Reinventing the Modern Association Through Trust, Talent and Transformation With Neal Couture

Full Transcript

[Intro]

Welcome to Learning by Association, a podcast brought to you by D2L, where we delve into the ever evolving world of associations and the challenges they face in navigating the currents of change. I’m Bill Sheehan and I’m thrilled to be your host. Join me and our guests as we explore the role learning plays in driving associations forward and how it can impact every part of your organization, from recruiting to engagement and renewals, to staff development, business strategy, and more. So let’s dive in.

Bill Sheehan:

Hello, everyone. Bill Sheehan here, global head of association strategy with another, I think, very powerful podcast today for Learning by Association. And I’m thrilled and honored to have Neal Couture, who’s president and CEO of the American Society of Nondestructive Testing. And I’ve known Neal for a year or two. He’s done some great things. I know I run into your staff all over the place. They can’t say enough great things about you.

And you and I have had some pretty neat conversations about the future of associations. And you and I always hear a lot of the same concerns and challenges that associations have. Membership acquisition and membership renewals. And, “We got to increase our membership dues,” and the importance of generating diverse revenue streams and other non-dues revenue types of things. And you’ve kind of come up with… I don’t know, you’ve been very successful in transforming ASNT over the years. But you also have a very fascinating background and I have always found it intriguing and I wouldn’t do you justice. So if you could just take a minute or two just to give a little bit of your background and how you got to ASNT.

Neal Couture:

Sure. First of all, Bill, thanks for having me. It’s always great to see you and to chat about these things that are just… We find, oddly enough, very invigorating and exciting and I can’t get enough of. So happy to have the discussion. So I come from a kind of a non-traditional background. I started out in the aerospace and defense and military industries. I was a Air Force officer. I served seven years active and four years in the Air Guard. I spent five years at a NASA center and another six or seven years in private industry. And the first 20 years of my career was basically in the government business side of the house, how the government buys and acquires technology and equipment and so on. I then woke up one day on the board of directors of my professional association that was in need of some management change, which is how I got into the association management business.

I never saw myself as an association manager. I never saw myself in this world, but here I am. And so that was in 1999. I took a side detour along the way to teach at a couple of colleges. I was at George Washington University as the director of government contracts, law and business programs. And I was at Boston College as an associate dean. So my background is business and not necessarily… I know nothing but nondestructive testing, to be fair. I’m an association executive at this point. So this is my quote, “third career,” if you want to count academics and the aerospace and defense industry. So that’s how I got to where I am today.

Bill Sheehan:

Well, that’s fascinating because you kind of have experience in all sectors that an association tends to operate under. Management, corporate side of things, and also education. So that’s pretty neat that you have that. You and I were talking, and I think it was almost a year ago, maybe over the summer. And we were at the SES show, the organization that represents all the STEM associations, and great event. And one of the things that I’ve been hearing is that associations oftentimes are either afraid to increase member dues or really reposition themselves as more of a corporation that’s innovative, that’s producing products and services that people will pay for, and that can help an association become self-sustaining. And I think you kind of said, “Hey, guys, as an organization, we shouldn’t live on dues alone. That shouldn’t be our goal.” Tell us a little bit about how you did that. I find this fascinating.

Neal Couture:

Yeah, I think it comes from having a background in a different industry. I find that people who grow up in associations tend to speak in this term of dues and non-dues revenue. I don’t understand it. It’s product A and product B. So I think a couple of things that I brought with me is understanding that in order to be successful, first of all, we have to run like a company. What that means is you have to think like a business. We like to say the not-for-profit status is a tax status. It’s not a business plan. But all too often that’s just lip service. We don’t really act like it. What do I mean by that?

Well, do you have an effective system of marketing and business development? Do you understand how to sell? Do you understand how to price? A lot of associations struggle with pricing because sometimes the members get in there and they act like members when they want to talk about pricing. So first and foremost, you have to have leadership who understands you’re running a business here. You are providing goods and services, and you’re in a very competitive environment, and that may be different than what they brought up with.

So first of all, how you view yourself, making sure that you have the corporate competencies that you need to run in business, large or small. Do you have the talent? One of the things that we did at ASNT is we literally had to turn over probably about 60% of our staff because we just didn’t have the right pieces in the right places. All terrific, wonderful people, but just not the skillset that we needed in 2020 and beyond versus maybe 1990 or whatever. So all of our transformation comes about from viewing ourselves, first of all, as a business, acting like a business, make sure we have the core competencies in the business, making sure we have the infrastructure, processes, talent, that any good company needs in order to be effective.

Bill Sheehan:

I think that’s fascinating. And where did you… So when you’re looking at this, I know that it sounds a lot easier, like what you just said than actually implementing it. And I’m sure it took time and it took, I think, buy-in too from the board or the executive committee saying, “Hey, this is where we’re going to move and this is why we’re moving that way.” I would think the board would say, “Neal, have at it.” Was that the case?

