Associations and Competitive Advantage

Any meaningful conversation about association strategy should include the concept of competitive advantage. Certainly, most educators and business thinkers agree that building sustainable competitive advantage is a critical component, perhaps the critical component, of creating successful businesses...

Associations and Competitive Advantage

The following article was originally published in the Fall 2004 Edition of ASAE’s Journal of Association Leadership.

Any meaningful conversation about association strategy should include the concept of competitive advantage. Certainly, most educators and business thinkers agree that building sustainable competitive advantage is a critical component, perhaps the critical component, of creating successful businesses. Consider this quote from Warren Buffet:

“The key to investing is…determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.”1

While “the key to investing” may be somewhat different than the key to association management, it is no doubt vital that associations consider their businesses in a competitive context. Indeed, substitute “association” for “company” and “members” for “investors” in the quotation above and one begins to see the link.

For many associations, Buffet’s moats are getting smaller. Many traditional association competitive advantages are quickly eroding as the information age takes hold throughout the U.S. and abroad. This erosion, coupled a tendency to focus largely on traditional competitors, has left associations clinging to competitive advantages that used to exist, without the capacity or understanding to develop new ones. To remain viable, associations must begin to focus on the advantages they can develop today to serve the members of the future. In other words, the entire nature of what constitutes competitive advantage for associations is changing. So where will associations find these competitive advantages of the future?

First and foremost, associations increasingly need to compete to provide unique value.

In the past, associations have been able to position themselves as sole sources for important benefits such as private label research, publications, events and other products and services, which in turn were major membership drivers. However, as information becomes more readily available, even those associations that have managed to remain “unique” will struggle to remain isolated for long.

For example, the American Society of Association Executives (ASAE) Foundation’s publication Exploring the Future: Seven Strategic Conversations that Could Affect your Association suggests that, “Associations will be competing with an increasingly diffuse and crowded marketplace of education and training providers and will need to focus more on continual member learning than on teaching traditional workshops and seminars or selling books and tapes.”2 This decentralization of knowledge and increased competition will create new challenges for association professionals and force associations to think more clearly about their value propositions. To forge a competitive advantage in the value they provide, associations will need to anticipate the needs of core constituents, not merely meet today’s needs.

Associations compete in a much wider arena relative to the experiences they create for members and customers. It is in this broader marketplace that associations must compete for attention.

This form of competition transcends the “vertical market” that associations face in selling products and services, and incorporates a diverse array of other organizations that develop relationships with members. In essence, associations are competing for their members’ attention with everyone. It is this competition that frustrates association executives charged with determining why members aren’t reading their emails, registering for conferences or purchasing products. Considering the thousands of marketing messages that bombard us each week, associations must continue to find ways to create meaningful experiences for members and customers that cut through the tremendous noise in the market. Creating these memorable experiences is largely a function of effective branding and brand management, concepts that have finally begun to take root in the association community.

As time becomes scarcer for most Americans, associations will continue to compete for volunteers.

Research conducted by Independent Sector quantifies a well documented trend — the average amount of time spent volunteering is steadily decreasing:3

Year
Avg. Weekly Hours
Per Volunteer
1987
4.7
1989
4.0
1991
4.2
1993
4.2
1995
4.2
1998
3.5
2001
3.6

However, the study also points to a vibrant opportunity for associations to create competitive advantage:

71% of respondents volunteered when asked.

So, in most cases we are able recruit the volunteers we need. However, keeping volunteers engaged and satisfied is an entirely different story. To raise the bar in volunteer management, associations must begin to identify the reasons members volunteer and continually exceed those expectations. This knowledge becomes even more critical as new generations become active volunteers and seek new and different outcomes from their volunteer service. In short, the discipline of volunteer management must be redefined and elevated for associations to capitalize on the tremendous potential that exists to create competitive advantage by building lasting communities of volunteers.

As the U.S. economy continues to improve and the job market strengthens, associations will once again find themselves competing for talent.

Associations have a nasty habit of shuffling responsibilities among staff in the name of “maximizing efficiency” and creating “synergies.” In reality, most are simply seeking ways to keep salary numbers “under control.” Consider the talented marketing professional who has done such a good job that she’s now going to be responsible for membership as well. Congratulations! You’ve just inherited an entirely new department that you are not trained to lead or compensated to cultivate.

As associations continue to seek new sources of revenue, they must get serious about talent and reward those responsible for building businesses. In other words, to create the competitive advantages of the future, associations will need to ensure that key personnel have the skills, support and incentives necessary to ensure success. For many associations, this requires a seismic shift in the way they think about human resources.

Sadly, many associations will come too late to realize that they are competing with their own structure and processes.

As Jack Welch, former CEO of General Electric has said, “an organization’s ability to learn and translate that learning into action is the ultimate competitive advantage.” Associations struggle mightily with this concept, as poor data quality, lack of market research and ineffective governance models hamper delivery of a consistent value proposition to volunteers, members, and customers. To create competitive advantage in this arena, associations must begin structuring themselves as knowledge based organizations and ensure that their systems and processes are in tight alignment with the needs and expectations of their core constituents.

Certainly, the association professional of the 21st century must be prepared to compete with a variety of internal and external forces to be successful. Since associations are beginning to lose competitive advantage in certain previously-held areas, namely the proprietary assets available only through the association, we must become familiar with the new factors that are shaping the competitive landscape.

Sometime soon, perhaps at your next board meeting, take a hard look at your association and have a critical conversation about competitive advantage — one where you determine if you are merely in the game, or in it to win.

1 fool.com
2 asaenet.org
3 Independent Sector, Giving and Volunteering in the United States, 2001