Creating an Innovative Association
While a commitment to innovation from the board and executive leadership is indeed critical, it must be embraced throughout the organization to truly take root and transform an organization, explains David Schmahl, Executive Vice President & Chief Executive of the Healthcare + Scientific and Technology Industry Practices at SmithBucklin. “Innovation in the association industry occurs most frequently when the leaders steward and enable the necessary environment,” says Schmahl. When these conditions exist, innovation can flourish; without them, it will fail.
Are You Innovative?
The 2018 Association Innovation Benchmarking Report — conducted by Marketing General and the National Business Aviation Association — introduced some interesting statistics about how associations view and implement innovation within their organizations. Specifically, it found that around 28 percent of associations consider themselves “very” or “extremely” innovative. In addition, about 25 percent of associations have a process for innovation, while 24 percent are working on one and 51 percent do not have one. Further, 54 percent of associations have a group or committee lead innovation efforts.
Approximately 41 percent of associations are now more likely to set organization-wide innovation goals, up from 36 percent the last time Marketing General conducted the survey in 2016. About 31 percent have specific, written goals for innovation while 21 percent said innovation is included in the strategic plan. Also, 78 percent say they have a culture of innovation, while 22 percent say they don’t. Further, 60 percent say they have an intentionally designed system to support innovation. The report noted that more associations now “get everyone on board for innovation,” maintain a supportive culture for innovation, and have designed systems for promoting and developing innovation.
Setting the Stage for Innovation
While all of these statistics shed light on how associations innovate, ultimately it all starts with having an environment that allows innovation to grow and flourish, explains Schmahl. Boards can help create this environment in several important ways.
Where Innovation Occurs
- Operational excellence. It’s critical for operations, services, and programs to be running efficiently. When an association has confidence in its operations, distractions are minimized, which means there is more energy and resources available to focus on innovation. “Routine administration and the things that may be viewed as less sexy in the realm of innovation actually contribute to innovation,” says Schmahl.
- Be financially prepared. Innovation typically requires some initial investment and it may involve some failures. Boards have to be willing to invest in the right projects, knowing that failure is a possibility. It’s important for boards to also structure policies so that funds can be accessed for innovation. While most associations have an investment fund, they may also want to consider an innovation fund. The board could have a policy that if the investment fund reaches a certain level, excess funds are directed to an innovation fund.
- Define innovation. Boards should ask themselves: Why are they innovating? To what end? Is it to generate new revenue? Is it to engage a new member segment? Is it to develop new products to improve member value? Is it to have a better event attendee experience? Often, it may involve improving upon a current product or program to make it more responsive to members. The more specific the reason, the better. A good springboard for innovative ideas is the strategic plan, as 79 percent of innovations come from strategic planning processes, according to the Marketing General survey. Also, 73 percent of respondents said innovation ideas stem from the need to improve existing products or processes, while 65 percent said they come from trends in technology and 54 percent said they were the result of market research.
- Empower change agents. Once the board determines which area it would like to focus on, it should appoint a task force to spearheaded innovation for that particular project. The task force could include members, volunteers, staff, and outside experts. The task force should also have the necessary resources and decision authority to take any steps required to innovate, whether that’s conducting market research, doing focus groups or concept testing, or anything else.
- Be adaptable. Innovation is a process. Some projects may not work, and others may not be successful right away. It’s important for boards to be nimble and willing to review and, if necessary, adapt when changes are required.
The Marketing General survey also lends some insight into where associations are innovating. For example, 75 percent of respondents say their objective is to “create and launch a member benefit/product that provides value to members,” while 69 percent say its “solving members’ unsolved problems.” Other top responses include “creating and launching member benefits/products that lead to an increased number of members” (59 percent), “improvements that make the association better than it was previously” (58 percent), and “creating and launching revenue-based benefits/products that increase association revenue” (54 percent).
What forces cause associations to consider new innovations? About 57 percent cited changes in the industry or profession, while 44 percent said technology, 33 percent said changes in demographics, and 32 percent said declines in membership. Economic pressure (23 percent), focus on innovation in business media (16 percent), and legislation (9 percent) were other less common reasons.
When innovation occurs, what products or services are typically focused upon? The survey found that most innovation focuses on the website and social media (68 percent); conventions, conferences, and seminars (67 percent); and education programs (67 percent). Other focuses of innovation are technology (58 percent), membership (55 percent), marketing (52 percent), association publications (45 percent), advocacy efforts (37 percent), governance (36 percent), customer service (35 percent), and certification and credentialing (32 percent).
The survey also found that more associations are investing in innovation. Specifically, 42 percent plan for innovation as part of their normal budget, up from 36 percent in 2016, while 10 percent have a special fund. Meanwhile, 38 percent don’t budget for innovation at all, but that is down from 43 percent in 2016. These numbers suggest that more associations are realizing that innovation is central to sustained growth. “Associations continue to grow in terms of membership, revenue, and staff,” says the report. “This suggests that innovation and growth are interrelated. Innovation leads to growth. Conversely, growth allows for the time and resources needed to properly develop innovation.”
FEBRUARY 2019 EDITION
| Board Forward is published 10 times a year by SmithBucklin, the association management and services company more organizations turn to than any other. SmithBucklin has served volunteer board members for 70 years.