Neal Couture:

No, association boards are not known for cutting CEOs loose to do whatever they want. I think it took time to build trust. When they recruited me, we had some really open and frank conversations to say, “Where are you in the change cycle? Are you aware that you need some business reformation? Are you ready to make some hard decisions? Are you ready to spend some money?” This is an organization that prior to my arrival had suffered through maybe six or seven years of financial losses, and they wanted to turn that around. But as you know, in business, sometimes you have to spend money to make money. It’s a bit cliche-ish, but it’s true. You have to spend money. You have to upgrade your talent. You have to upgrade your tech stack. You have to develop things that don’t exist. You have to develop new products and programs. And so these things all take time and money.

And so the first step to this journey, frankly, was an agreement when I came in the door to say, “We’re ready for this.” Now, no one had the answers at that moment in time. You develop a blueprint in your head, you get some ideas, but the board didn’t say, “Just go do something.” The board said, “We agree on the objectives, so start there.” And the first objective was not to return to financial profitability, which was important. They didn’t frame it as a financial issue, even though that was a reality. They framed it as a value issue. They said, “Look, we’re really concerned that we are losing traction with our community. We’re not providing products and programs and services of value, which is why we’re financially suffering.” They understood that in order to make that money, we had to have something of value.

So that was an important distinction, and the board got it right. They said, “Look, it’s all about value. It’s all about how you provide and position yourself to help people in their careers day-to-day and how you help companies achieve their objectives day-to-day.” A lot of individual membership societies tend to view themselves as concerned with the individual. Understandable. That’s how membership kind of evolved, which is individuals pay dues and join and you got to deal with their needs.

But what we found is that it’s impossible to separate out the interests of the employers, the companies, whether it’s for-profit companies, government organizations, whatever it is. They also have needs. The managers in those companies are individuals who have needs, but it’s really the company’s needs. So we had to reimagine ourselves as beyond just an individual membership society where I’m dealing with Fred, Joe, or Sally. We have to also deal with ABC company and what their vested interests are.

Why? Because they’re an essential part of our community. I can’t ignore the organization’s needs. Now, I don’t view this as an or. It’s an and. We have to deal with both. So it required us to view ourselves differently, number one. We also had to review how we brought leadership on. As an individual membership society, you did stuff like submit a nomination, throw it over the fence, maybe the nominating committee will put you on the ballot. Well, if you’re a member, you’re qualified…”Whoa, whoa, whoa, whoa, whoa. In what world does running a business act like that?”

And that was a hard one because individual membership societies are traditionally, “Well, it’s all about the member and the member…” Well, yes, but I need members who have the experience and the competency sets that we need in order to make hard decisions to govern the company in the manner it needs to be in order to be successful. Not everybody has that. As a matter of fact, in a typical individual membership society, few people have that. So sometimes you have to go out and look for it and find it in senior management at companies to say, “I need someone who understands what a board does.”

What does a board do? What is a board meeting supposed to look like? Is it just the dog and pony show where the CEO gets up there and says, “I’ve got 18,000 members. Yay.” And meanwhile, they don’t really understand the strategies. They don’t understand the market orientation. They don’t understand the product mix, the market set mix, all of those kinds of things that you learn in business 101 that you need in order to be successful today.

Bill Sheehan:

Yeah. And so you touched on something too. It’s like where you’re looking at the industry per se. You got the individual member is important, but it’s the industry in which they serve that you’re trying to provide an unmet need or a product and service that the industry needs and will pay for. How did you go about that? You really need to have a stat that’s in line with your thinking too that says, “Hey, we’re going to go out and survey our industry and our members to find out where are the gaps and then we can fill those in.” Was that part of the strategy too?

Neal Couture:

Critical. Being what we call a data-driven organization, which is instead of relying on anecdotal statements on the part of the volunteers, which is how a lot of associations grow up. You got 12 people on that board or 20 people or 60 people, depending how big your board is, and they each have their own little world of experience and they want that to be the basis for decision-making. And unfortunately, that’s not sufficient. So just like any other company, you got to go out there and do your homework. You’ve got to understand, “How big is my market?” “Okay, so we have 10 members.” How many should it be? How many could it be? What’s in that community? Number one. Number two, who is that community? Who are we trying to reach? So it all gets put together by data-driven practices. You need the right team to do that.

Doing market research isn’t just something you teach somebody to do one day. It’s a skill. It’s a discipline. It’s an entire career field. So we have to make sure we have the right people getting the right information to tee up the decisions that the board needs to make. I don’t expect NDT professionals to be market research professionals. I expect them to be able to read about maybe complex information and make informed decisions of which my role is to tee them up, inform them, give them options to choose from, not just simply, “Here’s a blank sheet of paper, go figure this out.” They can’t do that. That’s not their experience set.

So the role of the association CEO really is to make sure I have the talent and the processes in place to make the board successful, to make decision-making for them easier and more predictable and reliable rather than, again, the old notion of the loudest voice in the room shouts down everybody else. “I’m the CEO,” or, “I’m the chair of the board.” And meanwhile, you may have three people in the room that are that dude’s customers, this kind of inherent conflicts that a lot of associations face. We had that. And so well, do I risk challenging the chair if they’re my potential customer? So you have to have strong leadership that is well-informed through data-driven processes so that they can make insightful decisions. There’s an association space. We talk a lot about foresight, the ability to get the information you need in order to develop foresight about what’s coming and how to position your organization appropriately. Associations historically didn’t think like that. They didn’t have marketing teams. They didn’t have business development teams. But I think that’s an essential part of our evolution.

