Part 2 of 5 in a series, "The Winds of Change," facing & dealing with change in the Association / Nonprofit world.
Does anyone really like change? Of course not. Which is unfortunate since the association / nonprofit world is going through a period of tremendous change. If leadership fails to acknowledge and adapt to this change there’s going to be trouble. And we like trouble even less than we like change.
Follow along with this blog series as we look at a few of the challenges brought about by change and some ways smart associations & nonprofits respond to them.
Don't Screw Up
Sometimes I lie awake at night, and I ask, 'Where have I gone wrong'. Then a voice says to me, 'This is going to take more than one night’.
Charlie Brown, Peanuts
This year we’ve invested a lot of hours in an on-going conversation with senior management and executive directors from a number of associations. Our goal? To gain greater understanding of the challenges they face leading their organizations through changing times.
It’s been an interesting process. We’ve learned a lot. We learned we don’t know as much about what we know as we thought we knew. But we understand more than we realized. Got that? Good.
As these conversations continued, something interesting happened. Organization leaders shared with us the things that keep them awake at night while they wrangle with the changes surrounding their organization. Some common themes began to emerge. We heard them over and over. Almost mantra-like.
The first of these themes? Don’t screw up.
“Well, duh, IT Guys,” you say. “You spent how many hours learning the obvious? Nobody wants to screw up.”
True. Nobody wants to screw up. But as the world of nonprofits and associations is battered by gale-force winds of change, it becomes easier and easier to screw up. Margins of error are smaller. It’s easy to make a wrong decision when facing fundamental changes in your market. And nowadays, as the winds blow harder, the scope of screw-ups is huge and the cost of screwing up is greater than ever. A lot greater.
So what kinds of screw-up opportunities do we hear directors talking about?
A major issue directors of associations face is the decline in revenue due to shrinking membership rolls. The reasons for this drop are many and varied.
We’ll look at some of them in another blog.
For now, let’s agree to agree with the widely accepted notion that associations (with exceptions) are losing members more rapidly than ever before (2014 Member Engagement & Performance Survey, Advanced Solutions International). Facing declining dues revenue, an association director (and its board) can make decisions that fall squarely into the “screw-up” category.
For example, one reaction to falling membership is to just raise dues on remaining members. It makes sense on the surface. Why not raise dues? The organization needs more revenue, right? Yes, it does. And revenue comes from dues-paying members, right? Sure. So it’s easy. Jack up the dues and watch the revenue rise like a swelling ocean tide.
Until two-thirds of your members quit.
Which happened to one association we spoke with. Facing a decline in dues revenue, the association board decided the best solution was to triple member dues. So they did. And then watched in horror as the membership roll shrunk like your best all-cotton shirt in a hot dryer (it’s Metaphor Day at The IT Guys). The association lost almost 70% of its members.
Guess what. Years later, this organization still hasn’t fully recovered. A screw-up? Oh yeah. On an epic scale. For most organizations this would be game over; few organizations come back from this level of screw-up. Fortunately for this association, new, wiser governance has righted the ship and set course for a successful comeback. But it’s taking time.
Another opportunity to screw up while struggling to retain members is by adding more association services. That sounds reasonable. More services = more value, right? More value = satisfied members, yes? Satisfied members keep on paying dues. Problem solved. Everybody’s happy.
On the surface, that all seems like sound reasoning. Unless the added services are of dubious value. AKA, services nobody wants.
Adding a host of services whose real purpose is to bulk up the services portfolio, while failing to deliver any real benefit to members, dilutes the value of the entire portfolio. The organization ends up with a services portfolio so bloated by unwanted programs & services that those possessing real value are lost in the crowd.
Members tire of wasting time wading through them all. It takes too much effort to find a service or program they need and can use. So they give up trying. Ultimately, they give up on the organization. The entire exercise ends up exacerbating the membership problem, not fixing it. A screw-up? You got that right.
There you have it. A couple of reactions to shrinking membership rolls rich in screw-up opportunities. And that’s just a couple screw-up decisions. There are more.
So, is this an all bad news story? Is screwing-up inevitable? Does everyone screw-up when dealing with declining membership? No, no, and no. A number of organizations succeed in addressing the shrinking membership problem. In fact, they succeed in a big way.
In Part 3 we’ll look at how one of these associations has successfully dealt with the challenge of growing membership rolls when the trend is clearly running the other way.
Don’t screw up and miss it!