In order to fulfill their founding missions, several Associations observed a growing pressure on increasing their financial and business performance, with the objective of maximizing the generation of resources to be re-invested into relevant and valuable benefits, products and services for their stakeholders.
Associations, and their executives, are today called to a higher level of challenge in outlining effective strategies, drafting effective business plans and defining systems to monitor the efficiency of their organization.
Development of business strategies and business models for associations
1. Development of business strategies
and business models for associations
ESAE Congress at EMIF
March 15, 2011
Alessandro Cortese
CEO,
European Society for Therapeu9c Radiology
and Oncology (ESTRO)
2. Who’s in charge of strategy?
Well, formally. . . .
• Good news:
the management of Associa9ons in not in charge
of strategy development.
Your Board is!
3. Development of business strategies
and business models for associations
Thank – You !
Alessandro Cortese,
ESAE Congress, March 15 ‐ 2011
4. References, websites, blogs
• Arthur Thompson and Strickland, Strategic Management: Concepts
and Cases, McGraw Hill.
• Michael Muckian, Pren5ce Hall's One‐Day MBA in Marke5ng: A
Complete Educa5on for the Busy Professional , Pren9ce Hall.
• Alexander Osterwalder, Business Model Genera5on, Whiley.
• Jim Collins and others, 7 Measures of Success, ASAE & The Center.
• Jim Collins, Good to Great, Collins.
• Studymarke9ng.org
• Alexosterwalder.com
• Businessmodelgenera9on.com
• Businessmodelalchemist.com
5. However. . . .
profit
potential
+
old school
corporation x
− + social impact
potential
old school
not-for-profit
− Profit with a Purpose
6. Definitions: Strategy
• Strategy is the coordina9on of the means to achieve the
desired ends.
• It entails specifying the organiza9on's mission, vision and
objec9ves, developing policies and plans, and then alloca9ng
resources to implement those.
• A good strategy is the main help to steer the decision making
of what to do and when to do it.
• Most important, it tells you what not to do.
7. Strategic Planning Model
ABCDE
Where we are Where we want to be How we will do it How are we doing
Assessment Baseline Components Down to Specifics Evaluate
• Environmental Scan • Situation – Past, • Mission & Vision • Performance • Performance
Present and Future Measurement Management
• Background • Significant Issues • Values / Guiding • Targets / Standards of • Review Progress –
Information Principles Performance Balanced Scorecard
• Situational Analysis • Align / Fit with • Major Goals • Initiatives and • Take Corrective
Capabilities Projects Actions
• SWOT – Strength s, • Gaps • Specific Objectives • Action Plans • Feedback upstream –
Weaknesses, revise plans
Opportunities,
Threats
Put Everyone at the Commit to Action Commit to Action
Collect Data, Data, table (Define sustainable (Flexibility, Constant
Data growth plan, Align your reporting against KPIs)
(Broke ideas from
(market, surveys, due Members, Customers, Organization)
diligence) Industry)
8. At the end of the process you can make an educated
guess to reply to those Fundamental Questions:
• Where are we now? (Assessment)
• Where do we need to be? (Gap / Future End
State)
• How will we close the gap (Strategic Plan)
)
• How will we monitor our progress (Balanced Business
Scorecard) Model
• How will we integrate all components of the
organiza9on in one model.
9. Five Objectives of Strategic
Planning
• Forming a strategic vision
• Se[ng objec9ves
• Craing a strategy to achieve the desired outcomes
• Implemen9ng and execu9ng the chosen strategy
• Evalua9ng performance, monitoring new
developments, and ini9a9ng correc9ve adjustments
10. 1) Forming a strategic vision
Very early in the strategy‐making
process:
• "What is our vision for the Associa9on, what industry
standing do we want to achieve in three to five years?
What segments of members do we want to serve and
why?
• Convert managerial statements of strategic vision and
business mission into specific performance targets and
objec9ves the organiza9on wants to achieve.
• Every unit in a company needs concrete, measurable
performance targets that contribute meaningfully toward
achieving company objec9ves.
2) Setting Objectives
11. 3) Crafting a strategy to achieve the
desired outcomes
• A strategy reflects managerial choices among alterna9ves and signals
organiza9onal commitment to par9cular products, markets,
compe99ve approaches, and ways of opera9ng the organiza9on.
• An organiza9on's strategy represents the answers to such
fundamental business ques9ons as:
whether to concentrate on a single business or build a diversified
group of businesses (services and products)
whether to cater to a broad range of customers or focus on a
par9cular market niche (fit to the mission)
whether to develop a wide or narrow product and services line
how big a geographic market to try to cover (fit to the mission)
how to react to newly emerging market and compe99ve condi9ons
how to grow the organiza9on over the long term
12. How to . . . .
Def_Business Model
a business model describes
the rationale of how an
organization creates, delivers,
and captures value
In 9 building blocks (A. Osterwalder)
13. Stakeholders Segments
For who are we creating value?
Who are our most important stakeholders?
14. Value Proposition
What value do we offer to the Stakeholders? Which one of our
stakeholders problem / need are we helping to solve? What
bundle of products and services are we offering to each
stakeholders segment?
