What are Strategic or Organizational Values?

What are Strategic or Organizational Values?

By Steven Worth

Strategic values are sometimes defined as the "glue" that holds an organization together. In effect, values act as a sort of constitution that clearly defines what an organization stands for both for those inside as well as outside any given organization.

For example, we all instinctively know what McDonald's Corporation's values are. If we walk into a McDonald's restaurant and see that things are dirty we know immediately that a key value has been violated. Or if we were to order a hamburger and find that it costs $20 we also know something is amiss. In fact it is safe to say that McDonald's employees, shareholders, customers and stakeholders everywhere in the world know that McDonald's values are: cleanliness; affordability; convenience; and family friendliness.

A distinguishing value of Nordstrom's department store is to ensure all customers walking into their stores leave satisfied--even if Nordstrom employees need to refer them to another store for a product that Nordstrom's does not carry. Similarly, a key value around which L.L. Bean built their success as an outdoor outfitter is that all their customers shall be satisfied with the quality of L.L. Bean's products, or they get their money back. Such values might seem counterintuitive in a business environment. These values cost money! But on the other hand, the confidence they inspire has led to fiercely loyal customers and stakeholders who truly believe in these institutions. Values are not goals but, like goals, they do key off an organization's vision and mission and are in many ways special to that organization.

As can be seen by the McDonald's, Nordstrom's and L.L. Bean's examples, values oftentimes serve as an organization's competitive advantage in the marketplace. At the very least, the more successful organizations have a very clearly defined sense of themselves through the values they embrace and incorporate in their day-to-day activities.

So....as planning groups focus on strategic issues, they eventually always need to ask themselves, what does our organization stand for?

What are the values or principles that are or should be incorporated into everything we do? But there is a distinction to be made in all this talk about values. Personal values are often captured in HR policies or documents such as employee manuals. Certainly trust, respect, nondiscrimination (and a long, long list of other values as well) are all part of the personal qualities, ethics and values that make life livable as well as help to make for a pleasant and efficient work environment. But are they strategic? Certainly no organization sees an advantage in fostering distrust, dishonesty, discrimination, etc.

So, if it is a given that all these personal values should be incorporated into every work and personal life environment, then what are the types of organizational values that distinguish one organization from another?

In effect, there are strategic considerations that enter into play that make almost every organization's set of values as unique as a fingerprint. Furthermore these organizational values are not just externally driven; they have internal implications as well, because if they are to be taken seriously then they need to be ingrained into the organization's culture from the time the first employee is hired.

One would hope that parents and schools have done a good job inculcating the personal values that your organization needs and expects of its employees; but your organization's responsibility is to help these same employees understand what makes working at your organization different from working elsewhere. This of course means knowing what these values are in the first place and why they are uniquely important to your organization.

