Myths about Member Engagement: #1

Blog_13.pngWhat is member or customer engagement anyway?  Everybody is after it but most are hard pressed to define and measure it. One way membership organizations define it is by numbers: the number of events attended and benefits utilized by a member; the amount of time volunteered and degree of interest in the association’s causes and initiatives.

No one can argue that these are indicators of some level of engagement, but what level and to what end?  Research findings indicate that organizations that succeed in today’s environment go much further than engaging customers in their activities and product purchases. The limitations of the tactical approach are that it is static and one-dimensional.  It does not develop your association’s capabilities or move your members’ perception of your value to increasingly higher levels—both foundational pieces of sustainable growth today.

In the November issue of the Harvard Business Review, Rosabeth Moss Kanter has an interesting article: How Great Companies Think Differently. She writes:

Traditionally, economists and financiers have argued that the sole purpose of business is to make money—the more the better. That conveniently narrow image, deeply embedded in the American capitalist system, molds the actions of most corporations, constraining them to focus on maximizing short-term profits and delivering returns to shareholders. Their decisions are expressed in financial terms.

I can already see eye brows arching and lips curling in amused scorn when reading this: Nice but what does this have to do with us? We are non profits. We are not in it to make a profit. We are already into benefiting members and society and all that good stuff.   Check out our mission statements. Duh!

This is true but try substituting “making money” with “increasing retention or membership numbers;” “focus on maximizing short-term profits and delivering returns to shareholders,”  with “focus on maximizing short-term results and delivering them to the board.”  Rosabeth Moss Kanter is not talking about mission statements here but rather of a paradigm shift in a company’s view of customers, beyond product purchasing behavior.   She is talking about a strategy of “engagement” based on continuous and long-term development of the company’s relationships with customers and, through them, its own capacity for market competitiveness.  The company sees customers as whole persons whose value is realized in time and is immeasurably more extensive and sustainable than short-term gains.  This approach does not require action only from the customer but also from the company in that it re-thinks its core relationships with and role in the market place.

“Great companies,” she writes, “work to make money, of course, but in their choices of how to do so, they think about building enduring institutions. They invest in the future while being aware of the need to build people and society.”  She continues:

Rather than viewing organizational processes as ways of extracting more economic value, great companies create frameworks that use societal value and human values as decision-making criteria. They believe that corporations have a purpose and meet stakeholders’ needs in many ways: by producing goods and services that improve the lives of users; by providing jobs and enhancing workers’ quality of life; by developing a strong network of suppliers and business partners; and by ensuring financial viability, which provides resources for improvements, innovations, and returns to investors.

This line of thinking applies to the definition of engagement strategy.

This is not a call for missionary work but an analysis of what makes great companies great.  The conclusion is that by looking at customers as whole persons, and helping them improve the environment and factors that contribute to their success, you greatly increase your value and role in their lives and, hence, the value you derive from them.  This value is not simply measured by revenue but by the pieces that create sustainable success: continuing innovation, variety and growth of market need for your services.   She brings up the example of Cemex, a Mexican company that grew into the world’s largest building materials supplier and third largest cement producer in the world.

For Cemex, operating by institutional logic and considering unmet societal needs produced innovations such as antibacterial concrete, which is particularly important for hospitals and farms; water-resistant concrete, useful in flood-prone areas; and road surface material derived from old tires, desirable in countries that are building roads rapidly. An idea from Egypt for saltwater-resistant concrete, helpful for harbor and marine applications, became a product launched in the Philippines.

I had the privilege of consulting with Cemex in Monterrey, Mexico for 6 months in the 90’s. I remember how every single employee – from the CEO to the humblest worker – was energized by engaging with the communities their customers lived in: creating development tracks to the profession for high school students; piloting new product ideas with and in the community;  engaging with stakeholders along the value chain: builders, suppliers, distributors, users.  The result is one of the most innovative and fastest growing companies in the world.

This is not to suggest that every association can become a global giant but to argue against myth #1 and for a broader and more strategic philosophy of engagement.  How about: Effective engagement is a long-term, developmental process whose purpose is not only to keep members but to constantly deepen the association’ s relationships to them and its own capacities for market knowledge and innovation.  And this means meaningful connections with members as whole persons and in the context of their environments.   

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