Associations have been an American staple for 100+ years. Today their primary value proposition, bringing together like-minded professionals and providing them with the best education, professional networking, and advocacy to be found, is being disrupted by advances in technology and private sector competitors.
These member organizations are experiencing disruption on three fronts:
- Their business model is under threat. Almost every trade association and professional society is built upon a set of services that today is provided for free or a special interest group. Technology has made it possible for anyone to start a group, a community of practice, and deliver value-based education just-in-time anywhere in the world for almost no price at all.
Many large private sector companies are doing both as loss leaders. Further Governance is not making things easier with a revolving door of volunteer leadership that puts even the best CEO to the test for continuity and strategic execution.
- Members' businesses are under significant economic pressures due to technology advances, globalization, policy changes like health care reform, banking practices, talent development and acquisition. As a result they scrutinize value that now appears to be optional even though it was once accepted as part of doing business. They may cut dues as a short-term measure to make ends meet. In many industries M&As are shrinking the total number of members, cutting into the base their associations serve.
- Entire industries are being upended. Witness the massive disruptions health care reform is causing among medical companies, professionals and institutions or the challenge eReaders and iPads have created for the makers of printing equipment.
That said, there are bold leaders in the association field who are rising to the challenge with a business mindset that does not compromise on their double bottom-line of member value and financial growth.
Here are three clearly 21st century priorities that are making a difference among those who are leading the way:
- Talent development and talent acquisition. As always, getting the right person in the driver's seat is premium. This means developing those who are eager and have the capacity to take on challenges, and recruiting top-tier performers, often from the private sector. Bringing in high-level managers with a completely different mindset can challenge the best organization dynamics, requiring the rewiring of business processes and disrupting the status quo among the senior leadership team, but so much is at stake it is well worth the investment.
- Business intelligence is a necessary investment. Now is the time to (a) understand members' challenges and desires like never before, (b) survey the playing field to understand who else is on it, the trends they are creating, the challenges they represent, and the opportunities opening up, and (c) mine the collective intelligence of thought leaders and practical visionaries.
As change speeds up, the event horizon for taking action (i.e., the time available to respond competitively) shrinks. Long-term strategy carries more risk while short-term responsiveness carries higher value. Business intelligence mitigates the associated vulnerabilities.
- Leaders must shift from an organization-centric view to a market-centered view. Instead of viewing those who are eating your lunch as the enemy, recognize that something big is going on in the marketplace and find your unique way to contribute to the action, with a laser focus on value generation (as tested through your member-customers). Those that are playing a bigger game, participating in and contributing to future are seen as players and will attract market share as well as top talent.
Jeff Bezos so aptly illustrated this point just last week. At the Consumer Report event on Wednesday he was asked when Amazon would release an iPad killer. Here's an excerpt from his response:
Most business is not usually like a sporting event. It's very common to read blog or newspaper headlines, and the words "X Killer" is very, very common. I assume because it works--it must get more clicks. But in real life industries usually rise and fall together. When it comes to competing products, however, success isn't always so black and white. In a sporting event, there really is a winner and a loser. I think in business people use that metaphor--the sporting event metaphor is ingrained in us. Any kind of new product introduction, probably the company is not hoping to completely kill any other company. They're hoping they can be part of something big.
Like Bezos, leaders can read the market as a larger force and leverage competitors to co-create the future.
The three priorities above are equally challenging within the private sector. This is good news. It means associations are emerging from the periphery of American business and moving out onto the main field. It portends a shaking up in the sector, but hey--what's not already shaking?
Seth Kahan (Seth@VisionaryLeadership.com) is a Change Leadership specialist. He has consulted with CEOs and executives in over 50 world-class organizations that include Shell, World Bank, Peace Corps, Marriott, Prudential, American Society of Association Executives, International Bridge Tunnel and Turnpike Association, Project Management Institute, and NASA. He is the founder of Seth Kahan's CEO Leaders Forum, a year-long learning experience for CEOs in Washington, DC. His book, Getting Change Right: How Leaders Transform Organizations from the Inside Out, is a Washington Post bestseller. Visit GettingChangeRight.com for more info and a free excerpt. Follow Seth on Twitter. Learn more about Seth's work at VisionaryLeadership.com.