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American Chemistry Council


American Chemistry Council
(www.americanchemistry.com)
Contact: Charlie Van Vlack, Executive Vice President & COO



CEO: Frederick L Webber, CMIA
Budget: $25 Million
Staff Size: 251 - 500 Employees

 





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 American Chemistry Council is comprised of nearly 200 member companies.

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

 

The Challenge

How to re-model North America's oldest manufacturing trade association into an agile service and advocacy organization to meet the needs of a changing industry?

In 1997, CMA decided to tackle the issue of improving business processes before the need became an issue for its members. Although member satisfaction surveys consistently showed 80-90% satisfaction rates and there was no "problem", member companies had experienced massive reorganizations during the 1980s and 1990s. The association recognized that its existing structure, which comprised 300 staff and 2,500 member volunteers, had become bureaucratic. Moreover, its advocacy efforts were too internally focused. CMA identified the need to reinvent itself to bring its organizational model into line with the business model prevailing throughout its member companies, which were organized into nimble and accountable business units. To remain relevant to its members and be in the best position to impact public policy issues, CMA knew it had to take a fundamental look at its operations before outside forces compelled a change.

The Solution

CMA 2000, an association-driven reorganization, was a bold initiative designed to improve the association's business process effectiveness.

CMA's management team decided to adopt a bold approach and consider what it would have to change to start the organization from scratch. In choosing a methodology, CMA was wary of letting the reorganization process become a vehicle for "redefining the what" of the organization. Instead, the process focused on improving operational effectiveness and efficiency by setting aside prevailing biases and adopting a business model to help the association achieve its three strategic goals:

  • Earning the public's trust.
  • Improving CMA's advocacy impact.
  • Creating member value.

The Process

"If it ain't broke, break it."

CMA 2000 was implemented on the following timetable:

  • June 1997: Reorganization efforts begin (James Miller and Company engaged).
  • January 1998: James Miller and Company work complete. CMA board approves CMA 2000 concept.
  • February 1998: Design groups formed (Tate-Francesca Company engaged).
  • February - April 1998: Design completed for issue teams and shared and corporate services.
  • April 1998: CMA board approves CMA 2000 design and revised budget.
  • May 1998: Staff team reassignments completed.
  • July 1998: Staff began working on new teams.
  • August - September 1998: Members appointed to teams.
  • February 1999: Last of four member relations executives in place.


The reorganization was completed in the following phases:

  • Phase I - Buy-in
  • Phase I - Internal Research
  • Phase I - Operating Analysis
  • Phase I - Analysis and Conceptual Design
  • Phase II - Build-out of Conceptual Design
  • Phase II - Business Plans
  • Phase II - Board Approval
  • Phase II - Implementation
  • Phase I - Buy-in

CMA's first order of business was to develop a partnership with board officers to obtain support for the effort. Also, CMA expanded the buy-in process by spending time with member companies that had undergone reorganizations. CMA also worked to bring existing committees and staff into the loop. Before beginning the process described below, CMA had determined that the association's staff leadership would drive the "ground-up review" and allow consultants to facilitate while keeping full control of the project within the association.

Phase I - Internal Scoping Research
In the first step of the research process, CMA hired an "outside-the-beltway" firm, Dallas-based James Miller and Company, which had been recommended by member contacts, to compare the association's operations to a corporate example. First, Miller conducted approximately 50 individual staff and member interviews to identify the organization's strengths and areas for improvement. Nothing was off-limits and every area of the organization was subject to a thorough analysis.

Phase I - Operating Analysis
Upon completion of the preliminary interviews, CMA involved over 200 staff and members in an in-depth analysis of the association's operating systems. The analysis showed that CMA had too strong an internal focus and needed to intensify its communication efforts with members of Congress, state agencies, international organizations, regulatory agencies, and other key public organizations and stakeholders.

Phase I - Analysis and Conceptual Design
Based on the analysis, CMA decided to reorganize the association around interdisciplinary issue and program teams comprised of members and staff. These teams were asked to address specific association objectives, encompassing topics such as public health and market access. CMA created "shared services" comprised of CMA staff to provide functional support to issue and program teams and corporate service groups to handle day-to-day operations, such as human resource and accounting operations.

Phase II - Build-out of Conceptual Design
Next, CMA hired Arlington's Tate-Francesca Company to keep the in-house implementation team on track. It set an aggressive three-month timeline to put the new design and budget in place while working on a parallel track to deliver on existing program and issue priorities unrelated to the reorganization. Design groups, comprised of members and staff, worked from February to April 1998 on the following areas:

  • Member Relations
  • Issue and Program Management
  • External Relations
  • Information Technology
  • Human Resources
  • Business Processes
  • Internal Communication

Phase II - Business Plans
Next, each design team wrote a business plan for each new team and shared service. The plans addressed expected deliverables and milestones, operating elements, established a business case for change and defined key connection points between groups.

Phase II - Board Approval
In time to meet the April 1998 deadline, CMA presented the new organization design along with its corresponding budget to the board of directors. The board gave its unanimous approval to proceed with implementation.

Phase II - Implementation
When CMA decided to scrap the hierarchical model to create a new lateral organization, every single job was eliminated and redefined. There were no "winners or losers" at the outset and 280 new jobs were developed around priority programs defined in the planning initiative. The toughest challenge was to determine who could work within the newly established model. CMA offered early retirements and developed a "job book." Staff were asked to bid on anywhere from 1-5 jobs and it took two weeks to sort the replies and make offers. On May 27, 2000, CMA offered good severance packages and employment counsel, as needed to those employees who were not selected for new positions or chose to resign.

