“Is the association model broken?”

“What does ‘member’ mean to you?”

“Do we need a new membership model?”

“Is membership dead?”

These are all interesting questions, and I understand why some people are asking them. Unfortunately, they are not the right questions. Instead of trying to figure out how to extend the life of the existing paradigm, association leaders need to focus their attention on shaping the next one, specifically by building adaptive and resilient, i.e., thrivable, business models that do not depend on membership.

To move the conversation in a more generative direction, then, I want to challenge boards, CEOs, C-Suite executives and other contributors to grapple with three core strategic questions that will require them to undertake an honest appraisal of personal, organizational and industry orthodoxies, as well as pursue a deeper exploration of what is possible for their associations in the years ahead:

+What will it take for your association to thrive over the next decade and beyond?

Every association will need to come up with its own specific answer to this question, but one thing is abundantly clear: associations need to develop new capabilities for co-creating radical new value with their stakeholders. Over many decades, associations have invested considerable time and energy, as well as financial resources, in optimizing the work of selling membership to drive their existing membership-centric business models. As the forces of relentless societal transformation continue to erode the traditional economics of membership, however, associations will need to build stronger platforms for tangible and intangible new value creation that can become a source of “collaborative advantage” with distributed networks of trusted and talented contributors, irrespective of their desire for membership.

+What will your stakeholders need to thrive over the next decade and beyond?

While it can be hard for association leaders to conceive, the membership offer is almost always a better solution to the association’s “problem” than the stakeholder’s “problem.” After all, the association derives the immediate gain of another sale and another buyer it can begin to monetize through both direct and indirect revenue opportunities. Meanwhile, the stakeholder often must wait for access to most of what the association regards as the really compelling benefits of membership, only to discover later that those benefits aren’t really that compelling. To develop a clearer point of view on what their stakeholders will need to thrive in the years ahead, association leaders must nurture an empathic understanding of their stakeholders’ short-term challenges, intermediate-term needs and long-term outcomes to create distinctive value beyond the limitations of the benefits package.

+Why should your current and future stakeholders want to have a relationship with your association?

Membership isn’t a real relationship for the vast majority of association stakeholders, but a one-size-fits-all offer that involves little more than a magazine subscription and a once-a-year credit card transaction. For stakeholders with abundant access to a wide variety of information resources, network connections and learning opportunities that can help them succeed, ordinary approaches are not nearly good enough. To be intentional about building meaningful relationships going forward, associations must engage their stakeholders in deeper and richer value conversations that embrace serendipity, and seek to link purposeful action with the responsible pursuit of profitability.

If you’re interested in joining this conversation and you are attending ASAE’s Marketing, Membership and Communications Conference in Washington, DC on Tuesday, June 4, 2013, I will be speaking on the topic, “Why Membership is Killing Association Business Models” from 10:15 am-11:30 am in Room 150B of the Walter E. Washington Convention Center. You also may follow Twitter posts from the session using the hashtag #MMCCon LC4. One way or the other, I hope you will share your perspectives!

IMPORTANT NOTE: Google Reader will be shut down on July 1, 2013, making this an opportune moment to subscribe to the Principled Innovation Blog via email. You can use the “Receive Blog Posts Via Email” box found on the right sidebar to initiate your subscription. Thank you!

Jeff De Cagna FRSA FASAE, chief strategist and founder of Principled Innovation LLC, is serving as curator and provocateur for the inaugural Association Chief Executives (ACE) Symposium, to be held on Friday, July 12 at The Gannett Building in McLean, Virginia. The ACE Symposium is open exclusively to association CEOs, and CEO attendees may register their #2 executives to participate with them in the event.

The ACE Symposium will feature nine CEO Thought Leaders presenting 15-minute TED style talks organized into three critical conversation themes: the future of membership, the future of new value creation and the future of leadership. In addition, noted thinker Seth Kahan, author of the new book, Getting Innovation Right, will be the keynote speaker. Symposium attendees will receive a complimentary copy of Getting Innovation Right at the event.

In his role, Jeff is working directly with the CEO Thought Leaders to shape their talks within the framework of the day’s three critical conversations. On July 12, Jeff will serve as the event’s resident “provocateur,” asking challenging questions of the CEO Thought Leaders and engaging Symposium participants in rich dialogue around the day’s themes.

