Associations and nonprofits may be more committed to transforming their world than they are to transforming themselves.
I concluded this while analyzing the business transformation framework that Mark Bertolini, David Duncan and Andrew Waldeck offer in the December Harvard Business Review. (See Knowing When to Reinvent.) After conceding that most businesses also struggle with reinvention, the authors identify five interrelated fault lines that could signal a major change is needed: “whether a business is serving the right set of customers and using the right performance metrics, whether it is positioned properly in its ecosystem and is deploying the right business model, and whether its employees and partners have the necessary capabilities.”
After making a quick list of more than 25 past Signature i clients, I could only identify two in the process of reinventing themselves and maybe two more that may discover they are on that path once the major changes they are undertaking come to their logical conclusion. Wow. And yet in almost every case we were working together to identify and lead significant changes in their profession, industry or cause.
Needless to say, I am doing some serious self-reflection. Are associations themselves that unchangeable? What makes reinvention avoidable? The authors advise “identifying the gaps between an organization’s current state and where it needs to be to thrive in the future.” That’s at the heart of Signature i’s strategic planning methodology, Forward Design. So why so few cases of reinvention in this client list?
Let’s apply the authors’ reinvention framework to associations and nonprofits to see why so few are eager to transform themselves.
Associations examining their future are relatively quick to detect changes in who their members and customers are and what they might need. When new types of players move into their arena, they plan how to attract and capture those members even if doing so requires rethinking the association’s identity. However, they may not adequately prioritize or resource this shift in members and customers. The board decision makers are getting their needs met, and new markets mean risk and uncertain outcomes.
Associations are rarely that alarmed about potential competitors. They often describe a secure industry position. However, they are competing with irrelevance. Membership is a choice, and where there’s no real perceived value, people will simply meet the needs they have elsewhere, although not necessarily in another association. Cause-related nonprofits have a keener sense of their competitors. They can easily tell you who competes with them for donor dollars to do essentially what they do.
When a new strategic plan is adopted, association and nonprofit staffs are quick to put their boards on notice about capabilities they will need to execute the plan. However, they are not as aggressive as businesses can be in acquiring new talent and capabilities. Often they don’t have the budgets to recruit new staff positions and they aren’t as willing to ax employees to hire people who have the skills they now need. Boards do try to redirect or recalibrate their associations’ strategic direction when they hire new CEOs; however, not many come on board with a mandate to clean house and re-staff and re-organize.
Association and nonprofit business models are surprisingly resilient. Some associations start business subsidiaries. Some nonprofits now operate as social enterprises. All organizations recognize the wisdom of diversifying revenues. They might change where the money comes from; however, they are less likely to fundamentally change how they generate the money for their mission.
Performance metrics should be set once the organization is clear on what a successful outcome should be. Having the wrong performance metric can reinforce the status quo, yet the best performance metrics are still only lagging indicators that the right changes are occurring. Associations and nonprofits could use more research and proven practices to use performance metrics to drive change.
After some self-reflection I believe I do ask my clients how they need to change to achieve their vision. I may be too complacent in accepting the answers—or excuses—they offer. Be the change you want to see in the world is still the best advice for leaders who want to change the world.