Principled Innovation LLC

It’s time to move on…

February 23rd, 2008

While we’re engaged in an internal debate about Web 2.0 and associations, the rest of the world has moved on. Consider the words of John Battelle:

Today, I’ll assert, no matter what business you think you’re in – be it making widgets or providing a service, you’re now in the media business, plain and simple. Those that recognize this shift will succeed, those that ignore it will atrophy and eventually become irrelevant.

Now, what do I mean by the media business? Well, let’s start where all good businesses start: with the customer. Your customer’s media habits have changed dramatically in the past ten years. More likely than not, your customers spend nearly 15 hours a week online – it’s where they play, communicate, interact with services, and shop and research major purchases. In short, your customer has developed a major new media habit. The question is: Has your business? (Some emphasis added)

For most associations, the answer to the question is a resounding no. Too many leaders in our community remain reluctant to acknowledge that the explosive worldwide adoption of social technologies has irrevocably altered the strategic calculus for associations seeking to create radical new value for their stakeholders. Many boards and CEOs continue to extol the conventional virtues of the association even as their organizations struggle with today’s unconventional challenges. But the inescapable reality is that associations are in the media business, and we need to get serious about the work of inventing sustainable business models that will allow our organizations to succeed on this new landscape.

In a comment to my recent “Association 3.0 and being generative” post, blogger buddy Lindy Dreyer poses important questions:

OK. I’ve been drinking the Kool-aid for awhile now. But I haven’t been able to communicate the next step, which is a sustainable business model. That’s really the hard part, isn’t it? What are your thoughts on what that might look like?

Maddie’s request that we stop drinking the Kool-Aid notwithstanding, Lindy is absolutely right: developing entirely new business models is the hard part, both because it is not something we have had to do before in the association community and because there are no ready-made alternatives to our current approaches. To address this dilemma, we need to capitalize on the imagination of everyone in our organizations in order to come up with what’s next. So to spark our thinking, I will comply with Lindy’s request for a few thoughts:

1. Discovering sustainable business models for our organizations must begin with creating new organizational DNA. As “edgeconomy” blogger Umair Haque argues:

…it’s there – deep in the DNA of the firm – that strategy and advantage are being forged anew. New DNA – new ways to manage and organize production and consumption – lets today’s new market leaders perceive, think, judge, and execute (vastly) more efficiently, effectively, and productively than the norm, leading directly to new sources of advantage.

Continuing to believe that business-as-usual will get the job done in unusual times is already the Achilles’ heel of associations. At its core, my “Next Traditions of Association 3.0” article is a manifesto for association leaders who want to reshape the DNA of their organizations for the future by using tradition as a platform for innovation.

2. There is virtually no possibility of building new business models in the absence of real trust. Any viable alternative business model our organizations might create certainly will depend heavily on the richness and variety of user-created content, context and community that emerges primarily from contributors who live at the edge of our associations. It’s important to keep in mind that not all of these contributors will be members, and many will never be. Nevertheless, as I’ve suggested before, we must be willing to nurture a new “convenant of collaboration” that engages all contributors in a trusted manner to pursue the common purpose of creating the association’s enduring success.

3. Associations can build out their capacity as media enterprises and achieve business model innovation by layering social technologies on top of the foundational elements of new organizational DNA and trusted collaboration. When combined with the right leadership mindset and a supportive culture, the strategic and generative application of social tools can unleash extraordinary new creativity that will drive radical value creation.

So it is now time for us to move on from our current introspective conversation and look out over the horizon. When we do, we shall see that our organizations are lagging behind the rest of the world in addressing the real business challenges presented by a future that is already encroaching on the present. As struggling media businesses looking for new wellsprings of possibility, this is a strategic position we cannot afford to maintain.

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