the developed world to assist in stabilizing and building the economies of the least developed countries. The first trend was largely being driven by the Geneva based International Standards Organization (ISO); and the second was being driven by organizations such as the World Bank and The United States Agency for International Development- both based in Washington, DC. These second two global trends also represented special opportunities for ASME. These three global trends- corporate investment in white collar engineering talent in developing economies, the development and promotion of global standards, and the need to transfer technical knowledge and skills to the world’s least developed countries- all represent both challenges as well as opportunities for ASME. Should ASME have not taken the steps it needed to adapt itself to a changed global environment, it was likely to see its professional presence and influence eroded. However, as ASME positioned itself appropriately, there were considerable growth opportunities that were to be realized in these global markets. The schedule below represents a building block approach to ASME’s globalization plan, starting with a foundation, then building progressively over a three year period until each of its key global markets were covered. It utilizes local ASME offices in the European Union and Asia to cover ASME’s top priority markets – ones in which ASME already had many members. It also includes a specialty certification program for India that builds on the program already begun in China. It eventually includes an ASME office in India after the Society’s presence was established. Each step adds to the overall expense of ASME’s globalization program; but this incremental approach also allows enough time for the previous ventures to begin generating offsetting revenues. By the end of year three every new initiative will had been put in place and all of ASME’s priorities in its globalization strategy, as developed in this three-staged report, will had been addressed. In order to achieve success for ASME’s globalization strategy, Plexus Consulting recommended four markets that the Board approve costs to expand into (European Union, Southeast Asia, Asia, India, China). In the first year, ASME began with a foundation, and then progressively increased building over a three-year period until each market was covered. This plan also included a specialty certification program for India that built on the program already established in China. Within the first year, Plexus recommended the opening of a CSCA Standards and Conformity Assessment Office in Beijing and also adding on a dedicated globalization staff member to ASME’s Strategic Management division. During the second year, expansion continued to Europe and Asia, and also India’s specialty certification program was launched. In the last phase, the third year (2006), ASME India was to be completed. The Achilles heel of corporate globalization strategies lies in diversity
of standards and levels of professional sophistication throughout
the globe. This was why and where ASME’s standards and credentialing/education/training
programs had been so synergistic with these corporate needs. Aside
from corporate, or profit-based drivers, there exists government,
or policy-based drivers. The fact that most bi-/multilateral government
programs were “capacity programs,” designed to transfer skills and
knowledge and thus raise the standard of living in the world’s less
developed countries (US spends nearly $60 billion a year on this),
was another reason that ASME’s standard setting and credentialing/education/training
programs had been so perfect for expansion worldwide.
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