The ACE Symposium is the brainchild of Shira Harrington, founder and president of Purposeful Hire, Inc., an executive search and consulting firm located in Northern Virginia. Ms. Harrington, who also serves as founder and curator of the ACE Symposium, said, “When I decided to host a thought leadership event for association CEOs, I immediately reached out to Jeff because of his commitment to being a catalyst for unorthodox thinking. I’m thrilled to be working with Jeff as we challenge CEOs to think in radically different ways about the future of their organizations.”

Asked about his role in the ACE Symposium, Jeff said, “It is tremendously exciting to design and create this kind of unique gathering for association CEOs, and a genuine honor to collaborate with a consummate entrepreneur and visionary like Shira Harrington. The ACE Symposium is going to be an amazing learning experience.”

Registration for the ACE Symposium is now open, and early decision registration pricing closes on Friday, May 17. More details on the event, including the agenda for the day, can be found online at www.acesymposium.com. An electronic flyer for the Symposium is also available for download here.

IMPORTANT NOTE: Google Reader will be shut down on July 1, 2013, making this an opportune moment to subscribe to the Principled Innovation Blog via email. You can use the “Receive Blog Posts Via Email” box found on the right sidebar to initiate your subscription. Thank you!

In early January, I wrote a post on six serious ideas for 2013 that included the concept of SED, which is short for serendipity, empathy and discovery. SED is a term I coined to inspire association leaders to shift their conversations about the future in a more generative direction. Here is what I wrote about SED in that post:

In 2013, I want to challenge association leaders to prepare for the vast serendipity that lives all around them, experience genuine empathy and embrace new possibilities of discovery. To fully capitalize on the power of SED, however, leaders must find the courage to be open, vulnerable and filled with the humility that comes from understanding what they know isn’t as important as what they can learn.

Serendipity, empathy and discovery are essential ingredients of new value creation that can be combined in appropriate measure through the work of innovation. Among these three elements, I have always believed that empathy is what opens our hearts and minds more fully to the other two. It is our empathic understanding of others’ lives that expands the natural human desire to discover the world beyond pure self interest, and creates a lens through which to see the serendipitous connections among seemingly disparate experiences more clearly.

But there are different views on what constitutes empathy and how it is achieved. On the one hand, blogger Sara Wachter-Boettcher describes empathy in sharp emotional terms:

We can’t begin being empathetic when another person arrives. We have to already have made a space in our lives where empathy can thrive. And that means being open—truly open—to feeling emotions we may not want to feel. It means allowing another’s experiences to gut us. It means ceding control.

Empathy begins with vulnerability. And being vulnerable, especially in our work, is…terrifying.

On the other hand, Maria Konnikova, author of Mastermind: How to Think Like Sherlock Holmes, argues for an emotionless form of “sterilized empathy” such as that practiced by the famous fictional detective:

Usually, when we think of empathy, it evokes feelings of warmth and comfort, of being intrinsically an emotional phenomenon. But perhaps our very idea of empathy is flawed. The worth of empathy might lie as much in the ‘value of imagination’ that Holmes employs as it does in the mere feeling of vicarious emotion. Perhaps that cold rationalist Sherlock Holmes can help us reconsider our preconceptions about what empathy is and what it does.

Whether empathy itself is more about emotion or imagination, the decision to adopt an empathic approach to new value creation will challenge many association leaders to work through deeply-held feelings and beliefs. Even as the stakeholders of the future envision and create remarkable new possibilities for their lives and careers, there are more than a few association leaders who still hold the conviction that those stakeholders don’t really know what they want or need. I hear this view frequently, and while leaders often argue that it is based on past experience, it is actually rooted in the fear of losing control over who will define the terms of future relationships between associations and their potential stakeholders. This fear is misplaced, of course, since the stakeholders of the future are well on their way to asserting such control, if they haven’t already.

For association leaders committed to building their organizations to thrive in the years ahead, empathy is anything but a threat. Empathy imbues the work of innovation with greater meaning, and surfaces richer insights into the best opportunities to co-create radical new value with passionate stakeholders. Along with serendipity and discovery, empathy is a critical driving force of association success in the years ahead, and now is the time for association leaders to capitalize on its extraordinary power.

