Good news (and can’t we all use some!): The association’s business model — an over-reliance on membership and event revenues to keep it healthy — has been pushed to the breaking point by the current pandemic. Why is that good news? Because it will lead to a renaissance of mission-driven, membership-based organizations. And chances are, your organization has many, if not all, of the assets needed for your reinvention — a good brand, loyal members, and a team that can be mobilized to move in a new direction.
There are five central reasons why innovation has typically lagged at associations and systems and technology haven’t been updated. But there is one fundamental root cause: There hasn’t been a sufficient catalyst. No pain, no change. Let’s use this crisis as an opportunity to address the five core drivers of change that are necessary for associations to thrive in the future.
- Your business model. A business model is the rationale and structure of how an organization creates, captures, and delivers value. Your business model is built upon a nonprofit chassis and was established long ago. Strategic plans are meant to update your strategy but don’t get down to the roots of your model. A new model that is less of a walled garden and more of an open-architecture structure is required — for example, an annual subscription pricing plan based on consumption of value vs. a fixed membership fee. Expand your audience by unpacking what you offer and let the marketplace decide what it needs. The Business Model Canvas, a strategic management and lean startup template, is a good place to start to learn what’s required to initiate this process.
- Risk tolerance. Risk taking is like a muscle. It gets stronger when you use it and atrophies when you don’t. Most of us don’t take risk unless we have to. Associations’ No. 1 success factor going forward will be based the degree to which they take calculated risks. Start by testing. Test and see if new, younger cohorts will join if you modernize the look of your website and messaging. Test and see if new crowd-sourced user groups will self-organize, hosted by thought leaders working at your association. Test the risk of modernizing your annual event — now is the perfect time to break the pattern of better sameness and make it just plain better.
- Governance. Many associations have bloated boards, committees, and volunteer groups that are well-intentioned but kill creativity, and the flexibility to quickly pivot and take decisive action. Your staff may fear that a member of the board won’t like this or that change. Change the rules so you get the best engagement but less of the bureaucracy. The average board of a public company is nine people — and they have a fiduciary role and must live with the consequences of their decisions. How does your bureaucracy support your business?
- Investment. During this crisis, many associations are taking loans to mitigate the need to use reserves for operating costs. That’s a good start, however the practice of using outside capital shouldn’t end when this crisis is over. Investment spending in new CRM technology, member research, event reinvention, and new product and service development will be essential to compete. Consider partnering with a third-party trade-show organizer or take on an investor as part of a for-profit LLC subsidiary in exchange for the ability to accelerate your growth.
- Value creation. This is the most important factor in the renaissance I’m describing. It’s not enough to simply outsource value “capture” to your members, volunteers, and event sponsors. Being the landlord of a trade show or submitting a call for content will still be viable options for your organization, but going forward, that’s not enough. Value creation must come from within your organization. Original research, thought leadership, and in-house experts on your industry that are leading your members will become increasing more important. Convening authority has always been your X-factor. Now simply add association-driven insight and industry leadership and you’ll be amazed at the impact.
It may take time to develop but start now. As the saying goes, never let a good crisis go to waste.
Don Neal is founder and CEO of marketing, strategy, and experience agency 360 Live Media.