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The Six Rs of Association Thrivability (MSAE 2014)

Handout for AENC 2016 Annual Meeting: Jeff de Cagna "Embracing the Board's Duty of Foresight"

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The Six Rs of Association Thrivability (MSAE 2014)

  1. 1. 4 associationIMPACT < Issue 3> 2014 ASS O C IAT I O N K N OW L E D G E The Six Rs of Association Thrivability By Jeff De Cagna The rules of the game for associations have changed, and they will not be changing back. Here’s what it will take for your association to thrive over the next decade and beyond. T hrivability is at the core of what association boards, CEOs, and staff across North America and around the world grapple with everyday. The Age of Transformation—a still unfolding period in recent human history during which the powerful forces that have always shaped our society are all recalibrating and exerting their profound influence at the same time— represents an irrevocable shift toward a fundamentally different world from the one in which most associations first emerged many decades ago. To put it another way, the rules of the game for associations have changed, and they will not be changing back. Building 21st century organizations capable of flourishing in this volatile time will require more insightful and actionable answers to the core question. Surfacing more generative responses means senior decision makers must embrace different ways of thinking and acting when considering what the future holds for their associations, their stakeholders, and the fields in which they operate. Through more than a decade of strategic work with a wide variety of organizations, I have identified six critical imperatives for 21st century association decision makers to follow as they strive to nurture thrivable associations. I call them “The Six Rs.” 1. Realism for action Building thrivable associations begins with understanding the deep impact of what is happening today on how organizations create, deliver, and capture value. In The Age of Transformation, the growing ubiquity and influence of digital technologies in the lives of stakeholders means the half-life of traditional association business models is far shorter than ever before. Under these conditions, business model reinvention must be an ongoing exploration of new possibilities instead of a one-time exercise. The realism-for-action imperative demands that the work of business model innovation rejects the deep- seated assumptions of the past. In addition to questioning orthodoxy, association decision makers must steer clear of myopia, nostalgia, and denial so that they can honestly confront the ground truth of the situation facing their organizations and stakeholders. Association boards in particular need to reassert their strategic legitimacy in the eyes of stakeholders by recognizing the deep impact of transformation on those stakeholders, and by making a clear commitment to accelerate the association’s rate of strategic progress relative to the pace of transformation in the environment. 
  2. 2. 5associationIMPACT < Issue 3 > 2014   2. Responsibility for stewardship Without question, association boards must take their legal and fiduciary responsibilities very seriously. The board’s oversight and risk mitigation functions are not going away anytime soon, but nor do they exist in a vacuum. The work of stewardship lives within the dynamic context of transformation, and boards should be just as concerned with the risks of inertia in preparing for the future as they are about the specific risks of any particular course of action. The responsibility-for-stewardship imperative invites association decision makers to look beyond the boundaries of oversight and invest in building a sustained organizational capacity for innovation. Instead of narrowing strategic options based on financial or other short-term concerns, a genuine commitment to stewardship responsibility includes taking intelligent risks designed to provide meaningful, long-term support to association stakeholders as they pursue their most important personal and professional outcomes. Taking responsibility for stewardship begins with association decision makers developing shared principles of action—grounded in a commitment to purpose—to guide future organizational decision-making . 3. Readiness for learning Most association decision makers operate with the shared belief that strategy as an exercise in planning maximizes their ability to deliver reasonable programmatic and financial results, while minimizing any threats to their control over that work. Planning- centric approaches tend to keep the focus on what key decision makers already know, i.e., the tried-and-true ways of doing business as the basis for future action. While data collected from the organization’s usual suspects may bring some different perspectives to this work, such input rarely alters the central premises upon which plans are formulated. The readiness-for-learning imperative challenges association decision makers to pursue strategy as a process of ASS O C IAT I O N K N OW L E D G E learning. No association today possesses all of the knowledge it needs to create thick value for its stakeholders. The ability to learn distinguishes the organizations creating a thrivable future from those defined by the past. Strategy as learning lowers the barriers created by fear, uncertainty, and doubt (FUD), and surfaces new possibilities inspired by serendipity, empathy, and discovery (SED). Serendipity is about unexpected encounters with meaningful opportunity, including vibrant connections with the unusual suspects who are willing to challenge orthodoxy. Empathic understanding enriches strategic insight by inspiring decision makers to see the world through the eyes of others. Discovery involves uncovering ideas and opportunities. SED animates strategy as learning, and enables associations and stakeholders to co-create what’s next for themselves and others. 