Handout for AENC 2016 Annual Meeting: Jeff de Cagna "Embracing the Board's Duty of Foresight"

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ASS O C IAT I O N K N OW L E D G E
The Six Rs of
Association
Thrivability
By Jeff De Cagna
The rules of the game
for associations have
changed, and they will
not be changing back.
Here’s what it will take
for your association
to thrive over the next
decade and beyond.
T
hrivability is at the core of what
association boards, CEOs, and
staff across North America and
around the world grapple with everyday.
The Age of Transformation—a still
unfolding period in recent human
history during which the powerful forces
that have always shaped our society
are all recalibrating and exerting their
profound influence at the same time—
represents an irrevocable shift toward
a fundamentally different world from
the one in which most associations first
emerged many decades ago. To put it
another way, the rules of the game for
associations have changed, and they will
not be changing back.
Building 21st
century organizations
capable of flourishing in this volatile
time will require more insightful and
actionable answers to the core question.
Surfacing more generative responses
means senior decision makers must
embrace different ways of thinking
and acting when considering what the
future holds for their associations,
their stakeholders, and the fields in
which they operate. Through more
than a decade of strategic work with
a wide variety of organizations, I have
identified six critical imperatives for 21st
century association decision makers to
follow as they strive to nurture thrivable
associations. I call them “The Six Rs.”
1. Realism for action
Building thrivable associations
begins with understanding the deep
impact of what is happening today
on how organizations create, deliver,
and capture value. In The Age of
Transformation, the growing ubiquity
and influence of digital technologies
in the lives of stakeholders means
the half-life of traditional association
business models is far shorter than ever
before. Under these conditions, business
model reinvention must be an ongoing
exploration of new possibilities instead
of a one-time exercise.
The realism-for-action imperative
demands that the work of business
model innovation rejects the deep-
seated assumptions of the past. In
addition to questioning orthodoxy,
association decision makers must steer
clear of myopia, nostalgia, and denial
so that they can honestly confront the
ground truth of the situation facing
their organizations and stakeholders.
Association boards in particular need
to reassert their strategic legitimacy in
the eyes of stakeholders by recognizing
the deep impact of transformation on
those stakeholders, and by making a
clear commitment to accelerate the
association’s rate of strategic progress
relative to the pace of transformation in
the environment.
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2. Responsibility for
stewardship
Without question, association boards
must take their legal and fiduciary
responsibilities very seriously. The
board’s oversight and risk mitigation
functions are not going away anytime
soon, but nor do they exist in a vacuum.
The work of stewardship lives within the
dynamic context of transformation, and
boards should be just as concerned with
the risks of inertia in preparing for the
future as they are about the specific risks
of any particular course of action.
The responsibility-for-stewardship
imperative invites association decision
makers to look beyond the boundaries
of oversight and invest in building
a sustained organizational capacity
for innovation. Instead of narrowing
strategic options based on financial
or other short-term concerns, a
genuine commitment to stewardship
responsibility includes taking intelligent
risks designed to provide meaningful,
long-term support to association
stakeholders as they pursue their most
important personal and professional
outcomes. Taking responsibility for
stewardship begins with association
decision makers developing shared
principles of action—grounded in a
commitment to purpose—to guide
future organizational decision-making .
3. Readiness for learning
Most association decision makers
operate with the shared belief that
strategy as an exercise in planning
maximizes their ability to deliver
reasonable programmatic and financial
results, while minimizing any threats to
their control over that work. Planning-
centric approaches tend to keep the
focus on what key decision makers
already know, i.e., the tried-and-true
ways of doing business as the basis for
future action. While data collected from
the organization’s usual suspects may
bring some different perspectives to
this work, such input rarely alters the
central premises upon which plans are
formulated.
The readiness-for-learning imperative
challenges association decision makers
to pursue strategy as a process of
ASS O C IAT I O N K N OW L E D G E
learning. No association today possesses
all of the knowledge it needs to create
thick value for its stakeholders. The
ability to learn distinguishes the
organizations creating a thrivable future
from those defined by the past. Strategy
as learning lowers the barriers created
by fear, uncertainty, and doubt (FUD),
and surfaces new possibilities inspired
by serendipity, empathy, and discovery
(SED). Serendipity is about unexpected
encounters with meaningful opportunity,
including vibrant connections with
the unusual suspects who are willing
to challenge orthodoxy. Empathic
understanding enriches strategic insight
by inspiring decision makers to see
the world through the eyes of others.
Discovery involves uncovering ideas and
opportunities. SED animates strategy as
learning, and enables associations and
stakeholders to co-create what’s next for
themselves and others.
