Technology & Society Technical Division Bi-Annual Operating Report

2002 Congress

“Can We Bail Out This Boat?”

2

2002 Congress T&S Division Report Executive Summary

The T&S Division is in trouble - it has a small and largely inactive membership base, no secure revenue source and several threats to continued viability…

• Our primary members only total at about 550– About a third a new members with six years of membership duration or less– There are five identifiable customer segments

• We have no revenue source outside of our subsidy, but we are expected to start generating revenue to meet our costs

• The division is running on a skeleton crew with many basic administration tasks neglected

• We are delivering value to some members, but this is currently targeted at those who attend Congress, leaving a large portion of our base unserved

• We might think we have potential to improve, but we are facing several threats to our existence:

– Externally, our very right to exist is now being debated at the highest ASME levels– Internally, the lack of active volunteers, knowledge of customers and a sound

management and succession plan

… If we are serious about turning this division around, we must commit ourselves to a long term campaign and begin taking immediate action.

3

2002 Congress T&S Division Report Contents

• Division Report

• Appendix - Functional Assessment

4

2002 Congress T&S Division Report Membership

Our primary members total about 550 (0.5% of all non-student Society members); Nearly a third have been Society members six years or less.

0

10

20

30

40

20 30 40 50 60 70 80 90 100

Primary Members By Age

Member Age

No. of Members

0

10

20

30

40

0 10 20 30 40 50 60 70 80

Source: ASME Membership Database, July, 2002

Primary Member By Membership Duration

No. of Members

ASME Membership Duration

Primary Members by Region

Region Location # %

I New England 40 7

II Hudson 42 8

III Mid-Atlantic 95 17

IV Blue Ridge 33 6

V Great Lakes 74 13

VI Central 38 7

VII Northern Plains 22 4

VIII Northwest International 30 5

IX Pacific 52 9

X International Southwest 46 8

XI Southeastern 44 8

XII Rocky Mountain 21 4

XIII International ex NA 19 3

TOTAL 556 100

5

2002 Congress T&S Division Report Membership

Note 1: Remaining primary members did not indicate their job titleSource: ASME Membership Database, July, 2002

The T&S Division serves five primary customer segments from among its primary members; only a third are practicing engineers and educators.

Attorney5%

Other5%

Practicing Engineer

27%

Retired21%Manager

14%

Executive11%

Education8%

Project Mgmt

6%

Consultant3%

Primary Members By Job Title Category

Total Members Anaylized1 = 460

• We appear to have five primary customer segments:

– 25% - 30% are business decision makers

– 25% - 30% are technical decision makers

– ~20% are retired– ~10% are educators– ~5% are attorneys

• What does each segment need?

• How can each segment resource be tapped?

Membership Segmentation

6

2002 Congress T&S Division Report Finance

Our means are limited; we are expected to start generating revenue in exchange for transferring knowledge to our members and other customers.

Net Income:

Net Investment Gain (Loss) ($ 25)

Net Expense:

Request for member data $ 35

Custodial Account Balance: $2,990

Year to Date Financials1, through 9/30/02

Note 1: ASME Fiscal Year begins on July 1Note 2: Source: Retreat Highlights & Training, 2002 TEC Presentation

• The Council on Engineering will undergo a dramatic reorganization beginning with the 2004 fiscal year

• Divisions will become ‘technical units’

• Group VPs will have P&L responsibility, accountability and ultimate authority for their divisions

• Focus will be on cost efficiency

• Technical units will be expected to use the most “competitive means” available to deliver technical content

• The COE will be actively seeking opportunities to reduce expenses, including division subsidies

• Group VPs, with the support of their divisions, will be expected to develop business models that work

Future Expectations2

7

2002 Congress T&S Division Report Administration

The division is now running on a skeleton crew with many basic administration tasks neglected…

• Only four active volunteers– Three serve on the executive committee in addition to holding 1 - 3 other positions

• Several unfilled volunteer positions– Two executive committee positions - Vice Chair and Treasurer / Secretary– Six program and administrative chairs– One CPA representative– Several At-Large positions

• No current strategic or operating plan in place– Group plan includes specific T&S objectives and high level financial targets

• Most website content last updated prior to 2000– Several gaps in content compared to other divisions’ sites

• Victor Paschkis Founder Award not issued since 1994– Only two known recipients since award establishment in mid ‘80s

• By-laws last revised in 1978– Includes a laundry list of objectives, but no coherent mission statement– Officer duties defined by a COE document that is no longer published– Many title and name references out of date

8

2002 Congress T&S Division Report Recent Accomplishments

…But despite these obstacles, we do continue to deliver value to some members.

• Formed a new intellectual property program committee - gathering momentum– Critical mass around Washington, D.C. patent office and courts– Several T&S members at the core, with more coming forward to join

• Delivered technical programs “punch well above our weight”– Expected to deliver total of 12 technical sessions and a joint dinner with

management division at 2002 Congress– Two sessions planned for 2003 National Manufacturing Week (March, Chicago)

• A number of other initiatives are beginning to emerge– Technical journal, external collaborations, new conference opportunities, others

• Full T&S representation continues on several external ASME units: BPPE, H&H, Congress Technical Committee

• Contributing to E&TM Group administration– Well represented in strategic plan development– Contributed Group volunteers for Nominating Committee, Congress Program Rep

(Hiroshi Honda) and At-Large member (Susanne Tinker Jones)

9

2002 Congress T&S Division Report Current Issues

We might think we have potential to improve, but our very right to exist is now being debated at the highest levels.

