irreverent, thought-provoking analysis of the industry-- with an
occasional guest columnist.
An Interview with Mike McCooey
CHA's finances, staff, shows,
and the future.
by Staff Report (July 5, 2010)
Mike McCooey has been President/CEO of Plaid Enterprises since 1994.
Before coming to Plaid he was President/CEO of an industrial sister
company of Plaid’s, and prior to that he had spent his entire career
in decorative products manufacturing, specifically wallcovering,
paint, and home decor fabrics.
He was elected to the ACCI Board of Directors in 1995, and after
chairing several committees became Board Chair for 1999 and 2000, at
which time he was elected to the HIA Board. He was a member of the
merger task force which ultimately resulted in the creation of CHA.
He was elected Chief Governance Officer (Chair) of the Board last
year. His term will as CGO will expire at the end of this year.
CLN: CHA ended its fiscal year in the red by
$492,566.00. Why so much? What happened?
As a non-profit, established to support our membership, CHA ends in
a typical year as close to break-even as possible. This means that
we are spending the revenues we have collected on programs to
benefit membership. CHA also is required by our by-laws to carry a
“reserve” to be used only in difficult times or for emergencies. We
are required to maintain that reserve at between 20% and 50% of
annual revenues. That reserve currently stands at over
2009 turned out to be a difficult year for the overall global
economy and for our membership specifically. Because our membership
struggled, our revenues were down. The Board in May 2009 authorized
a $500,000 loss for 2009, which allowed the staff to continue to
invest in important programs (consumer shows, CPSIA initiatives, and
international expansion) previously approved in January of 2009. The
Board thinks this was the right decision, and we are already seeing
some of the fruits of our efforts. It is important to note that,
even with this investment spending, we continue to maintain a
reserve at well above the 20% minimum required level.
CLN: Are there any specific steps being taken to
improve the situation this year?
In fiscal year 2010 the Board has directed the staff to return to
break-even spending. Despite the continuing effect the economy has
had on our members, CHA continues to fund initiatives to educate our
members and to grow the craft business. We always try to strike a
balance between good fiscal responsibility and delivering value
added services to our members.
CLN: The Board of Directors’ management style is
what’s called “policy governance.” Could you explain what that is
and how it differs from the traditional way of overseeing the staff?
Policy governance is basically setting out a series of desired
results for our membership (ends), while leaving the method of
attaining the results (means) to the staff. In directing the staff,
we tell them what they cannot do (proscriptions), then measure their
performance on a regular basis (monitoring reports). It essentially
recognizes that a volunteer board (all with other jobs) cannot
efficiently run the day-to-day operations of an organization as big
and complex as CHA.
CLN: Reportedly, membership has dropped. Is it
inevitable, given the decline in the number of independents and the
merger of so many companies? Is there anything that can be done to
reverse that trend?
Yes, it is true, CHA membership has declined in the past year. We
have lost members in all categories of membership due to store
closings, mergers, decline in certain product categories sales, and
the general economy.
However, tough times also represent an opportunity. We believe, done
correctly, that we can form alliances with other creative
organizations (art materials, quilting, etc.) and actually grow
membership to the benefit of all of our current members. As an
example, we have created a “Toy Pavilion” that you will see at the
Rosemont show this summer. If it’s successful, and we think it will
be, look for more alliances like this in the future.
In providing exclusive member benefits including robust buy-sell
venues, best practices education, legislative updates, compliance
resources, and other business resources such as public relations
tools and consumer research, CHA can continue to focus on giving its
membership the tools to succeed. As the economy improves, we believe
the money we continue to invest in these programs will reverse the
CLN: The trade shows appears to be smaller, too, as
are so many trade shows these days. What, if anything, can be done
to reverse the trend?
While many exhibitors are taking less space, our retention rate is
very good when compared to other trade shows. The association
continues to strive to improve the value of our shows for both
buyers and exhibiting companies.
Also, we have to be creative with our marketing for exhibitors,
because they are all more aware of their ROI. CHA has introduced
Show Biz Connections, which is a matchmaking program for
exhibitors, at no cost to them, to set up meetings in advance of the
shows with buyers who are looking for their particular products.
