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Dues and Don’ts

Business membership organizations must confront the forces of the Flat World when it comes to civic endeavors.
By Phil Ritter |

Last month this column introduced the concept of “purchasing civic outcomes” as a way for Dallas business leaders to rethink civic leadership in the “Flat World” described by Thomas Friedman. One element of this challenge is to examine return on investment from business membership organizations in a different way.

The traditional way of evaluating chambers, trade associations, and the like is the purchase of a “membership” and whether ongoing “value” is derived from that membership. Every year businesses in the Dallas region spend millions of dollars and countless hours on dozens of business organizations. Many of these organizations deliver solid results. However, the issue to think about is whether the “membership” model allows the business community to assemble the critical mass of resources and talent necessary to address the challenges facing our community.

Most membership organizations are hierarchical, just like public corporations. There is usually a board of directors, a president/CEO, a professional staff organized by functions or departments, and various programs and committees. The challenge for all hierarchical organizations in a Flat World is that communication within them is often slow, there are enormous hidden costs, and they do not always have the ability to shift quickly in response to changing conditions. 

Corporations seeking to win in global competition are innovating new business models. These include changing the mix of contractors and employees, cooperative research and development, supply chain consolidation, outsourcing, and offshoring. The Flat World increases the pressure for corporate managers to disaggregate every line of business and every business process. Those that offer competitive advantages are given strategic priority, those that do not are shed, and anything that can be done better and less expensively by others is outsourced.

For the most part, business membership organizations in Dallas have not been subjected to the disaggregating forces of the Flat World. If they were, you would see more organizations breaking out their core functions and deciding what to focus on,what to shed, and what to outsource. Unfortunately, the incentive for membership organizations is to continue to add programs, staff, and expense as they seek to create more “value” for their membership. This is why we have overlapping “technology business councils” in the Dallas region. It explains why we have piecemeal business efforts for comprehensive education reform—each organization has to have its own program. It’s why our federal and state lobbying efforts are uncoordinated and often fail to deliver the goods for Dallas in comparison to other cities.
 
City Manager Mary Suhm and the Dallas City Council are attempting to steer municipal government in a new direction, and their efforts are instructive to the business community. The city is using a budgeting model developed by urban theorist David Osborne and outlined in his recent book The Price of Government. In it, city leaders first agree on a limited number of key priorities. Then they agree how much they are willing to pay for each priority. Then they tally the cost and force rank every program that supports each priority. Those that fall above the line of available resources are funded, and those below the line are not. Ultimately, private sector vendors will come in and compete with public employees to deliver services that support strategic objectives. The process leads to better service at lower cost, with higher stakeholder support.

What a great opportunity for Dallas business leaders and membership organizations to come together and undertake exactly the same process! Business leaders must first define a handful of strategic priorities and decide what we are willing to pay for each priority. Then we determine the cost and rank the effectiveness of each program from every organization that supports that priority. Those above the line we fund, and those below the line we don’t. This would encourage new collaborations and innovative strategies as membership organizations seek to place their program “above the line.”

The opportunity for innovation in business leadership has never been greater.

 

Phil Ritter is a senior vice president for Texas Instruments. In addition to overseeing TI’s public affairs, Ritter is a trustee of the TI Foundation and serves as chairman of the company’s Constructive Citizenship Program. A board member of the World Affairs Council of Dallas and the Texas Taxpayers and Research Association, he considered a run for mayoral office in the upcoming election.
 

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