Any organization's business life cycle, especially those with long histories, is marked by major milestones, successes, potential turns in viability, or changes in focus or strategy. The Recreation Association of the Public Service of Canada—the RA—is no exception.
Created in 1941 as an outlet for federal government employees to socialize, be active, and stay healthy, the organization spent the its first 35 years expanding and growing. This was achieved primarily through the development and construction of the association’s central asset: the RA Centre. This 250,000 square foot facility was, and remains, a one-of-a-kind operation in the National Capital Region. It offers a wide range of activities such as bowling, hockey, curling, soccer, archery, squash, badminton, and bridge—all under one roof. Mixed into this array of play spaces are areas for socializing, such as restaurants and cafés, a fitness centre, and meeting spaces. The combination creates a unique environment offering play and work under the same roof. The RA Centre's central Ottawa location is easily accessible to public servants from all over the National Capital Region.
Figure 1. Image Copyright Corporate Finance Institute
Examining the RA's Business Life Cycle
Each stage of the RA’s business life cycle (as described in Figure 1) can be pinpointed over the years. When 1976 rolled around, the association was in the midst of a major “shake-out”, which led to extensive organizational changes. There was a need for additional capital to add to the RA’s offerings. As part of a proposed grant, the RA decided to expand its membership beyond the federal public service to include individuals not employed by the Public Service of Canada. This one decision had far-reaching ramifications that changed the course of the association for the next 42 years.
Membership Change Consequences
Because membership was no longer just for Federal Government employees, the Government of Canada (the association’s major funder at the time) began to adjust their business model. With new members from the general public joining, the RA Centre became similar to a municipal recreation centre servicing a broad cross-section of the population, the Federal Government began to claw back support.
As the organization moved towards maturity at the turn of the century, the government started a “Program Review.” Changes to the membership model convinced the Federal Government to pull its remaining remainder of its support out of the RA, reducing funding by 20% over a 5-year period, until it ceased completely by the end of the 1990s.) The Association was set on a new path where all activities needed to be financially self-supporting, which forced our not-for-profit to identify new ways to fund operations.
In 2001, the RA acquired the Rideau Tennis Club to stem the tide of projected losses by bringinginto the association a new business with revenue potential. By 2014, the RA was facing decline. A radical change was needed—and fast! The association saw a decline in traditional revenue sources, and our financial lender was very unhappy. Effectively, the RA was on the verge of bankruptcy.
Time for a Leadership Shakeup
Following a change in leadership, the new CEO and management team faced the daunting challenge of re-imagining the RA's future.
What activities would we be offering?
Where can we identify and secure sustainable revenue streams?
Can the RA's culture be rejuvenated to withstand large-scale changes?
How do we renovate a 60-year-old building with limited resources?
More importantly, where do we start?
It was clear the RA needed to reverse course on contribution and needed to identify new ways to generate long-term, future-proofed revenue sources. While the road to financial sustainability is a long one, the RA was able to get on the right path by successfully rethinking its own direction and future. Led by an energetic and strategy-focused board, and under the guidance of a future-focused CEO, the RA now has a very bright future ahead. RA members, staff, and volunteers can be excited to see the association's core components and founding principles of sociability, fun, and wellness still reflected in its new vision.
Moving into the Future
How did we do it?
What did we learn along the way (and are still learning), and what major business transformation did we undertake to get the association on a new path?
Join our interactive session, Breaking Down Barriers: How the RA Re-Imagined the Future, at 2018 CSAE National Conference & Showcase to learn how you could re-imagine your strategy and innovate to future-proof your association. The RA, a 75-year-old organization with 22,000 members, 110 staff members, and hundreds of volunteers was able to face new realities and market challenges.