A Marriage of Associations: Make the Relationship
Harmonious from the Proposal to the Honeymoon
"We weren't hired to preserve our jobs or even our own associations. We were hired to provide the best services for our members," says Dianne McMillan, regarding association consolidations. McMillan, executive vice president of the North San Diego County Association, and other executive officers offer their insights on association consolidations--an issue some of you may face in the coming months and years.

The North San Diego County Association was formed last year, and comprises five associations--the Carlsbad Association of REALTORSŪ, Oceanside Association of REALTORSŪ, San Dieguito Association of REALTORSŪ, Valley Center Association of REALTORSŪ, and Vista Association of REALTORSŪ.

McMillan cites board of choice and the economic decline in southern California as two catalysts for the San Diego consolidation. "We had a history of cooperation among the five associations, and as the economy slid downward in recent years, we stepped up our efforts to work cooperatively. It was more economical financially, as well as from a human resources standpoint," she comments. "When we put on programs, they were more successful as cooperative ventures than as projects taken on by individual associations." Moreover, members of the associations realized that it was impractical to maintain separate associations that produced identical programs and to spend money on separate staffs.

Cindy Dobias, executive vice president of the Milwaukee Board of REALTORSŪ, faced a similar situation--a duplication of services with the nearby Waukesha County Association of REALTORSŪ. Last year a group of brokers joined together to propose a consolidation. "The biggest reason for the consolidation was economic," Dobias says. "We had duplicate services, staff, and buildings. In some cases, there was an overlap in membership. We looked at the cost savings of running one organization instead of two. Savings in staff costs alone will probably total $60,000 to $80,000. Each association's dues were $126, and we anticipate we'll be able to cut that down to $95."

Service Consolidation Style
The other motivator for consolidating associations is new, increased, and improved services. Included among those services is state-of-the-art technology. "Individually, the five associations couldn't afford to take advantage of new technologies, but by pooling our resources, we increased our buying power considerably and are in a much better position to respond to our members changing needs" , comments McMillan.

"With consolidation, we feel that staff will be able to specialize more in the areas they do best, allowing us to provide higher-quality services and programs," says Dorothy Erickson, the executive officer of the Greater Green Bay Association of REALTORSŪ (WI). By January 1995, the association is expected to consolidate with the nearby Oshkosh and Fox Valley Associations to form the REALTORSŪ Association of Northeast Wisconsin. Erickson says they haven't yet decided what services and products the new group will offer, but they'll do so by holding member focus groups to determine what REALTORSŪ need and want.

Robert Golden, executive vice president of the REALTORŪ Association of South Palm Beach County (FL), comments that the consolidation process requires you to conduct a sound structural audit. "It provides an opportunity to evaluate what you're doing and, if necessary, to change direction to meet members needs," he says. In the Greater Boca Raton Association's case, the audit helped eliminate products and services that members didn't really need, such as Ad Page, a member-to-member advertising publication used only by those advertising in it.

The association is also working on new services that members say they really want, such as a sophisticated computer program that will provide local statistical data.

One of the North San Diego County Association's newest services is an association-wide fax- order-delivery system, which allows members to fax in their orders for forms and other products and receive them by the next business day. "Ours is a large metropolitan area, and this service saves members the tremendous amount of time they'd spend traveling to service centers. We discovered that the amount of money we save on postage pays for this service," says McMillan.

Maintain Individual Identity
Both McMillan and Dobias note that there's no formula that ensures a successful consolidation but that there are issues all associations contemplating a consolidation are likely to encounter. Just because operations are streamlined in a consolidation, it doesn't necessarily mean the individual regions must lose their offices and the personalized service they offer. For instance, the North San Diego County Association maintains four service centers. "We hesitate to use the tag satellite office, because we don't want anyone to feel less important or remote," says McMillan. "Each center provides--as much as possible--a full range of services."

Of equal importance is not forcing individual associations to surrender their identities. You don't want members to feel they've been swallowed up by an impersonal, indifferent bureaucracy. "We established a series of districts or regions within our association, and each operates its own council. Each council has areas of expertise and things it's fond of doing," says McMillan. One council, for example, has a background in local government relations, and another is experienced in continuing education. "All members are able to benefit from their knowledge and experience," she adds.

The Ins and Outs of Consolidating
Although few dispute the immediate and long-term benefits of consolidating, the actual process is no simple undertaking. Challenges that associations have faced include

Managing staff duplications, necessitating the elimination of some positions

Devising new bylaws

Keeping members apprised of changes and addressing their concerns

Determining what services to offer

Deciding how the association will work

How a consolidation is handled depends on the individual needs of the members. Golden strongly urges conducting focus groups or surveys with members early in the consolidation process. Give them an overview of what you're proposing, and if they support the idea, you can go to the leadership and say, "This is what the members think is a good idea." Golden says, "Don't let the leaders feel as if they were the authors of the concept. It's important that the wants and needs come from members."

