A forthcoming study claims that corporate CEOs have gained increasing influence over their organizations’ success—particularly as measured by the bottom line. Can the same be said of association chief executives?
As the face of an organization, the chief executive officer gets the bulk of the praise and criticism for how an organization performs under his or her leadership. And, as fair or unfair as that may seem, a new study by researchers at the University of Georgia and Penn State University suggests that corporate-world executives have a bigger impact on their organizations’ bottom lines today than ever before.
“More and more, it’s not just the mission of the organization that defines success, it’s the strategy.”
According to the study, the “CEO effect” has increased at a steady rate over the past several decades and is showing no signs of slowing down. While the researchers did not define what exactly makes a CEO important, they found that strategies like leveraging technology and focusing on maximizing shareholder value play a major role in driving up the CEO’s importance.
Compared to the nonprofit sector, it’s easier for researchers to come to that conclusion about the for-profit world, where results can be directly measured in market share and total revenue, but association executives can still learn a lot from the study, said Jean Frankel, president of executive coaching firm Ideas for Action, LLC.
“The short answer to if association CEOs are more important is yes,” she said. Among the reasons: “Volunteers have less time, volunteer leaders have a different relationship with their association than they used to, and there are greater expectations for CEOs and for staff.”
And while technology has played a significant role in the association space as well, Frankel said, new challenges to the traditional association business model have been the biggest game changer.
“More and more, it’s not just the mission of the organization that defines success, it’s the strategy,” she said. “Just about every association is dealing with a more complex environment, and volunteers simply can’t do the job, and the association management profession requires a much more strategic and much more tactical approach for staff and for CEOs. They can’t just provide information, they have to help members sort through the choices and sort through the strategies.”
Frankel said she doesn’t see the momentum for the increasing importance of the CEO slowing down any time soon. “This also goes for small associations as well as large ones, because what’s driving it is the nature of business itself and the industries, professions, and causes that our association CEOs are supporting,” she said.
So how does an association chief executive stay on his or her toes?
“Continue to know as much as possible about your industry, and constantly have two-way interaction with your members and volunteer leaders to make sure that you’re guiding decisions rather than making decisions,” Frankel said.
And CEOs can’t go it alone, she added. Success requires “making sure you’re ready for the challenge by not only building up your own capabilities, but having excellent relationships with all levels of members, having an outstanding staff, implementing an effective performance-management system, and knowing yourself—know your strengths and weaknesses and how to make sure that you put yourself in the best position for success.”