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

Strategy

Skillful, creative and disciplined use of resources to achieve objectives.

Tradition

Tradition – not strategy – is the master of most associations and nonprofits

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

Build on Strength

1. Better, more rigorous assessment2. Full exploitation3. Source of innovation

Hedgehog Concept

1. Deep, passionate commitment2. Best at producing it3. Drives economic engine

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”

Concentrate Resources

“We don’t want all our eggs in one basket.”

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

How Associations Stay Viable in a Changing Healthcare

Landscape

New Orleans, LouisianaFebruary 24, 2014