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For most nonprofits growth and, in fact, survival is equated to an unceasing struggle for more resources —revenue, staff, members or customers. The mantra is “more”—more programs, members or revenue will solve their problems. Yet, in today’s economy it is leverage rather than quantity, innovation rather than production that yields solutions. Take the case of Facebook cited in a Fast Company article.

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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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Reprinted with permission from SocialFish Chapter summary from my book: The Demand Perspective Leading From the Outside Do you know what question stymied association executives the most in the course of my research? It was a simple, straight-forward question: “What do you think is the greatest value members get out of your association?” While they were eager to list great programs and achievements in their answers, they were unable to penetrate their customers’ thinking and understand what it was about these customers’ experience with their association that made them select its services over those of other service providers with comparable offerings.  What outcome did they achieve through their membership that was essential to their success? What solutions were critical to their careers that the association might be able to better facilitate and increase its value? There is a serious, mostly undiagnosed problem here. The majority of associations, like most organizations in other sectors, are unable to see the world from their members’ perspective; put themselves in their shoes to understand what truly matters to them and what destination they are trying to get to. Even more alarmingly, they have no interest in doing so. They believe that occasional snapshots of member opinions and factual information are adequate. Program design, “value propositions” and strategic priorities are, therefore, determined on the basis of the association’s perspective. The gap between members’ perceptions of value and the associations’ assumptions about it is an incapacitating hurdle to an organization’s ability to create products and solutions that matter “to what keeps members up at night” and make a difference. Without an outside-in perspective, you cannot discern the true market value of your assets and, hence, construct meaningful value propositions, beyond recitations of programs and products. If an intelligent and strategic CEO cannot identify (not simply guess) in depth what creates value for members at various situations and moments in time, his/her organization is in serious trouble. How could it design products and solutions that deeply resonate with its customers, let alone, grow to become indispensable to their success? This is why the book helps readers identify and articulate true value propositions before delving into customer engagement, programs and services. Three things emerged in my research as prerequisite to the construction of a true and compelling value proposition.
  1. A value proposition is not about you—your flagship programs, reputation or achievements. It is about the value a member perceives and actually experiences through the relationship with your association. Your job is not to persuade members of the value you see, but to uncover the real sources of value they see; drill beneath the surface to understand what makes them “tick” and what most matters to them.
I once joined Planet Fitness, one of the fastest growing franchises in this sector. There were myriads of choices of gyms around me. Why did I join this one? What made the difference? For me it was their carefully constructed culture that soothed my fears, and their practices that matched my wallet and allowed me the low commitment I was prepared to give at that point. The value proposition that the culture reflected — a “judgment-free zone” — cut to the core: “We at Planet Fitness are here to provide a unique environment in which anyone— and we mean anyone— can be comfortable. A diverse, Judgment-Free Zone® where a lasting, active lifestyle can be built!” Obviously the company invested a great deal of time to understand someone like me. It “got” the hurdles that kept us, slouches, away from “serious”-looking gyms and built a business, designed to deliver on the promises their value proposition made. No great financial commitment since its elite “black card” membership costs only about $20 a month. No pools, saunas, aerobic classes, or tons of choices to make me feel guilty for not wanting to commit to hours at the gym. No intimidating people and behaviors. My goal was to get off the couch, not build my biceps or enter a beauty pageant. Planet Fitness acknowledged rather than belittle this goal. Conspicuously absent were any references to the company’s prestige, achievements or great products and benefits. The gym states its value in terms of its ability to address my concerns rather than persuade me of its greatness.
  1. Look for intangible value. Customer value does not reside in the purchase of a product itself but in the way this product is experienced and the results users get from its use.Sometimes what makes the most difference is not the great quality of a conference but the speed of recapping and distributing its contents to you after the conference; the type of conversations you have in-between sessions; or the access to potential clients or suppliers you get out of it. Yet most organizations miss and squander such sources of value that, if leveraged, could become the basis for future high-value programs and targeted member experiences. The Community Roundtable, a membership organization for community managers, realized that interaction with other members—the community itself—had much highest value for members than their formal programs. Instead of continuing to push the value of these programs on members, the company made these community-based interactions the basis of its business model and value proposition. Yet most associations miss, rather than leverage, such informal sources of value because they don’t fit with their own criteria of success. By measuring value on the basis of responses to program questionnaires or attendance, they miss the far greater value that informal experiences and intangibles.
