Innovation within Constraints
Significant Positive Change on a Dime
Summary
“Innovation is significant positive change.”
As I argued in a recent article, investing in value creation is a powerful way to drive new business to your association.
But it’s difficult to create new things when we’re strapped for resources and don’t have a clear picture of where or how to focus. I argue that associations can make focused innovation investments to help us (over time) become less resource constrained, siloed, or rushed.
Without innovation, we will suffer from flat revenue, predictable offerings, and a community forever wanting more. We will struggle to bring new ideas to market.
Everyone is resource constrained. Read this article to learn how to integrate innovation into your association culture. Unlock growth, build new products, and diversify much-needed revenue.
The product community is a product development learning community designed specifically for associations.
The Power of Focus
“Ideas never stand alone. For most, there is no singular magical moment; instead, there are many small insights accumulated over time.”
Scott Berkun
Innovation happens when an association commits to a powerful, shared identity and makes specific focused choices: on direction, where to play, how to win, capabilities, and systems.
Focused choice is a powerful driver of investing in and committing to product development. Product development is people-centered value creation.
It puts member’s wants and needs at the of our core activities; it provides the right value at the right time in order to spark and sustain longitudinal connection.
An ideal product-led association is responsive, interdependent, market-centric, and strategically-focused. It is in constant touch with, and can anticipate the needs of, its member community.
This way, our association offerings become relevant, timely, engaging, and organized for a seamless member experience. These outcomes are driven by a transparent product roadmap that is funded, agile, and in-tune with customer expectations.
This, in turn, pushes the association toward agile relevance in which understanding and meeting the community’s needs comes to the fore and becomes not just another operational tactic, but a meaningful and durable way of re-engaging and re-energizing your community.
Translated for associations, Nagji’s and Tuff’s classic HBR article Managing Your Innovation Portfolio claim that organizations that excel at innovation management simultaneously invest three levels of ambition, being careful to manage (and achieve balance).
This means, in part, that the days of solely relying on our cash cows – namely membership, annual conference, etc. – are not enough. How do we build a culture of innovation within constraints?
It starts with what associations do best: build communities around ideas that robustly engage and further the interest of the community, but also by enhancing connection and creating and sustaining new revenue opportunities.
This is the main reason people love and find consistent and timeless value in associations: they are the ultimate connector organization.
This clear value driver is not enough!
We need to robustly engage and respond to the future. We need to build on this core value and work toward re-skilling the association by embracing product communities.
The Balance of Efficiency and Innovation
“By idolizing those whom we honor, we do a disservice both to them and to ourselves. We fail to recognize that we could go and do likewise.”
Charles V. Willie
Most if not all associations balance an ongoing tightrope to allocate our resources: we plan for today and prepare for tomorrow.
We desire to maximize efficiency and excel at value creation, but also to invest in new ideas and new opportunities to help us seize the future.
We monitor the market – what’s coming, what’s real, how to adapt – while also staying laser-focused on what we do well and what makes us uniquely great.
Finding the right balance can be tricky.
Like Nagji and Tuff, we argue that associations should focus 70% of their resources on existing, core initiatives, 20% on extensions of those existing initiatives, and 10% on things that are new and have potential for transformation.
What should be in the 30% (extensions or new efforts)?
Member wants (realizing they often don’t know). We learn this through empathy, relationship-building, and understanding how they engage with your association.
Trends. What’s happening in the social, cultural, political, or economic environment? Look to the future and speculate what’s coming and why it might matter.
Technology. Technology touches everything we do. Look at how these trends may help identify new opportunities.
Competition. We also need to be aware of our competition, not with the intention of replicating programs. Instead, we should pay attention to what competitors might be seeing in the market that we may not.
Tangent markets. We can learn from wildly different industries as much as we can from organizations that are similar to us.
How should we allocate our resources?
Review our portfolios. Plot offerings and identify commonalities and interdependencies. Can we create efficiencies or cost savings?
Maximize current opportunities. And maintain an eye on future prospects. (Use the 70/20/10 rule as a guide).
Leverage for scale. Review the offerings portfolio to identify spinoffs, tangent offerings, or quick wins.
Maintain balance. Don’t fear the new, but don’t discard existing, well-trod, consistent value providers in pursuit of what’s next.
Ultimately, an organized and diversified portfolio of offerings operates interdependently driving a balanced approach to current offerings and future investments.
This will lessen the pressure on big bets, allow for occasional failures, and permit us to invest for trust, predictable returns, and steady growth.
Innovation ROI
“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.”
Niccolo Machiavelli, The Prince
By nature, associations are pragmatic, traditional, safe organizations.
