Leading Broken Organizations

Bruce Butterfield has created an interesting dialogue over on the ASAE listserve when he compared the association community to the struggling/dying industry of newspapers. Maddie posted about it, as did Peggy. Glen Tecker did a pushback post, arguing that we shouldn't compare the plights of for-profit companies to associations because they have such different purposes. Quoting Glen, "Their [nonprofits] mission is to serve; not sell."

First, I'll have to write another post on the notion that for profit companies exist solely for profit. That makes no sense to me because for profit companies are made up of human beings who care about things like quality, meaning, careers, solving problems, etc. The notion that they are all profit-searching robots seems off the mark to me. 

But that's another post. In this post I want to re-focus on Bruce's original points. He was arguing that newspapers were faced with a situation where their industry was dying, and they weren't adapting. He suggests the same could be true for associations, and I don't think the tax status of the two groups is particularly relevant here. All organizations run the risk of dying due to adaptation failure, whether they distribute profit to owners or not.

Read Umair Haque's December "builders manifesto" post. It's fairly mind-blowing. He argues that even the word "leadership" is a relic of the past now. And one of his main points hit home regarding this conversation:

Here's the problem in a nutshell. What leaders "lead" are yesterday's organizations. But yesterday's organizations--from carmakers to investment banks, to the healthcare system, to the energy industry, to the Senate itself--are broken. Today's biggest human challenge isn't leading broken organizations slightly better. It's building better organizations in the first place.

Whether or not my organization/industry's mission is to serve or sell, the bigger question is, is it broken? And I don't mean that in the simplistic yes/no good/bad sense. I mean digging into the complexity of your system and coming up with some deep strategic insight about what's happening and how you need to change, and that includes actually being open to the possibility that the change might be radical. And then translating that insight into some experiments that can give some actual texture to this necessary change, and then building a new organization from there.

Comments

[Cathi Eifert, CAE]

Hi Jamie - actually, I think you and Glenn are saying similar things - Glenn was basing his post on an article in this month's Harvard Business Review. I read most of it last night and they are talking about turning the focus from shareholders to customers. Much like the association world is - or should be. I agree, we have a lot of broken organizations and we need to work at fixing them. Lots of work - but very much needed. You are very correct when you say, organizations need to adapt or they will die.

[Bruce Butterfield]

Glenn is mistaken that businesses exist only for shareholders. The economic engine of the country is small and medium-sized businesses that are not publicly held. Even those that are publicly held would not be in business long if failed to focus on their customers.

Peter Drucker said long ago that the purpose of business is not to make a profit; it is to provide a valued product or service. When that's done, profit follows. If not, failure follows.

My analogy of the newspaper business supports this view. Also, one could argue that media are in the service business. They are the fourth estate. And broadcast media operate on the public airways and are held accountable because of that.

Glenn is right that associations should provide a public service in return for their tax exemption, but he knows as well as I from long experience in the field that the public service purpose of associations increasingly is overlooked in the parochial drive to get and satisfy members. This is exacerbated by the myth that members are owners (shareholders?) that often pervades discussion in the community. Members have no ownership rights; they have a right use based on payment of dues. If an association fails, its assets are distributed to another nonprofit members.