how associations stay viable in a changing healthcare landscape new orleans, louisiana february 24,...
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How Associations Stay Viable in a Changing Healthcare
Landscape
New Orleans, LouisianaFebruary 24, 2014
The “New Normal” for Associations
1. Time
2. Expectations; R.O.I.
3. Member diversity
4. Generational values
5. Competition
6. Technology
Association ModelAssociation
Environment
Time intensive
Slow, tradition-bound
Designed for homogeneous member
Face-to-face and print
Package of services
Time pressuresAccelerating
changeDiversity of
interests & preferences
World going digital“What/when/how I
want it”
The Mismatch
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
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.
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.
Relevance
Need the capability to think differently about how we manage and govern, often unconventionally and counterintuitively
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
5 Strategies for the Competitive Nonprofit
1. Build on strength2. Concentrate resources3. Fit4. Lean5. Abandonment
Strategies for Association Viability
1. Competent Governance2. Empowered CEO3. Build on Strength4. Precise member market
definition5. Concentrate Resources;
Narrow Product Line6. The Technology Imperative7. Abandonment
Five-Member Competency-based Board
1. Governance failures in NFPs2. Strong governance critical for performance3. Competency-based boards4. Careful, rigorous identification & selection process
Empowered CEO/New Staff Skills
1. “sub-optimized chief executive and staff”2. Volunteers: out of time and out
of their depth3. Objective: optimize human
capital4. Increased behavioral health
expertise on staff
Build on Strength
Why?
1. Can’t compete from a position of weakness2. Low member tolerance for mediocrity3. Resource constraints on product line scope
Rigorously Define the Member Market
1. Markets are dynamic; associations are not2. “we are attempting to serve a
member market that doesn’t exist anymore”3. Smaller market; stakeholder with higher value-added
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 ClausewitzOn War
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. Drucker
Rationalize Programs & Services
1. “Volume equals value”2. How many businesses can an
association be in?3. The power of a narrow product line4. “Shrink to grow”
The Downsides of Diversity
1. Results in organizational complexity2. Causes communications challenges3. Disperses resources
The Power of a Narrow Product Line
Ford
VolvoJaguarMercuryLand RoverAston
Martin
GM
SaabOldsmobilePontiacSaturnHummer
Purposeful Abandonment
“The art of leadership is saying ‘no’ not ‘yes’… It is very easy to say ‘yes’”
Tony Blair
Purposeful Abandonment
1. Purposely withdraws resources from low value activity to high value activity2. The key to innovation3. “Feed winners; starve losers”
The Power of Abandonment
1. Steve Jobs returned to Apple after a 12 year exile in 19972. Apple had gone through a period of product
proliferation: multiple versions of computers, servers, printers, etc.
3. Jobs eliminated 70% of Apple’s product line4. Apple went from a $1 billion loss in 1997 to
a $309 million profit in 1998
Purposeful Abandonment
1. Don’t underestimate resistance2. Compelling opportunity first – people will “give to get”3. Use data to counter emotional responses and political pushback4. Risk free!
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
Strategies for Success
1. Create a sense of urgency2. Questions > conversations > change3. Use data4. Quick wins5. Just say “no” and “goodbye” 6. Focus is your friend7. Shortcut to irrelevance: ignore technology8. Leverage political/interpersonal skills
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