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Most of us “play it by ear” when it comes to the execution of a new concept. Our focus is on acquiring ideas or information—planning, reading, discussing, hearing or analyzing them. When it comes to execution, we rely on the same old tools we always used and settle for ad hoc activities and initiatives. Yet one cannot achieve systems-wide change by “understanding” the concept or generating detailed plans. What these require are fundamental changes in the way organizations think and behave.

It is the execution of change rather than the ideas, themselves, where the rubber meets the road. Paradoxically, however, there are no tools or systems approaches for “executing” innovation.

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An article in Harvard Business Review, titled The Performance Management Revolution reports that more than one-third of U.S. companies are abandoning the traditional annual performance review in favor of less formal, more dynamic and frequent “check- ins” with employees throughout the year. These conversations provide immediate performance feedback in specific contexts and aim at future improvement rather than rewards or punishment.

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Making innovation happen requires a shift in mindset. Case in point: Association for Financial Professionals. CEO Jim Kaitz approaches expansion by building organizational capabilities to constantly adapt to the
speed and nature of market change. Kaitz does not marginalize change by reducing it to new product launches or isolated initiatives outside of AFP’s core business. Instead, he lets small-scale successes and lessons learned catalyze broader changes to the association and disrupt business as usual.

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handcuffsAMSA (the American Moving and Storage Association) had enjoyed stability and growth for decades, largely because of what is commonly referred to as Golden Handcuffs. In AMSA’s case, its rate-making authority and antitrust immunity allowed it to “tether” members to the association as the only way they could set pricing tariffs. (From case in book). When Linda Darr, currently President of ASLRRA, became AMSA’s CEO in 2007, she was inheriting a stable organization.  Yet she questioned the sustainability of the organization’s success with a model that was dependent on one product. Moreover, Darr was concerned that this “hook” of price-setting did not engage members’ strategic needs, making their relationship with the association tactical and shallow and, hence, easy to sever. Shortly into her tenure Darr’s concerns proved true. In 2007, the Surface Transportation Board reviewed industry pricing agreements and decided to end joint rate-making. Without the “golden handcuffs” of rate setting, there was nothing to connect members to the association and AMSA experienced a dramatic decline in revenue and membership. Darr was able to turn the association around by shifting to an entirely new basis for competitive advantage– from helping members set pricing tariffs to helping members’ customers in selecting certified, reliable movers and thus growing the market.  Other associations depending on similar golden handcuffs may not be that lucky. What will happen, for example, to the many associations whose stability and health are based on the monopoly they hold in certification and credentialing if these entry requirements are no longer needed or for-profit companies take over? I have often written about associations that are struggling or declining but, mind you, these are mostly large and very successful associations. And this success become an obstacle to change and flexibility. “The most dangerous part of every business,” writes Lior Arussy in an article in Inc. is success. Success breeds complacency. Success turns you from a ready-to-invent person to a ready-to-enjoy person.’ Associations and other non-profits are flush with organizations whose success is narrowly defined, for example through membership and retention numbers as they relate to the sales of one product or product category. What is not being measured, however, includes factors such as: their customers’ levels of engagement; their organization’s relevance to members’ strategic challenges and the solutions needed; their ability to constantly deepen their relationship to members and expand the value they provide to them; their capacity to adapt, innovate and reinvent the basis of their value proposition. It is hard to think beyond business as usual when your products and processes generate steady streams of revenue, however. And this is just the problem. “The success trap,” the article explains, “is the attempt to continue to do what worked in the past instead of evolving. It’s the loss of hunger, succumbing to incremental corrections as opposed to bolder exceptionalism. For a period of time, your success formula will carry you. You will repeat the past and customers will pay for it. But, eventually, they will get bored. Your competitors will reinvent themselves, and you’ll be repeating yourself.” Success attaches you to the way things are done, blinding you to possibilities that do not fit that framework. Even Google failed to recognize the potential of an experiment, known by the name of the engineer that designed it, Orkut.  “Google shut it down despite its success because it didn’t fit the Google success formula. For the company that developed a superior algorithm and eliminated most of the search engines in the way, it was difficult to see a future in which people, not algorithms, determine search and popularity ranking. Past success blinded Google to future development. This is a classic case of success by repeating the past, not creating the future.” In my research and client work, organizations experiencing relative success are the most likely to be on auto pilot and resist strategic thinking and change. Clinging to what worked in the past creates cultures of complacency; blocks continuous learning and innovation with unexamined assumptions; and generate standard and reflex responses to situations, for example:
Reflex Response Underlying Attitudes Stemming from Success
We are the biggest, greatest, most prestigious, oldest etc. organization of this kind.   Narrow, inside out view of the world: self-satisfaction vs. hunger; internal vs. market perspective  
I get all the advice I need from my excellent staff, peer network, other CEOs who have been my friends for years and I respect. I don’t need help. Attachment to business as usual; driven by routines and habits that may no longer be relevant or effective  
We know what we are doing and have no interest in using a different perspective or framework to challenge my thinking and assumptions and push the limits of what I thought was possible. Closing the door to discovery and exploration; settling for what there is and missing what could or might be.
We already know our members well. We have already considered all these things in our last strategic planning. No real interest in members. Members have become commodities and their value is perceived very narrowly–only in terms of the short-term sales they generate.
We have already tried this and it didn’t work Loss of motivation and urge to experiment and innovate; results in opportunity loss, “disconnect” with the market
We have 90% market penetration and 96% retention through our certification program. Everyone in the profession has to take our exams to qualify. Narrow and short-term metrics that results in delusions about the association’s ability to survive for the long-term. Why go to the extra effort of long-term investments and capability-building when it is so easy to keep milking the same cow?
That’s not what we do:
  •  There is increasing demand for X technology products among our members and we have a potential partner, willing to invest in a new business line we would develop. But this is not what we do, and has not been identified as a core strength in our SWAT analysis.
  •  We are an association, and associations don’t do consulting (or retreats, business development, joint ventures etc.)
 
