Thinking Like A Business Is Not Optional
Last 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.