A new report challenges association leaders to expand beyond member-focused adjustments and think more broadly about their potential customer base.

Business Model Innovation: Fuel for an Association’s Mission was published last month by the consultancy McKinley Advisors. The report recommends that leaders look at their revenue model through the lens of five elements: value, revenue, community, reach and operations. Together, the report says, those elements encompass “a revenue-centered mindset, a deep understanding of your markets and the ways you serve them, the products and services you offer, and how you manage and deliver to best effect.”

That kind of holistic approach, says Meena Dayak, MA, practice director at McKinley Advisors, represents a break from association’s typical approach to its business model, which is to make marginal changes to discrete products or services.

“When it comes to membership, we’ll ask, is it time to raise our membership dues, or should we add membership tiers?” she said. “Or, the annual meeting is not doing so great, let’s look at how we can fix that individual piece of it. But given all the political, economic and social forces, plus needing to meet the needs of a new generation, it’s really time to step back and think about the whole picture before you get into those specifics.”

The report offers advice and brief case studies about expanding product lines and audiences, and right-sizing pricing, while also recognizing that such changes often require a substantial cultural adjustment among association staff, volunteers, and stakeholders. “Associations are notorious for moving slowly and maintaining the status quo,” the report says. “Tradition and political dynamics with member leaders or staff combine to make change more difficult. Challenges to innovation include deep-seated cultural barriers, knowledge and behavior gaps, a lack of goal clarity, and misaligned structures and staffing.”

Dayak says leaders need to nurture buy-in for any business-model changes they seek to implement. 

“I think it starts with being able to create excitement, really being able to share the vision and the why, and imagining where we can be if we transform in this way, or we change in this way,” she said. “It requires being very transparent and keeping people in the loop. You may not need to reveal everything to everyone, but letting people know that you are going down this path, that you are exploring this change for a reason, and keeping them informed at key stages as the work on the change progresses, is important, because people are afraid of what they don’t know.”

Among the associations featured in the report is the Association for Supply Chain Management, which in recent years has shifted the heart of its business model from individual certification to providing products and services in the larger supply-chain community. 

ASCM Executive Vice President of Marketing Sherri Goodlove says that a shift to being a more data-driven organization has allowed it to transform its business model. “One of the things that we did a few years ago is we implemented a business intelligence unit…. As an organization, [we ask] how’s that grounded in data? We always try to ensure that we’re putting our customer ahead. Do we have the voice of the customer in this data?” 

Leadership for business transformation needs to come from the top, Goodlove said, but support from staff is essential.

“Work cross functionally and ensure that you have people across the organization who also become evangelists and advocates through the change,” she said. “Those individuals can help you, because what often happens is CEO and executive leaders put out a North Star vision, but where things tend to fall down is when it gets to the staff and the execution level.”