  2. Value propositions are NOT marketing tools. Constructing them is not a matter of wordsmithing or persuading as in:
“Our members don’t understand our value. We need to tell them about it; improve communication; hit them over the head with minute descriptions of programs and services to make sure they get it. It is not even enough to “understand” what creates the most value to your stakeholders. You have to deliver it. This means that instead of simply enticing with marketing promises of value, you build organizations capable of delivering this value. At the end of the day, the value of your organization is judged by the results that customers experience. Not the promises made. This requires a relentless focus on customers and a single goal for all pieces of the organization: customer success. Customer-centric organizations are focused on the single and relentless goal of constantly identifying sources of member value, and then organize around their ability to deliver it.
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Socious looks to ASAE’s resources, such as its recent publication, The Demand Perspective: Leading from the Outside In by Anna Caraveli, PhD, to further its understanding of the potential online communities hold for associations, and of the expanding options they provide for generating member value. In this introduction and video interview with Anna, Socious’ Joshua Paul zeroes in on the 6 primary misalignments between associations and their markets that emerged from Anna’s research as debilitating obstacles to growth; and asks her to walk him through the key re-alignments leaders must make to bring their value into line with the things that matter most to their members.
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Chapter summary from my book: The Demand Perspective Leading From the Outside Suppose your organization is experiencing attrition. Do you focus on symptoms and tactics—improving your “message,” revving up your communication or investing in a cool new website, for example? Or do you uncover and remedy the roots, such as the value of your benefits no longer being relevant to what matters to your customers? Ironically, while many executives would impatiently scoff at the title of this chapter, dismissing it as “soft” stuff, such choices spell the difference between obsolescence and survival. Suppose that while you sweat over how to improve or add to your current programs, an opportunity comes along that is outside your usual categories. Is your organization equipped to recognize and act on it? Would Amazon have evolved into a global e-commerce giant had it not been able to visualize a future beyond an online bookstore?   Whether you are Amazon or a 3-person organization, it is the same modes of thinking that will get you unstuck and allow you to come up with constantly new bases for competitive advantage. This is why an organization’s thinking emerged in my research as the key determinant of its outcomes and so it is the first realignment in my book The Demand Perspective. (See introduction to the 6 organizational re-alignments for member/customer centricity). The Tyranny of Entrenched Assumptions and Habits of Mind The greatest obstacle to change I have encountered in my research and consulting practice is the inability of conventional, inside-out organizations to extricate their thinking from habitual assumptions and look at familiar things from an entirely different perspective—that of the customer. Why are millions of hours of association staff time each year squandered on unproductive activities such as endless meetings, revisions of policies and procedures, etc., that do nothing to increase member value and engagement? Why are committees the go-to mechanism for addressing just about anything when many committees spin their wheels for months on end trying to figure out what they are even supposed to do? Why are association practices and decision-making processes slow, tiered and elaborate when the rest of the world is fast-moving? Why do associations favor interminable, abstract planning, while successful organizations learn by doing? Because mental habits become so embedded in an organization’s culture that we come to consider them as the face of “normalcy” – the irrefutable way associations do things.” Without the outside-in logic of the customer’s success driving every aspect of the business, an internal logic is established that bears no relationship to market and customer logic. Over time the focus on an organization’s own products, processes and procedures becomes crystalized as the “normal” perspective on the world, creating an ever-widening distance between association and members. At a time when successful competitors eliminate anything that encumbers their intense focus on customers, associations are devoting the bulk of their time and capital on products and processes that revolve around internal and personal agendas and add little or no value to members. “Association Think:” Confusing Assumptions with Facts You simply cannot get to the future on autopilot. The toughest and most critical capability to cultivate is this: re-examining your own, most common and accepted assumptions and regularly challenging the logic of what comes to represent “normalcy.” Take a look at the guidelines for starting an association posted somewhere on ASAE’s website. How often are accepted truths (left column) questioned, and their underlying assumptions (such as those on the right column) identified?
General Guidance Underlying Assumptions to Question
“It is also wise, however, to see that the core group represents all factions of the constituency the new organization will serve.” Associations are quasi-political entities with criteria for defining a customer base based on political representation rather than stakeholder value.
“You’ll want to set the dues for each membership category at this stage.” Without a question, running an association means that you have dues-paying members.
The “organizational plan is fleshed out [when] you have a well-defined structure, membership categories, a program of benefits and services, a draft budget, and an operating blueprint in your bylaws.” There is a set blueprint for association architecture. You first design your structure and products and only then do you go after customers to get sales (rather than developing the products and business models that best respond to customer needs).
In my experience and research, one debilitating obstacle to effective change is that even the most ambitious change strategies do not challenge the fundamental building blocks of association-driven architectures and the hidden assumptions that undergird them. Without capabilities for engaging in a different mode of thinking, no amount of improvement, product innovation, or investment can make a significant difference to an organization’s ability to remain relevant to what matters to its clients in a fluid and unpredictable environment.
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