Plexus Consulting Group    Success Stories

Society for Human Resource Management
(SHRM)


Society for Human Resource Management

1800 Duke Street
Alexandria, VA 22314-3499
703-548-3440

[www.shrm.org/students]
Contact: Susan R Meisinger, SPHR, J.D., President & CEO



CEO: Helen Drinan, SPHR
Budget: $70 Million
Staff Size: 101 - 250




Plexus Consulting Group, LLC
1620 Eye Street, NW
Suite 210
Washington, DC 20006
Phone:  202-785-8940
Fax:      202-785-8949
Email:   info@plexusconsulting.com


Vital Stats:

The Society for Human Resource Management's (SHRM) membership is comprised of 490+ US chapters; 165,000 + members (professionals). SHRM is the largest nonprofit organization of its kind in the world and the global voice of the Human Resource profession. Two thousand of its 145,000 members are from outside the United States. These members joined SHRM despite there not being any direct marketing or recruiting effort outside the US. The largest number of non-American members comes from Canada, Mexico, the United Kingdom and the rest of Europe. In all, SHRM's international membership covers 105 countries.

The Challenge | The Solution | The Process | Unintended Consequences | Measurements & Results | Lessons Learned

 

The Challenge

How to develop services and benefits that attract and retain members? How to bolster non-dues revenues?

During the 1980s, SHRM was a modestly growing organization. Originally headquartered in Ohio with a government relations presence in Washington, the organization relocated with seven full-time employees to Alexandria, Virginia in January 1984. At that time, SHRM had approximately 39,000 members and was just beginning to grow its programs and staff. Until 1986, volunteers managed SHRM's annual conference and SHRM was viewed as a small organization for entry-level human resource professionals.

Moreover, the Board of Directors was focused on a dues-based revenue growth strategy. The Board's philosophy was to raise dues incrementally on the theory that the higher the dues, the greater the perceived value of a SHRM membership. Prior to 1990, the annual membership fee was steadily increased every other year. In 1900, membership dues increased from $75 to $160. The members became concerned and SHRM began to lose members and revenue.

The Solution

By implementing a "business mindset" throughout every level of the organization, SHRM catapulted to $70 million in (projected 2000) annual revenues - - representing a five-fold increase from $13.4 million in 1990.

"It's all about members."

Developing quality member services and benefits and attracting and retaining members goes hand in hand. Drawing on years of corporate experience honed at Unisys, President and CEO Mike Losey saw an opportunity at the beginning of his tenure at SHRM in 1990 to implement a greater "business mindset" throughout the organization. This shift in organizational strategy and culture, which involved capping dues at $160 and focusing on building non-dues revenue streams, led to an unprecedented era of creative programming, membership and revenue growth with no end in sight.

SHRM's remarkable growth was driven in the backdrop of a labor shortage, a "stretched" human resource profession facing a "new economy" paradigm shift and rapid-fire congressional action on employment issues ranging from civil rights to disabilities to family and medical leave. Moreover, the Internet has had an enormous impact on how services are delivered to a rapidly changing profession.

The Process

Key elements contributing to SHRM's sustained growth include:

  • Strategic recruitment of qualified hires
  • Overall strength of the economy
  • Diversity of revenue stream
  • Strategic alliances
  • Creating a culture of entrepreneurship


While the overall strength of the economy contributed significantly to SHRM's success, a key pillar of this success in building non-dues revenues involved careful recruitment of qualified new hires to boost the level of educational programming, seminar and conference offerings in the mid-1990s. Moreover, most new senior staff hires were drawn exclusively from the human resource management profession. To enhance the organization's credibility, all chapter field managers are drawn from the profession as well.

Key programs that generated significant, diversified streams of non-dues revenue for SHRM include:

  • Award-winning and revenue generating website
  • Educational products: The SHRM Learning System
  • Annual conference - - 12,900 paid attendees in 2000
  • Publications

Another key element of success involved structuring alliances in several core areas. Realizing that SHRM "can't do everything," there was a conscious effort to seek out high-performance affiliates to leverage the organization's efforts. Before long, such organizations were actively working with SHRM. A particularly successful partnership was structured with Marketing General Corporation, which helped to spur the expansion of SHRM's membership from about 44,299 in 1990 to 122,848 in 1998, and a projected 152,000 in 2000. The "right leadership, tools, program of work and visibility are all aligned."

Membership recruitment programs include a chapter incentive program, web promotions and "member get a member" promotions. All SHRM programs, such as publications and conferences, are leveraged to recruit members and the internet has made a "huge difference" in leveraging the success of these efforts.
Also, the increasing number of people sitting for the certification exam offered by the Human Resource Certification Institute, a separate SHRM affiliate, significantly boosted sales of SHRM's "Learning System" educational materials to an audience of 12,000 human resource professionals seeking basic and senior levels of certification.

Most importantly, SHRM was able to successfully implement a culture change, which empowered employees to embrace entrepreneurship throughout every level of the organization. Here's how:

  • The CEO and Board of Directors actively encouraged a culture of entrepreneurship among vice presidents and directors.
  • Incorporation of "business review process" into routine planning.
  • Senior managers were empowered to "to risk and develop new products."
  • Feedback and idea generation were encouraged at all levels of the organization.
  • An incentive/bonus plan was introduced into SHRM's compensation framework

The goal of the incentive plan was to convey the benefits of success to exempt and non-exempt (eligible for overtime) employees alike. This objective-based bonus system introduced an unprecedented level of staff accountability and was so enthusiastically received that bonus targets have been consistently exceeded every year since the plan was established.

