Make Change Your Most Significant Advantage
This idea from an article in the “Harvard Business Review” caught my attention.
“As the shelf life of business strategies grows shorter, a corporation’s transformation capability becomes its only enduring advantage.”
Authors N. Anand and Jean-Louis Barsoux go on to ask: “With serial transformations becoming the norm, a key strategic question for any corporate leader is, how can we make our next transformation flourish?”
When the article appeared in 2017, the concept and the question weren’t especially relevant for associations. Today, things have changed.
Light years ago, in a pre-pandemic universe, transformation wasn’t a common word in the association vocabulary. Organizations wrote five-year strategic plans. Operational, and certainly not visionary, changes weren’t typically considered outside of those windows of opportunity.
In 2018, my business partner, Kevin Ordonez, and I wrote “Association 4.0: Positioning for Success in an Era of Disruption.” The book was motivated by the impact we believed that technology would have on associations. We profiled executives who had incorporated a contemporary leadership style into their organizations.
Because we saw disruption on the horizon, we deliberately chose leaders who are experienced change managers. Change isn’t any easier today than it was four years ago. But the pandemic opened both CEOs and their boards to the need for broader perspectives. More associations are investigating how they can improve member engagement and ROI by making both large and small shifts in culture and operations.
Fear is the great inhibitor of change. Whether the initiative is as limited as introducing a new software platform or as far-reaching as restructuring a business model, exploring uncharted territory can be risky and intimidating. A wrong step has been known to send people out the door.
I picked the following stories from the book to illustrate how the ability to change can become your significant advantage. These examples describe how CEOs confront organizational challenge and find the courage to make an about-face.
When Abe Eshkenazi joined the Association for Supply Chain Management (ASCM) in 2006, he was faced with a difficult situation. A growing lack of trust had eroded communication between the board and the staff. Even financial decisions were negatively impacted by the disconnect.
Eshkenazi began his tenure as executive director, well versed in this troubled history. He understood the organization’s governance was in dire need of restructuring. More importantly, the board needed clarity on the focus and scope of their role.
Change, Eshkenazi realized, could not occur without establishing a culture of trust and accountability. “I knew that if I didn’t fix the relationship issues, there was no future,” Eshkenazi recalls. He spent his first six months as CEO interviewing former board members to evaluate the problems.
Eshkenazi reinforced confidence in his guidance by modeling the values he wanted to promote. “We have one rule at ASCM,” he advises. “No surprises, I will never wittingly surprise my board. I asked my team to follow the same rule with me and with the volunteers they support.”
Trust improved further when Eshkenazi quickly addressed several of the board’s priorities. A move from Alexandria, Virginia to Chicago provided an opportunity for needed staff restructuring. Other improvements included introducing planning processes that aligned with budget and staff resources as well as establishing key performance indicators and reporting procedures for critical operations.
Collaborate and Build Confidence
One year after Eshkenazi became CEO, ASCM had the cultural and operational confidence to make the most controversial and complex change. To streamline governance, the organization’s 14 regions were restructured into nine districts. This move reduced the number of geographically based representatives to the board and paved the way for additional changes.
As a result of the positive cooperation between board and staff, when the 2008 recession upended business across the country, ASCM was prepared to manage disruption. It wasn’t easy, but as the economy began to improve, volunteers and employees developed the competence to work together. Their collaboration ensured that ASCM was able to rebound quickly and grow.
After ten years, three mergers, and additional significant changes to governance, ASCM is positioned to succeed in an environment where emerging technologies are transforming how both supply chain and association professionals work.
Eshkenazi’s experience demonstrates the power of a straightforward, transparent approach. Playing the board against the staff or vice versa breeds suspicion and ill will. Accountability to both groups makes it easier to move forward in new directions.
Use Losses to Build Strength
The Society of Automobile Engineers is another organization whose members are frequently in the cross-hairs of change. Developing standards for autonomous vehicles places SAE Group among the pioneers who are bringing this revolutionary new transportation to market. CEO David Schutt notes, “It is an incredibly complex process. There is an amazing amount of technology involved.”
Shortly after Schutt joined SAE as CEO, recession hit the automotive, aerospace, and commercial vehicles industries hard. “In 2008, our organization went from $60 million to $40 million overnight. I had to reduce our workforce by a third,” Schutt recalls.
Inside this extreme challenge, Schutt found a kernel of opportunity. The recession allowed him to reconceive the organization. He turned over the entire executive team and brought in leaders from the commercial sector who were ready to both compete and collaborate. By either divesting or outsourcing superfluous activities, Schutt focused the organization on what they do best. New, more relevant, partnerships and acquisitions prepared SAE to grow.
Maximizing talent was another area of concern. Schutt updated volunteer roles, creating a more meaningful experience. “We engage 10,000 plus engineers worldwide. Because what we are doing is so industry-critical, they help us. But the volunteer workforce doesn’t have time or the professional expertise to be involved in operations. Instead, we use our teams to provide what they alone can offer, significant market insight and technical support.”
To introduce innovative perspectives, Schutt also restructured the international governance model. The group moved from an outdated representative board to a small and nimble team of leaders selected to serve for their expertise.
By 2015, SAE International alone had grown its topline revenue to more than $85 million, making it the largest contributor to the $150 million plus SAE Group. When asked whether this growth was the result of strategy or opportunity, Schutt replies, “I like to think strategy has led to growth, but it is also opportunistic. I didn’t create the recession, but I took advantage of it.”
In a different economic environment, such sweeping changes might have created considerable controversy. Finding the right context for a new vision is an important element in gaining people’s confidence. Schutt used the organization’s losses to build a bridge toward strength.
Incorporating change into the planning process is another path to buy-in.
Pauli Undesser, CEO of the Water Quality Association cites the current speed of business as one of WQA’s biggest challenges. Online sales condition consumers to expect to receive products within hours or days. “You can’t plug and play the products that our members manufacture,” Undesser notes. Protecting the public from lead and other dangerous contaminants requires a rigorous process.
“So much is happening in our space that it’s not worth our time to plan out five to 10 years. We can’t predict what that future environment will be,” Undesser advises. To prepare for disruptive changes, such as the U.S./China tariff wars, the association creates stakeholder groups. Discussions begin with the staff, and as issues are formalized, bubble up to the stakeholders.
“We make our intentions, strategies, and reasoning as public as possible,” says Undesser. “When there is resistance, we ask that people understand and appreciate the consensus position even if they don’t agree.”
“To involve as many people as possible, we implemented a rigorous process for declaring a conflict of interest and confidentiality.” The aim is to get buy-in so that when a decision becomes public there will be broad-based support among the membership.
“For example,” Undesser says, “WQA is engaged in a polarizing discussion about whether plumbers should be members. There are compelling arguments on both sides of this question. We are managing the debate by involving as many people as possible. We’ll look for them to support the decision whether the outcome favors their position or not.”
By creating broad-based consensus, Undesser confronts change with synergy.
Find a Better Direction
Ashkenazi, Schutt, and Undesser understand that change is risky and uncomfortable. But inertia is never the right solution to a challenge. With the courage to introduce a better direction and bring transparency and collaboration to the process, change can become your greatest asset.
Read profiles of Ashkenazi, Schutt, and Undesser in “Association 4.0: Positioning for Success in an Era of Disruption.”
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