IMPORTANT NOTE: Google Reader will be shut down on July 1, 2013, making this an opportune moment to subscribe to the Principled Innovation Blog via email. You can use the “Receive Blog Posts Via Email” box found on the right sidebar to initiate your subscription. Thank you!

This post originally appeared on the Associations Now Leadership Blog on March 28, 2013. You can read Part I here.

In Part I of this series earlier this month, I identified the association value gap as an underlying structural problem within membership-centric business models. Put simply, associations are unable to drive profitability solely by delivering on the membership value proposition and must find alternative ways to monetize membership to maintain their existing business models. Unfortunately, since membership-centric business models wrap all value into membership, associations typically have few options for filling the gap that do not depend on membership.

Even so-called non-dues revenue streams are not the answer, as they too rely almost entirely on buyers from within “the member market.” The problem for associations is that the member market does not really exist. It is an invention designed to create artificial predictability and a sense of security for risk-averse organizations. Overcoming the value gap, then, will challenge associations to play outside their existing comfort zones to identify emerging opportunities for radical new value creation. To make this happen, boards, CEOs, C-suite executives, and other contributors need to think beyond orthodoxy and embrace a 21st-century sensibility in their pursuit of business model innovation.

Here are three suggested approaches association leaders can adopt immediately:

Pursue value conversations–In designing 21st-century business models, association leaders need to pay much closer attention to the kind of people their current and future stakeholders wish to become and what they want to achieve in their lives. Instead of formulating value propositions based on what insiders believe about the value their organization should create for stakeholders, associations need to pursue ongoing “value conversations” by asking more powerful and generative questions about the kinds of value they can co-create with their stakeholders and their extended networks. As part of these conversations, associations must consider three overlapping time horizons: they must seek to solve short-term problems, provide for intermediate-term needs, and, most of all, support stakeholders as they strive to realize their most important long-term outcomes.

Negotiate value relationships–Despite decades of evidence demonstrating that membership simply isn’t a good fit for many potential stakeholders, associations continue to make essentially the same pitch to everyone. This enduring commitment to the membership paradigm reflects the triumph of hope over hard-earned experience. We want everyone (or at least everyone who is eligible) to want membership in our organizations, even when membership benefits us more than them, which is almost always. What stakeholders really need is not more one-size-fits-all offers but an expansive view of the power of associating as an open and inclusive experience, without mandatory financial transactions or tests of fidelity. By lowering barriers to participation and developing trusted stakeholder relationships that are mutually beneficial, associations can co-create meaningful and purposeful value that helps stakeholders answer a critical question: why do I need this relationship?

Identify value flows–Membership-centric business models typically produce a predetermined bundle of mostly standardized products and services that are pushed out to all stakeholders according to work practices and schedules that best serve the association’s interests. This quasi-industrial method of value creation and delivery is no longer a good fit with the real-time demands facing the stakeholders of the future. By working through value conversations with stakeholders involved in more meaningful relationships, associations can co-create new tangible and intangible value flows and receive flows of value in return from their collaborators. This approach affords associations the opportunity to discover and surface hidden assets from within stakeholder networks, including previously untapped knowledge, expertise, connections, or even financial resources that would not be otherwise accessible.

These are not conventional times, and association leaders must stop thinking about the future of their organizations in conventional terms. Accelerating and intensifying societal transformation will continue to expose and exacerbate the structural limitations of membership-centric business models. To overcome the value gap, we must question our most deep-seated assumptions and embrace our responsibility to imagine, design, and develop the adaptive and resilient business models that will give our organizations the best chance to thrive over the next decade and beyond.

This is most important conversation your association will have. Are you ready to get started?

IMPORTANT NOTE: Google Reader will be shut down on July 1, 2013, making this an opportune moment to subscribe to the Principled Innovation Blog via email. You can use the “Receive Blog Posts Via Email” box found on the right sidebar to initiate your subscription. Thank you!