Groups Can Collaborate for Success

Groups Can Collaborate for Success

By Tavia Evans Gilchrist As a tight economy challenges corporate members and associations to look for new ways to add member value, effective partnerships with other groups, the private sector and the government will become critical to the success of many organizations. The biggest hurdle is identifying those partners who share common goals, strategy, mission and philosophy, said Keith Skillman, vice president of publications at ASAE, who worked on the book's content. Choose well, and the partnership can extend resources and relationships that an organization did not possess before. That's the premise behind this partnership primer, itself a collaboration between the U.S. Chamber of Commerce, ASAE &The Center for Association Leadership and Plexus Consulting Group LLC. Together, they continue the conversation started two years ago in 7 Measures of Success: What Remarkable Associations Do That Others Don't, also published by ASAE and the U.S. Chamber. In that publishing effort, alliance building was identified as a key mark of a thriving organization. This book takes that idea a step further, with case studies, partnership strategies, legal requirements and checklists to guide groups down a winning path. The scenarios included in the publication are drawn from real examples, though names and organizations remain anonymous. The research process included a preliminary questionnaire, virtual focus groups with association leaders and interviews that helped identify organizations with a track record for successful partnerships. A reality check endows this book with a practical sense of what real and successful partnerships require-it's not as simple as slapping another group's logo on marketing and promotional materials. Nearly 50 percent of partnerships fail, usually due to a lack of shared vision and communication about goals, said Raymond Towle, executive director, federation relations, at the U.S. Chamber. And if that rate seems high, it factors in the risk to membership and an organization’s potential revenue and brand. The authors encourage a multi-step approach to the endeavor, which includes first preparing your organization to partner, identifying a good it in another group, legal steps to formalize the relationship and maintaining it for success. Communication on clearly defined roles, responsibilities and metrics-increased revenue for members, or increased attendance at a conference, for example-can help the organizations clarify strategies and goals for the collaboration. "Before a partnership, there must be some self-exploration about the needs and strategic goals of each group, and where those intersect," Skillman said. “Those organizations that are good at partnering and building alliances understand where this practice fits in with their overall strategy." And where that strategy includes growing revenue, transparency, disclosure and trust are paramount. One case study reveals a group that severed ties with its trade show partner over accusations that neither side was forthcoming about finances. Exit strategies, a well-thought out plan to sever the relationship, don't equal a failure, the authors point out. A handy legal appendix, with sample contracts and agreements, helps walk associations through the legal protections and agreed consequences of a partnership that goes south. The book's biggest takeaway is that partnerships can be an effective tool to enhance an association's strategy, and getting more done in an economic climate where resources may be fewer in the foreseeable future. The most successful groups have team mentalities, with coupled strategies and compatible missions that underscore the collaboration, said Steve Worth, managing director at the Plexus Consulting Group. "We stumbled upon some partnerships that lasted for a decade or more and the people involved had retired or changed or moved on," Worth said. "It highlighted the fact that if it's a well-conceived partnership, the players and executives can change and the partnership will continue because it's the right match."

Do the Ends Ever Justify the Means?

Do the Ends Ever Justify the Means?

By Steven M. Worth

The laws of most nations allow tax-exempt status for organizations that can prove they serve a higher purpose--one that presumably benefits society as a whole. The promotion of a higher purpose--is perhaps the most distinguishing characteristic of the association sector. This characteristic is the association community’s strength, but it can also be its Achilles' heel.

It is easier to understand how the call to serve a higher good is a strength. Apart from the financial advantages of being tax-exempt, these organizations attract well-intentioned people who like the

idea of serving a cause that is greater than themselves. The idea of doing well by doing good is motivation enough for millions of people who volunteer their time and financial resources every day to organizations that have such a purpose.

Because these organizations do serve clearly defined purposes it is relatively easy for them to manifest a strong sense of mission; and therein lies a dangerous potential—that the nobility of the purpose may be used to justify somewhat less than noble tactics.

One definition of barbarism is when people act on the belief that the ends justify the means. If this is the case, then associations are arguably very temping places to cut corners and do things that might otherwise make civilized people blush. “Well,” the reasoning goes, “I wouldn’t do this normally, but it is all for a good cause….”

The danger of ethical violations within an organization is sometimes greater because employees might not even notice unethical practices until they are pointed out by an outsider. When this happens, it is not so much that the outsider has a grudge or even that they are more observant, ethical, or ingenuous than those inside the organization. Rather, these outsiders see problems that are sometimes invisible to those trapped in "group think."

“Group think” is the term coined by George Orwell in his book 1984 and recently resurrected by the congressional intelligence committee investigation of the US intelligence failures that preceded the tragedy of 9/11. Group think occurs in organizations that are too homogeneous, where uniformity of approach and thinking causes obvious danger signals to go overlooked. In the worse cases victims can “group think” their way into a fantasyland of self-deception.

All managers—but especially for the reasons noted above, all association managers--need to be mindful of the dangers of ethical violations that are inherent in their organizations. But more even than being mindful, managers need to take preventative action, including the following.

Define your organization’s principles, the values that should be inherent in everything your organization does or that people do on the organization’s behalf. Ideally these principles should be incorporated into your strategic plan and follow naturally on from your organization’s vision and mission. These points should be considered the organization’s “constitution” against which all plans and actions should be judged. If an action arguably helps achieve an organizational goal but in a way that violates your principles—then it cannot be allowed or encouraged with an unofficial “wink and a smile.”