Bill Sheehan:

Yeah. And you need to make sure that information you’re getting, that data is trusted. In other words, “Is this real? Is this information real?” I think another challenge that some executive directors and some C-suite, and most folks don’t know this, but when you’re in an association, that board is churning maybe every year. You’re losing some intellectual capital each year. Which I mean this in the best way, that can be good and bad. Don’t get me wrong. A lot of us struggle with that sometimes. Did you run into that challenge where, “We’ve agreed to this and now we got new people coming in, now we got to explain ourselves all over again and justify it”?

Neal Couture:

Yeah. So here’s a tip. In interviews, be listening for key terms like “legacy.” If you interview a board chair and the board chair says, “My legacy is going…” That’s a warning bell. Because what they’ve done is they’ve articulated that their goal as the chair is to leave something with their name on it. I believe in servant leadership. You should be there to serve the community and it’s not about what you leave behind. In fact, it is what you leave behind. But it’s not the motivating factor. It’s not why you’re doing this.

So one of the things that you usually have with… This is my second CEO position in the association space. Both times it was a case of, “Do we have the right people in the room? Do we have the right board in the room?” And believe it or not, that’s a CEO discussion. That’s not something you can just leave to the board to figure out for themselves because they may not realize. My first association, the board of directors was 160 people large.

Bill Sheehan:

Wow.

Neal Couture:

And it was what we call a kind of a house of representatives. If you were a chapter president or their delegate, got to be on the board. So you’d have a board meeting and it would be a different 50 or 60 people in the room every time. So you could never have a continuous conversation. There was always proxies showing up and it was just chaos. So they talked about the things they could talk about, award criteria, conference locations, completely non-strategic, non-meaningful things.

So in that case, we had really quickly realized we’ve got to bring down the size of the board, make sure the people in the room are the right ones. So your leadership selection process is perhaps the most important process of governance. At ASNT, we went through that same discussion. We said, “How are members elected to the board?” We had a couple of board members that got elected based on 12 member votes because they had a system of write-ins. Well, if you had four openings and only three nominations on a nominating committee, a member could do a write-in candidacy and get elected with two votes. We literally had board members who got elected because 14 of their friends got together and cast a vote. That’s not leadership selection. That’s one step short of randomness.

So we said that’s not feasible. We have to have a way of making sure that the people that are on the board of directors are the right ones. And what are the right ones? Are they the right mix? The mix is key. And you’re right. It changes over every year. So it’s a constant continuous discussion that the board itself has to own. It can’t be just… Our selection committee at ASNT used to be prohibited board members from engaging in the process. Well, who knows best what the challenges of the board are than the current board? So that was the very first thing while I was busy assessing my staff and figuring out what to do there. On the governance side, I was working with the executive committee essentially to say our leadership selection process has got to change dramatically. We have to make sure that the board has strong input and control, frankly.

It can’t just be like your local motorcycle club where, “Hey, it’s my turn. It’s my turn.” That doesn’t work today. Our business is too difficult to run like that. So you have to have some conscious process that results in the right leadership team on the board table. And that’s a never ending journey, by the way, because you can have the best selection process in the world and someone gets on there and you find out what they’re really like, which is, do they get along well with others or are they really able to have some of these difficult conversations? Do they understand the concepts of confidentiality? So we put together a very deep and extensive board orientation. It’s really a training program to say, “This is what board behavior looks like.”

Bill Sheehan:

Oh, that’s great. And did you have to redo your bylaws by any chance?

Neal Couture:

Several times. Several times.

Bill Sheehan:

Yeah, that’s never easy.

Neal Couture:

No, it isn’t, but one of the first things we… And this is, I think, a trend in association space is getting the power to change the bylaws into the board’s hands because that’s really where the governing of the association happens, not within the membership. And that’s a hard conversation because we always… How many associations have you heard to say, “We’re member driven”? I’m sorry, I’m going to have to disagree with that concept today. We’re mission driven. We’re here to satisfy a mission that this organization was created for. And that isn’t what the whims and needs of this individual member wants. It’s what the community as a whole needs. And that’s my job is to understand that and to make sure that the board understands that so it makes informed decisions. So there’s a lot of changes that happen. We got the bylaws revised, we’ll change the selection process in the bylaws, the composition of the board.

As a matter of fact, we’re going through another round to bring our board size down. It’s currently 20. We’re bringing the board down to between 9 to 12 because we find that 20 people is too big to have constant, ongoing, in-depth strategic conversations. 20 people in the room is great if I’m just briefing them, but when you need deep, deep understanding of the issues, you can’t do that with a very large group. So associations are shrinking their boards.