4. Resources for investment Association decision makers must clearly recognize that nonprofit is simply a tax status. It is not now, nor has it ever been, a business model, and it is certainly the wrong mindset on which to base critical business- model decisions for the future. Indeed, one of the main reasons why every association must have a robust conversation about its current and emerging business models is to ensure that the organization’s commitment to purposeful action is fully integrated with its pursuit of a responsible level of profitability. In the traditional discourse of nonprofit organizations, however, the word “profit” still creates significant disquiet for many decision makers. Building thrivable associations for the future will depend, at least in part, on whether boards, CEOs, and other association stakeholders can let go of their personal discomfort to make profitability a top organizational priority. The resources-for-investment imperative insists that association decision makers treat thrivability as a holistic condition. While a consistent flow of financial resources is essential for 21st century associations, money is not the only appreciating asset needed to build a thrivable organization. Association decision makers must also capitalize fully on other invaluable yet finite resources— including organizational time, energy, and attention—as part of the creation of thick value for stakeholders. Future association business models will depend just as much on the wise investment of these and other intangible assets as they will on the imaginative application of digital tools and technologies or other forms of innovation. 5. Relationships for collaboration The traditional membership-centric business models in place in most associations today focus entirely on persuading stakeholders to join. For some organizations, this model remains sustainable, at least for now. For many associations, however, this model is a persistent struggle because any progress made through the membership recruitment process is often undermined by the failure to retain those members for any length of time when their memberships do not deliver an actual experience of value in every stakeholder interaction. In short, today and going forward, creating thicker value matters more to association thrivability than does selling more memberships. The relationships-for-collaboration imperative requires association decision
  3. 3. 6 associationIMPACT < Issue 3> 2014 makers to build more thrivable business models by shifting away from a narrow and self-limiting focus on membership. Instead, associations must expand relationships beyond the long-standing boundaries of membership to build and activate strong networks of connections with a wide variety of stakeholders who see the benefit of entering into meaningful relationships with the association. Associations pursuing this approach can harness the distributed capabilities and hidden resources of a broader and richer network of stakeholders who can collaborate with each other, as well as the association, to create new thick value.' 6. Resilience for growth The potent forces of the Age of Transformation continue to create significant disruption throughout society, including associations. To counteract the negative effects of disruption and build for thrivability, association decision makers must identify opportunities to increase resilience at the individual, group, and organizational levels. Boards, CEOs, and other key contributors must be ready, willing, and able to make smart and courageous decisions that move their associations down a thrivable growth pathway, even in the face of increasing complexity and volatility in the environment. The resilience for growth imperative urges association decision makers to take a closer look at the five previous imperatives to understand their deeper implications. At the core of each imperative is a fundamental notion about building resilience for growth: 1) seeing the world as it is, 2) being a responsible steward, 3) choosing learning over knowing, 4) prioritizing investment, and 5) organizing for collaboration. By pursuing meaningful growth in organizational capacity for thrivability, decision makers will give themselves a much better chance to guide their associations toward the achievement of their most critical outcomes. The Age of Transformation will not end any time soon. As an association decision maker, the Age of Transformation will not show you any forgiveness if you try to ignore it or deny its existence. And even if you fully embrace the enormous possibilities that transformation creates and implement the six Rs of association thrivability with great care, inevitably you will make many mistakes and experience failure along the way. Such is the nature of the challenge before you, but it is not an insurmountable one. Without question, building your association to thrive over the next decade and beyond will demand more of you, as well as more from you. It also will afford you the unique opportunity to transform yourself into a true 21st century leader. The only remaining question: Are you ready to raise your game? Jeff De Cagna FRSA FASAE (jeff@ is chief strategist and founder of Principled Innovation LLC. De Cagna’s presentation at ORGPRO, July 10, 2014 at 9:00 a.m., is titled, “How Association Leaders Can Think Differently About the Future.” Your MSAE Contact: Terese McInnis, CMP, Account Executive 231-995-3911 | True Inspiration Come to meet. Leave inspired. resorts & spas | unique meeting venues | historic hotels |meeting planner assistance four-season adventure sports | championship golf | boutique shopping | art galleries | 30+ wineries | craft breweries TCT IMPACT OrgPro Issue.indd 1 4/17/14 3:54 PM   No association today possesses all of the knowledge it needs to create thick value for its stakeholders. ASS O C IAT I O N K N OW L E D G E 