We rely on predictable cash cows that assure conservative annual recurring revenue (membership, events, etc.) that tap our resources and leave little time, energy, or might to try new things.
Should associations invest in innovation at all?
Given the resource lift – time, people, money – it takes to succeed with innovation, associations need a clear answer to this question.
According to Tendayi Viki, there are two worldviews to help frame our risk tolerance for innovation:
Exploit. In an exploit world, leaders largely manage the current association. The level of uncertainty is low. The financial philosophy is steady returns. Teams have the data necessary to calculate ROI upon which they can base their investment decisions.
Explore. In the explore world, leaders navigate new value propositions and business models. The level of uncertainty is high. In this world, leaders cannot pick the winning ideas on day one. The financial philosophy is more risk-taking and accepting failure while expecting a few outsized winners. So the rate of return has to be calculated based on the entire portfolio.
In a recent article, Viki argues for ambidextrous leaders who can lead in both the explore and exploit worlds. For every opportunity, leaders can identify whether it is exploit or explore then set the proper ROI expectations.
As one might expect, exploit projects are typically faster than explore projects. It can be helpful to distinguish among the three types of innovation when talking about speed of return.
Efficiency Innovation focuses on improving the core business. Examples include technologies to improve operations or processes. Expect returns within one year.
Sustaining innovation explores opportunities that build on an association’s existing offerings or business model. This is typically investment in new products for existing customers and may involve new channels, technologies, or geographical reach. Expect returns within 1–2 years.
Transformative innovation helps an association create substantial growth from radically new opportunities. This involves exploring new value propositions or business models. Expect returns within 3–5 years.
A balanced mix of the three types of innovation will keep everyone focused on what’s coming while keeping a stabilizing hand on day-to-day operations.
Innovation as Daily Rhythm
“Motivation comes from vision. Extraordinary leaders inspire people to see a better future and how they'll be a part of it. As a result, people work harder because they believe in the organization's goals, truly enjoy what they're doing, and know they'll share in the rewards.”
James Young
Most associations don’t sufficiently understand their community’s needs, no less envision, create, and get to market new products, programs, or services that resonate and succeed with our membership communities.
It doesn’t have to be this way.
In our fast-paced world, innovation is required for associations striving for long-term viability and success. A consistent challenge for anyone espousing new ideas is earning enough legitimacy and influence to get the best ideas to the fore.
Ideally, innovation is largely democratic — it typically doesn’t happen at the top of the org chart — but can be viewed as an inefficient or unrealistic afterthought.
Then how do we integrate innovation so it’s top of mind and part of the daily rhythm of a thriving association? Here are some thoughts:
Start with vision. All great organizations have a vision that drives daily action! Great visions are alive, active, and drive shared behavior toward common goals. If your association vision is lukewarm, create an exciting one for your product aspirations (just make sure it sufficiently aligns with the org-wide one).
Align innovation with strategy. Strategy and innovation are interconnected, with strategy envisioning the future and innovation focused on execution. It can be hard to instill a culture of innovation if your association’s strategic plan is not undergirded by strategy (an assumption that commonly goes unchallenged).
Focus! Great innovation is harnessing good ideas and focusing on the best ones. Great innovation allows for open messiness, yet results in focused execution. You need both!
Rework the machinery of committees. Volunteer committees can be a boon to a thriving association. Mostly, however, they are designed to be an inefficient pain in the ass. Celebrate inclusion and focus, set realistic yet exciting targets, and work closely with volunteers for small wins. Doing so will create trust relationships and shared momentum. Here is an article I wrote on preparing volunteers for strategic change.
Foster shared accountability. Innovation is cultural and participatory. It is the ultimate ‘we, our, us’ concept. Distribute responsibility and accountability for new ideas and get best ones to your community (generation, green light, design, develop, execute).
Embrace incrementalism. Great visions force focus and belief in the possible. Remember that small wins trigger momentum and, ultimately, big wins.
The word innovation is constantly misused and misunderstood. Let’s bring it down to earth and integrate it into our daily rhythms. Our members, our volunteers, our staff, and our community will benefit from the new energy, new value, and resultant vibrant culture.
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About the Author
James Young is founder and chief learning officer of the product community®. Jim is an engaging trainer and leading thinker in the worlds of associations, learning communities, and product development. Prior to starting the product community®, Jim served as Chief Learning Officer at both the American College of Chest Physicians and the Society of College and University Planning.
Please contact me for a conversation: james@productcommunity.us.
Every newsletter has a “take away” worth grabbing and sharing.
So much to absorb….not just relying on cash cows, ideas that robustly engage further interest of community. Excellent.