Turning the Membership Model on It’s Head

This past week I was exposed to an organization that is turning the membership model on its head. Upon studying it further, its the kind of model that threatens the traditional membership organization.

The organization is called the Hospitality Industry Professionals (HIP) Network. According to their website, the network began in 2008 and is the fastest-growing community of meeting, event, travel and hospitality professionals in the US with over 4,000+ members. They produce high-energy events that fuel professional growth, help facilitate durable industry relationships and provide industry resources that complement their member’s ever-growing needs.

While that doesn’t sound any different than the mission of many of our organizations, its what they have done with their membership model that sets them apart.

Can you take a guess at what the cost of membership was and what the member registration was like?

Well, if you are like our organization, and you likely are, the cost of membership is an annual fee of $275 or we also offer group memberships that are more affordable for multiple staff.

And the registration process is fairly simple. You download (or we email) a membership application and then you complete it and return to AENC. Some mail, some fax and some scan. Either way, we get the data and process the application. We process payment and process in database the information and then send an acknowledgement of membership. In a few days we send out a new member kit, followed by in a few weeks a member orientation.

As I said, it isn’t probably very different from many of our member organizations. So, what set the HIP Network apart from any other membership based organization?

As a test, I joined the HIP Network and upon visiting their website, was able to join and receive my membership confirmation in less than 5-minutes. And here is the kicker, there was no charge for membership in the organization as a planner. Nothing, Nada. You get all the benefits of membership like a traditional association, but there is no membership fee.

So, how do they make money. They have increased membership numbers to such a large degree they were able to justify charging supplier members $795. In addition, because of the large numbers and rapid growth, they have been able to garner tremendous sponsor support on their website and through their events. AENC, for example,  is  promoting a HIP Network hybrid event in mid-May.

The organization has figured out how to provide the same products and services as a traditional association and figured out how to allow its primary members free entry. Which begs the question – we all say we are supporting the professions or industry we serve, correct? So, how do we compete with an organization who has lowered two big barriers to membership – ease and cost.

We need to learn to compete with this, it could be the new membership business model.

Employee or Independent Contractor?

By Guest Blogger - Sandy Abalos, CPA

There are times when it seems unclear whether a worker who performs services and is paid by your company is subject to employment taxes. The answer depends on whether that worker is an employee or an independent contractor. Because the determination of a worker’s status depends on facts that may differ in each case, you need to be able to define the business relationship on a case-by-case basis:

• In general, an employee is considered to be someone who works for and performs services under the control of your company.
• An independent contractor is in business for himself or herself, and performs the services free of your company’s control.

When you are determining whether an individual is an employee or an independent contractor, the IRS stresses that you must consider all evidence of the degree of control you have over that individual and the degree of independence that person has from your company.

The evidence of the degree of control and independence falls into three major categories: behavioral control, financial control and the type of relationship between your company and the employee.

1. Behavioral Control

Does your business have the right to direct and control how the worker does the task for which you have hired him or her? To answer this question, consider the following:

• The type and degree of instructions your business provides to the worker. An employee is generally subject to the instructions from the business about when, where and how to work. Even if your business provides no instructions, sufficient behavioral control may exist if you, as an employer, have the right to control how the work results are achieved.
• Any training that your business provides to the worker. If your business has trained an individual to perform services in a particular manner, indications are that person is an employee, since independent contractors generally use their own methods.

2. Financial Control

Does your business have a right to control the business aspects of the worker’s job? To answer this question, consider the following questions:

• Does the worker have unreimbursed business expenses? If so, this indicates independent contractor status.
• Does the worker have a significant investment in the facilities or tools used to perform services for your business? If so, this indicates independent contractor status.
• Does the worker make services available to the relevant market? If the worker performs services for other businesses, this indicates independent contractor status.
• Does your company pay the worker by the hour, week or month? An independent contractor is usually paid by the project. However, some professionals, such as lawyers are paid by the hour and are considered independent contractors.
• Can the worker make a profit or incur a loss on services performed for your business? If so, this indicates independent contractor status.

3. Type of Relationship

The type of relationship between the parties is indicated by facts that include the following:

• Any written contracts describing the type of relationship the parties intended to create.
• Whether your business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay or sick pay.
• The permanency of the relationship. Employer/employee relationships generally have the expectation that the relationship will continue indefinitely, rather than for a specific project or period of time.
• Whether the worker provides services that are a key aspect of your company’s business activity. If so, this may indicate an employee status.

Upon request, the IRS will make a determination for you whether a worker would be deemed  an employee based on the information provided by filing Form SS-8 (Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding).

Sandra A. Abalos, CPA is the managing partner of Abalos & Associates, PLLC, a full-service, award-winning CPA firm in Phoenix that specializes in the needs of privately held businesses. For more information, contact (602) 943-1984 or visit the website at http://www.abaloscpa.com. 

Taking Action

By Guest Blogger – Ed Gideon

Everything seemed stalled. Things were not going the way Jason had hoped. His motivation wasn’t great. It hadn’t been one thing that happened, it was more of a series of small things. They had chipped away at his confidence, drive and discipline. But, he was the leader, the boss. If he didn’t get out of this slump what would happen to his company?

Sales needed to increase. The bleeding wasn’t too bad, but it was there. He saw some inventory control challenges that needed his attention. Customer complaints were beginning to pile up. There were employees that truly did not belong in the organization. He barely had time to go home and see his family before they went to bed. He was just stalled. Jason was not sure what to do first. Didn’t know if what he attempted would even work.