The 1990's leadership change did not involve an immediate downsizing or reshuffling of the management team and staff. Rather, a year was taken to carefully assess the operation and allow existing staff to acclimate to a new, heightened pace of activity. An inaugural "business review meeting", a three and a-half day exercise, gave senior staff the opportunity to present financials and engage in creative brainstorming to develop new programs and initiatives. The "business review" process was subsequently incorporated into the routine planning process.

Unintended Consequences

Unforseen hurdles included:

  • Employee education
  • Helping staff to cope with a new and intimidating financial mindset
  • Time and resource constraints

Success was far from effortless and involved overcoming significant hurdles. One major challenge involved employee education, another involved proverbial time and resource issues. The knowledge of the average SHRM employee regarding financial statements and revenue/expense concepts was limited. As a result, staff became somewhat defensive with regard to embracing a new and intimidating financial mindset. It took time before everyone was comfortable with the approach and able to use new tools to forecast effectively. Mentoring programs helped to cushion the impact of a more intense culture. There was concern, even at management levels, that the pace was too fast, and some employees left as a result.

The culture change could be likened to jogging on a treadmill at steadily increasing speeds. Was SHRM too aggressive? Some Board members felt that financials were stressed excessively. However, this focus allowed SHRM to invest in new programs and take unprecedented risks that ultimately proved worthwhile.

Measurements & Results

"We work hard to ensure we make our numbers."

The entrepreneurial mindset enabled SHRM to tap creative energies that a stagnant planning process would never have accommodated. For example, management found during one strategic planning session that 50% of the organization's accomplishments went successfully beyond the original budget. As a testament to this strong performance, the 230-person organization, which moved into a new, 80,000 square-foot building in July 1997, is working on completing its second 80,000 square-foot building.

Other key indicators of SHRM's success are:

  • $70 million in (projected 2000) annual revenues - - $6 million over budget
  • Drop in dues-based revenues from 45% in 1990 to 17% (forecast) in 2000
  • Double digit growth from 11% in 1993 to 23.4% in 1998 and 17% in 2000 (forecast)

SHRM's top strategic priority focused on membership growth, not as an end in itself but as a tool to achieve the vision of serving as the premier voice of the human resource profession worldwide. In order to manage growth, it had to be measured, and monthly budgetary discipline was integrated across all levels of the organization to ensure consistency of focus to meet this priority goal.
A symbiotic relationship emerged between membership growth and revenue growth. For example, as programs were put in place to boost membership, conference attendance increased, generating revenue above and beyond "sunk" conference costs, which increased only incrementally compared to non-dues revenues generated by an ever-increasing membership base.

"We do surveys. We ask, listen and respond."

SHRM tracks and measures its programs using:

  • Spreadsheet formats to gauge the success of new program initiatives.
  • Member satisfaction surveys.
  • Recruitment and retention surveys.

Initially, it was a challenge to develop spreadsheets to adequately measure the success of new program initiatives. Prior to 1990, budget and program disciplines were relegated to member "care and feeding." The focus had been to "keep the train running" and not to determine whether it was running in the right direction. SHRM management introduced metrics and financial analyses to measure the organization's efficiency. The new, results-oriented culture of financial discipline, as difficult as it was to implement at first, made all the difference.

Surveys have shown that members are pleased with the quality of SHRM's services and that the value of the $160 membership well exceeds the cost. Surveys show SHRM's recruitment and retention programs are working. More members join by "word of mouth" than by any other means. "People hear about us because members are happy."
Top-rated member services include:

  • HR Magazine
  • HR News
  • Award-winning website
  • SHRM Information Center (addresses some 80,000 inquiries annually)


Lessons Learned

Financial discipline and success are inseparable.

SHRM learned that the key to success involves:

  • Understanding members and their needs.
  • Adopting a corporate governance structure.

Members
The key to SHRM's success is "understanding who your membership is, what their needs are and addressing those nees are and addressing those needs. We are constantly doing that." SHRM actively invests in its members. As membership and non-dues revenues continue to grow, funds are continually plowed back into member benefits.

The Board
The Board's culture and structure are integral to an organization's success. Ideally, a non-profit Board that approaches its governance role by following a corporate model brings out the best in volunteers. As a result, everyone "does what they do best." When Board members focus on contributing strategic thinking and intellectual capital, and staff are free to focus on tactical details, everyone wins.

Other key lessons from SHRM's experience are:

  • Being "not-for-profit" doesn't mean that an organization shouldn't generate revenue and additional net assets to achieve its vision and mission.
  • Keeping a focus on the core business is essential to success.
  • Understanding numbers is critical.
  • There is no substitute for budget performance against budget goals.

However, SHRM's management always recognized the need to "find a balance", the need to be flexible and to respond quickly. The numbers in a budget are viewed as plans and not a "chain around the ankle." An organization cannot afford to overlook opportunities.

At $70 million and growing, SHRM continues to be challenged by growth and "good problems" such as restructuring the call center and check processing systems to accommodate an ever-increasing membership. SHRM management faces a continual challenge to deliver the professional development experience on which members have come to rely. Essentially, the "bottom line" is that success creates new challenges, good challenges. It involves multiple moving targets - - you are never "there" - there is no plateau, no opportunity to "kick back and enjoy success." As a result, there is no such thing as "best practices", only "competitive practices".