Omer Soker discusses the future organisation that is emerging from the nexus of corporate organisations and nonprofit associations.
Capitalism used to be so simple, with clearly divided lines. Corporate sector companies would focus on profits and prosperity, leaving nonprofit associations to serve society’s other needs. The global network economy has blurred these lines, and the two sectors are now colliding in a clash over value creation and market share.
The Corporate Sector
The corporate sector is fast encroaching on the association landscape. Corporates have realised they can grow profits faster by also serving society’s other needs. The drive for commercial growth reveals new opportunities in every facet of association services from revenue generating exhibitions, conferences and publications to replicating the reasons members join an association – education, information, networking events and advocacy. The transparent digital landscape has made it easier for corporates to reach out into traditional association markets for growth. It has also made it easier for association members to compare service offerings between associations and corporates, and make more informed purchase decisions.
The value associations deliver is indisputable. Their purpose in creating communities around critical mission and vision, benefiting markets and supporting members are unique and powerful attributes. But many are unprepared for this competitive onslaught. The Australian Associations Research Survey revealed that 100% of associations know they are being disrupted, but 72% rated their ability to respond with innovation as either poor or mediocre. These associations must evolve and embrace change if they are to survive into the future.
“The greatest growth opportunities lie in the nexus between the two sectors”.
The organisation of the future is evolving as a hybrid that melds the best traits of both sectors, while mitigating the inherent weaknesses of each individual model. So what are these traits?
Commerce is a force to create prosperity
The best corporates excel at this with efficient governance and operational systems supporting smart commercial strategies to deliver growth, progress and prosperity to free markets. But unchecked, the downside to this model can be greed: the greed that caused the Global Financial Crisis. Some companies get so obsessed with short-term profits, they cross ethical lines to achieve it.
Purpose Beyond Profit
Purpose beyond profit is a force to address the world’s problems. The best nonprofit associations excel at this with passionate, well intentioned people working towards an important vision through centrally planned programs and services. The downside to this model can be complacency: without accountability, measurable objectives or responsibility for outcomes, it’s easy for associations to imagine they are performing well. Bureaucracy, outdated systems, inertia and resistance to change are all signs of complacency. Some associations get so confident of their position, they become dangerously comfortable.
The Organisation of the Future
The organisation of the future is a fusion of the best traits of each sector, melding the purpose (mission) of the nonprofit sector with the prosperity (growth) of the corporate sector. This hybrid model provides the added benefit of checks and balances to mitigate the two worst traits of each sector, by transforming greed into stakeholder alignment, and complacency into innovation. Greed can be kept in check by the overarching purpose – to create good for members (customers) and markets. Complacency can be addressed by a heightened expectation of real outcomes – to deliver financial and non-financial targets on all mission critical objectives.
“The organisation of the future has the purpose and values of a nonprofit and the enterprising and businesslike nature of a corporate”.
The melding of sectors has already begun. New models of capitalism that blend the best of each sector are already emerging. Conscious Capitalism is a global movement transforming capitalism by bringing social value into companies who want to make the world a better place. B Corporations are redefining success by meeting rigorous standards of social and environmental performance, as well as accountability and transparency. The Creation of Shared Value (CSV) changes the role of business in society to one where multinationals make money solving the world’s social problems. Customers too, are becoming more conscious and demanding that the organisations they choose to support deliver profits and purpose, accountability and transparency, and generate tangible outcomes.
The organisation of the future has the purpose and values of a nonprofit organisational mission, coupled with the enterprising and businesslike nature of a corporate – to create prosperity, growth and progress for members and markets, as well as its own sustainability.
It now matters less whether an organisation is a company or an association. What matters more is the value they offer and the loyalty they inspire. This is the new battleground for relevance, and both must deliver if they want to thrive in the future.
Omer Soker is an association futurist, corporate strategist, and author of The Future of Associations and The Trust Future. Omer advises nonprofit boards on future strategy, and engages corporate audiences on trust creation.