There is a quote by Jack Welch that Jim Kaitz, CEO of the Association for Financial Professionals (AFP), loves to recite: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”

Kaitz lives by these words.

What stands out when talking with him, even more than his ability to identify new opportunities for growth, is his approach to expansion: building organizational capabilities to constantly adapt to the speed and nature of market change.

Kaitz does not marginalize change by reducing it to new product launches or isolated initiatives outside of AFP’s core business. Instead, he lets small-scale successes and lessons learned catalyze broader changes to the association and disrupt business as usual.

Though AFP enjoyed years of great success with its certified treasury professional (CTP) designation, Kaitz was looking to the future. If he was to move the association to another level of growth and relevance, he needed to go beyond the treasury profession and uncover new opportunities.

One such opportunity became apparent during his frequent visits to members’ companies: the emergence of the new profession of financial planning and analysis. While the profession began expanding in 2009, Kaitz saw that it lacked structure. It was “a large group of individuals that operated without standards, a peer community, a defined body of knowledge, and avenues to certification and professional development,” he says.

Having defined and developed the treasury profession, Kaitz believed that AFP was uniquely positioned to fill this gap.

So, how did he move from realization to action? Not by simply plugging AFP’s existing certification systems into another industry. The two professions are very different. The treasury function manages an enterprise's holdings and mitigates risks. Financial planning and analysis helps a corporation map a path to growth and profitability in unpredictable environments—hence its importance to a company’s ability to plan for the future.

“The treasury function is focused on today,” Kaitz says, while “financial planning and analysis is focused on the long term.”

Thinking Like a Startup

Bringing financial planning and analysis into the AFP fold would need to be approached as a startup business venture rather than a new product launch, with the understanding that it would require a multiyear commitment and millions in capital investment. Kaitz approached his board as potential investors rather than as gatekeepers of an approval process, made a convincing business case, and succeeded in getting the necessary capital. Then what?

Instead of resorting to the conventional tools of methodical strategic planning and waiting for the AFP team to craft the perfect plan before launch, Kaitz employed a more entrepreneurial methodology. He adopted a strategy in line with author and tech entrepreneur Eric Ries’ lean startup principles: testing initial concepts with select customers, learning empirically from their feedback, making necessary adjustments, and tweaking until the product resonated with client needs.

The model of organic, demand-driven expansion exposes options for growth and innovation that methodical, association-driven planning cannot. It creates momentum as one initiative, lesson learned, or relationship leads to another.

As expected, AFP’s process was wrought with mistakes, miscalculations, and surprises. For example, sales lagged behind predictions because Kaitz’s team did not anticipate the 12 to 18 months it took companies to sign a service contract. But learning directly from the market and adjusting appropriately is the objective of a market- and learning-driven product-development process.

Through this ever-deepening understanding of the market, it became evident that the success of this new certification depended on changing some of the ways AFP did business rather than just ensuring good product design. Selling it to professionals with a strategic role in their companies required a far more forward-thinking and consultative sales model. Creating a new corporate sales team and business development program was the first change. In turn, this catalyzed additional adaptations to market demands.

With a dedicated sales and business development group bringing new competencies to the organization, AFP could leverage their keen market insights and relationship-building skills to discern unstated needs and capitalize on opportunities beyond the association’s core business of certification. For example, AFP has incorporated professional and leadership development, thought leadership forums, strategic consulting services; and partnerships with technology companies to meet the emerging need for software in financial planning and analysis.

Breakthrough Shift

This model of organic, demand-driven expansion exposes options for growth and innovation that methodical, association-driven planning cannot. It creates momentum as one initiative, lesson learned, or relationship leads to another. Driven by market demand and innovation, Kaitz and his team gradually shifted the nature of AFP’s business from commodities to solutions and from transactions to strategic relationships.

This is a breakthrough shift for any organization.

It also sparked a far larger adjustment to the association’s culture and capabilities than just new strategies for product development and sales. These changes included, for example

• development of new types of expertise
• a focus on customer engagement and relationship-building
• integration and coordination across silos
• customer-centric profit centers
• the ability to rapidly assemble and disassemble project teams
• portfolios of customers rather than products
• a culture of patience in fostering deep-seated member relationships rather than pushing sales.

AFP is no longer a one-dimensional association in the certification business. Its growth cannot be measured in terms of numbers of products or members, but through a far more significant reorientation. It has gone from focusing on products to customers and members. It is embracing a cultural transformation.

AFP is “completely changing the fabric of the organization,” Kaitz says.

Synchronizing the rate of internal change with that of the market requires constant attention and innovation. It is “never being satisfied with the status quo,” Kaitz says. “It’s like playing Whac-A-Mole every day.”