Inside the world of trade associations, the 135-year-old American Coatings Association’s has never wavered in its dedication to answering the needs of professionals inside the paints and coatings industry.
However, ACA members—like those of many associations these days—are becoming increasingly demanding when it comes to the value that they receive in exchange for their dues.Read More
“In the old days, belonging to an industry association was a badge of prestige, and it was something that people felt that they just had to do if they were part of an industry,” comments Ilana Esterrich, who was named ACA’s CFO in 2019 after having served as chief administrative officer for a Washington think tank and spent the previous decade among the financial planning rank-and-file of Thomson Reuters and General Mills Corp.
Upon her arrival, Esterrich was told that to better address the escalating demands of ACA’s membership, she needed to clean house—beginning with the accounting department, which seemed to be a province populated by known underperformers.
“I came in thinking that this was going to be a turnaround situation, and it was—but not in the way that I think management thought that it was going to be,” reports Esterrich, who after assessing the “skills and wills” of her accounting team members rendered a verdict of “not guilty” on all counts. It turned out that instead of being based on malfeasance, the accounting department’s laggard reputation was rooted in dated systems and processes—a set of circumstances that she and her team have since taken steps to correct.
Along the way, Esterrich discovered that a number of the association’s traditional sales practices involving media needed to be updated in order to be able to provide the sales team with better guidance when it came to determining if and when a customer could receive a discount.
Not unlike most associations, ACA has long published a membership magazine, which Esterrich was told operated profitably.
“However, when we took a ‘fully loaded’ look at the costs of the magazine, we were upside down in the red,” recalls Esterrich, who sought to distance ACA from associations that choose to view the price tag of their member magazines as a necessary evil.
Says Esterrich: “Finance needed to show where the magazine brought value and where it did not—and at what cost.” –Jack Sweeney
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CFOTL: Tell us about the American Coatings Association … what type of association is this?
Esterrich: We are a 501(c)(6) association, a trade association. We represent and support the companies in the manufacturing, distribution, and supply of adhesives, paints, and coatings. Anyone having anything to do with coating another surface, these folks are our members. We support them through lobbying, through scientific research, through connecting them as an industry. We basically represent the whole industry, which has more than 300,000 individuals in it.Read More
We’re at an inflection point in the association industry. Nowadays—especially post-pandemic—organization members really want to know what they’re paying dues for. What value are they getting for their membership in an association? As an association, we really need to think about where we want to be in the next 5 to 10 years, especially in industries that are consolidating. The number of physical member entities is declining, even though the mass of membership hasn’t changed. We have to figure out not only how to collect dues from our members and use the funds to support the mission but also what our members get in exchange.
My mantra going in was to do the right work at the right time, with the right people, with the right tools. This was what I was focused on during the first 12 months. Within 90 days of starting, I had developed a capabilities requirement list that went to every major stakeholder. What is it that you need, that you want, that we’re not giving you? I started with the accounting team, the finance team. I told everybody, “We are now going to be known as finance and accounting, not accounting—we need to expand our skill sets.” I went to every major stakeholder: “What are the pain points? How can we help you?” Then I wrote out a list of every requirement that our new financial system was going to need to have.
I put it out to bid. We had two companies that were brave enough to take us on. One of them was Oracle NetSuite. We did a series of three sales calls with the two. First, they came just to tell us about their products. We sent them back with some comments, questions, concerns. Each came back for a second pitch. We pushed back with more comments, questions, concerns, and they each came back with their best and final sales pitch for a third time. By then, it was very clear that NetSuite was where we wanted to put our investment.
I started in June of 2019. By October, we had a resolution. In November, I went to the board to request permission to sign this very large and important contract. We signed in December, and we kicked off the project in January 2020. We launched on June 1, 2020. We’ve been using the product for 2 years, and it has solved about 60% of our issues. The rest of the challenges come from reinforcing and restating our policies across a broad variety of finance and accounting issues and really working to shore up our relationships with our key business partners. This means looking at communications, events, legal, government affairs, even the office of the president, and reestablishing our value with the board of directors, as well. Then we began working with each of our subsidiaries to deliver the things that they felt had been missing prior to 2020.
American Coatings Association | www.paint.org | Washington, DC