Bill Sheehan:

Yeah. I was just going to ask you that and two things I wanted to touch on there. One, you mentioned onboarding and onboarding to me is not only important for both staff and members, but I think those committee members and board members really need to know what their fiduciary responsibility is. So you have an onboarding process.

Neal Couture:

And that’s where I get to play college professor. I put my teacher hat on because I get the chance to spend… We spend about six hours on it in person in a workshop environment. In addition to that, I have a series of training videos that are really informative, a review of the bylaws, the concepts of fiduciary duty, duty of care, duty of loyalty, all that. So we have videos… About four hours of videos, as well as a six-hour in person orientation. All of the board attends every year. So it’s not just the people that are coming in. It’s really a refresher training for those.

And we do scenarios like if a board member makes a proposal that has no information or data behind it, they just come up with a crazy idea, what are our duties? Taken from a fiduciary perspective, but also from just a governing perspective, what should we do if someone on the board misbehaves, how do we handle that? All of those kinds of narratives. So we really put them through bootcamp in board training and we get usually great feedback. Most of them come in and say, “I had no idea, number one, all that we’re up to, and number two, what a board member actually does.”

Bill Sheehan:

I think that’s fantastic because being in the association space for 30 years and being involved in boards, and when some people don’t renew and you tell them, “This is all you do,” one of the first things they say is like, “I didn’t see return on my investment or my values.” One of the first things they’ll say is, “I didn’t know you did that.” And it’s like, kind of shame on us for not… So I think that’s wonderful that you’re actually onboarding, “This is why we’re doing it.” Because I think then there’s a bit of a responsibility for the board members to promote the goodness of the organization to other members. So we know all this, so we can get more members.

But the one question I have too, and I think other CEOs probably find this challenging, is how did you know that you needed to reduce your board almost by 50%? And then from that, I guess, is made up also in executive committee, because you’ll have your… How was that? That was over time. That’s something that you figured were just too big.

Neal Couture:

A couple of things. First of all, experience. I’ve been in 200 board meetings, let’s say, maybe before, you start to understand how they should work and what doesn’t work, what works well, and you start to see the symptoms. So there’s that experience. There’s the research. There’s plenty of association literature out there that has researched good governance and you bring all of that to the table. And as a matter of fact, I assign reading assignments to our board. I say, “You need to read this because you can either hear me preach it or you can read this to validate what I’m telling you is legitimate and I’m not making stuff up.”

So we do a lot of research into good governance, a lot of different sources out there available in the association space, the nonprofit space, and we look at our own data. One of the most powering exercises we had when I first got here was I pulled up the minutes from the last five years of board meetings, and I pulled out all of the decisions they made, motion, decision, and I listed them. And I said, “Okay, over the course of five years, you made 72 decisions. How’d they turn out?” And they didn’t like the record. In hindsight, they said, “Whoops, that was a bad decision. Now, let’s look at why that was a bad decision. Well, we didn’t know X, Y, or Z.”

You’ve come to find out that their processes for preparing the board and informing the board were absent. You could quite literally walk in, give a proposal, and if you were persuasive, everyone would vote on it. Well, that leads to bad decisions. So a combination of expertise, experience, literature from the industry, the association industry, and our own experiences at this company really informed the board in terms of how they had to change, recognizing that one of our challenges, we really had a hard time with that conversation the other day because there were so many people in the room and they all wanted to go in different directions. These people clearly didn’t know what we’re talking about. These people didn’t read the read ahead.

And so you started to see that the eight or nine people that were really engaged, that really were prepared and that were really understanding the challenges and the issues weren’t able to speak enough to get to the point where we had to make an informed decision. And that led them to believe and said, “Look, we’ve got to change. We’ve got to continue to refine our selection process and make sure there’s a size of a room where we can have these hard, hard, deep, data-driven discussions, and that’s sometimes hard to…” Now, I have seen some boards with 20 people on it that are great. Congratulations. It’s a challenge. It’s hard to overcome. So I think the trend is bringing it smaller in size so you can get deeper with more in-depth discussion on the part of each individual without having 10-hour long board meetings.

Bill Sheehan:

Hey, so another question too, over the course of your career with ASNT, you came in, noticed, “We need to kind of get lean in a way, and be more profit-driven mentality to serve our mission so that we can stay in business.” Where are you now, as far as staff? Are you smaller now than you were then?

Neal Couture:

Actually, we have the same exact number of staff. Our revenue has grown from the day I came in… Well, about 50%. So revenue’s up 50% from 2019. That was before the pandemic drop because, of course, just like everybody else, we took a big hit. So our revenue’s up, but our staff number headcount is exactly the same. Not necessarily consciously trying to do that. It’s just the way it shook out. But I could tell you what, none of them has the same job they did five years ago. No one. Every single position changed. For example, I walked through the door, I had an executive assistant. Don’t need an executive assistant. Reapplied that position somewhere else. Membership department, seven people, reorganized.

So essentially, we took the talent we had, properly structured, organized, trained, if necessary or replaced, but we have the same number of people with one asterisk. We have a staff of five people in India now that we didn’t have before because of global expansion and they handle our Southeast Asia business interests. So except for those five where that’s entirely a business line, everything else we did is done with the same number of people. So we track metrics, we do a revenue per employee metric and how does that compare to other associations? We’re way up compared to where we were five years ago.