Create and define the operational modes and constraints of a structure through which ethical violations are reported and investigated. You must ensure that the rights of all concerned parties are protected. The accused needs to be protected from unjust accusations, but neither should the reporting of ethical violations be so difficult or objectionable that whistle blowers are discouraged.

Actively promote and encourage diversity of backgrounds and opinions in your staff and volunteer leadership. There is nothing so pleasurable for a manager than to see a team jumping to a task and acting harmoniously as one. For a teacher the brightest pupil always seems to be the one that follows the teacher’s thoughts most closely.

But that staff member who sees things differently, who persists in apparent nonconformity, might actually be the manager’s best friend. That person is the one who is most likely to see the problems. Their apparently abrasive challenges will serve to polish your policies to perfection.

Do periodic organizational audits using resources that can operate at an arm’s length from your governance and operational structures. Despite all your precautions, know that you are too close to things always to see clearly. Incorporate periodic outside organizational audits into your good governance processes.

Too many unfortunate souls have learned that disasters can happen incredibly quickly and that laudable ends can be spoiled by faulty means. Search out these weaknesses—better yet, prevent them from occurring!

Is Your Association in a Class by Itself?

Is Your Association in a Class by Itself?

By Steven M. Worth

The American Society for Public Administration once conducted a survey to identify the common characteristics of managers in public office who had longevity in their positions. Among other findings, the study found that introverted personalities seem to be more successful in retaining their positions than their extroverted counterparts. It is curious in the first place that introverts should be attracted into a role that is associated normally with meeting and working with large numbers of people.

It also reveals a tendency, particularly in associations, to stay within comfort margins by working with smaller groups of people and staying with what is familiar rather than venturing into something new. But in the time associations are going out of business, merging, or otherwise undergoing fundamental restructuring challenges, could this tendency be leading to two different classes of associations?

One class might be defined by a club-like familiarity of association members and staff participating in programs of long standing. These associations are marked by the longevity of their executives and have learned to rely on cash cow programs that may not be growing, but are profitable and predictable.

The other class is defined by environments that are more entrepreneurial, growth oriented and marked by movement and change.

Now if the reader thinks that one class is more likely to realize success than the other, they would probably be wrong. The first class described above may sound boring, but boring can be good and profitable, not to mention less nerve racking! Entrepreneurial environments certainly are exciting, but more entrepreneurial start-ups fail than succeed and, as the ASPA survey found, chief staff executives who tend to run such associations tend not to last long in their jobs! On the other hand, virtually all the biggest success stories had entrepreneurial beginnings. In Darwinian terms, stressful and trying times create the ideal environment for evolution; however, ancient species like crocodiles and sharks have shown us by their survival from the dinosaur era that if you find your niche in the evolutionary mainstream, there is very little need to adapt to change.

But what happens if you suspect your organization might be in the current that is headed for the falls or for the morass of a stagnant backwater? Is it possible to change direction? The answer is “yes,” but not without a leadership change.

In his book Who says Elephants Can’t Dance? Louis V. Gerstner, Jr. describes how he wrestled IBM into undertaking the changes it needed to ensure its own survival. In this case, IBM’s long and distinguished history of success proved to be its own worst enemy. Gerstner’s fresh perspective and rigorous top to bottom strategic planning saved IBM from the fate of other once great companies like PanAm, Studebaker, and other names that have faded into history.

There are other successful change models for success, but whatever methodology used, common elements of successful organizational change are: 

1. board members and management recognize when change is needed; 

2. the board matches the organization’s needs to the personality and leadership characteristics of a new CEO; 

3. all stakeholders resist the temptation to establish “sacred cows”—programs and policies that are off-limits to change; and 

4. all stakeholders are willing to identify themselves as a team and to make the sacrifices needed to identify and to achieve essential goals.