15. Channels
Through which channel do our shareholders want to be reached?
How do we reach them? Which channels work best and which
ones are the most cost-efficient?
16. Shareholders relationship
What type of relationship does each of our stakeholders
segments expect us to establish and maintain with them? Which
ones have we established? How are they integrated with our
model?
17. Revenue Streams
For what value are our shareholders and customers really
willing to pay? For what do they currently pay? How much does
each revenue stream contribute to the overall revenues?
18. Key Resources
What key resources do our value proposition require? Our
distribution channels? Stakeholders relationships? Revenue
streams?
19. Key Activities
What key activities do our value proposition require? Revenue
streams? Stakeholders?
20. Key Partners
Who are the key partners? Who are the key suppliers? What key
resources do we retain from partners? What key activities are
performed by partners?
21. Cost Structure
What are the most important costs inherent in our business
model? Which key resources are most expensive? Which key
activities are most expensive?
25. 3) Crafting Strategy: the business model
Organiza9onal strategies concern how:
•how to grow the business
•how to sa9sfy stakeholders (members, partners, customers)
•how to outcompete rivals
•how to respond to changing market (fit to vision)
•how to manage each func9onal piece of the business and develop
needed organiza9onal capabili9es
•how to achieve strategic and financial objec9ves
26. five phases of business model design
mobilize understand design implement manage
set the stage immersion inquiry execution evolution
27. 4) Execution
• Good strategy execu9on involves crea9ng a strong
"fit" between the way things are done internally and
what it will take for the strategy to succeed.
• The most important fits are between:
strategy and organiza9onal capabili9es
strategy and the reward structure
strategy and internal support systems
strategy and the organiza9on's culture
28. 5) Evaluating performance
• It is always incumbent on management to evaluate the
organiza9on's performance and progress.
• It is management's duty to stay on top of the
organiza9on's situa9on, deciding whether things are
going well internally, and monitoring outside
developments closely.
• Marginal performance or too ligle progress, as well as
important new external circumstances, will require
correc9ve ac9ons and adjustments in an organiza9on's
long term direc9on, objec9ves, business model, and
strategy.
30. Do we have a good strategy?
• A good strategy has to be well matched to industry and compe99ve
condi9ons,
market opportuni9es and threats, and other aspects of the organiza9on’s
external environment.
• At the same 9me, it has to be tailored to the organiza9on's resource
strengths and weaknesses, competencies, and compe99ve capabili9es.
• A good strategy leads to sustainable compe99ve advantage.
• Performance Test: good strategy boosts organiza9on performance.
• Two kinds of performance improvements are the most telling of
a strategy's caliber: gains in profitability and gains in the organiza9on's
compe99ve strength and long‐term market posi9on.
31. Why do Strategic Planning? Benefits of
the planning process
• If you fail to plan, then you plan to fail – be
proac9ve about the future
• Strategic planning aims at improving performance
• Counter excessive inward and short‐term thinking
• Solve major issues at a macro level
• Communicate to everyone what is most important
32. Strategic Doggy Bag. . . .
• Define an inclusive methodology when defining a vision.
• Collect data, data and data when assessing the opportuni9es and your
current situa9on.
• Drive cultural change in the organiza9on through the objec9ves of your
strategy.
• Communicate against performance (financial and KPIs) and be flexible to
an9cipate scenarios.
• Be disciplined in monitoring against KPIs
• Align all component to an integrated model.
33. Development of business strategies
and business models for associations
Thank – You !
Alessandro Cortese,
ESAE Congress, March 15 ‐ 2011
34. What strategic approach fits you best?
• The Full‐Frontal Direct A2ack
Marke9ng history, like military history, is filled with
examples of full‐frontal assaults. General Douglas
MacArthur said that a direct assault is the sign of a
mediocre commander. The same holds true for
marke9ng.
• The Indirect Assault
The indirect assault exploits a weakness of the
opposi9on, iden9fying and penetra9ng a weakly
defended point of entry in the marketplace, only to
grow and expand from within. This indirect assault
oen operates as a diversionary tac9c, masking a direct
assault that comes aer the point of entry has been
exploited.
• The Envelopment Strategy
It iden9fies weakly defended points of entry in order to
gain a foothold. Once established, the agacker spreads
out in all direc9ons, finding other points of entry or
market niches on which to capitalize. Mass marketers of
consumer goods oen find such a strategy successful
introducing first one product, then another, un9l the
marketplace is ligered with the company name and its
related brands.
35. What strategic approach fits you best?
• The Bypass Strategy
Probably the most difficult and failure‐prone of all
plans, the bypass strategy enables agackers to bypass
its chief compe9tors and diversify into unrelated
products or markets. In marke9ng it runs the risk of
dilu9ng the core business and central opera9ng
strategy, extending resources into areas where the
company had no business being.
• The Guerrilla A2ack
In an age of smaller, entrepreneurially driven
companies, the guerrilla agack has become one of the
most frequently used marke9ng strategies.
• Most oen guerrilla marke9ng is conducted by a small
company against a larger, market‐domina9ng firm. It's
characterized by periodic, strategically driven strikes,
each of which has its own single objec9ve.
