Five New Levers for Entrepreneurial Growth

Blog_14.pngBy Anna Caraveli

 “The fact is,” Shelly Alcorn says in her October 28 blog, “Embrace the Ordinary,”   brainstorming happens when you aren’t looking for it and you least expect it.”

We agree. When thinking about growth and innovation, most associations look for additions: more and different programs; the adoption of new technologies; new websites, etc. This mode of tactical, product-base thinking rarely leads to substantive and sustainable growth.  Instead,  if you embed a culture of intrinsic innovation—“innovation to the core” as Gary Hammel calls it—you can constantly transform the “ordinary,” often hidden, assets into extraordinary member value.

 

I looked over my notes from interviews and consulting projects in the last three years, and came up with 5 levers of entrepreneurial growth that have been highly successful in turning around declining membership and revenue.  These associations had replaced association-centric with demand-based approaches; all of them uncovered new, untapped value in their assets by learning how to look at them from the perspective of their members and rapidly translate knowledge into marketable product.  

  1.  Reframe:  No matter how you cut it, decreasing retention, engagement or recruitment mean that there is a “disconnect” between your association’s view of value and that of your members. Instead of trying to persuade them, close the gap by reframing.  By reframing, I don’t mean coming up with a new “message,” but reconfiguring what you have into new solutions packages for problems members perceive as critically important and delivering them on their terms and time frame.  
    1. The American Moving & Storage Association (AMSA) experienced a decline in its membership because it lost “the golden handcuffs,” it bound members with; and that was their dependence on the association to set pricing tariffs. Yet new anti-trust laws made these services unnecessary. AMSA looked for a new “hook” to get members in.  This meant a new value proposition and business model, rather than a new program or message. The solution was a new consumer protection and certification program called ProMover, launched on January 1, 2009.  The program vetted movers through a 6-step vetting process so that customers could separate reputable, professional movers from the increasing hordes of con artists, known as “rogue operators.” By taking a role similar to a Better Business Bureau for businesses, AMSA solved a market problem; expanded its reach; gathered market data that would be helpful to member companies; and greatly increased its value to them by building demand for their services.  
  2.  Build on small scale successes.  AMSA did not just stare into thin air to find a solution but looked at its own resources through insights gathered from members. In collaborating with members and potential members to “re-imagine” the association from their perspective, it realized the value of the only program that had remained popular in spite of the decline: an earlier and more limited version on the “pro mover program.”  The CEO knew saw this as an excellent building block and made it the cornerstones of a new architecture.   
  3.  Customize: Shift mindset & business development from selling products/benefits to crafting strategic solutions to member problems.  Decouple your assets from existing programs and services so that you can better detect their value as pieces of larger solutions service packages that address member problems and may look nothing like anything you previously classified as “program” or “service.” First you have to uncover the problem, even before it is articulated.
    1.  Instead of asking members what type of executive education program they would like, Bob Weidner, CEO of the Metals Service Center Institute (MSCI) visited with member CEOs and engaged them in probing interviews to uncover their most critical challenges, whether or not these fell within their relationship to his association.  What he found was that uncertainty about future leaders in their companies and industry was preoccupying them above anything else.  What would happen once the current generation of executives was gone? MSCI’s answer was to develop a proprietary program on metal leadership with the Executive Education arm of Washington University’s Business School in St. Louis.”  This was not a generic executive program, but one that used MSCI’s data and access to build real world business cases, tap members’ experiences, defined and develop industry’-specific leadership competencies. By shifting the association from product sales to information-based solutions, and replacing committee-driven new product development processes with customer collaboration the association achieved a dramatic transformation from a rapidly declining association into a market leader.
  4.  Expand your services to your members’ value chain:  Think of how you can re-package your assets into services for all those who contribute and have a stake in your members’ success: employers, suppliers, partners, providers etc. This is increasingly the cornerstone of growth for successful organizations.
    1.  MSCI broadened its definition of “member” from only the steel industry to the entire metals base, including carbon, steel, stainless steel, aluminum. This move did much more than to simply increase the numbers of members. Under the new name of Metals Service Center Institute (instead of “Steel Service Center Institute”) MSCI became a premier metals association, rather than simply a premier steel association.  Its centrality in the value chain greatly increased its value to all members.  Access to the right players within the value chain; one-stop shopping; structured collaborations and discussions among various segments of the value chain now became the association’s most valuable benefits and new revenue sources. 
  5.   Leverage:  Innovative leverage rather than linear addition is the key to the kind of entrepreneurial, market relevant growth required to thrive today. Look at what you already have with a lens that is constantly renewed by your customers’ view of the world and the new problems you uncover.  Look to resources that you never before saw as “benefits” and consider if and how they may be translated into new business lines, products and services.  
    1.  The International Scientific Authority for the Safe Use of Fragrance Materials (RIFM) realized that its proprietary database could be of great value to members. By making it accessible and more usable to all members as well as the public, it increased its value and created new revenue sources. Sermo, the largest online physician network in the world, determined that the case-based, online conversations among physicians had commercial value beyond the physician community.  It expanded to include corporate membership, offering corporations and government entities that did business with physicians, tiered access to these conversations. As Sermo learned from assessing the outcomes member companies achieved by using their information, it continued to expand services to address a larger range of customer needs through high-end, lucrative services such as: trend analysis, consulting, education and other highly lucrative services.  Sermo achieved such enormous growth and financial success that membership to physicians is now free.

 So, what’s the conclusion?  I am not sure there is any one conclusion other than the importance of building entrepreneurial, demand-based capabilities rather than just new products and services. 


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