4. Resources for
investment
Association decision makers must
clearly recognize that nonprofit is
simply a tax status. It is not now, nor
has it ever been, a business model,
and it is certainly the wrong mindset
on which to base critical business-
model decisions for the future.
Indeed, one of the main reasons why
every association must have a robust
conversation about its current and
emerging business models is to ensure
that the organization’s commitment
to purposeful action is fully integrated
with its pursuit of a responsible level of
profitability. In the traditional discourse
of nonprofit organizations, however,
the word “profit” still creates significant
disquiet for many decision makers.
Building thrivable associations for the
future will depend, at least in part,
on whether boards, CEOs, and other
association stakeholders can let go of
their personal discomfort to make
profitability a top organizational
priority.
The resources-for-investment
imperative insists that association
decision makers treat thrivability
as a holistic condition. While a
consistent flow of financial resources
is essential for 21st
century associations,
money is not the only appreciating
asset needed to build a thrivable
organization. Association decision
makers must also capitalize fully on
other invaluable yet finite resources—
including organizational time, energy,
and attention—as part of the creation
of thick value for stakeholders. Future
association business models will depend
just as much on the wise investment of
these and other intangible assets as they
will on the imaginative application of
digital tools and technologies or other
forms of innovation.
5. Relationships for
collaboration
The traditional membership-centric
business models in place in most
associations today focus entirely on
persuading stakeholders to join. For
some organizations, this model remains
sustainable, at least for now. For many
associations, however, this model
is a persistent struggle because any
progress made through the membership
recruitment process is often undermined
by the failure to retain those members
for any length of time when their
memberships do not deliver an actual
experience of value in every stakeholder
interaction. In short, today and going
forward, creating thicker value matters
more to association thrivability than
does selling more memberships.
The relationships-for-collaboration
imperative requires association decision

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makers to build more thrivable business
models by shifting away from a narrow
and self-limiting focus on membership.
Instead, associations must expand
relationships beyond the long-standing
boundaries of membership to build and
activate strong networks of connections
with a wide variety of stakeholders
who see the benefit of entering into
meaningful relationships with the
association. Associations pursuing this
approach can harness the distributed
capabilities and hidden resources
of a broader and richer network of
stakeholders who can collaborate with
each other, as well as the association, to
create new thick value.'
6. Resilience for growth
The potent forces of the Age of
Transformation continue to create
significant disruption throughout
society, including associations. To
counteract the negative effects of
disruption and build for thrivability,
association decision makers must
identify opportunities to increase
resilience at the individual, group, and
organizational levels. Boards, CEOs,
and other key contributors must be
ready, willing, and able to make smart
and courageous decisions that move
their associations down a thrivable
growth pathway, even in the face of
increasing complexity and volatility in
the environment.
The resilience for growth imperative
urges association decision makers to
take a closer look at the five previous
imperatives to understand their deeper
implications. At the core of each
imperative is a fundamental notion
about building resilience for growth:
1) seeing the world as it is, 2) being
a responsible steward, 3) choosing
learning over knowing, 4) prioritizing
investment, and 5) organizing for
collaboration. By pursuing meaningful
growth in organizational capacity for
thrivability, decision makers will give
themselves a much better chance to
guide their associations toward the
achievement of their most critical
outcomes.
The Age of Transformation
will not end any time soon. As an
association decision maker, the Age of
Transformation will not show you any
forgiveness if you try to ignore it or
deny its existence. And even if you fully
embrace the enormous possibilities that
transformation creates and implement
the six Rs of association thrivability
with great care, inevitably you will make
many mistakes and experience failure
along the way. Such is the nature of the
challenge before you, but it is not an
insurmountable one. Without question,
building your association to thrive over
the next decade and beyond will demand
more of you, as well as more from
you. It also will afford you the unique
opportunity to transform yourself into
a true 21st
century leader. The only
remaining question: Are you ready to
raise your game?
Jeff De Cagna FRSA FASAE (jeff@
principledinnovation.com) is chief
strategist and founder of Principled
Innovation LLC. De Cagna’s presentation
at ORGPRO, July 10, 2014 at 9:00 a.m.,
is titled, “How Association Leaders Can
Think Differently About the Future.”
Your MSAE Contact: Terese McInnis, CMP, Account Executive
231-995-3911 | terese@traversecity.com
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TCT IMPACT OrgPro Issue.indd 1 4/17/14 3:54 PM
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No association today possesses all of
the knowledge it needs to create thick
value for its stakeholders.
ASS O C IAT I O N K N OW L E D G E
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