Just six weeks after CMA's board approved the final CMA 2000 design and budget, staff were informed which of the assignments they had sought in the new system they would receive. They began to work on their new teams within a month. CMA's human resources staff developed and implemented a competency-based measurement system to assess how CMA staff scored on each of the organization's core competencies. The system also measured how well they would work in a team environment and their level of receptivity to change. Of CMA's 300 employees, 20 took early retirement, 20 were separated from the association and 10-20 left on their own accord. CMA offered departing employees good severance packages and job counseling. 40% of CMA's resulting team, comprised "an infusion of new blood and energy," came from outside the association.

Unintended Consequences

One of CMA's most "unconventional" moves involved hiring an in-house communication professional to head the information management and technology area. While a main goal of CMA 2000 was to implement state-of-the-art technology, it was more important to have an information management and communications expert at the helm rather than someone who focuses exclusively on the "gigabyte" side of the technology equation. CMA sought to engage an information manager who could translate technology into manageable content.

Also, when CMA scrapped its committee structure in favor of member-staff teams, dislodging some veteran committee members who could not be accommodated due to team size limitations, these members felt that they no longer had a "say" in the process. CMA developed networks for these member company professionals to share information on key issues. The twenty networks are primarily electronic in media, but occasionally meet in person.

Also, the association has received complaints for moving too quickly on some issues! Some members felt that they did not have sufficient time to provide thoughtful input into the association's decision process.

Would ACC do it again? Absolutely.

Measurements & Results

"Our goal is to keep looking for ways in which to serve our members better."

By any measure, CMA 2000 has been successful in helping to achieve the association's goal. And here are the new measurement tools that emerged from the organizational restructuring:

  • 360-degree reviews
  • Balanced scorecard (focused on financial performance, customer knowledge, internal business processes, learning and growth)


After completing the reorganization, CMA emerged with a business model that is radically different from the traditional hierarchical and functional approach that remains common in the association world. CMA reorganized over 70% of its staff into issue and program teams to focus its resources on achieving specific externally-oriented goals. The issue and program teams focus on advocacy and program delivery. Corporate services, encompassing executive services, human resources, etc., ensures smooth association operations and shared services teams, such as external relations and state affairs, provide "surge" capacity to support issue and program teams. The re-branded American Chemistry Council --the name change took place in June 2000 -- occupies a new building with floor space custom-built to its own design to accommodate multi- functional teams that are working together in single team environments.

Although the reorganization involved considerable personnel changes, the fundamental plan worked and resonated with the board, members and staff. The Council boasts a more corporate look and has reinforced the confidence of its members, who saw the association make some hard choices. Moreover, the new model is more effective in adapting to industry changes and as a result, The American Chemistry Council is able to significantly reduce time and resource pressure on member volunteers.

In addition, the new model resulted in the following benefits:

  • Member Services Center: A "one-stop-shop" staffed by four employees designed to handle everything from meeting registration to publications fulfillment to general questions.
  • Member Relations Executives (MREs): CMA hired former senior executives from industry with an average of 25 years of experience to better understand and engage members in the new Council system. The MRE's are located in Houston, Chicago, Greensboro, and Philadelphia - the centers of business of chemistry in the U.S.
  • Issue Review Team (IRT): This team, comprised of senior member company representatives and CMA staff -- including environmental health and safety pros, lobbyists, communication experts, a CEO and three business unit managers, make recommendations to the board, finance and executive committees to evaluate the advocacy potential and resource requirements for prospective issues. They also evaluate the issue team's success in meeting the objectives the IRT and teams set for specific issues.


Moreover, two key success stories have already emerged from the effort. Within a short period of time, CMA was able to launch a voluntary testing program for over 2,800 high-production-volume chemicals and to establish consortia to sponsor testing in a cost-efficient manner for members. Also, the Council's distribution team is addressing the issue of rail competitiveness, using its member network to improve the association's advocacy efforts. The new organization design has enabled the American Chemistry Council to move quickly enough on these two initiatives to have an effective legislative and regulatory impact.

 

Lessons Learned

"Planning is not an event but a continuous process. You either commit or it fails."

The American Chemistry Council learned that flexibility is essential, and any management team embarking on a fundamental reorganization must be prepared to make adjustments as needed. While the uncertainty over job fallout was uncomfortable, the association hired many new employees who infused the atmosphere with fresh, new ideas and a rich base of experience and expertise.

Also, the following change innovations were critical to the reorganization's success:

  • Improved relevance of operations to members' business strategies.
  • Learned lessons from member companies that had reorganized themselves.
  • Took a break between phases of the reorganization to retain control.
  • Shifted from an internal, function-oriented to an external focus.
  • Planned new organization structure.
    Put business planning at the heart of the project.
  • Created a partnership between staff and volunteers.
  • Established advisory roundtables.
  • Created a member services center.
  • Assigned member relations executives to different regions to communicate with members.
  • Eliminated standing committees.
  • Fired staff and invited them to reapply.
  • Hired a communication professional to manage information and technology.
  • Initiated all-staff performance review.
  • Adopted "balanced scorecard" measurement tool.

Most of all, the Council found that it was essential that leaders establish good communication among all parties affected in the reorganization:

  • Communicate Early and Often: Use e-mail, the Website, ask for input, use publications, walk around to meet with staff, discuss progress in chance meetings in elevators, etc.
  • Ask for Input and Help: Input from key stakeholders: members and staff.
  • Acknowledge the Downside: Don't sugarcoat the sacrifices and be fully transparent.
  • Emphasize the Positive: Remind stakeholders about the bright long-term prospects.