Thinking Like A Business Is Not Optional

Thinking Like A Business Is Not Optional

moneyLast week I attended the first, annual Association Chief Executives Symposium, put on by Shira Harrington and Jeff De Cagna. I really enjoyed the day-long conversation among association CEOs and senior staff (Jeff and Shira invited me as one of the facilitators). At one point in the conversation, however, a familiar refrain in the association community was mentioned: "We recognized that we needed to think more like a business."

This has always bugged me. When did thinking like a business become optional?! Nonprofits are businesses! They have revenue and expenses, and if revenue is consistently exceeded by expenses, than they go out of "business." I'm not saying that nonprofits and for-profit companies are the same. Not by any means. But one core thing they do share is that they are businesses.

I asked some of my fellow facilitators what they thought was meant by the idea of thinking more like a business. Some of the answers I heard:

  • We need to focus on the financial aspects of the business more
  • We need to stop pandering to whatever the Board wants
  • We need to stop programs that members like but don't generate enough results.
  • In a business we could make decisions and implement them, but it's not that easy in an association.

Really? Someone needed to sit back and think for a bit to come to the conclusion that maybe that's not how we should do things?! First of all, all of those issues could easily apply to for-profit companies (substitute "members" with "customers," "suppliers," or "stakeholders"), and second, what kind of bar do we set for ourselves when it comes to managing the enterprise!? Why is it okay to have "running a successful business" be optional, or something we might have to convince others is a useful thing to do?

I am not suggesting that financial considerations should rule all the time. I understand that running an association is different than a lot of businesses, and requires attention to different things. But it never exempts you from thinking like a business. That would be profoundly irresponsible, given that you are working with "the members' money."

We need rigor when it comes to running our businesses. We need discipline when it comes to understanding what drives the success of our enterprise and making sure that's what happens. I'm fine if that looks different than running a Pizza Hut franchise, but I will NOT let anyone off the hook when it comes to thinking like a business.

- Related post: Best Low Cost Franchises.

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  1. 11.11.2013 at 10:47 am

    Love the post Jamie. I would think the same thing except I come from the younger side of the generation running many associations and most of them have known this for many years but have been in denial. When they all entered the association market 20 years ago, people belong just to belong. For a long time, associations were where you learned the inside scoop on things, new product releases and no one questioned membership. It was kind of easy. Over the last 10 years, none of that is true and a membership, whether right or wrong, it being questioned by many. You have governors running associations who need to turn into business savvy leaders and many are challenged with this because its not their gift. They run great board meetings, make sure the association adheres to the bylaws and Robert’s rules, but they lack the traits a Vice President of Marketing, Business Development of Finance would have. Takes time to turn 20 years of habits.

  2. Ric Kirchner
    20.11.2013 at 9:58 am

    Coming from corporate middle management and trying to think that way has not been an easy task. I have been constantly told you need to think totally different than that. I feel much better realizing that I am not totally misguided in my thinking. We were always a recognized customer service organization in the corporate world, recognized nationally with a lot of admired companies. I have tried to bring some of that thinking with me to my new role in association management but have been discouraged a number of times. I found this article a breath of fresh air.

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