We do a lot of technology. Our tech stack is probably too thick, but we find we can become much more efficient doing things differently. So process redesign enables us to save on labor. I will say though that the labor we do have today is more expensive, not just because of inflation, but we’ve upgraded the talent. So the people that we have in our CFO position, the people that we have as a chief strategy officer. I have a chief operating officer. Those are more expensive people than a manager of membership.

So we had to bring in some talent, so our labor costs went up, but it was necessary. We had been starved of talent, I think, for so long that they got into… I called them what we call red button pushers. I think I told you this analogy, which is they were all well-trained. As soon as you walk in their door, they’d be like, “Yes, sir. What do you want me to do?” And, “Well, press that red button.” “Well, okay.” Well, I don’t have that luxury to go around and tell everyone to press the red button. I need you to know what to do, when to do it, how to do it, and use judgment and so on. So we had to change out several people because that was not a resident skill that we had in the space. We had to teach all of our management team financial management. None of them had prepared a budget. It was all essentially controlled by the CFO. So things like that, it’s part of organizational transformation.

Bill Sheehan:

Yeah. I love what you’re talking about here too, because I call it, I guess, upskilling. What you’ve done is reallocated resources. And you know how replacing an employee can be a disruption, particularly if they’re coming in from the outside, you got to get them up to speed, you’re losing all the momentum that the previous employee had, but it looks like you’re doing the upskilling. In other words, we had to teach them about financial management or about marketing or about data analytics or what have you. And I think what you probably saw is that maybe productivity increased too.

And when you’re bringing in those higher value, or if you will, higher cost employees, things will… Your productivity changes. Your efficiency changes. You’re bringing in different types of thinking to keep you ahead of the tech curve and the like. So I’d love to hear about upskilling. Do you also find… Getting back to when you were going out and looking what the industry needs, and I know you guys do a lot of education, is upskilling part of that to the membership, ensuring that they’re staying hit? But do you find upskilling and training is a value that they can’t get anywhere else but through ASNT?

Neal Couture:

Yeah, absolutely. I think that’s back to that value proposition. What value does a person get from joining ASNT? Kind of a little regression here. So what was the most landmarked change that happened in associations? It happened in 1996 for us and most people didn’t appreciate what it was. Well, it was the internet. The internet came along somewhere in the early ’90s, got widely adopted more in the late ’90s. And what we didn’t appreciate is that it opened the door to a whole series of competitors that didn’t exist before. Now, once upon a time, if you wanted to learn anything about NDT, you came to ASNT and maybe five or six college programs around the country, which are not accessible to a lot of people. And so they had no choice. They had to come here.

And if they wanted to talk to someone about NDT, they had to go to the local section meeting. If they wanted anything at all to learn professionally, they had really one, maybe two places to go to. Well, all of a sudden the internet comes along and any Joe Schmo can hang a shingle and say, “Here’s some content for you. Here’s my PowerPoint presentation on ultrasonic testing. Here’s my video.” Associations didn’t appreciate all that did was increase scaled up competition. Everybody and their brother is now providing content that used to be exclusively our domain.

But what they also have failed to recognize is our strategic advantage. Our strategic advantage is trustworthiness because Joe Schmo may have a video on UT, but how much can I trust that? I don’t know Joe. So ASNT, we look at it that way, which is we’re in competition for everything we do with a large group of people. And our strategic advantage is trustworthiness, meaning the pressure’s on for us to get it right.

Upskilling the talent in our staff also created innovation opportunities. For people that are no longer thinking about pressing the red button, they’re now able to think about, “What the hell are we doing here? What are the problems we’re trying to solve? It can’t just be Neal and the corner office solving problems. I need to understand what are the issues with certification, membership, whatever.” That’s how we came up with the idea of a new membership model, a freemium style system, is all innovation comes with that talent upgrade. And that reflects in the products that we deliver and in the quality of the services we offer. NDT is just like any other field. It’s a technical field. People get into the field either through practical skills in a technical training program all the way up through a PhD in engineering. So our members are very diverse in their backgrounds and their levels of education and what they actually do.

Some of them are handling equipment, taking measurements, whereas others are designing processes, just examining and designing materials for manufacturing, et cetera. So it’s a really broad field. But they require constant training, the constant development, a lot of credential requirements to make sure that they can do the job effectively so whatever it is they’re working on building or repairing is done so safely and in accordance with some standard.

So that innovation shows up in our products, but it’s a challenge because it’s expensive and it’s slow. How do you develop an entirely new educational system compared to what you used to have, which was basically textbooks? “Here’s my textbook. Go ahead.” Well, we were losing customers because, like I mentioned, all those members are out there running great videos showing them, “This is how you do an ultrasonic inspection. This is how you analyze the data.” We were being left behind because we didn’t have those capabilities. So it’s an important part of that upskilling is to make sure we keep our product portfolio competitive.