• Harry Armen, ASME Governor, has recommended that COE sunset the Engineering & Technology Management Group1. His rationale includes:

– Appearance of insufficient focus to the Group’s activities– Lack of significant recent accomplishments that suggests lack of contribution– Activities such as those associated with Technology and Society are highly

important and coordination and collaboration with CPA’s Boards on Government Relations and Public Information is expected; however, this is not occurring

• Others senior leaders beyond our Group do not yet support this view; but Harry’s views require a response; the debate will continue until the new COE organization design is approved

• The T&S Division must contribute to the argument to keep E&TM alive by making rapid progress toward increased focus and contribution

Note 1: Source: COE Annual Report Review Presentation, BoG Planning Meeting (July, 2002) and subsequent communication with E&TM Vice President and others

10

2002 Congress T&S Division Report Current Issues

In addition to this immediate external threat, we have several other internal issues that demand our prompt attention.

• The majority of our division’s mandate is not being addressed– We currently fulfill less than one third of our required division functions (see

appendix for assessment)– We have few customers, and our most important customers’ needs are not known – Our current programs are largely delivered to a small fraction of our membership

who happen to attend the Congress

• We do not have a management plan in place– We lack a coherent vision, mission, strategy, objectives or operating plan– Our current business model results in value destruction even as we are mandated to

develop a “P&L-like” cost structure

• Number of active volunteers is well below critical mass– Current volunteers are “overloaded” with maintenance duties with no time to create

new programs– Numerous volunteer positions are needed but remain unfilled

• We do not have a plan for leadership succession, thus violating our bylaws– Two executive committee positions remain unfilled– Other members have not been confirmed by nominating committee– We are not following the committee’s required rotation plan

11

2002 Congress T&S Division Report Near Term Strategy

If we are serious about turning this division around, we must commit ourselves to a long term campaign and begin taking immediate action.

• First priority must be to actively seek new volunteers - without more hands, we can not bail this sinking ship

• Our stakeholders must be sought out and their needs identified– Division members– Other internal ASME units– People outside of ASME (remember, this is the Society in our division name!)

• We must initiate new programs to serve these stakeholders; the programs must have several key characteristics:

– Real programs delivered by real people - good ideas are not enough– Collectively support a new business model that can lead to elimination of our

subsidy– Sustainable - heroic efforts on the part of one are not as valuable (in the long term)

as a sustained process that can be transferred to others

• We must renew our leadership by seeking our replacements now and mentoring their development while we still have time

• Finally, we need a coherent management plan– We must develop a compelling vision for ourselves that will drive us forward in

pursuit of a mission that we need to identify– We need a medium term strategy to achieve this vision, and an operating plan that

supports this strategy

12

2002 Congress T&S Division Report Contents

• Division Report

• Appendix - Functional Assessment

13

2002 Congress T&S Division Report Division Functional Assessment

The Council on Engineering mandates 17 distinct functions for a technical division; The T&S Division currently addresses only 6.

Note 1: Based on Council on Engineering Operating Guide (1997), section 4.2.1 “Division Functions”

T&S Division Functional Assessment1

Description Comments

Sponsor conference sessions to achieve technology transfer

We perform consistently well in this areaConferences

Rating

Coverage

Learning

Recruitment

Applications

Cooperation - CMA Units

Viability

Committees

Leadership

Cover Division constituents’ entire technical area of interest

Only one program committee is fully functional

No activity

No activity

No activity

No activity

Costs greatly exceed revenues

Five committees named, two chaired, one fully functional

No activity

Promote life-long learning by developing seminars, tutorials and, continuing education courses

Seek out, identify and encourage individuals interested in new technology or applications to organize under ASME

Cooperate with other Divisions and Societies to identify how basic Division output may be used in products and designs

Actively seek and implement sponsorship of joint meetings, lectures or other functions of mutual interest with Sections and Technical Chapters

Seek ways to become financially viable while providing quality technology transfer through short courses, conferences, exhibits, directories, reports, etc

Establish a sufficient number of technical committees to cover the division's technical scope and attract more active members

Provide active leadership in incubating, shaping and developing the ideas, technologies, disciplines and areas of application represented by the Division

Function

14

2002 Congress T&S Division Report Division Functional Assessment

The Council on Engineering mandates 17 distinct functions for a technical division; The T&S Division currently addresses only 6 (continued).

Note 1: Based on Council on Engineering Operating Guide (1997), section 4.2.1 “Division Functions”

T&S Division Functional Assessment1

Description CommentsSeek opportunities to cooperate with other technical divisions through joint development of sessions, workshops, special meetings, etc.

Active relationship with other E&TM divisions

Cooperation - COE Units

Rating

Research

Publication

Recognition

Students

Journals

Minorities

Newsletter

Identify research needs, foster their fulfillment and translate the results by working with group Vice Presidents and the Center for Research and Technology Development

Encourage and assist in publication of significant information related to Division technology

Recognize individuals with outstanding achievements in the Division's technical field

Encourage student participation in Divisional activities

Maintain quality publications and journals

Actively promote the participation of minorities and women in the activities of the Division and its Executive Committee

Provide information on new technologies and describe the activities of the division and its officers and members by publishing a newsletter

Function

No activity

No activity

No activity

No activity

No activity

Women and minorities are represented

Jointly with E&TM; technology information not provided