For Norman Mailer in his classic career-launching book, The Naked and the Dead, the conflict in the Pacific during the Second World War stripped his soldier-characters of whatever social pretense or frivolity they may have had before the war. If the war did not kill them outright, it pared them down to their essential souls.

Many associations are undergoing trials not dissimilar to warfare. For some the future is to stay the course, and for others it is to embrace change. 

In which class is your association?

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Membership and the Millennial Generation: A Whole New World

Membership and the Millennial Generation: A Whole New World
by Mark Scheffer, Nonprofit Communications Report

Millennials. Generation Y. Echo Boomers. Whatever you call this group, there are 76 million of them, the oldest are just turning 30 and, according to Steven Worth, president of Plexus Consulting Group (Washington, DC), they have already transformed just about everything you thought you knew about the marketplace.

“My generation grew up local, and local was all there was,” he says. “This generation has grown up with the world at their fingertips and they’re accustomed to going out and getting exactly what they want.

The days of members sticking with a fat and happy organization are long gone and not coming back.”

Here Worth reflects on several notable attributes of the Millennial generation and the impact they are having on membership organizations.

Around 40 percent of millennials are of a minority or racially-mixed background. “It used to be you did business only with people you knew, who looked like you, were part of your ‘tribe.’ Now business is based on competency, and the U.S. is headed toward becoming a majority-minority nation. That is all for the good, but it means membership organizations have to give serious thought about how they appeal to people with different work habits, value propositions and languages. Sensitivity is part of it, but ultimately associations must find ways to define their missions in ways that are universally compelling, regardless of racial or ethnic background.”

Millennials are often said to be the first American generation expected to less well economically than their parents.

“The millennial generation will face, literally, a world of competition. America will no longer be the unquestioned leader in any industry, and many people will advocate reactionary and protectionist stances--but shutting out the world is exactly the wrong thing to do. Successful organizations will be the ones that realize that, along with all the competition, they are also facing a world of potential members and customers. Globalization, if only marketing to overseas industries and professionals, will be the way to a prosperous future.”

Millennials are the first generation who have never known life without the internet. “Growing up on the internet, millennials are used to going out and getting whatever they want. In many organizations, membership has dropped, prompting some to suggest that this generation simply aren’t ‘joiners’. But in this same period volunteer activities have risen. What has become clear is that millennials are more motivated by mission than any previous generation. While they will not show loyalty to an organization like previous generations did, they will show loyalty to a cause. Membership organizations must therefore articulate a clear and compelling cause, mission and purpose.”

Millennials tend to frequently change positions, jobs and even fields.

“Many membership organizations are going to have to rethink their entire business model – what their purpose is, how they relate to members, how they make money. In the old paradigm, money came through membership dues. Now many of the most successful associations rely not on dues but on the products and services they sell. To them, membership rolls are important only for the data they provide, and as long as people are participating in their courses and purchasing their products ,they are not bothered by members coming and going. Some of our fastest growing clients don’t even have formal membership departments. They know that if you offer essential services, members will come as a matter of course.”

Causes for Concern: For-Profit Competition, Advancing Age Sometimes member organizations don’t recognize trouble when they see it, says Steven Worth, president of Plexus Consulting Group (Washington, DC). To stay on top of needed changes and developments, he suggests watching for the following warning signs.

· For-Profit Competition. “Non-profits should be able to offer better products at better prices because they don’t have shareholders to pay,” says Worth. “So if for-profits are gaining traction in your area, it means your organization is not operating as efficiently as it needs to be, or is not offering products the target market wants.”

· Advancing Age. “Any organization should see membership pick up around age 25 and drop off around 55, because those are the prime years of a career,” says Worth. “If the average age of your members is right down the middle, you’re where you need to be. If the average is pushing to the high end of that range or off into the sixties, you’re developing an association of retirees getting together socially, and that’s trouble.”