Defining your business by the products you create at a given time in your history; inability to re-define the nature of your business to match changing market needs and opportunities  
It is difficult to be motivated to learn, experiment, reinvent and keep growing in new directions when you are relatively comfortable –at least not in crisis.  Yet this is what leaders are called to do today. The article cautions: “But while you’re preoccupied with your present success, someone else is busy redefining it through some breakthrough experience that will excite customers all over
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Member/Customer Engagement, Organizational Learning
sunrise_1 PART II By Anna Caraveli and Andrea Pellegrino Click to read Part I How many associations have been unpleasantly surprised at having to cancel a program that members or customers had asked for in a survey or in an answer to a direct question? They were so sure it would work! After all, it’s what the members said they wanted! So, why are they not responding? Why are they not flocking to the program you designed just for them—with their input? How did this program, which seemed like such a perfect fit, miss the target so badly? Missing the target Experience management consultant Lewis P. Carbone talks about the fallacy of companies investing in painstaking and expensive customer research only to find out that asking customers directly what they think about their products, services, or experiences does not reveal their real thoughts and needs. “The assumption,” he says, is that “customers will accurately report their thoughts and desires. Yet time and time again, these companies find that consumer behavior in the marketplace bears no resemblance to what their research indicated.” He cites the example of New Coke. While the company’s research showed that consumers were very willing to welcome and buy the new product in place of the “Classic Coke,” their actions demonstrated the opposite, soundly rejecting the New Coke.  For Coca Cola the result of relying on what customers said they wanted rather than deciphering what they actually wanted was a well-known strategic planning, sales, and public relations catastrophe. The problem is that conventional research does not help identify what truly makes a person “tick” because it fails to capture the key contributors to engagement and decision-making–underlying emotions, goals, motivations and values, as well as the elements and dynamics of different contexts. Numbers alone don’t tell the whole story. It is the nature and quality of your connection with your members/customers rather than their numbers that determine everything else: the marketability of your products; your profitability, market value and capacity for growth. The deeper the connection to what most matters to your members, the greater their engagement and retention and the more solid your foundations for growth.  Understanding vs. Data Gathering In the end, your thousands of members are individuals first. Even companies are made up of individual people making individual decisions. Understanding just a few of them as unique persons will give you a much better basis for extrapolating about the whole group. This is what anthropologists do, utilizing what they call “participant observation.” They immerse themselves in their subjects’ lives as participants while maintaining objectivity and applying specific methodologies for observing behavior, analyzing and synthesizing data and deducing patterns that may apply to the larger group. An association using the participant observation method of research, for example, might select five to ten target companies to study in depth instead of (or in addition to) surveying hundreds or thousands of them. Utilizing a framework for discovery that takes them outside habitual assumptions and ways of thinking about their members, they would visit the companies and interview a range of executives and employees, paying attention to relationship dynamics among them and observe behavior and practices. The goal is to understand the way individuals actually experience problems, view opportunities, define success, make use of resources, look for help, relate to each other and look for solutions; and to deepen their grasp of customers’/members’ business and industry. This type of immersion will not only uncover what truly makes your customers “tick” but will also deepen and change the tone of your relationship with them in the process. In short, associations, like social scientists need to map out and understand what a typical “day in the life” of their target member or customer group looks like—what they do and think about, why, when, how and to what end; what relationships are key to their success and who brings what value to what.  