Principled Innovation LLC

Creating the next tradition

August 27th, 2007

If you are an association executive or volunteer leader concerned about identifying the most significant opportunities for your association’s strategic success in the long run, I urge you to read Seth Godin’s post on the scarcity shortage. And you should pay particular attention to the last two paragraphs:

So what’s scarce now? Respect. Honesty. Good judgment. Long-term relationships that lead to trust. None of these things guarantee loyalty in the face of cut-rate competition, though. So to that list I’ll add this: an insanely low-cost structure based on outsourcing everything except your company’s insight into what your customers really want to buy. If the work is boring, let someone else do it, faster and cheaper than you ever could. If your products are boring, kill them before your competition does.

Ultimately, what’s scarce is that kind of courage–which is exactly what you can bring to the market.

The ungovernance doctrine argues that the definitive responsibility of association boards and CEOs is the capable stewardship of sustainable business models powered by innovation. In a follow-up question on this point, Virgil Carter wonders why I make the link between business models and a new approach to stewardship. He suggests:

…(un)governance and the business model (and processes) are simply means to an end. While (un)governance and the business model (and processes) should be expected to change over time as needed, isn’t the better long term focus for success on the association’s vision and purpose as the desired end(s)? What about the recognition that most staff recognize the value of an effective (un)governance and business models, most volunteers didn’t join the organization because of either and generally don’t care at all about them?

Let me frame my response by looking through the lens of Seth’s argument. In an environment of increased “cut-rate competition,” the diligent pursuit of the association’s vision and mission can no longer be viewed as a guarantee of loyalty. Like respect, honesty and good judgment, vision and mission are critical intangibles that must be married to tangible approaches capable of maximizing the association’s opportunity for success. Indeed, given today’s dynamic strategic context, any meaningful dialogue about vision and mission cannot take place separate from a conversation around the strategy and business model that offer best chance to realize them.

For better or for worse, new sources and forms of competition have raised questions about and exposed flaws in the traditional membership-centric association business model, and senior association leaders bear the responsibility to address these issues of sustainability by anticipating the future and developing inventive new approaches to value creation. Without this kind of genuine business model innovation, associations will continue to struggle with the duplication and/or commoditization of their offerings by companies willing, for example, to embrace the kind of “insanely low-cost structure based on outsourcing” or other type of unconventional business model. Moreover, as the nature of membership itself changes going forward, the strategic imperative for our community is to achieve clarity on what will eventually supplant it as the driving force of our work.

This view is anathema within legacy governance systems that depend on the assumptions of the membership-centric business model for their very existence. Arguably the fundamental tension inherent in traditional governance is the choice between doing what’s right for the members versus what’s right for the association as an enterprise. Since time immemorial, our choice has been to focus on the former in order to address the latter. But in the last fifteen years, the forces of profound, accelerating and intensifying disruption and discontinuity, i.e., paradigm shift, have tipped that balance in the other direction. The ungovernance doctrine codifies the belief that today and for the foreseeable future acting decisively on behalf of the association enterprise is what’s best for the members, as well as other key stakeholders.

Virgil is correct that the overwhelming majority of members don’t join the association with either an interest in the intricacies of governance or the complexities of business model in mind. But they do join because they expect the association will create some form of value for them and their employers. It is the role of the association’s stewards–those entrusted by the majority to use their good judgment respectfully, honestly and with an eye toward the long term–to ensure that the organization is constantly building the necessary capacity to create that value. So if you are an association staff or volunteer leader, ask yourself this question: do you possess the uncommon yet necessary courage to embrace this new way of thinking? If your answer is yes, you can be among the pioneers who will create your association’s next tradition.

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