Bill Sheehan:

Yeah. And I guess particularly from that younger generation, they want to see those engaging type of content. At D2L, we spend a lot of time on our platform ensuring that a lot of video, a lot of the latest technologies are applicable within this because that younger generation… Back in the day, you and I kind of knew what an association was. It was the original social network. You had to go there and have conversations, but now with the internet and the technology disruptions that we had, now you didn’t see them at the conventions anymore at conferences. So I think it’s important to really understand that younger generation, and particularly you mentioned too the freemium model, because the younger generation, at least my kids, hate to spend money, apparently. I guess they want dad to spend the money. Talk to us a little bit about that freemium model type of idea.

Neal Couture:

Really started, Bill, with us reexamining, reevaluating, or reframing how we viewed what membership was, what’s a member? In membership associations, membership is treated with the capital M, the Member. Well, we’ve viewed it a little differently. We kind of said, “Wait a minute. If you’re in this community, if you’re in NDT or if you are interested in NDT, you’re a member of this community.” So as opposed to a member of the association, you’re a member of the community. How can I serve you?

Well, it’s impossible for me to serve you if I can’t even find you or reach you. And when we examined what our biggest barrier to entry was was people just didn’t want to spend $10 or whatever it was just to get marketed at, because that’s how a lot of associations treat members. Most association marketing programs are essentially not marketing programs, they’re communication programs pinging the hell out of their members saying, “Come to our conference. Buy my book.” And so they have very little thought into expanding that funnel, if you will.

And so what we said was, “You know what? If the biggest barrier to my putting my value proposition in front of you is $100, well, let’s eliminate that barrier. Let’s give you an option to join. You’ll get a scaled down scope of benefits, certain amount of content, teaser content, if you will, but you don’t get the right to vote.” They don’t care anymore anyway. But it opens the door.

And so we had some members of our board that said, “Well, are we going to cannibalize? We’re going to cannibalize. We’re going to take people that are currently paying $100 and then they’re going to renew at the $0 rate.” We said, “No, that’s not what’s going to happen.” We said, “What’s going to happen is we’re going to reach people that we’re not currently reaching. And once we’re able to reach them with the proper and effective marketing campaigns, you can sell them on the value proposition.” And we’ve been now doing this about, gosh, close to a year. That’s what we’re finding. No one dropped their regular membership for the freebie. No one.

Bill Sheehan:

Wow.

Neal Couture:

If they were at dues paying 125 a year now, they renewed at that rate. That’s fine. What we did though is we reached… I think we picked up 3,000 members at this point, completely who had not been in our system anywhere. We reached them through some form of social media, advertising campaigns, partner campaigns, any of these ways of getting the message out. And they said, “Oh, it’s free. I’m going to try it out.” And once they came in, we then were able to track what did they buy? What did they spend? Huge amounts of renewed revenue that we would’ve never had if I would’ve somehow tried to convince them, “Well, first pay $100 so you can get the discount.” It’s not how people buy anymore.

You really have to be able to give them a chance at viewing your value proposition in a safe, inexpensive way. And it worked for us. Now, by the way, I’m going to ask to assist by saying, this model may not work for every association. I get that, but it’s working really well for ours because what we are finding is that that barrier was in fact the dues to join. People view joining differently than they did when you and I started in this world. When you and I were joining in this world, it was an expectation. You joined your professional association or you weren’t treated seriously. If you didn’t have a membership… Now, you may never have gone to a meeting or never done anything, but it was on your resume, and that was an expectation. That’s not how people think today.

Why? Well, because the career’s crafted differently. You and I thought when we joined, we’d have a career. It’s a straight path. “I needed to be part of this industry, so I’m going to join now and I’ll be with it.” My kids don’t think like that. And I have one kid who’s on his third career at the age of 40 and you’re like, “Okay, so they’re not just going to join for the sake of joining because it’s a social expectation or a professional expectation. They’re only going to do it if it gives them value.” So we’ve got to get over that nonsense to say, “Look, the only people we’re going to deliver our value to are people who are members who have chosen to spend $100 to get marketed to,” and instead figure out how we expand our envelope, how do we expand that set?

And in the old days, we used to read mail lists. You don’t do that anymore. So our freemium model has been working out well. We transition a fair amount of those people from the freemium to a paid dues so they get the full suite of products, premium membership, if you will. And we’ve got a whole stream of new revenue that we’d have never had before if we wouldn’t have done this. So it’s a success for us.

Bill Sheehan:

That’s pretty impressive. And speaking of that too, I’ve often said… And you and I have been at all these functions outside of work and you’re talking to friends and they ask you, “What do you do as an association?” And it’s really hard sometimes for them to understand what an association does. And most of my career was spent on the trade side of things with the National Confectioners Association, snack food and the like. And I used to say, basically what associations were created for was three things to protect, promote, and advance an industry, whatever that may be. Just to sum it up so I could get to the bar and get my drink instead. But as far as are you seeing one of the value propositions for ASNT is to help advance your member’s career. In other words, you can get smarter and you can see where you are within where your colleagues are. Do you find that as a huge value proposition?