Immersion in a “day in the life” of members will clarify where and how an association, or other service provider, can deliver the most value to them and what distinctive role it can assume in their larger value ecosystem. The following case study shows how true immersion in members’ lives on a daily basis uncovers nuanced details that allow the provider to continuously deliver indispensable, “must have” value within a continuum of needs. Case Study: The Veterinary Information Network (VIN) To remain indispensable to its members’ success, VIN literally and metaphorically lives in its members’ space, using the same platform members use for all aspects of its own operations; monitoring and participating in members’ conversations. Instead of standard products and benefits, VIN’s members are the “product” in that they ask and answer each other’s questions and serve as co-developers of content and value. VIN sets in motion a continuous stream of value-generating exchanges among its members; captures, synthesizes and leverages their insights, cases and research into an ever-growing, collective dynamic body of knowledge that is constantly applied and renewed. Immersion in the day-to-day life of its members is the reason that VIN’s services and solutions are seamlessly integrated with the way its members think, learn, communicate and work. VIN has positioned itself as “the world’s largest virtual veterinary practice”—a strategic partner to its members’ ability to practice and stay in business, rather than a vendor of add-ons for whenever there is time or money to use them. For the members of VIN, daily visits to its online community platform are indispensable to their ability to practice. Welcome to a day in the life of a VIN member
  •  First thing in the morning: checks headlines on VIN’s online newspaper. First he questioned the need for a separate newspaper but sees the value of understanding headlines and news stories from the vet’s perspective.
  • Mid-morning: posts a couple of questions on treatment to the appropriate message boards and receives a total of 8 responses.
  • Lunch break: fatigue sets in; is refreshed by login into VIN and checking insights on various message boards. Checks on clinical updates to be prepared for afternoon visits.
  • Afternoon: tough case. Needs to check with specialist. In the past he would have to search local universities and place numerous phone calls to identify a knowledgeable, willing and available specialist.  Now he can have immediate answers from the appropriate specialist out of a group of 258 vetted consulting specialists that VIN identified from among its members, developed and organized into a consulting core.
All through the day:
  •  Consults with VIN’s Food Recall Center to stay on top of products that have been recalled; checks clinical updates to cases he has worked on.
  • Browses through archived discussion to check if anyone had positive results using a particular drug for the kind of case he just diagnosed. VIN has a comprehensive searchable online source for veterinary information accessing, integrating and curating information from thousands of research data, publications, conferences, past discussion etc. Members can access research on multiple levels of depth depending on their needs.
  • Checks into a new board on bankruptcy and practice re-design
Can your association say it is this central to its’ members’ professional lives each and every day? But this is the kind of indispensability that is increasingly necessary for a member or customer-based organization to thrive in today’s fast-paced, interconnected competitive environment. Connection vs Short-Term Sale    Do you want to be “nice to have” or indispensable to your members’ ability to succeed? The key to uncovering the member/customer needs that truly matter and creating products, services and solutions that hit the sweet spot is forging long-term relationships with them rather than gathering data, and seeing the world through their perspective. It is understanding the customer in action, rather than in frozen snippets of time; in the context of daily life and the motivations, values, beliefs and practices that shape choices. Mapping out a day in the life of a member brings into focus what members actually do and what resources they actually need to do it, instead of what they say they need. And, understanding how members operate and think throughout their professional day– what problems they face, and how they view and solve them (including when and if they turn to the association) — provides invaluable information on where an association’s benefits are falling short, whether they are being utilized or ignored, how they might be reconfigured or optimized to meet member needs and what gaps might provide opportunities for new products, services and solutions. Viewing a working day through the perspective of members is a powerful gateway to what makes them “tick;” can transform the way we think about, create and deliver value to them and, hence, engage them.
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