Business Planning in Associations a theoretical approach and a practical case: The BP of ESTRO

2. Business Planning in Associations a theoretical approach and a practical case: The BP of ESTRO Alessandro Cortese, ESTRO CEO ESAE Vice President

3. Social entrepreunership Profit Potential + x Old School Corporation + − Social Impact Potential Old School Not for Profit − Profit with a Purpose

4. Challenges in Social Profit Paths to growth • Paths to growth are not idiosyncratic but strategic • Any organization that wants to be relevant, to deliver value at scale, and to sustain itself must clearly articulate and evolve its business model • Translate mission, vision, strategy and business model into business plan • Multi-year Plan (Long Term) • Year Plan (Short Term)

5. Challenges in Social Profit Dual Focus • Cultivate a distinct set of funders • Identify beneficiaries and create value through programs • However, what is the difference between shareholders and stakeholders? • Provide clarity about • how you will fund your mission • how to deliver your programmatic impact • Often main focus on beneficiaries ↔ fundraising on an ad hoc basis

6. Challenges in Social Profit Key drivers to growth • Identify beneficiaries and make difference for them with programs • Beneficiaries usually fund only part of your mission • Cultivate a distinct set of funders • Building and scaling sustainable financial support Key drivers to growth in non profit • Choose right business model that is a natural match for your mission • Choose transparant governance model to achieve your goals

7. Some elements to define a Business Plan • The business plan is not abstract, uninformative, theoretical or mysterious • It’s a document that convincingly demonstrates that your business can sell enough of its products or services to make a satisfactory social profit and be attractive to potential backers • it is a selling document • The plan writers should have an in depth understanding of financial pro forma statements, cost and cash flow analysis and revenue modeling.

8. Definition • A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. • In non-profit organizations, creative tensions may develop in the effort to balance mission with "margin”. • a 3 to 5 year business plan is essential to any organization…

9. FUNDAMENTALS

10. FUNDAMENTALS Multi-year Plan: • Financial forecast over 3 to 5 years • Key Performance Indicators forecast over the same period • Detailed Program Plan Annual Plan: • Budget • Description of key processes and procedures • Include a cash flow analysis next to the P&L (costs & revenues) Processes and Procedures: • Standardization of operational activities • Definition of accountabilities and controls

11. Mission Vision Strat. LT Plan ST Plan From Strategy to Business Planning Strategic Plan Business Plan

12. THE PRINCIPLE OF DELEGATION OF POWERS AND REPORTING Transfer of authority by one person or group to another person or group: • Authority • Accountability • Responsibility 12

13. Why is strategic planning important? • to bring everyone on board – to engage and to mobilize towards the vision • to be proactive vs reactive to external forces of the environment • to guide decision making at all levels • to be accountable to the key stakeholders and to the public • to improve organizational learning and capacity • to communicate to the public what is important

14. Mission Vision Strat. LT Plan ST Plan Business Model: the step to business planning

15. Stakeholders Segments For who are we creating value? Who are our most important stakeholders?

16. Value Proposition What value do we offer to the Stakeholders? Which one of our stakeholders problem / need are we helping to solve? What bundle of products and services are we offering to each stakeholders segment?

17. Channels Through which channel do our shareholders want to be reached? How do we reach them? Which channels work best and which ones are the most cost-efficient?

18. Shareholders relationship What type of relationship does each of our stakeholders segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with our model?

19. Revenue Streams For what value are our shareholders and customers really willing to pay? For what do they currently pay? How much does each revenue stream contribute to the overall revenues?

20. Key Resources What key resources do our value proposition require? Our distribution channels? Stakeholders relationships? Revenue streams?

21. Key Activities What key activities do our value proposition require? Revenue streams? Stakeholders?

22. Key Partners Who are the key partners? Who are the key suppliers? What key resources do we retain from partners? What key activities are performed by partners?

23. Cost Structure What are the most important costs inherent in our business model? Which key resources are most expensive? Which key activities are most expensive?

24. The 9 building blocks of a business model Architecture of the value creation, delivery, and capture mechanisms Stakeholder Relations Key Activities Stakeholder Segments Value Proposition Key Resources Channels Key Partners Revenue Streams Cost Structure

25. Fundamental Questions • Where are we now? (Assessment) • Where do we need to be? (Gap / Future End State) • How will we close the gap (Strategic Plan) • How will we monitor our progress (Balanced Scorecard / KPIs) • How will we integrate all components of the organization in one model. ) Business Model

26. Mission Vision Strat. LT Plan ST Plan

28. Starting Prespective ESTRO in 2009 • Created in 1980 • No little changes in Statutes • Environmental Changes in Oncology • From ‘Grocery store’ to ‘Supermarket’…. To chain of supermarkets • From ‘ad hoc’ planning to growth modeling

29. Key Paths to Growth Recommendations received • Clear vision & mission of the social profit organisation • Clear strategy to involve stakeholders in the realisation of the organisation’s goals • Clear roles & positioning of the different functions • Clear delimitation of tasks between the different functions • Balanced and educated Board of Directors • Close attention for the decision-making process • Complementary tasks to the members of the Board • Integrity of management

30. Mission Vision Strat. LT Plan ST Plan From Strategy to Business Planning Strategic Plan Business Plan

31. MISSION: Organizational Audit and New Articles of Incorporation and Internal Rules • WP1: Review current organization and governance model • WP2: Review of laws and bye laws (legal perspective) • WP3: Review future objectives • WP4: Consolidate observations and present recommendations • WP5: Draft action plans and provide plan for implementation