Neal Couture:

That is the value proposition. If the value proposition is how can I help you get ahead? And that’s framed in the terms of your current job. We’re either going to help you do your job today better or position your career for advancement. So there’s two levels. It’s immediacy and long-term thinking. And that’s kind of our product portfolio in a nutshell, which is what are the things that a person needs today. Our AI tool, for example. That’s not a career tool. That’s a job tool. A technician can go, if they’re a member, access our Betty Bot AI tool, we call ours Anita, and they can ask her, “Anita, I’m doing an inspection on a type four stainless steel elbow pipe with four inch diameter. What’s the appropriate NDT method I should use for that? Which piece of equipment is best to do with that? How do I calibrate that piece of equipment? How do I interpret this data that I’m getting out of it?”

These kinds of questions that used to be answered by a supervisor sitting behind you in the field, which is expensive, and we can’t do that anymore. So now that supervisor sits in the home shop. He may or she may have a radio or telephone or whatever, but generally we want to be able to help that technician in the field do their job, do it more reliably, do it quicker. There may be a video on how to do an ultrasonic test. There may be any number of resources that helps them do their job. So our job is to help him or do their job today and to position their career long-term. So those are the things like training courses, professional development courses that are more long-term focused, new skill sets, that kind of thing.

But we view the workforce or this community… Our job is to first of all, tell you it exists. So if you’re a high school kid or a middle school kid, so our job begins by informing you we exist and how important and valuable this is. Getting you into the field, whether that’s a training program, an educational program, whatever, connecting you to the employer, getting you properly trained and certified and qualified, helping you advance, and then seek recognition, awards and honors, self-fulfillment. That entire life cycle is our responsibility as a professional association. And there’s a parallel one for companies as well. And so that’s how we feel.

Bill Sheehan:

Do you find in doing some research… And I’m sure along the lines there’s some level of membership surveys, what are you happy with? What can we change? What should we stop doing, keep doing, and start doing? Are you finding that a lot of the industry is looking for that trusted source of education? Are you seeing that or hearing that?

Neal Couture:

Yeah, very much so. Because one of the things… And you know how this works. You go out there and you do a Google search and you got 143,000 responses. How do I tell which one I want to listen to? Well, most of the time it’s ordered in terms of who paid the most to get your attention, sponsored ads, et cetera. So what we want the world to know is when it comes to NDT, we’re the trusted source. So we’ve actually started adopting that kind of language to say the distinction between us and our competitors… I’ll give you an example. There is a media company out there which does tons of interviews and articles that they’re pulling and interviewing people and writing articles. They don’t have any resonant knowledge. They’re just selling ads and that’s great. That’s their right to do so. But how do I know that the person in the interview is qualified? And I don’t know that article I just read that told me how to do something, how do I trust that?

The internet is full of that. It’s full of videos of people showing you or telling you. How do you know what you should trust? Well, if you come to us in the same way that if I’m a business guy, I’m going to go to McKinsey. I’m going to go to Harvard Business Review. I’m going to go to MIT. I’m going to go to what I know are trusted sources of information on strategy, business, that kind of thing. That’s the way the association should be postured to say, “We need to distinguish ourselves from everybody else by number one, telling you we’re the trusted source, and then number two, proving it.”

Bill Sheehan:

Are you seeing also increased engagement across the board? I always say that the 80/20 rule where you have 20% of your membership or maybe more are just raving fans. They love you. It’s that other 80% that’s always on the fence. And I think with some of these offerings that you have, be it the education, the upskilling, and I see you’re global now, I guess, organization. Are you starting to see more of your members engaging or even some of the existing members who are already engaged, spending more time with the organization?

Neal Couture:

So interestingly enough, Bill, it’s a combination. So we’re seeing more people engage, but engaging in different ways. So one of the things that we have to do is step back and examine what do we mean by engagement? Engagement is essentially any interaction they have with your society. It could be buying something, using something, attending something, or contributing in some way. So we measure engagement in all of those levels. It’s not just who’s volunteering. It’s who’s attending, who’s participating. But when it comes to volunteering specifically, what we’re seeing is different patterns. So once upon a time, again, using you and me as an example, we would get in. We would join the association. We would volunteer for something, and five years later, it’d be my turn to be the chair. But I was in charge of it and I would go up and spend a lot of time… Maybe by the time I was 50, I could be the president of the association.

“Great, I’ve reached the pinnacle.” And people would say it just like that. “I’ve reached the pinnacle.” Try to tell a 22-year-old that you’re going to have to wait until you’re 50 years old to achieve the pinnacle. No, there’s no way. Not going to happen. So the other thing that’s changed is our attention span, and we haven’t talked about the pandemic, but the pandemic really changed this. It accelerated a trend that was already happening, which was how people engage is changing. You’ve heard of the time deficit. People’s attention span is the new currency. How do I get your attention and hold it? So in the old days, when it was just you and I, we didn’t have all these other things. Maybe we had bowling night, but I had very little distracting me other than my wife, kids, maybe bowling night and my job.