Plexus Clients Achieved Growth far Above Market Norms

Plexus Clients Achieved Growth far Above Market Norms

During the three years immediately following the onset of the Great Recession from 2009 to 2011 thirty-nine nonprofit organizations that were already growing strongly increased their annual growth rates by an average of 4% after using the management consulting services of Washington, DC-based Plexus Consulting Group, LLC (Plexus).  Eleven other nonprofit organizations that had been shrinking in size, managed to reverse or reduce their losses and performed on an average 22% better than before they used the firm’s management consulting services.

The organizations included in this analysis are trade associations, professional societies and philanthropies in areas covering education, community development, financial, professional, manufacturing, and various aspects of healthcare.  Every nonprofit organization that used Plexus’s services during this three year time frame experienced higher annual revenue growth rates than their respective sectors overall.

In order of frequency of use, the services were:  strategic planning; surveys and market research; marketing; international business services; organizational restructuring; and government and public relations.  The organizations using strategic marketing and strategic planning services registered the greatest growth increases of 45% and 26% respectively.

“This is the first time we have done such a comprehensive analysis of the bottom line results of our work,” said Plexus President Steven Worth, “but we thought this would be important to know during these financially uncertain times when making a decision to spend badly needed cash on management consulting services can be controversial.  These figures show our firm’s services more than pay for themselves—even during a recession.”

First Steps for Going Global  

By Steven Worth

It’s common to find that association boards and association staff are out of step with each other on the topic of globalization. This disconnect generally has to do with two key concerns:

1. Should a board’s responsibility stop at the national border? While the staff is usually the first to see market growth opportunities, boards rightfully see themselves as custodians of their association’s resources and representative of the interests of current members. As such it is sometimes difficult for boards of directors to allow association resources to be spent on developing markets outside the home base of most of their members. How can they justify to themselves, much less their members, a decision to spend time and money developing markets in other countries that may be their own rivals? In these times of economic uncertainty, this concern has to weigh heavy on everyone’s mind.

2. How does an organization with limited resources expand to meet the needs of a market that could literally encompass the globe? Some organizations have consciously made the decision to embrace globalization by creating a board of directors from different parts of the world. That board then feels obliged to include global expansion opportunities in everything that they do. But if this is not done in a businesslike manner, the organizational stresses the board creates can lead to a whole host of problems, including high staff turnover, strained budgets, and weakened brands.

These complex issues can be manageable if volunteer and professional leadership remember to focus first and foremost on meeting the needs and understanding the trends of the markets they serve. So how do you go about it?

Meeting the current needs of your members is absolutely a prerequisite, but don’t jump to conclusions. You might be surprised at how globally attuned your “domestic” membership might actually be. Time and again associations with “national” or “American” in their name make the mistake of assuming that their base of operations should be confined to home soil, only to find their memberships drifting away in favor of organizations that are more attuned to their growing global market needs. As a rule, people, organizations, and nations do best when they are free to interact with others like themselves. Confinement is not a natural state. So do your homework, study the interests of your members on a regular basis, track their trends, and be sure to be there where and when they need you.

There are more than 190 countries in the world today, and the number is growing. So where are the opportunities? Where should you be, if you can’t be everywhere at once? It is amazing how haphazardly some organizations make decisions as to which markets they choose to expand into—their globalization “plan” is purely opportunistic, and as such is a recipe for failure. Here are seven measurements you should make of each and every international market opportunity:

1. The absolute size of the market

2. Presence of competitors who are fulfilling the market needs as well or better than you could

3. Presence of potential strategic partners who might be interested in collaboration

4. Affinity with your home market in terms of culture, language, and trade relations

5. Growth trends in your sector of their market

6. Success of similar organizations in entering the market

7. Expected ROI within a three-year time frame

Rank each of these seven criteria for each market on a scale of one to four and then average the whole (weighting those points that you deem are more important than others) and see how various national markets compare with each other. From this exercise you can prioritize markets and thereby ensure you are focusing your organization’s resources effectively.

Finally, think like a businessperson. Demand hard market data and make your decisions accordingly. Give your investments time to pay off, but ensure that they do. If your organization is providing valuable resources to meet market needs you will find buyers willing to pay fair market prices—a rule that is as true anywhere else in the world as it is in your home market.