- February 19, 2016
- Posted by: Omer Soker
- Category: Blog
Commerce is a force to create prosperity. The best corporate sector companies excel at this with efficient governance and operational systems supporting assertive commercial strategies to deliver growth, progress and prosperity to free markets. But unchecked, the downside to this model can be greed: the greed that caused the global financial crisis and the greed that led VW to lie about engine emissions. Some companies get so obsessed with growth, they cross ethical and moral lines to achieve it.
Purpose beyond profit is a force to address the world’s problems. The best nonprofit associations excel at this with passionate, well intentioned people working towards an important vision through centrally planned and administered programs and services. The downside to this model can be complacency: without accountability, measurable objectives or responsibility for outcomes, it’s easy for associations to imagine they are performing well. Bureaucracy, outdated systems, inertia and resistance to change are all signs of complacency. Some associations get so confident of their position, they become dangerously comfortable.
The Association of the Future is evolving as a fusion of the best traits of each sector, melding the purpose (mission) of the nonprofit sector with the prosperity (growth) of the corporate sector. This hybrid model provides the added benefit of checks and balances to mitigate the two worst traits of each sector, by transforming greed into stakeholder alignment, and complacency into innovation. Greed is kept in check by the overarching purpose: to create good for members and markets, and by a set of organisational core values to steer decision making towards mission goals and the diverse needs of all stakeholders. Complacency is addressed by a heightened expectation of real outcomes: to deliver both financial and non-financial targets on all mission critical objectives, with the support of efficient internal processes and a culture that rewards innovation and progress.
While some traditionalists may not like this, the melding has already begun. The corporate sector is colliding with the traditional domain of associations. (Click here for a previous newsletter on the topic with examples). To argue over whether corporate motives are inherently good or bad is to miss the point. Some companies have realised that customers (read members) want them to deliver more than just profits and are now behaving like associations in embracing purpose: creating communities, benefiting markets, helping society … and all the while growing profits by delivering competitive products at the expense of associations themselves.
Compounding this threat for associations is that these very same customers (members) also want their own associations to become more efficient, effective and innovative. It now matters less whether an organisation is a company or an association. What matters more is the value they offer and the loyalty they inspire. This is the new battleground for relevance, and associations must deliver if they want to thrive in the future.
However, some have taken things too far in blurring the lines between sectors. Two lawyers and a Canberra lobbyist who represent Australia’s ultra-rich in disputes with the Australian Tax Office set up ‘The Family Office Institute’ in August 2015, which despite having no members, informed large parts of a Senate report recommending the Government shield privately owned companies from increased transparency. Fairfax Media reported this example of astroturfing, which is the use of artificial grassroots to create an impression of widespread support.
This is not to say associations should be run like companies, certainly not. There are clear limits to commercialism for associations. Commercial initiatives must serve and assist the association’s mission and vision, and not run counter to them. Associations must never lose sight of their purpose.
But associations can learn from some of their corporate counterparts to be more businesslike in structure, operations and strategy, while maintaining the purpose, values and ethos of achieving critical (and bone fide) mission goals.
Associations must stop thinking like associations, and begin to think adaptably across six diverse areas:
1) Disruption & Competition
Innovate like a disrupter.
Maintain a healthy respect for tradition but innovate boldly regardless, in order to tackle systemic change. Directly confront your biggest challenges to create value into the future. Disrupt yourself or be disrupted.
2) Mission & Vision
Set goals like a business coach.
Create absolute clarity around organisational objectives in order to transform passion and activity into real, measurable outcomes to benefit society, markets and members. Stretch your goals year on year.
3) Good Governance
Govern like a best practice board consultant (would advise you to).
Optimise governance structures with a small, efficient, diverse, skilled and accountable board. Extend your responsibility to meet the needs of the market and members, as well as your association. Be a board that strives.
4) External Strategy
Communicate like a marketeer.
Grow income, influence and members with a transparent, inclusive and commercially viable strategy. Engage with passion, advocate with authority and communicate with integrity. Listen to your members.
5) Internal Alignment
Engage like an employer of choice.
Care deeply for the wellbeing of employees and empower them with clear objectives and a culture of progress. Support them with efficient processes aligned to goals and make it easy for them to enjoy innovating. Allow them to thrive.
6) Future Focus
Think like a futurist.
Invest time looking outward and forward. Consult widely with new and disaffected members. Acknowledge challenges and openly debate solutions to create a shared perspective of what the future may hold. Inspire confidence.
Associations are grappling with commercialism in the same way that communist states are grappling with capitalism. China and Russia are unrecognisable from a mere 25 years ago, both economically and socially. Cuba is now on the verge of massive systemic transformation, modernisation and commercial growth. These nations are being pulled towards the globally connected free enterprise capitalist model that delivers prosperity.
In the same way, associations are being pulled towards the businesslike operating systems of their corporate counterparts. And yet, they can and they must maintain their critical points of difference as they adapt to create a sustainable future.
The Association of the Future has the purpose and values of a nonprofit organisational mission, coupled with the enterprising and businesslike nature of a corporate, to create prosperity, growth and progress for its members, markets and its own mission goals.
Or invite Omer to present at your next strategy or board meeting.
- How to Maintain Association Relevance in the Network Economy
- The Collision of the Corporate and Nonprofit Sectors
- The Launch of The Future of Associations survey