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Associations Now

The Ungovernance Model

ASSOCIATIONS NOW, August 2007, Feature

By: Jeff De Cagna

The environment associations operate in has changed radically, forcing fundamental shifts in the core ways associations provide value. The problem: Current governance models aren’t up for the task.
Summary: Simple. Collaborative. Diverse. A new form of association governance based on these three main principles could help your association innovate and create value for its stakeholders in a whole new way.

In the next few years, associations and their leaders must confront a set of truly daunting challenges: shedding the burdens of the rapidly decaying economic framework for the association of the past, building creative new business models that can sustain the association of the future, and overcoming the legacy of governance structures that undermine the full transition of the organization from the previous century into this one. This last challenge will be especially acute. But if association boards and CEOs are able to set aside personal agendas and move beyond petty political squabbles to imagine something different, they may well discover an untapped capacity to embrace new ways of thinking about association stewardship in their organizations and in themselves.

The absolute need for innovation in the work of associations is unmistakable and urgent. That there continues to be debate on this point in some organizations should be a source of real concern for the association community, as it reveals the pervasive and toxic influence of denial and nostalgia within increasingly antiquated approaches to governance. Far too many CEOs report that governance remains the chief obstacle to moving ahead with the business of creating what's next for their organizations. Yet association leaders continue to fine tune the mechanisms of their existing governance systems, when the top priority should be provoking radically different mindsets among those who govern. In short, a successful future for associations will not suddenly materialize from the ongoing struggle to perfect governance as we know it. Associations will have a better chance to flourish if they can begin moving toward an emergent model I call “ungovernance.”

A New Economic Framework

In the last 15 years, virtually all associations experienced intensifying instability and unpredictability in their specific markets. Naturally, every organization has its unique perspective on the way these changes have unfolded, but across all of them, the elements remain fairly consistent: Trends such as industry convergence, the rise of new technologies, and varying generational preferences, among other factors, have produced a significantly less favorable competitive landscape for associations. Of course this situation is not at all unique. What is actually happening is nothing less than a fundamental—and probably irrevocable—recalibration of the basic economic framework that has been the traditional underpinning of the value associations create for those they serve.

Associations have typically created value in two core areas: access to relationships and access to information. When the limitations of physical distance demanded it, associations were a primary vehicle for building and maintaining professional relationships and networks. In a web-enabled world, however, all stakeholders have largely unfettered access to a limitless number of virtual networks and communities. These formal and informal groups include contributors from every corner of the planet, representing the entire long tail of niche interests and creating the potential for a richer, more varied, and more meaningful set of connections than most associations can offer. To create these relationships, there is no longer a need to pay dues to a centralized administrative bureaucracy. Stakeholders assemble and wholly own their networks and easily configure them in whatever ways they find useful without the need for additional support from an association.

The Need for New Business Models

Similarly, associations were once the chief developers of industry and professional information products, capitalizing on the scarcity of such resources by controlling access to them. As the cost of digital information approaches zero, however, it becomes a commodity, although not a scarce one. It is difficult, therefore, for associations to command a premium on resources members expect to receive for free or at a deep discount—and those that other potential buyers anticipate will appear online in some form. Moreover, the traditional view of associations as creators of so-called “authoritative information” is called into question by the growing recognition that far more relevant and practical knowledge is created outside associations today rather than within them. Indeed, members often have more and better information than their organizations, an asymmetric condition that once ran decidedly in favor of associations. These new circumstances raise serious questions about the demonstrable authority of information from membership organizations, especially since many associations are heavily invested in maintaining their prominence and influence by perpetuating the accepted “that's-the-way-we-have-always-done-it” practices of the professions and industries they serve. As global, knowledge-based collaboration continues to grow in importance, organizations seeking to perpetuate the status quo by enforcing existing knowledge orthodoxies may well be supplanted by a new generation of market-creating enterprises that fully embrace the opportunities of greater inclusion and transparency in all phases of the knowledge-creation—and value-creation—process.

Governance That Supports the Framework and Models

As the economics of association value continue to change, it will prompt new concerns about the future of organizations in the association community. The task for all association staff and volunteer leaders is to channel their energies away from counterproductive activities motivated by denial and nostalgia and toward creative yet focused thinking about the kinds of inventive strategies and business models their organizations will need to adapt to the changing shape of the marketplace. The good news is that associations can still leverage their capabilities for facilitating relationship building as well as developing and sharing knowledge resources. That is, if they are willing to test their assumptions about the changing incentives now driving these activities and if they are able to experiment with new concepts of associating that create value. To put it another way, I believe that, looking forward, the definitive responsibility of association boards and CEOs is the capable stewardship of sustainable business models powered by innovation. This is what I refer to as the ungovernance doctrine.

