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Focus 2006 What should NEKIA do to enhance member competitiveness in the changing market over the next three years?. NEKIA Board of Directors Winter Meeting February 25, 2003 Washington, DC. Topics. Background Retreat, Annual Goals, Focus 2006
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Focus 2006 What should NEKIA do to enhance member competitiveness in the changing market over the next three years? NEKIA Board of Directors Winter Meeting February 25, 2003 Washington, DC
Topics • Background Retreat, Annual Goals, Focus 2006 • Context Industry/ Market Trends in 2006 • Implications Members’ aspirations, NEKIA’s focus • Strategies Options for Action • Action Discussion, Decision and Next Steps
BackgroundRetreat: Process Stuff • Start positioning yourself now for what you anticipate the market conditions will be like in the future. • Focus on a time frame within which you can most effectively get something done • Recognize the “fact-based” threats and opportunities in the market. • Understand your own strengths and weaknesses and build from there.
BackgroundRetreat: Trend Stuff • Increased de-centralization of k-12 funding decisions • Increased emphasis on results measurement • Increased competition/involvement from private sector • Increased use of technology in administration and teaching-learning • Expanded choices/options in the delivery of instruction • More outsourcing of components of schooling
BackgroundRetreat: Jim’s Reflections • NEKIA members are undergoing dynamic changes in management, identity, product & service development • NCLB will have a schizophrenic effect on k-12 market: market-driven for solutions, compliance-driven for results. • NCLB & ESRA stimulates greater demand for members’ products and services that are grounded in SBR.. • An industry is defined by a group of organizations with similar products that seek to penetrate a market. • NEKIA should be a function of its members’ vision for the future as well as its members’ most immediate survival needs.
BackgroundNEKIA Goals:What is guiding our current work? • Government Relations---31% • Membership Development---6% • Industry Leadership---19% • Capacity Building---13% • Member Services---17% • Organizational Development---15%
BackgroundFocus 2006: Within NEKIA goals, what should we aim to do in three years? • Help ensure survival by: • Shaping federal policy (#1) • Enhance members’ competitiveness by: • Shaping federal policy (#1) • Influencing industry development (#3) • Building members’ capacity (#4) • Strengthen financial viability of NEKIA by: • Generating new revenues (#2, #6) • Providing top quality cost effective services (#5)
Context5 Market Trends Areas Through 2006 • Public Funding • Private Funding • Nature of Demand • Types of Suppliers • Political Influences
ContextEducation Budgets • Federal • Significant growth unlikely with budget deficits, even less likely with war • Continued pressure to eliminate programs of interest to us • Continued pressure towards fewer programs and more local discretion as to use • State • Continued budget crisis and more likely to fall than rise
ContextFoundation Funding • Historical growth of 3-5% per year • Substantial decline in foundations’ stock market earnings • Large grants ($1+ million) are relatively rare • Small portion of funds available for new commitments in any year • Funding insufficient to counter Federal trends
ContextNature of DemandNCLB & ESRA as Market Shapers in 2006 • Number of schools in corrective action could be as high as 24000 (3x higher than this year) • Many more schools on the cusp will be desperate for help • Schools will want more support that focuses on specific population groups • Districts will want help in implementing corrective action provisions including supplemental services, school choice, re-constitution.
ContextNature of DemandNCLB & ESRA as Market Shapers in 2006 • Districts and states will want more help in assessments, alignment, data management • High poverty schools will use “school wide” provisions to re-allocate Title I funds to new types of programs and services • There will be high demand for SBR services and products • There will be a lot of turmoil and confusion
ContextSupply---Outsourcing • Districts and states will continue to “outsource” their support needs. • Market-oriented suppliers/providers will aggressively compete to build substantial revenues and capture greater market share. • New trade associations will form (eg EMOTA, NCSA) to strengthen position in market and shape federal policy. • New types of partnerships of suppliers will be created to help fulfill corrective action and SBR requirements. • Smaller, start-up providers will be bought out or dissolve. • Survivors will diversify, rapidly expand, commercialize and go global.
ContextPolitical Influences on Market-2004 Election & Beyond • Education will decline as a domestic priority compared to the economy and home land security but will remain in the top five. • Deficits will keep overall education spending increases relatively low and will be a major campaign issue. • Bi-partisanship in NCLB implementation will disappear with Dems focusing on failed policy and Reps focusing on success stories. LEAs and SEAs will get caught in the crossfire. • School improvement and choice will be lightning rod campaign issues in 2004 thus creating greater federal pressure to demonstrate effectiveness of the current Administration’s NCLB implementation plan. • School improvement and R& D will take on added importance in “battle ground” states (eg Ohio, Florida, Pennsylvania) leading up to ‘04. • NCLB implementation will likely continue on current path up to ‘ 04 election but there may increased pressure to relax AYP provisions thereafter.
ImplicationsWhat the trends suggest about NEKIA ‘ s work over the next 3 years Members need good market data in order to anticipate the specific types of services LEAs and SEAs will require in three years based upon AYP timeline. NEKIA needs more intelligence about the industry, particularly regarding the size and shape of the market and what other suppliers/providers are doing to expand their share . Members will need to continue to give high priority to cultivating strong working relationships with SEAs and LEAs both for political and future marketing purposes. Members will need to make SBR features a standard part of all products and services.
ImplicationsWhat the trends suggest about NEKIA ‘ s work over the next 3 years (cont’d) NEKIA needs to consider providing marketing support to Members who are competing (or wanting to compete) on the open market. Members who want/need to compete on the open market will need to develop market-oriented operations and cultures within their organizations. NEKIA advocacy for current programs will need to continue to be a holding/defensive action as negative pressure mounts from the current Administration.
ImplicationsWhat the trends suggest about NEKIA ‘ s work over the next 3 years (cont’d) NEKIA and its members need to visibly promote their non partisan posture and strategically cultivate balanced support from both parties in Congress. NEKIA needs to be prepared for the development of new education trade associations that will likely be competing with NEKIA for federal attention, funds, and members. We all will need to give priority to building new types of partnerships and attracting new members to strengthen our individual and collective competitiveness.
OptionsFour Different Directions that NEKIA Could go 1. Study Explore the range of possibilities: Convene a task force of members (or hire a consultant) and conduct more market research into market needs and industry competition. Use November retreat to review report and make decisions. 2. Act Pilot a specific project: Identify a workable venture such as contracting with a publishing house (or build our own with consultants) for marketing NEKIA member services and products. Convene a task force to manage the process for two years.
OptionsFour Possible Directions that NEKIA Could go (Cont’d) 3. React Continue on current path: implement this year’s work plan, explore new relationships and possible ventures on a less focused basis. Be prepared to respond to opportunities that might arise through the Executive Committee. 4. Pull Back Focus only on immediate needs: Discontinue industry development component of work plan and give exclusive focus to government relations and communications.
Where Do Members Want to Be? • To what extent should the size and source of members’ revenues change? • What do members offer in exchange for revenues that’s different from today? • How has the members’ customers base changed? • What is the nature of members’ relationships with the other actors? Federal, state, district, school, other R&D outfits, for-profit providers, etc?
Options3 ways to Strengthen NEKIA’s Financial Viability by 2006 • Increase Membership • Offer More Services to Existing Members • Offer Services to Non-Members
Questions for Discussion • Where do the trends leave members if over the next three years we act as we have up to now? • Can we change the trends? • What can we do to thrive under this scenario? • What do members need to do to get there? • How can NEKIA support them? • Can Washington Office provide support in ways that enhance its financial sustainability?
