“What’s changed,” the blog I glanced at said, “is that competitive advantage is no longer the sum of all efficiencies, but the sum of all connections. Strategy, therefore, must be focused on deepening and widening networks of information, talent, partners and consumers.”
The need to re-focus associations from increasing numbers (of members, events etc.) to increasing the value of relationships, especially existing relationships has been on my mind a great deal lately. Abe Eshkenazi (CEO of APICS) and I have a panel in the upcoming ASAE’s Great Ideas conferences on this issue, titled: Relationship-Driven Leadership; and have had discussions on how this is exercised and to what end. My new book also focuses on how associations can shift from the inside-out, product driven orientation to outside-in, customer and connection-driven organizations. So I am knee-deep in this topic.
Many executives and professionals will nod their heads in agreement with this approach, and even passionately advocate for member centricity. The problem is that most are at a loss when it comes to translating it into action. So Abe and I recently had a long conversation last week about what exactly “relationship-driven” means in practice.
Being relationship-driven is mostly understood in terms of member communications, volunteer leadership, specific partnerships, events or initiatives. It is not linked to the way one thinks, leads and does business. Yet our definition of being “relationship-driven” is precisely the latter rather than the former.
I can only think of specific experiences to illustrate what we mean.
In one client project, for example, a colleague and I helped an association change the model of its relationship with members from transactions to strategic partnerships. The association was happy with the results of market testing and the model re-design that emerged. However they proceeded to the implementation phase without changing the silos that prevented a holistic view of the customer and the rapid configuration of assets across the association into targeted member solutions. They also left in place the same leadership team that helped create and manage the previously dysfunctional model; a team that lacked relationship-building skills; member and market insight and foresight; empathy for and curiosity about their members and market. What do you think would be their chances of succeeding in changing the basis of their relationships? The results were process changes without increasing member value, retention and the association's competitiveness.
Another example is that of an association that was experiencing continuous attrition. To remedy the problem, it invested in massive and expensive marketing campaigns and a sophisticated, interactive software program; yet the attrition continued. In the meantime a member-created LinkedIn community was thriving. It went from 1 to 24,000 members in the course of one year. Wouldn’t you think that the association would learn about its member needs and preferences by studying this community? How about collaborating with these members on adopting some of their innovations to change its own membership and education models? Or how about building on what members had accomplished to add higher-value, more customized tiers of community participation they could charge for?
Well, this was not how this association thought. Its leaders considered the LinkedIn community a threat. They decided to fight it and do all they could to close it down so that, in the association’s logic, members would pay a fee for subscribing to its own new software platform which, by the way, was bought and designed without members’ input. If you think that this plan had no chance of succeeding, you would have been right as the association’s attrition problem has accelerated.
Some people might argue that both of these associations had done their share in becoming relationship-centered. After all, they had conducted marketing campaigns and purchased interactive software. The more Abe and I discussed the topic of our panel, the more we realized that being “relationship-driven” meant a pervasive people-centered mindset rather than isolated initiatives or relationships; a mindset that is reflected in all aspects of an organization’s culture, values, priorities, criteria for success and operations.
Had the first association thought outside its current silos, processes and structures it would have re-organized on the basis of a deeper and more strategic relationship with its members and developed capabilities for solutions and relationship development. Had the second association invested its resources in understanding and collaborating with members rather than in board management, product development, budget and conference planning, it would have known where its members wanted to go and collaborated with them on replacing passive benefits with the interactive, idea-sharing and problem-solving forums they preferred.
Basically, relationship/customer centricity means that you see yourself as being in the relationship rather than the “association business.” And being an association is most commonly perceived as adherence to specific governance and organizational models; a certain way of conducting business; and established categories of educational products, programs and benefits. The conventional “association business” is to first create products, structures and governance on the basis of the “association model” and then force members to fit their needs within your categories, policies and perceptions of member value.
The opposite is true with relationship-driven practices in which you begin with the customers and then build governance and organizational models that facilitate solutions to these customers’ needs. It also means changing the way you think, lead and do business, for example: shared vs. top down leadership; solutions vs. products; co-development with members vs. “we make/you use;” internal collaboration and joint learning by doing vs. performing tasks and implementing top down "strategic plans;" networks of connections on multiple simultaneous fronts and strategic partnership vs. solitary production of member value; retention vs. recruitment. To determine whether you are a relationship-driven leader, you might ask your leadership or yourself:
- Do you manage your organization or position by focusing on operations and the execution of the board’s strategy? Or do you lead, treating your board like peers in a learning and co-development partnership and ensuring that you have the authority you need to shape an organization that quickly and continuously adapts to the market rather than to the board’s policies?
- Do you hire staff to fill specific positions and functions or do you hire them for competencies and motivations that will help advance your vision and then shape with them roles and responsibilities that play to their strengths?
- Do you hire on the basis of things like skills, experience, competence and management efficiency; or for capabilities for understanding and connecting with customers; crafting innovative customer solutions vs. standalone products/programs; discerning and seizing new or hidden opportunities in unusual places that others miss?
Do you evaluate staff on the basis of efficiency and competence in the performance of their duties, or for results and the value of the relationships they forge?
To develop staff are you more likely to emphasize mastery of your systems or a body of knowledge and completion of training programs or to assign them a month or two of intense and meaningful engagement with members so they can understand their needs and way of seeing the world?
- When you want to develop a new strategy or solve a strategic problem, is your first move to assemble an internal task force or committee or to talk to members to understand the destination they want to reach, and tap their insights and talents to co-develop solutions with you?
If you answer yes to the first part of the question, you may be able to articulate member-focused strategies but lack the capabilities, culture, motivation and authority to translate them into action. If you choose the second part of each question, then congratulations! Your organization is customer-centered, adaptable to the market and focused on meaningful and high-value connections rather than production, sales and compliance to policy.
Relationship-driven leaders enable organizations to transition from the former to the latter.