Jeff De Cagna, chief strategist and founder of Principled Innovation, has been selected as the opening keynote speaker for the Council of Engineering and Scientific Society Executives (CESSE) 2013 Annual Meeting. Jeff’s keynote talk, which will take place on Wednesday, July 17, 2013 at the Omni Providence Hotel in Providence, Rhode Island, will focus on themes and ideas shared in his provocative free e-book, Associations Unorthodox: Six Really Radical Shifts Toward the Future.

“For the CESSE 2103 opening keynote, we wanted a speaker who would confront the deep-seated assumptions of association management head on. As a well-known association provocateur, Jeff is the perfect person for the job. We’re looking forward to Jeff challenging CESSE 2013 participants to think beyond orthodoxy,” said Tony Keane, president and CEO of the International Facility Management Association (IFMA) in Houston, Texas, and CESSE vice president. Mr. Keane is the overall volunteer organizer for CESSE 2013.

CESSE, which was incorporated in 1977, is an informal, not-for-profit international organization of chief executive officers and mid-to-senior level staff members of scientific and engineering societies. The organization’s mission is to “share and examine successful approaches to managing engineering, scientific and technical societies while providing opportunities for networking and education of executives and senior staff of member societies.”

In addition to his keynote talk, Jeff will present a one-hour workshop called, “Serendipity, Empathy and Discovery: Building Your Association’s Collaborative Advantage.” The workshop will invite participants to prepare for the vast serendipity that lives all around them, experience genuine empathy and embrace new possibilities of discovery, all in the spirit of collaboration.

Jeff De Cagna said, “It is a great honor to be chosen as the opening keynote speaker for CESSE 2013. The participants in this meeting lead some of the most important and successful organizations in the association community. I anticipate a spirited exchange of ideas during both the keynote talk and the workshop. I’m really looking forward to it!”

To learn more about the CESSE 2013 Annual Meeting, please visit http://www.cesse.org. If your association would like to book Jeff as a keynote speaker, please contact him through the Principled Innovation website with details of your inquiry.

IMPORTANT NOTE: Google Reader will be shut down on July 1, 2013, making this an opportune moment to subscribe to the Principled Innovation Blog via email. You can use the “Receive Blog Posts Via Email” box found on the right sidebar to initiate your subscription. Thank you!

This post originally appeared on the Associations Now Leadership Blog on March 7, 2013.

In a recent post, Associations Now blogger Joe Rominiecki shared what both he and I regard as a startling fact: 53 percent of associations surveyed in 2011 had raised their dues in the previous three years. To put it another way, during the most severe economic decline in most of our lifetimes, more than half of associations surveyed still moved forward with a dues increase. This data point is significant because it is the clearest evidence yet of the value gap that continues to hamper membership-centric association business models.

According to the most recent edition of ASAE’s Operating Ratio Report (ORR), membership dues account for an average of 38 percent of total revenue for all associations. No other single revenue category comes close to reaching that number. (For comparison, the ORR reports that meeting/convention registration fees, the next-highest single category of revenue, account for just over 11 percent of revenue, on average.) Despite all the protestations to the contrary, then, membership dues remain the only sustaining revenue stream for many, if not most, associations. And in his blog post, Joe puts his finger on the dilemma this creates:

For these associations, I suspect that the decision to increase has been tricky in recent years. Keeping dues flat makes for a goodwill gesture to members who are tight on money. But the problem with not increasing dues is that, if expenses still rise, every year of static dues digs the association deeper into a hole to be climbed out of later, either through cutting costs, attracting a lot of new members, or raising dues. If and when you do get around to raising dues, the greater the increase needed to “catch up” means the greater the risk of losing some members due to sticker shock.

On one level, membership-centric business models need retention more than revenue to ensure their integrity, since it is possible to monetize members through third-party revenues such as advertising, exhibits, and sponsorship. (According to the ORR, these revenue categories combine to account for, on average, about 14 percent of association revenue.) So while the decision not to increase dues may be partly a gesture of goodwill, it is also an attempt at self-preservation.

Unfortunately, this effort can only go so far, as securing increasingly limited and targeted third-party marketing dollars becomes a more competitive endeavor. In addition, as Joe makes clear in the quote above, without the ability to grow the dominant revenue stream through changes in pricing, associations are typically left with only two options: increase membership numbers substantially or reduce costs significantly, both of which are usually much easier said than done.