Without question, ungovernance is a neologism and—worse still—uses a negative descriptor. Such language constructs encourage us to proscribe our thinking by emphasizing what those things aren't, rather than opening our minds to what they can be. Notwithstanding this concern, the notion of ungovernance can ignite a generative spark of fresh thinking about the kind of future-focused leadership associations desperately need. Going forward, our emphasis must not be on governance as an end, but as a means to advancing the vision and mission through the active pursuit of innovation. Ungovernance is about the solemn duty of sustaining organizations for the future, one that rests squarely on the shoulders of association boards and CEOs.

The concept of ungovernance is grounded in three simple beliefs that together form the basis of the ungovernance doctrine:

  • Associations exist to create value for a set or sets of stakeholders. Associations do not exist to be governed, but do require appropriate stewardship to ensure their value-creation efforts will thrive.
  • Innovation is about creating new value. Despite its difficulties, innovation is a remarkably effective way to deliver the value members, customers, and stakeholders need and to build a strong, enduring organization.
  • The focus of association stewardship must be the business model. Every other responsibility of governing the association must connect back to ensuring its sustainability for the long term.

Making Ungovernance Work

What might the ungovernance doctrine look like in practice? Any model of association stewardship built on this doctrine will need to follow at least three critical design principles. First, the model must simplify traditional activities of governing by eliminating superfluous structures and entrenched bureaucratic impediments. Leaders should ask themselves a question: What is the minimum infrastructure required for success? Then, they must act decisively to remove any obstacles to the pursuit of innovation. In many associations, posing this question may lead to the decision to sunset most officially constituted committees and task forces, in favor of a greater number of small, informal, flexible, and inclusive groups that operate more fluidly. These groups would pursue their creative, collaborative, or decision-oriented activities at the most granular level possible for defined periods of time and then disband, handing off any ongoing work to the next organically formed group.

Second, the model must distribute responsibility for stewardship throughout the organization and inspire all stakeholders to make a meaningful contribution through collaborative innovation. Within boards, distributing responsibility for stewardship includes the creation of two governing councils: one with a focus on strategic direction and capacity and the other paying careful attention to the disciplined investment of available resources. These councils are not committees, but interdependent decision-making groups that must learn to work cooperatively to advance the association's overall agenda with care and without killing innovation. On a human level, this distributive design will definitely challenge staff and volunteers to take their leadership capabilities to the next level, which should enhance the quality of strategic discourse and decision making.

A third principle for designing an ungovernance model is the need to inculcate a genuine diversity of perspective into decision-making processes. However, it must be consistent with the simplicity principle and be done in a way that does not increase bureaucracy. For boards, this means no more than 16 to 18 voting members, including the CEO, the number-two staff executive, and two public directors. The remaining directors would come from across the organization and reflect diversity along every conceivable dimension. Integrating divergent worldviews into the two governing councils, as well as the whole board, is an essential element of an overall culture of creativity and innovation within associations.

Much more dialogue about the state of association stewardship and the way associations practice it is needed. The ungovernance model is a set of ideas designed to spark conversation, challenge assumptions, and push thinking about how to move beyond governance approaches that are inadequate for the new world in which associations must learn to operate. Association boards and CEOs can no longer afford to treat innovation either as an afterthought or with deep-seated contempt. Innovation is the central association capability of the 21st century, but its full potential will not be realized if leaders don't radically change the way they approach their associations in preparation for an uncertain and complicated future.

Jeff De Cagna is chief strategist and founder of Principled Innovation LLC, located in Reston, Virginia. He is establishing a virtual network of association leaders around the ungovernance model. Visit www.ungovernance.ning.com in September or contact him for more information. Email: jeff@principledinnovation.com

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  Loretta Donovan , August 24, 2007
This is a manifesto whose time has come. Associations must understand and come to grips with the complexity of the global and local circumstances that have become the norm. Refining governance models of the past is like polishing fool's gold - the finish will soon wear off revealing a lack of substance. Jeff has eloquently stated the case for refocusing on stakeholders as the very reason for associations' existence. The innovation that associations can provide to the professions and members must be related to testing the boundaries of their fields and finding the Blue Ocean opportunities. By partnering in this way, and creating shared intellectual capital in partnership with stakeholders, the business model will surface on its own.
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  David Sabol , August 23, 2007
Jeff's article provides a thought provoking and potentially paradigm shifting conceptualization of an achievable vision for association (un)governance. I think this is an essential read for all current and future association executives as it provides three core principles: simplicity of activities, distributed accountability/responsibility, and diversity of thought that will help associations remain relevant and focus on the mission and vision that all associations share in common: creating and providing member/stakeholder value.




 

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