McKinley Marketing, Inc.

Q: What are the goals of AARP's for-profit subsidiary?

A: Simply put, the goal is to help fulfill the mission of AARP. We exist to help create more value for the AARP members by providing unique products, services, and experiences. By members taking advantage of these offers, revenues are generated that help AARP run its community programs and advocacy efforts. From a business perspective, we manage all the provider contracts, product marketing, and quality control functions required by the IRS Private Letter Ruling that formed AARP Services, Inc.

Q: What measures are used in the for-profit side vs. the non-profit side for staff evaluations or institutional evaluations?

A: AARP Services is run like any commercial enterprise. We have annual plans, product metrics, and we monitor the marketplace and operating performance (member product usage, customer satisfaction, profit/loss, etc). Since the majority of the direct staff perform product management and business development functions, they are likewise measured as their commercial counterparts are measured.

AARP as a whole is curretly working to establish similar ways to measure its performance, through an organizational “dashboard”. Like other world class organizations, we are looking to quantify the measures of success for what we do. Unlike measuring widgets, the success of community and advocacy projects are harder to quantify and could be viewed in many ways, depending on the many stakeholders. We are developing common metrics that focus on our overall organizational goals, and will cascade these down through all the different organizations, so that their tasks and functions will support the mission of AARP.

Q: Are there any detectable differences in management style and practices between AARP and AARP Services, Inc.?

A: AARP has a long history of successful cause related work. AARP Services is a relatively new (3 years) “start-up” created with mostly commercial industry hires. There are obvious cultural differences from the start where business and community mind-sets meet. As we start the fourth year, each side is learning to work to complement the other, and realize the synergies needed to fulfill AARP’s mission through this structure. Both sides are looking to use the best practices of any type of organization to improve performance.

Q: Can you think of any potential tensions or dynamics of working in a for-profit in a traditional non-profit environment?

A: There has to be a clear focus on the parent company's mission  and the role of the for-profit in accomplishing it. Each has to respect factors that lead to individual entity’s success and therefore mutual success for the “cause”.  You must understand how each supports the other, to the ultimate benefit of the stakeholders/customers/members.

In our case, while the need for generation of revenues is a major concern, it is not the primary one in the way we do business.  Member value and maintaining the trust of our members are paramount in a business venture, regardless of the potential revenues.  We take a long term approach and do volumes of member research to ensure the business ventures not only provide good value, but also fit into the reasons AARP exists to serve its members.

Q: Where do you see for-profit subsidiaries fitting into the future of the association marketplace?

A: I feel this presents a great addition to the “toolbox,” or best practices, that are available to associations. No matter what you do or believe in, the “community” that is created around an association creates an affinity.  As individuals and professionals, we look to find value and fulfill a multitude of needs. If we can do this and support our affinity at the same time, everybody wins! The trick is obviously finding the right mix and execution to achieve everybody’s goals!

Q: What specific challenges do you see facing for-profits subsidiaries?

A: I think at this point in time, for-profits are still seen as hybrids, and are not necessarily easily definable by the larger marketplace.  There are many areas that will need better definition in how the parent and subsidiary operate (boards/governance, operating plans, reporting relationships, product development, corporate relationships and sponsorships, understanding IRS rules, etc). Since there are many ways of setting things up, and they are dependant on what the end result is intended to be, there is no explicit template for such a venture. There is no core group you can quickly call to compare notes or analyze large trends. (There are some of us working to create a networking forum however!) It feels lonely out there for some of us!

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