This is the association value gap: the space between what associations are able to charge for their most fundamental value proposition and their need for additional profitable revenue streams to sustain their operations. By definition, membership-centric business models wrap all value into membership, leaving most associations with few alternatives for creating radical new value that are not dependent on membership to fill the gap.

My article “Trapped in the Past,” which appears in this month’s issue of Associations Now, challenges association boards to look beyond the richness of their own association membership experiences to recognize the unintended negative consequences of their organizations’ membership-centric business models. Of course, this is extremely difficult to do, so in Part II later this month, I will explore how boards, CEOs, and C-suite executives can work together to overcome the association value gap.

IMPORTANT NOTE: Google Reader will be shut down on July 1, 2013, making this an opportune moment to subscribe to the Principled Innovation Blog via email. You can use the “Receive Blog Posts Via Email” box found on the right sidebar to initiate your subscription. Thank you!

My brand new Associations Now article on boards and business models is now available online. The magazine has given the article the title, “Trapped in The Past,” although I refer to it as “Five Reasons Why Boards Are Killing Association Business Models.” In addition to the article, I hope you will check out the companion piece I wrote as web extra on “Five ‘Next Practices’ for Board Business Model Stewardship.”

While the article shares deeper reasons why boards are damaging their business models, the web extra offers suggestions on what association boards and CEOs can do to address those concerns. If you are a CEO or senior association leader, I hope you will share both the article and web extra with your association’s board to begin a meaningful dialogue about business model stewardship. Also, I will be extending the conversation on boards and business models through posts both here and on the Associations Now blog during the month of March, so look for those items in the weeks ahead as well.

If you are in the Washington, DC area and would like to hear me speak on this new article, you are invited to attend the P.I./TMA Executive Breakfast next Thursday, March 6 in Alexandria, Virginia. Full details on the breakfast and the special “deep dive” session can be found here. For other upcoming events both outside of DC and online, please read this blog post.

I want to offer my thanks to Julie Shoop, Associations Now editor-in-chief, for being open to my article idea as well as her patient efforts in stewarding my work through the publishing process. I am very grateful for her support. To my readers, as always, I welcome your questions and feedback on both the article and the web extra in the comments below.

In support of my new article, “Trapped in the Past,” a.k.a. “Five Reasons Why Boards Are Killing Association Business Models,” that will appear in Associations Now next month, I have a few activities on the calendar to which members of the association community are invited. Here is a list of what is planned so far:

March 6–P.I./TMA Resources Executive Breakfast in Alexandria, Virginia including a free talk on the Five Reasons-Boards article and an optional “deep dive” session (registration fee for deep dive). Learn more/register at http://pinnovat.es/march6breakfast.

March 8–Better Boards Workshop (full day) and a luncheon talk on the Five Reasons-Boards article in Denver, Colorado. Learn more/register at http://pinnovat.es/march8boardsworkshop.

March 10–Informal discussion on the Five Reasons-Boards article at ASAE’s Great Ideas Conference in Colorado Springs. Meet up at 10 am CDT in the seating area outside The Hotel Bar in The Broadmoor Main Building (Mezzanine Level). Email Jeff or follow @pinnovation on Twitter for details.

March 11–Informal discussion on the Five Reasons-Boards article at ASAE’s Great Ideas Conference in Colorado Springs. Meet up at 7:30 am CDT in the conference’s networking continental breakfast location. Email Jeff or follow @pinnovation on Twitter for details.

March 26–#Assnchat Google+ Hangout with KiKi L’Italien. 2 pm EDT. More details to follow.

In addition to these events, there will be blog posts throughout the month, both here and on Associations Now, as well as an online discussion on the Associations Now LinkedIn group. I suggest you subscribe to the P.I. Blog and my Twitter feed (@pinnovation) to stay on top of any updates.

This post originally appeared last Wednesday on the ResultsDirect AssociationCentric Blog.

Remarkable…simply remarkable.

I find it remarkable that it is February 2013, and I am still reading magazine articles advising associations to create strategic plans every five or six years, and encouraging leaders to review those plans just once a year.

Do association leaders still believe we live in that world? Really? That’s remarkable.