The consolidating associations in North San Diego County established a business plan approximately midway through the consolidating process. "It was really an outline of the direction we wanted to take," says McMillan. "But there were also some specifics we had to decide on: Should we establish districts? What are the projected budgets? How will the board of directors be selected? Many people hammer out all the details up front. But we decided that the consolidation was the important thing and that we should provide members with immediate cost savings. Our approach was, 'Let's get the framework of the house up before we start to paint the walls.' We left an awful lot of questions unanswered." The Milwaukee Board and the Waukesha County Association established advisory committees to examine such issues as staff structure, buildings, services, and bylaws.

Humane Human Resources
When companies pare down or consolidate in corporate America, certain positions are eliminated and job loss is a given. It's no different with association consolidations. There are, of course, good and bad ways to handle job eliminations, and most agree that keeping the consolidation a secret from staff is the least desirable approach. "The staff of each association was kept apprised of what was happening, and it was known from the outset that jobs would be eliminated" , says McMillan. Dobias handled the personnel issue similarly. "We told everyone that all the positions would be analyzed and that most likely there would be some cuts" she says. "We're also looking at retraining so that we can move some employees into different positions."

Although there might be instances when it isn't economically feasible to retain staff, Golden recommends maintaining an EO or staff specialist from one of the consolidated associations during the transition period. The REALTORŪ Association of South Palm Beach County kept one of the EOs on as a transition coordinator for six months. "It's key to have someone with a historical perspective whom you can consult about such tasks as switching over the books," Golden says.

When asked about any advice she would pass on to others considering a consolidation, McMillan says people shouldn't feel they must jump on the bandwagon just because it's moving. "Look at your association, market, members, and geographic area to determine what's most beneficial to the members. That's what we were all hired to do" . But she also warns, "Sometimes doing what's best for your members means writing yourself out of a job."

Golden echoes that sentiment. "Consolidation may not apply in some areas, but it's up to association leadership to at least check it out."

This article was written by Elyse Umlauf, associate editor, The Executive Officer magazine.

For Additional Information
Board consolidation: why it may be the answer. Empire State REALTORŪ May 92:8.

Egan, Kathleen, and Christina Hoffmann. The many means to meeting minimum service. The
Executive Officer. Winter 94: 9-13.

Foley, Jan. Is board consolidation for you? Texas REALTORŪ Nov. 92:18-19.

Fuhrman, Cindy. Why consolidate local boards? Minnesota REALTORŪ Spring 88:15.

A Word about the Word Consolidation

Robert Golden, executive vice president of the REALTORŪ Association of South Palm Beach County (FL), which recently consolidated from three associations--Boynton Beach Ocean Ridge Board, Delray Beach Association, and the Boca Raton Association into one, offers one simple but effective word to keep the mood positive: consolidation.

"Merger seems to have become synonymous with radical takeover, so early in the process we started using the term consolidation to fight that perception," he says. He explains that in this three-association consolidation, the leaders took steps to avoid making it look as if one large association were swallowing up two smaller ones. "We wanted it to sound as what it really was--the ending of three associations and the creation of a new one," he says. "Besides, with consolidation, all those involved feel as if they had an equal opportunity."

Techniques to Increase Member Acceptance and Approval

Dianne McMillan, executive vice president of the recently consolidated North San Diego County Association of REALTORSŪ, offers these tips on how to keep consolidations on a smooth, forward-moving course.

Involve members equally. Set up a task force that includes at least one representative from each association involved so that each has an equal voice in how the new merged board will operate.

Identify each association's "hot buttons.' Each association will probably have specific concerns. Find out what they are, address them, and, as much as possible, try to satisfy everyone's needs.

Establish working committees to address crucial issues:

Buildings and service centers.

Creation of the initial budgets.

Selection of executive officer.

Setting up outreach programs for members.

Continue to hold local events during and after the consolidation. Don't force individual
associations to abandon all their traditions. Encourage members to preserve their culture by meeting and networking at the local level.

Keep all members informed. Hold informational meetings, with question-and-answer sessions, and mail out press releases, articles, or any other materials that will keep members abreast of the status of the consolidation.

Be prepared with answers to commonly asked member questions. One of the most effective tools we provided members was a Q & A sheet. Questions that seemed to pop up frequently in our area included

What is the district system, and how will it work?

How do I know my area will have a voice in the new association?

Do you have a business plan and bylaws?

Do you have professional assistance (accountants, lawyers, etc.)?

Where will I go for supplies and services once we consolidate?

Who will answer my questions after the consolidation?

Issues to Consider During a Merger

Budget. Set a merger-related expense budget. Estimate the costs and divide expenses proportionally to membership of the boards involved.

Staffing. Look at the pros and cons of maintaining a full staff or reducing staff.

Real property. Weigh the tax implications of the plan.

Member services. Determine the number of service centers to provide and the level of service to offer at each location. You want to avoid a sense of loss on the part of the members.

MLS. Consider whether you'll be starting with separate MLSs. Will you use the same or different vendors? Are you going to be part of a regional MLS?

Filing of documents. Follow the steps of your plan in a logical sequence. Establish a timeline, starting with the projected merge date and working backward.

Antitrust. Contact the NATIONAL ASSOCIATION OF REALTORSŪ for its handout on the issue. See "Legal Update" in the Summer 1994 issue of the Executive Officer.

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