Innovation, Organizational Culture

What Surprised me most about Associations in my Research: Four Fatal Flaws for Growth

What surprised you most in the course of doing your research for your book?”  This was one of the questions that Joshua Paul from Socious asked me for an upcoming video interview about my book. The question intrigued me.  Simple enough but I never thought about it. So this is what I came up with after reviewing my research and experiences in the last 3 years. I interviewed some exceptionally intelligent CEOs and uncovered pockets of enormous innovation that I developed into case studies for the book. In spite of this, however, I was surprised to encounter a few unexpected gaps of huge importance for the growth of these associations. 1) My first surprise was that by far the majority of CEOs had no clue about the real value of their associations—that is, the value their customers actually perceived and experienced through their membership. There was a slight pause to my first question: what did they think was the greatest value members derived from their association?  In response, they invariably defined their greatest source of value in terms of catalogues of programs and benefits. My second question often elicited surprise in those I interviewed: “in a world in which there is a plethora of programs and networking opportunities, why should a member choose yours? What is different about them?”  It was clear by their answers that this was not the kind of question that they had thought much about: “Hmm! Good question.  I never thought about it this way. I suppose it must be….” Questions such as – what member problem does this program solve?  Why is it more effective or distinctive than that offered by other resources available to members?—didn’t ordinarily drive product development. And this was the source of my surprise: without a preoccupation with this type of questions, let alone answers, how can an association create value that truly resonates with what matters the most to members?  Investment in marketing or program development without deep and continuous understanding of members’ criteria for value is like building an edifice without foundations. 2) My second surprise was that, lacking the members’ perspective, the vast majority of associations sadly missed and squandered existing value in their assets.  In interviewing chapter leaders of one association, for example, I found out that they greatly valued the opportunities their roles provided to understand their markets, build reputation, start new businesses and develop new competencies.  The association never realized the enormous gap between members’ criteria and its own assumptions of the sources of member value as: service to their association; the prestige of the title; “giving back to the profession” and other similar abstractions. As a result, the opportunities leaders valued were random and required the ingenuity of individuals to uncover and figure out how to leverage them. The great opportunity the association missed was to target and deliberately facilitate such opportunities as the basis of its value proposition and the inspiration for products and benefits that were in sync with customers’ criteria and needs Compare, for example, the association’s static benefits packages of discounts and standard, standalone programs to customer-driven solutions such as facilitating business opportunities, targeted development of competencies, platforms for members’ reputation development, etc.  Which one would provide the most value and, hence, most engage members? Last but not least, the association missed opportunities for engaging volunteer leaders on their terms. Without understanding the perspective and criteria for value of these leaders, how would the association be able to properly motivate and engage them? The inability to engage by understanding and targeting deep motivations are the roots of the antagonistic relationships many associations have with their chapters. 3) My third surprise was the degree to which even highly innovative leaders “bought-into” the association model,  avoiding at all costs to challenge its basic pieces, such as:

    • Definition of “association”  and the kind of business an association is in at any point in time (vs. we can’t do this because we are an association)
    • Conventional leadership roles
    • Conventional models of governance and structure
    • Value assumptions and formulas, centered on standalone products and standardized benefits
    • Assumptions about who their customers are.
4) The enormity of the gap between talk and action was a fourth surprise.  Many association leaders enthusiastically agreed with the premises of the book and the necessity of creating customer- centric, flexible, innovative learning organizations to be able to compete today.  Yet, I was amazed to find out that most of these leaders thought that they were already implementing these models. There was no association that did not believe that it was member-centric with perhaps a few minor gaps left to fill and some additional fine-tuning to be done. They had not really re-thought the core elements of their business from a customer’s perspective and had not looked for models outside comparable associations so that they would be able to envision what a customer-centric organization looked like and  how it operated. I once helped a scientific organization restructure its entire model around members rather than product silos. The result was a new design for a flexible structure focused on value-generating relationships rather than transactions.  My surprise was that the association felt it had achieved its goals with the creation of the plan. They did not believe that to implement it they needed to make changes on the operational and cultural levels.  For example, the same people, completely lacking in people skills, remained in their old membership positions.  Budget was developed in the same way, around the needs of departments rather than cross-functional goals based on satisfying customer needs.  The association created nominal cross-functional teams that, theoretically, would collaborate on developing customer solutions tapping assets from the entire organization.  However without authority and with performance criteria and rewards still based on production rather than customer outcomes, there was no incentive for collaboration across silos and no mechanism for success. The degree of the difficulty in getting association leaders to match theory with a different way of thinking and doing business surprised me. This is why the emphasis in the book was increasingly on execution- walking leaders, step by step, through six fundamental organizational realignments for executing change and building customer-based architectures.