There was one thing that stood in Jason’s path and had him blocked out. He wasn’t taking Action. “Let’s talk about it, study it.” “Let’s see if the next month brings a change.” What if we …” It kept going like that for several months. Of course the things that needed his attention just simply got worse.

We typically don’t move forward due to things like procrastination, fear of failure, fear of ridicule, fear of the unknown, we simply don’t want to make a mistake and so on.

Maybe some of Jason’s experiences are yours too. It’s ok, but take action. Waiting for the perfect plan means you won’t have one.

Most of all enjoy the decision to get into Action. You’ll be pleased you did it. There is a certain amount of pride in moving yourself forward. It feels good.

Here are some things to do to get into Action and help insure they are successful:

• Define your current situation. Be as detailed as you want to, but be honest and insightful. Even if you do not have a completely clear view of where you are going, but you know you are headed in the right direction get going. Don’t wait for a 100% clear path ahead of you. A partial plan well executed is better than a 100% plan never executed.
• List the things you want to accomplish, your goals. By taking the Action what will I achieve? Define a mission.
• List the skills and knowledge you will need, people with whom you need to associate, organizations you should join. This is the execution of your plan.
• Act as if you are already there. Don’t be a fake, just act as if you are already successful. Play the role in your mind. Dress the part. To look like you’ve been digging in the back yard isn’t helping your cause.
• There are no guarantees, but that’s not bad news. There is just a promise of opportunity. So, stand on the shoulders of your achievements and see what else is out there. Right now you may only see the forest. Stand up and look at the other peaks out there that you can climb. There are more opportunities.
• Break your Action into small steps. How do you eat and elephant? One bite at a time. Accomplish several small tasks that when added up will equal or exceed the larger Action you wanted to take.
• Maintain your confidence when others doubt you, when you fail. Don’t quit.

To your continued success. www.breakthroughsforsuccess.com.

Unleash the Potential of Your Strategy

By Guest Blogger Joy Stroud Ruhmann

Level Up Leadership has been working with companies on the issue of strategic execution management for many years and has identified three key competencies necessary to ensure effective execution occurs.  They are to clarify, align and engage.

Clarity:  The Starting Point for Action:

Clarity is a key objective in the strategic planning process and, in our model, is also a key first step to strategy execution.

Effective strategic planning includes developing a compelling vision and mission so that both executives and employees are clear about why the organization exists and what the organization is trying to achieve.  Smart companies also define the values that will drive employee behaviors and decision making. An effective strategic plan also includes well-defined key initiatives or goals that must be achieved in the next 12, 18 or 24 months to ensure fulfillment of the company’s vision and mission.

This is also where clarity becomes critical to execution. In many organizations, those employees dealing most directly with customers are often not vested in your values and cannot see the link between what they do and where the organization is headed.  This is where the manager comes in: to initiate a dialogue with each employee that is focused on helping them understand how what they (the employees) do to contribute to the achievement of the organization’s goals.

From Clarity to Alignment:

This dialogue is the first step in the alignment process.  The manager works with his or her direct reports to be sure they fully understand their roles and responsibilities.  They work together to go beyond the traditional job description to define primary job responsibilities that are action based, clearly detailing the types of activities the employee is responsible for on a day-to-day basis.

Managers and employees should also work together on goal development.  This includes defining clear goals that are directly linked to the goals and initiatives laid out in the company’s strategic plan.  It is also important that the creation of goals goes beyond the traditional SMART (Simple, Measureable, Attainable, Realistic, Time-bound) goals to those that are WHY-SMART, meaning they are Written, Harmonious – they are in harmony with the employees primary job responsibilities, and they are Yours – meaning the employee owns them.

Most Critical:  Ensuring Full Employee Engagement:

Full employee engagement starts with the process outlined above and ensures that all employees feel that what they do contributes positively to the organization’s success.  Then, to keep the employee actively engaged, it is critical that managers and their direct reports meet no less frequently than every other month to track progress against goals, provide support where goals are at risk, capture additional contributions, and provide specific feedback on areas requiring additional attention.

Whether you are a football fan, a basketball fan, a baseball fan or any other sports fan, you would not tolerate a coach who sat down with his or her team to review the year’s objectives at the beginning of the season, went on about their own personal business throughout the season and did not effectively coach on a play-by-play basis.  Yet that is what so many managers in organizations do today.

Success with a team or individual on the field requires frequent feedback and course correction.

The same is true with employees.  They feel more valued and significantly more engaged when they participate in frequent and timely progress meetings with their managers, especially when they have a voice in the feedback process.

The challenge for many leaders and managers is that they do not believe that they have the time to make this happen.  The truth is, in the long term, you can’t afford not to.  As a leader, your job is to get things done through others, essentially to work through others to achieve your organization’s plans.  There is no doubt that in today’s economy the challenges of doing more with less have caused many leaders to focus more on what’s on their own plate and not on what they are responsible for managing through others.

The good news is the tools do exist to help you do both, and healthy, sustainable organizations of the future will ensure that they effectively implement these tools – Unleash the Potential in Your Strategy.

Joy Stroud Ruhmann, president of Level Up Leadership, works with organizations to implement cultural transformation and strategy execution tools to achieve sustainable, long-lasting results.  Visit www.levelupleadership.com for more information.