The Customer-Driven Association of the Near Future

An interesting article in today’s online Association Now argues that associations must engage all customers—whether these are members, subscribers, non-member customers or other designation-- to be truly customer-centric. To be in sync with market opportunities and needs they have to re-define their customers beyond “members;” and innovate beyond the current, narrow categories:  

 “Let’s say, for example, one of your members doesn’t have the technical know-how to plug into an industry-wide tech offering and needed some help. You could potentially charge for consulting knowledge, knowing that this could prove a fruitful revenue source for your organization… And suddenly, members aren’t just members but customers too.”

 These results, however, require a different culture, orientation and mindset than most associations have, especially constant focus on, interaction and collaboration with customers.  Let’s be honest here. How engaged are most associations with their markets and customers? What is the percentage of time, resources, mindshare and even conversations that focus on understanding and co-creating with customers rather than, say, committee meetings, process improvements, board management, conference production?

The thing is that it is not perfect products, policies or events that primarily engage knowledge-age customers, but participation--having a voice in choosing and shaping what they learn or consume rather than simply receiving and using generic goods, services, or information.  Interaction and collaboration are dominant in the way that knowledge workers and consumers learn, work; purchase, communicate and derive value. Hence the prominence of Internet-enabled communities vs. stand-alone products and services!

 

 As this writer and others have noted, the new face of competition today is non-profit providers adopting the membership models that associations pioneered.  Yet these membership models are not exactly the same passive benefits- and dues- based models of association membership. Members derive benefit, not from single products, services or discounts but by participating in communities of peers, customers, experts or actors within a value network where they learn from each other, exchange information about products, collaborate on solutions or do business with other members.  And here is the catch. The organizations that are in-step with their customers – the ones their customers consider indispensable to an aspect of their success—are themselves collaborative, flexible, learning and innovative communities rather than top-down bureaucracies.

In a chapter of a book on the future of management Gary Hamel gives us a glimpse into a deeply engaged and engaging organization anchored in shared purpose—Whole Foods:

 Imagine a retailer where frontline employees decide what to stock; where the pressure to perform comes from peers rather than from bosses; where teams, not managers, have veto power over new hires; and where virtually every employee feels like he or she is running a small business…  Picture, if you can, a company that doesn’t think of itself as a company, but as a community of people working to make a difference in the world, where the mission matters as much as the bottom line.

 Hamel describes Whole Food’s niche as “the Starbucks of supermarkets:” It is “a full service, natural-food alternative for mainstream shoppers based on a simple but powerful premise: people will pay a premium for food that’s good for them, good-tasting, and good for the environment.”

Whole Foods creates for both its employees and customers what Hamel calls “a community of purpose.” The company and its customers share a commitment to organic food and sustainable agriculture.  Whole Foods charges a premium for its healthy products to shoppers that are willing to pay for it because they share the same commitment.

 Whole Foods is not your “grandma’s supermarket,” Hamel says. Neither is its approach to management. To become America’s most profitable food retailer and generate $6 billion a year in sales, the company needs motivated, resourceful and dedicated employees driven by shared purpose rather than job descriptions and performance criteria.  This is how the author describes it:

 Whole Foods’ approach to management twines democracy with discipline, trust with accountability, and community with fierce internal competition. ..At Whole Foods, the basic organizational unit is not the store, but the team. Small, empowered work groups are granted a degree of autonomy nearly unprecedented in retailing…. Small teams are responsible for all key operating decisions, including pricing, ordering, staffing, and in-store promotion. Consider product selection. Team leaders, in consultation with their store manager, are free to stock whatever products they feel will appeal to local customers…At Whole Foods, no executive sitting in Austin decides which products will appear on what shelves. Stores are encouraged to buy locally as long as the items meet Whole Foods’ stringent standards. As a result, every store carries a unique mix of products. Teams also control staffing levels within their departments, a prerogative that is elsewhere usually reserved for the store manager.

 This exceptional degree of autonomy conveys a simple but invigorating message: it is you, rather than some distant manager, who controls your success. The fact that this freedom is matched by a high level of accountability ensures that associates use their discretionary decision-making power in ways that drive the business forward.

 Why can’t associations shift from command and control management to a team approach? Each team could be responsible, not for performing tasks or functions, but for successfully developing a market segment; understand, co-design and test new products for specific customer groups; investigate, assess and propose a plan for leveraging new market opportunities, etc.  Engaging with customers and each other would not be a chore or nominal gesture but a logical and necessary process if they were accountable for revenue, customer satisfaction and retention. If each team were like a small business based on shared purpose, they would be driven to innovate, learn, grow and deepen relationships with customers because they would own the outcomes rather than perform tasks. It is this type of engaged, empowered and motivated employees that can truly engage customers in what matters the most to them and not just to the association.


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