Well, today, the internet is constantly in your face, TV, video, content from every corner of the world, not to mention the important stuff that you get to attend to. So we have this challenge of holding people’s attention. So this concept of being a chair or president or owner of something big is less appealing. They don’t want to own it. They just want to help out. So what can I do to help out? So we call that this concept of micro volunteering. How do you structure your engagement so that people can contribute in ways that are meaningful to them in very set and clear ways that is not endless and won’t consume their life. They’ve already got a job. They don’t need yours. Well, what that means is how you operate your entire association has to change.

Our councils. For years, our councils were the hub of activity. People would show up, there’d be 100 people in the room and they would work for months and years on products. Nope, not happening. Some of the old baby boomers are still there, but your current generation says, “Hey, look, I’ll be glad to contribute to this document, but I’m not going to stay here for the next six years and give you that much time. I can’t do it. I may be a single parent. I may be in 14 clubs.” They’re just not doing it. We’re seeing it also in elections. Members don’t vote in elections. We’ve got a vote rate of about 7% right now. We’re actually considering kind of, “What do we do about that?” Increasingly smaller numbers of people making these decisions, and that’s not a good idea.

So what we have to do is redesign the engagement expectation. Get away from this notion that it’s a commitment. It’s a long-term commitment. People are very sporadic, meaning just in time. We have this monolithic view of engagement. A member engages. Now, a member engages, gets out, disappears, won’t see them for a year. Member engages, gets out, disappears, won’t see them for a year. So you’ve got to have very low barrier to entry into volunteer activities. A lot of communication saying, “These are the things we’re working on. What do you want to work on?” And that requires a different way of structuring… You got to get away from committees and infrastructure and much more in a project task orientation. And frankly, that puts burdens upon your tech stack and on your staff to kind of orient.

Bill Sheehan:

I was just going to say that, and there’s that old mentality. We need to have councils or committees so that the members can feel like they’re getting value and they can serve on a committee or a board and they get value and they feel they can control the industry. And I think sometimes, to your point, a lot of that is just wasted energy. It’s just a position for them to be in. We’re up against it right now, but in the amount of time we have left, a minute or two, and looking to the future, and you have transformed your organization and you’re continuing to transform it and stay ahead and be innovative.

What do you think the association executives and the staff over the course of the next two, three years, what are those challenges? What challenges do you feel they’re facing either from competition, like education or upskilling or something? What are some of the big assets that they can have to really differentiate themselves within the marketplace to establish themselves as that single source of truth and the barometer for their industry?

Neal Couture:

Well, clearly artificial intelligence is the word of the day. I think that associations are going to find two things. Number one, huge amount of opportunity if you get in at the front end, train your staff. A lot of associations I hear from say, “Oh, I’m not letting my staff…” Stop it. Just stop it. Get them in it. Get them to learn it. Get them comfortable with it. And learn how to leverage it to your advantage. If you wait, too late. Number one, get your people in it, use it, leverage it. Number two, if you don’t, the competitors will.

Bill Sheehan:

Yeah, that’s right.

Neal Couture:

So I think what we’re going to see is increased competition from content providers. It could come from within your industry. It could come from outside your industry. People are going to find that the ones who are really willing to take a risk and adopt AI are going to find new ways of delivering value that you’re slow to deliver, and they will seize upon it, and they will take your market share. So get into it quickly and have a close watch on what’s going on in your industry. Who else is putting information out and see whether it’s an opportunity for collaboration or whether it’s just going to be competition, but it’s got to be informing you either way. I think that’s a major shift as we look.

I think we’re past the point of realizing we’re in a competitive world, but what we have to realize is that we have to act quickly. We have to take risks that are really uncomfortable because that’s the way the world works today. You want to be informed. You want to be smart. Which is why you have to have good team to do that. But if you are waiting for someone else to prove that AI is useful, you’ve already lost the game. So that’s just one example of what I see coming in the next three years in particular.

Bill Sheehan:

Yeah. Well, Neal, you have been so generous with your time. I know you’re busy and you’re swamped. I really appreciate this. You’ve done so many innovative things for ASNT, and I think you’re setting a wonderful example for the industry. And I think people should spend some time on your website just to take a look at what you’re doing and how you’re doing that. So I think you gave some good advice for those CEOs out there, particularly with regards to either education or AI. You need to jump in now because you’re not going to have the ability or the resources to catch up in that. And so I can’t thank you enough. This has been the fastest hour I’ve had all year. I look forward to seeing you around and wish you continued success for all you do for not only your association, but the association community in general. You do a lot of good work. So thank you very much, Neal.

Neal Couture:

Appreciate it, Bill. Thanks. I’ll see you soon.

Bill Sheehan:

See you.

[Outro]

You’ve been listening to Learning by Association, a podcast where we delve into the ever-evolving world of associations and the challenges they face in navigating the currents of change. This episode was produced by D2L, a global learning innovation company, helping organizations reshape the future of education and work. To learn more about our solutions, please visit www.d2l.com. And don’t forget to subscribe so you can stay up to date with new episodes. Thanks for joining us and we’ll see you next time.