As I wrote in Associations Unorthodox, the era of strategic planning is over. For decades, the practice of strategy has been about the application of static planning frameworks to the task of solving mostly understandable business problems. Today’s strategic landscape for associations could not be more different. As social, mobile and related technologies continue to drive deep and accelerating societal transformation, associations will continue to confront increasingly complex strategic challenges that will require fresh mindsets and more dynamic approaches to address. Consider just three ways that technology is irrevocably shifting the nature of strategy, and thus how association leaders need to think about the work of strategy-making in the years ahead.

+Technology creates on-going disruption–Technology is the most powerful disruptive force driving transformation in every field of human endeavor. This disruption is proceeding unabated, and no industry or profession is exempt. In this volatile and uncertain environment, the real work of strategy is not the supposed certainty of more planning, but the invaluable serendipity and discovery of purposeful and rapid learning. Designing strategy as learning enables associations to imagine, anticipate and capitalize on technological disruption, instead of always lagging far behind it.

+Technology creates new openness–Technology has created an unprecedented level of global connectivity, with a growing number of people participating in online interaction, conversation and sharing. This digital openness sheds new light on the orthodox beliefs and insular thinking at play inside all legacy organizations, including associations. Through the work of strategy, leaders must take responsibility for shifting conventional mindsets away from the entrenched prejudices of the organizational core, and toward the diversity and creativity of the more technologically savvy edge.

+Technology creates radical value–Technology is not only undermining traditional ways of doing business, it is also a catalyst for experimentation with new business models that can integrate purposeful action and the pursuit of profitability. Most associations, however, have struggled to make this kind of strategic innovation an on-going priority because of an inability to embrace risk as an essential precondition for creating the radical value the stakeholders of the future are demanding. Technology offers associations a platform from which to launch the development of novel business model concepts that are both adaptive and resilient.

To thrive in the years ahead, associations must challenge the assumptions and end the practices of years gone by. Technology is a game-changing force that has forever redefined the work of strategy for associations. Boards, CEOs and other leaders must now reimagine the practice of strategy if they are going to build truly remarkable organizations for the future.

Register today for our March 6 Executive Breakfast in Alexandria, presented in partnership with TMA Resources. Jeff will discuss “Five Reasons Why Boards Are Killing Association Business Models,” the topic of his forthcoming article in Associations Now magazine.

Join Jeff De Cagna of Principled Innovation on Wednesday, March 6 for the P.I./TMA Resources Executive Breakfast for association CEOs, C-Suite executives and other association leaders. This free breakfast session will be held at the headquarters of the National School Boards Association (NSBA) in Alexandria, Virginia, and registration for this event is now open. The schedule for the morning is below:

Registration and Continental Breakfast (8 am-8:30 am)

Please join your colleagues for breakfast and networking before the morning session. Detailed directions to NSBA, including information about public transportation, can be found here.

Morning Session on “Five Reasons Why Boards Are Killing Association Business Models” (8:30 am-9:45 am)

Association boards have a unique and critical responsibility for building their organizations to thrive over the next decade and beyond, especially in the realm of business model sustainability. Unfortunately, far too many boards continue to operate in ways that undermine business model success, sometimes without even realizing it. Put simply, boards are killing association business models.

This executive breakfast, based on the Jeff’s provocative article in the March 2013 issue of Associations Now, as well as his hands-on experience as a nonprofit board member, will help CEOs and other senior leaders better understand the board beliefs and actions that run counter to effective business model stewardship and innovation.

Bonus Deep Dive Session (10 am-12 noon)

From 10 am-12 noon, Jeff will lead a “deep dive” session that will help participants build the capacity of their boards to engage in business model stewardship. Participants will learn how to nurture new mindsets and apply “next practices” for more productive and generative business model thinking within their governing groups.

The “deep dive” registration option includes attendance at the breakfast session. If you plan to attend for the entire morning, please register ONLY for the Bonus Deep Dive Session.

Principled Innovation is pleased to be partnering with TMA Resources to present this Executive Breakfast. TMA Resources, located in Vienna, Virginia, provides member-centric organizations with the software solutions, services and partners that help keep their members and other constituents returning to them to find information, collaborate, learn and communicate with their communities.

Please use the “Register Now” button below to sign up for the P.I./TMA Resources Executive Breakfast or visit this link.