Driving Impact through a Portfolio Analysis

Associations exist fundamentally to advance their mission, which usually involves a considerable amount of time and energy dedicated to delivering programs that support its members. For many association leaders, this creates a tension between balancing financial margin and mission impact.

As costs increase and pressures to drive member value mount, associations must maintain a healthy and relevant portfolio. At the same time, legacy programs, many of which were built for a prior generation, are passed down over decades. This can result in a lack of focus, a drain on resources, or even dilute attention away from an association’s fundamental purpose.

In fact, it’s not uncommon to see an association run hundreds of programs that are virtually unused!

Conducting a portfolio analysis empowers association leaders to build intentional strategies on how the sum of their programs can be responsive to changing market dynamics, member expectations, and financial and talent resources.

Jay Younger, FASAE, president and CEO of McKinley Advisors

Bill Lynch, President of the SFA

“Regular analysis of the financial, human, and operational investments in programs and services ensures that the association maintains a healthy and sustainable balance across the portfolio,” said Jay Younger, FASAE, president and CEO of McKinley Advisors. “It should be a consistent, data-driven process, not an exception or a one-off event.”

In 2021, The Specialty Food Association (SFA) developed a new, exciting strategic plan with bold priorities. As part of this process, the organization partnered with McKinley Advisors to conduct a portfolio analysis for greater focus and impact.

“One of our primary motivations was to streamline our product and service offerings, ensuring they remain relevant and competitive,” said Bill Lynch, President of the SFA. “The primary goals we aimed to achieve through this project were to assess the current portfolio comprehensively, identify areas for optimization, and prioritize strategic initiatives. This allowed us to reallocate resources effectively, invest in high-potential products and services, and enhance our overall ability to deliver value to our members.”

Establishing Decision Criteria

How do you conduct a portfolio analysis, and where do you begin?

A variety of metrics and data that can illustrate and evaluate program performance, including alignment with strategic plans and missions, scalability, financial performance, perception data, member feedback, competitive analysis, and market potential. Reaching consensus on the most important criteria is critical to a successful outcome.

“Emotion always creeps into the process,” Younger said. “Establishing common ground on what programs are being analyzed and what decision-making criteria will be used is one of the most important steps in the process and should not be underestimated.”

A common challenge is the lack of reliable data. “As a general rule, associations do not typically have the data they need at their fingertips to make strategic portfolio decisions,” Younger noted. “We need to address this and raise our game to generate the type of business intelligence that enables critical thinking and the confidence necessary to adapt our portfolios into the 21st century.”

Lynch highlighted that the metrics agreed upon by SFA yielded valuable, data-driven insights that informed their decision-making. The data helped them assess the investment and cost-effectiveness of each program and product within their portfolio. It revealed evolving market trends within the food industry and how their offerings and events could be improved to better meet members’ needs in the context of market shifts and their competitors. 

Applying Strategic Thinking to Interpret Results

The analysis may identify opportunities for increased investment in programs with high potential, areas that are doing well and should be maintained, and efforts that might be considered for divesting, pausing, or eliminating.

Through facilitated discussion and strategic debate around the data, SFA was able to make informed decisions. The association identified the products and services that performed exceptionally well, showing significant growth potential and alignment with their objectives.

“One of the actionable insights was the need to reallocate resources to capitalize on the strong performers and growth opportunities,” Lynch said. “We decided to increase the level of investment and resources flowing to high-potential products and services, enhancing their market presence and driving revenue growth.

The assessment also highlighted underperforming elements of the SFA portfolio that were not delivering expected value or aligning with their strategic vision.

“Some stakeholders were apprehensive about divesting from certain programs, services, or products that had historical significance but were no longer aligned with our strategic goals,” Lynch said. “To navigate this challenge, we implemented a robust change management plan that involved clear and transparent communication, engagement with affected teams, and showcasing the benefits of the changes.”

“Again, change management is key,” Younger said. “There can be very clear conclusions stemming from these analyses that are often not adopted due to subjectivity and ‘feelings’ about the value or impact of programs.”

Analyzing the Results

Outlining measurable objectives and initiatives that align with your updated portfolio can help you track success and guide adjustments as your association evolves.

The SFA’s analysis yielded a sharpened organizational focus, bringing heightened clarity and direction to their strategic plan. They introduced new programs that received very positive initial feedback from members.

“Our investment in the Fancy Food Shows translated into an unprecedented year, marked by double-digit percentage increases in exhibit space and attendance, while concurrently welcoming the highest number of new members in our organization’s 70+ year history,” said Lynch.

As the SFA prioritized enhancing key products and services, member satisfaction scores also increased.

“In essence, the insights from our portfolio assessment empowered us to make informed decisions that led to a more agile, competitive, and strategically aligned portfolio,” Lynch said. “We continue to monitor our portfolio regularly, ensuring that it remains in line with our evolving goals and the dynamic market landscape.”

As associations continue to be challenged by declining memberships, increased competition, disruption, and new opportunities, it’s critical to routinize the portfolio analysis process. A data-driven approach to evaluating your offerings will maximize your contributions to supporting members while preserving a healthy balance between mission and margin.