New Orleans Louisiana February 24 2014 The New Normal for Associations 1 Time 2 Expectations ROI 3 Member diversity 4 Generational values 5 Competition 6 Technology ID: 430277
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How Associations Stay Viable in a Changing Healthcare LandscapeNew Orleans, LouisianaFebruary 24, 2014Slide2
The “New Normal” for Associations 1. Time
2. Expectations; R.O.I.
3. Member diversity
4. Generational values
5. Competition
6. TechnologySlide3
Association Model Association Environment
Time intensive
Slow, tradition-bound
Designed for homogeneous member
Face-to-face and print
Package of services
Time pressures
Accelerating change
Diversity of interests & preferencesWorld going digital“What/when/how I want it”
The MismatchSlide4
Relevance When a competitor or alternative does a better job of delivering value or satisfaction, they matter more and the association or nonprofit matters less
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Relevance Requires an awareness of trends and changes and their consequences.
Reality is often difficult to accept, particularly when it is not the reality that the association was designed for. Slide6
Relevance Traditions which served us so well and for so long can be impediments.
But don’t ever, ever, ever underestimate to power of tradition.Slide7
Relevance Need the capability to think differently about how we manage and govern, often unconventionally and counterintuitively
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Strategy Skillful, creative and disciplined use of resources to achieve objectives.
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Tradition Tradition – not strategy – is the master of most associations and nonprofits
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Five Radical Changes 1. 5-member competency-based board
2. Empowered CEO & staff
3. Rigorously define the member market
4. Rationalize programs and services
5. Build a robust technology framework
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5 Strategies for the Competitive Nonprofit1. Build on strength
2. Concentrate resources
3. Fit
4. Lean
5. AbandonmentSlide12
Strategies for Association Viability1. Competent Governance
2. Empowered CEO
3. Build
on
Strength
4. Precise member market definition
5
.
Concentrate Resources; Narrow Product Line
6
. The
Technology Imperative
7
.
AbandonmentSlide13
Five-Member Competency-based Board 1. Governance failures in NFPs
2. Strong governance critical for performance
3. Competency-based boards
4. Careful, rigorous identification & selection process
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Empowered CEO/New Staff Skills 1. “sub-optimized chief executive and staff”
2. Volunteers: out of time and out of their depth
3. Objective: optimize human capital
4. Increased behavioral health expertise on staff
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Build on Strength
Why?
1. Can’t compete from a position of weakness
2
. Low member tolerance for mediocrity
3
. Resource constraints on product line scopeSlide16
Build on Strength
1. Better, more rigorous assessment
2. Full exploitation
3. Source of innovationSlide17
Hedgehog Concept
1. Deep, passionate commitment
2. Best at producing it
3. Drives economic engineSlide18
Rigorously Define the Member Market 1. Markets are dynamic;
associations are not
2. “we are attempting to serve a
member
market that doesn’t exist anymore”
3. Smaller market; stakeholder with higher value-added
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Concentrate Resources“It sounds unbelievable, and yet is has happened a hundred times over, that troops have been divided and separated merely according to some vague sense of how things are conventionally done, without a clear understanding of why it is being done
.…There is no higher or simpler law for strategy than keeping one’s forces concentrated.”
Carl
Philipp Gottlieb von
Clausewitz
On
War
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The Concentration Decision
“Wherever we find a business that is outstandingly successful, we will find that it has thought through the concentration alternatives and made a concentration decision.”
Peter F. DruckerSlide21
Rationalize Programs & Services 1. “Volume equals value”
2. How many businesses can an association be in?
3. The power of a narrow product line
4. “Shrink to grow”
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Concentrate Resources“We don’t want all our eggs in one basket.”Slide23
The Downsides of Diversity1. Results in organizational complexity
2. Causes communications challenges
3. Disperses resources
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The Power of a Narrow Product LineFordVolvoJaguar
MercuryLand Rover
Aston Martin
GM
Saab
Oldsmobile
Pontiac
Saturn
HummerSlide25
Purposeful Abandonment“The art of leadership is saying ‘no’ not ‘yes’…
It is very easy to say ‘yes’”
Tony Blair
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Purposeful Abandonment1. Purposely withdraws resources from low
value activity to high value activity
2. The key to innovation
3. “Feed winners; starve losers”
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The Power of Abandonment1. Steve Jobs returned to Apple after a 12 year exile in 1997
2. Apple had gone through a period of product proliferation: multiple versions of computers, servers, printers, etc.
3. Jobs eliminated 70% of Apple’s product line
4. Apple went from a $1 billion loss in 1997 to a $309 million profit in 1998
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Purposeful Abandonment1. Don’t underestimate resistance
2.
Compelling opportunity first – people will “give to get”
3. Use data to counter emotional responses and political pushback
4. Risk free!
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The Technology Imperative 1. The technology mindset
2. Take the association to the member
3. The total technology “spend”
4. Finding and allocating the resources required
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Strategies for Success1. Create a sense of urgency
2
. Questions > conversations > change
3. Use data
4. Quick wins
5. Just say “no” and “goodbye”
6. Focus is your friend
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. Shortcut to irrelevance: ignore technology
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. Leverage political/interpersonal skillsSlide31
How Associations Stay Viable in a Changing Healthcare LandscapeNew Orleans, LouisianaFebruary 24, 2014