At its 100th anniversary, Boy Scouts stands out as a business model

By: Chad Paul

Iwanted to bring to you and your readers’ attention an organization that will turn 100 on Feb. 8, 2010: The Boy Scouts of America (the “BSA”). I recently reflected upon this organization from a business case methodology perspective and found the analysis enlightening. Much can be learned by both non-profit and for profit businesses from studying and benchmarking this “best in class” organization.

When you look at the BSA through the lens of a business case analysis, you recognize how successful and consistent it has been in everything from marketing and organizational behavior to product development and service offering delivery.

How many other non-profit and for-profit organizations are in existence after 100 years of operation, let alone thriving in the 21st century? For profit companies like General Electric Corp. (1878) and Ford Motor Co. (1903) and non-profit organizations like the American Red Cross (1881) and the Salvation Army (1865) are the only few that come to mind.

From an operations perspective, the BSA is a decentralized organization. Its national headquarters in Irving, Texas is managed by one senior executive with a small administrative staff. Virtually everything but policy is delegated to regional “divisions” called Councils. The BSA is represented regionally by the Cape Fear Council. The Cape Fear Council oversees the Boy Scout program across an eight-county area, serving in excess of 14,000 youth and adult leaders and volunteers. Additionally, the Cape Fear Council manages and operates a 1,487-acre camp that includes a 46-building physical plant, a high adventure climbing base, gun and archery ranges and a full waterfront activities center. The Cape Fear Council operates all of the aforementioned with a 5 percent overhead expense margin. Other than a few religious organizations, I can’t think of any business or organization that operates with a 5 percent overhead cost platform.

When analyzing the BSA, it is clear that the principal reason for the organization’s success is that it has never strayed from its core mission and underlying values. I know…I know…the terms “mission statement” and “value proposition” have been so inappropriately and inconsistently applied that they have become passé and have lost all meaning of importance. After some research, my understanding is that the BSA has had a formal written mission statement since on or about June 15, 1916, long before mission statements became fashionable business lexicon having no significance. For 100 years, the BSA has remained true to the core principles and values of its mission statement: “The mission of the Boy Scouts of America is to prepare young people to make ethical and moral choices over their lifetimes by instilling in them the values of the Scout Oath and Law.” From the customer’s perspective, the BSA’s core principles and values have been consistent for 100 years.

What I can tell you for certain is that the BSA’s current 2.8 million youth members and its 1.2 million adult leaders and volunteers can cite the Scout Oath and Law without hesitation. How many other companies and organizations in existence today have more than 4 million living and breathing customers who not only know the basis of its core mission statement and value proposition, but can recite it from memory?

Moreover, how many other companies or organizations in existence today have a mission statement that forms the basis of the value proposition and customer service experience that the company provides? General Electric’s “We bring good things to life,” Ford’s “Quality is job #1,” Nike’s “Just do it” and Intel’s “Intel Inside” don’t even come close combined.

One of the reasons the BSA has been successful during the past century has been its ability to stay customer relevant. The BSA has been able to remain customer relevant because it has done a masterful job in segmenting its customer base and tailoring its product and service offerings to meet specific customer needs and priorities. Scouts are segmented by three primary age subgroups - Cub Scouts, Boy Scouts and Venture Scouts. This customer segmentation “feeds upon itself” over time, as customers move from one level or service/product offering to another, each acting as the “new” customers for those that recently moved on to another level or service/product offering.

Since 1910, Merit Badge “product offerings” have been an integral part of the Scouting experience. Many adults have pursued careers as a direct result of participating as a youth in one of the 121 Merit Badges currently offered by the BSA.

Merit Badges and outdoor experiences are not the primary products or services offered by the BSA, but merely represent by-product offerings. They in essence form the downstream delivery and distribution platform for the “intangible” product that has been in demand since before the founding of our great Nation. What is this “intangible” finished product? Individuals who have character; who understand how to make responsible choices; and, who understand the “value” of what it means to be “trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean and reverent” (Scout Law). The historical record is awash with companies and organizations that have tried to service this “intangible” demand priority or variations of it. The BSA is the only organization that comes to mind that has been able to continuously meet this customer demand priority since the turn of the last century.

Many of America’s greatest political, business, military and community leaders were involved in Scouting at some point during their youth.

Much can be learned by reflecting upon the BSA from a business case perspective. The finished product developed by the Boy Scout experience is “intangible.” You can’t hold it, touch it or buy it…but you know it when you see it. Character development and learning to live by the Scout Oath and Law…all for $18.00 per year in registration fees, and the cost of a hand-me-down uniform and some used camping equipment…“Priceless.”

Chad Paul is managing partner of Harbour Island Partners and earned his Eagle Scout rank in 1983.

At its 100th anniversary, Boy Scouts stands out as a business model

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