New for the summer show is Exhibitor Invites – another free
program that allows exhibitors to invite their data base of
customers to come to the show and allows for pre-populated, self
registration for attendees.
These are just two of the initiatives being developed to help the
association grow our trade show events. The staff is currently
working on other initiatives for member retention and member growth
which will be introduced later this year.
CLN: According to the CHA tax return, CEO Steve Berger
makes $400,000+ a year and two vice presidents make $200,000 each.
Could you explain how CHA arrived at those figures? Are those
Our tax return is accurate. CEO Steve Berger’s total compensation
package is slightly over $400,000, which includes not only salary
but also the value of other compensation including health benefits,
retirement benefits, life and disability insurance, and others. The
same is true of the Vice Presidents’ total compensation.
What is important in this question is what compensation is
appropriate to pay the CEO and Vice Presidents of our organization?
To better understand this, in 2008 the CHA Board conducted a
national compensation study for CEO’s of trade associations. This
study was performed by Organizational Consulting Group of Avon,
Ohio. The study confirmed that trade association CEO’s are highly
compensated, because their business acumen has proven to be good for
their respective industries. We found that our CEO and the Vice
Presidents were within the appropriate salary ranges (in fact, at
the lower end) when comparing similar type and size associations.
Several factors including budget, revenue, staff size, and geography
were also used to determine appropriate compensation.
In 2008, due to changes in the IRS rules affecting non-profit
associations, the Board also retained Robert Johnson, an attorney
specializing in CEO Compensation for non-profit associations, to
review our compensation practices. With the help of Mr. Johnson, the
Board initiated new practices to review and determine compensation
for the association’s officers that will keep us in compliance with
CLN: There aren’t as many members involved in the
association since the committees were eliminated. Is there any
thought to reviving the committee structure?
Actually, the number of members involved in the association has
grown. Through a wide range of task forces, member teleconferences
and surveys, more members have contributed input to CHA than ever
before. Last year, 504 members provided input to CHA, +54% vs. prior
CLN: How much money was spent on the consumer shows in
Orlando and Anaheim? Together, they attracted 16,000-18,000 people.
Was the cost worth it?
The Orlando consumer show, the first one we ever attempted, had a
net loss of $258K. The show was a test to see if we could hold a
successful consumer show. Based upon the knowledge we gained, we
held our second consumer show in Anaheim which had a net loss of
Our goal is to ensure that the show is profitable for the exhibiting
members and the association. We believe the shows are worth the
cost, because we are introducing consumers to new crafts, and post
-show research supports the fact that consumers try new crafts at
these shows and intend to purchase items related to the new crafts.
This is very exciting. If we can continue to perfect the “consumer
show model,” we should be able to offer more of them at no cost to
the association. In turn, this could really lead to a boom in
CLN: What is the plan for future consumer shows? Will there
be one in conjunction with the winter show in Los Angeles? In
conjunction with the 2011 summer show?
As I mentioned above, we are very excited about the potential that
consumer shows hold. CHA will be holding a consumer show immediately
following this year’s Summer Show in Rosemont. Following the show,
the staff will be presenting to the Board a comprehensive three-year
strategic plan for review concerning the future of CHA sponsored
CLN: Is the summer show going to stay in Rosemont? The
winter show will be in Los Angeles in 2011 and Anaheim in 2012. What
No decision has been made regarding future shows at Rosemont. We
will review the results and make the appropriate decision after this
year’s show. We do have tentative hold/options on future summer show
dates in Rosemont. As far as the winter show is concerned, we will
be in Los Angeles in 2011 and Anaheim in 2012. No decision has been
made in any of the out years. Again, we will let our results drive
Where do you see the industry going from here for the rest of
2010 and beyond?
We believe the craft & hobby industry is strong and vibrant ($28
billion U.S. retail sales). While we are certainly not immune to
global economic conditions, we have fared significantly better than
most other industries. It is clear in our own businesses, as well as
not-for-profit trade associations; it can’t be “business as usual.”
We are reaching out to other related industries and investigating
better ways to leverage members’ time and money.
Through it all, the bottom line is that we are a healthy
organization, with strong leadership at the Board and staff levels,
but most importantly we have a passionate and committed core
membership – and that will allow us to thrive and prosper into the