Saturday, January 28, 2012

Why Boards Need to Innovate

Posted in the January Edition of ASAE's Associations Now
Associations are currently experiencing one of the biggest dynamic shifts in technology and demographics ever experienced in human history. Business is changing at lightning speed, traditional business models are no longer relevant, and each demographic group wants things differently.
Yet many boards are choosing to ignore these changes and instead make decisions that are driving their associations to become irrelevant to their members. One of the biggest challenges associations face today is motivating and inspiring their boards to face facts and take steps to move their association’s communication strategy, value propositions, and member service models into the future.
The problem, you see, is that many board members believe they are in the membership business. Success and failure is defined by asking, “How much did we grow membership this year?” That is wrong thinking.
Your association is in the business of creating a financially strong organization that has the funding to do the purpose of the organization. If you do that, people will want to join.
The questions that you, as a board member, constantly need to ask are, “What real value are we delivering to the member?” and “Is it shifting with the changing demands of our current and future members?”
Many boards today are predominantly controlled by baby boomers, who in large part rebel against making radical changes away from how it's always been done to adapt their associations. Baby boomers belonged to associations just to belong, but that’s not the case with younger generations. They want value.
Engaging with the concepts of innovation and change isn’t about making some radical shift that disrupts the association so much it splits the membership. Successful innovation and change starts with small steps, and continues with targeted, incremental changes that sees member value, loyalty, and excitement rise year after year. (I’ve seen this in my own association, where in the past six years membership has increased 8 percent, member revenues up 28 percent, and our overall net member surplus increased 582 percent.) 
Some associations may actually require a radical shift, but most simply need a series of small consistent changes over time to create the wave of excitement every association longs for. Below are three keys for tapping into innovation as a board member.

Identify the problems you need to solve as an association. I’m amazed at how many associations
embrace solutions because “everyone is doing it” without identifying the problem first. You shouldn’t be putting up a Facebook page without answering the question, “What problems are we solving by having the Facebook page?” Real innovation means matching up tangible solutions to meet real member problems, while also introducing futuristic ideas to solving problems we aren’t aware of yet. The key is to define the challenges of your members, and help them solve the problems they can’t solve effectively by themselves.

Survey your membership. As a board member, you serve the membership. That’s why you were elected. A key element to making great decisions as a board is to survey your membership on its thoughts about problems and solutions. Keep your finger on the pulse of how your overall membership views programs, services, and technology, and use the data to drive your value proposition. If they believe in the programs, they’ll remain members.

 Look at your financial trends. There are four key metrics you need to look at over time. These four numbers tell you whether board decisions are enhancing member value, or driving the association into the abyss.

·  Total Member Surplus at Year End. This displays the overall success of the organization in building financial resources to do the work of the association.
·  Total Membership Each Quarter. This tells you the direction of member confidence. If members have confidence in your association, retention rates are high, and membership continues to grow.
·  Rolling 12 Months of Revenues and Expenses Each Quarter. This helps you see the impact of your board decisions on monthly basis.
·  Revenue Per Member on a Quarterly Basis. This shows how engaged the members are in member programs.

Looking at these trends graphically at a board meeting will tell you within seconds if you are on the right track, or if you need to do something different. It’s amazing how quickly the conversation changes when you see any of those numbers heading south.
Stay tuned for next week's blog post on a new metric many associations are fearful of looking at and sharing with their's called Return on Management (ROM).