32. VISION: New Statement

33. VISION: New Statement Every cancer patient in Europe will have access to state of the art radiation therapy, as part of a multidisciplinary approach where treatment is individualised for the specific patient’s cancer, taking account of the patient’s personal circumstances. In order to achieve this vision ESTRO will support the following initiatives and model of clinical care as part of the future strategic development of the Society: 1. All patients are entitled to access healthcare systems that enable the highest quality radiotherapy delivered within a safe healthcare environment, and on completion of treatment have access to appropriate long term follow-up, advice and support from members of the clinical radiation oncology team. 2. All patients are entitled to receive full information on the primary benefit, and where unavoidable, the potential side effects associated with their proposed radiation therapy treatment programme. ESTRO Vision for 2020 Vision Every cancer patient in Europe will have access to state of the art radiation therapy, as part of a multidisciplinary approach where treatment is individualised for the specific patient’s cancer, taking account of the patient’s personal circumstances. Vision 1.1: Optimal individualised patient care will be achieved by integrating, new clinical and preclinical evidence from biology, molecular/functional and anatomic imaging, and the use of novel systemic agents together with the delivery of high-precision radiation therapy in a safety-aware environment. Vision 1.2: The majority of patients will live cancer free with minimal toxicity following the use of radical radiation therapy when used as a single curative modality of treatment or when used in combination with surgery, systemic chemotherapy and/or systemic targeted therapeutics….

34. Mission Vision Strat. LT Plan ST Plan Business Model: the step to business planning

35. Vision Linked to the Business Model

36. Vision Linked to the Business Model • vision linked to model Influence Practices Protection Practices Economical Information

37. Vision Linked to the Business Model • vision linked to model Influence Practices Protection Practices Economical Information

38. Vision Linked to the Business Model • vision linked to model Economical Information

39. Vision Linked to the Business Model • vision linked to model Influence Practices Protection Practices Economical Information

40. Vision Linked to the Business Model Protection Practices: • Patents • Contracts • IT platforms • Membership • … • Legislation

41. Vision Linked to the Business Model • vision linked to model Influence Practices Protection Practices Economical Information

42. Vision Linked to the Business Model Influence Practices: • Lobbying • Marketing • Professional Practice standards • Organizational models • Patients awareness

43. Vision Linked to the Business Model • vision linked to model Influence Practices Protection Practices Economical Information

44. STRATEGY: 13 Actions Focus on ‘Vision initiatives’ with budgetary impact on reference period: Action 2: • To implement a renewed ICT platform • To provide a solution for internal and external communication (in terms of responsibility, management and affordability) according to state of the art modern technology Action 3: • To create a new structure (committee) that will enable an oncology intelligence /horizon scanning & monitoring function for the society Action 4: • To create new categories of membership offering an expanded range of choices Action 6: • To invest in a stable, affordable and reliable engagement of young inside the ESTRO organisation

45. STRATEGY: 3 years KPIs, translating vision in measurable objectives Membership • The objective of ESTRO is to increase significantly its representation factor by growing its membership reaching a higher percentage of the total Radiation Oncologists, physicists, radiobiologists and RTT in Europe, focusing on providing relevant benefits and services, and linking those to the ESTRO activities. • ESTRO can count on a basis of around 4.400 members in good standing and on a base of over 8000 persons which every year attend an event or a teaching course or are members without participating to any activity. • Three Membership programmes exist today: individual, joint and corporate. A new Programme will be launched to meet the growth opportunity with a revised set of categories. • Based on the previous considerations, ESTRO aims at reaching the ambitious goal of 8000 members in a three to five years timeframe.

46. STRATEGY: 3 years KPIs, translating vision in measurable objectives Education: Teaching Courses • The educational offering of ESTRO is one of the most important “stars” of the Society, having grown steadily in the last years. • Over the years the number of Teaching Courses offered by ESTRO hasn’t stopped increasing.For 2010, 31 courses and 4 pre-meeting courses are scheduled. Out of those, 3 are new courses. • The faculty of ESRO is today made of over 190 teachers. Plateau? • The offering of teaching courses is planned to grow to 33 in 2011 and to 35 in 2012.

47. Mission Vision Strat. LT Plan ST Plan Multi year and annual Plans

48. FINANCIAL PLANNING : THE CONCEPT Starting point of the model: • Input = budget based on actual figures and averages on long term • Explanations for the deviations between the budget and the actual figures To facilitate decision making, the model should: • Allow working with changing assumptions • Allow measuring the expected revenues and costs of a single scenario • Include a cash flow analysis next to the P&L (costs & revenues)

49. FINANCIAL PLANNING : OBJECTIVES In order to be a working instrument, the model should be made dynamic, allowing to: • Verify the financial impact of strategic choices • Verify the actual economic investment and return of a single action • Allow assumptions and scenario changing • Allow variable input • Allow comparison with actuals • Payroll cost is normally split over different levels • Allocation of indirect costs is normally on a more activity based principle • Include measurements for KPI’s, both qualitatively and quantitatively • Include both P&L and cash flow analysis

50. FINANCIAL PLANNING : PRINCIPLES • The budget of the plan has been based on historic data (accounting data for previous years or meetings) • Assumptions are based on the strategic choices made by the board or are based on assessing specific information by management, such as: • Clustering activities, and their respective revenues and costs • Indirect costs (overhead) • Growth of the organization (FTE) • Specific information (eg: estimation of forum costs and revenues, negotiations with Elsevier…) • Indirect costs: • Based on historical data • Calculated as an amount per FTE • Together with salary costs, fixed at 110 Keur / FTE • Evolution in FTE and turnover is possible