I was one of the speakers at the recent 8th Associations Round Table Asia-Pacific organized by the Brussels-based Union of International Associations (UIA) and hosted by the Seoul Tourism Organization (STO). The learning event, held virtually for the first time, also afforded the 130 attendees to explore the sights and sounds of “Virtual Seoul.”
I presented a pre-recorded 20-minute video on the topic “Association Business Model Innovation” and conducted a “live” workshop with the attendees. Below is the summary of my presentation:
The lingering and ever-evolving coronavirus pandemic made it imperative for associations to review their business models. While there are as many definitions of business model as there are ways of doing it, a simple way to define it based on my experience is this: the best way to generate revenue and have a surplus.
I adapted my presentation on a McKinsey Quarterly article I read years ago entitled “Disrupting Beliefs: A New Approach to Business Model Innovation,” written by Marc de Jong and Menno van Dijk. They provided a 5-step business model innovation re-frame for for-profit companies, which I tweaked in the context of associations.
Step 1—Study the dominant business model of a same-purposed association like yours by noting its long-held core belief on how it creates value. In general, scale (e.g., number of members) is considered crucial to an association’s ability to generate revenues, i.e., more members, more revenue (from membership dues and non-dues revenue, e.g., event registrations, certification programs, publications).
Step 2—Analyze this core belief further and derive impressions that support this belief by determining, for example, how member engagement, technology adoption, regulatory compliance or operational systems affect your association’s value addition and differentiation. All these factors come into play right now due to current regulations on social distancing and restriction on face-to-face group gathering.
Associations are engaging members by organizing virtual events and using digital technologies to enhance content curation and enrich communication channels.
Step 3—Turn an existing belief upside down and ask, “What if?” by formulating a radical new assumption or proposition of doing things. For example, like what Wikipedia has posited, i.e., that you can get work done in bits and pieces by encouraging everyone worldwide to contribute their knowledge on a subject in accrual basis. Or, on what is happening today where association staff works from home, an arrangement which is getting to be “normal.”
Step 4—Test your assumption or proposition since most re-framed ideas may not work in the real world. Perhaps your best option would be to apply a re-frame that has already been tested and proven in a business setting. Unlike product or service innovations which are not well-disseminated, business model innovations in industries are more known and available such as similar experiences of sharing organizations like Airbnb, Uber and others.
Step 5—Reposition your new belief into your new business model. Once your association has decided on a specific re-frame, new ways of doing things will correspondingly manifest themselves in terms of, among others, new governance and management systems, member engagement, revenue generation and asset capture.
The column contributor, Octavio “Bobby” Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific and the Founder & CEO of the Philippine Council of Associations and Association Executives. PCAAE is holding the Associations Summit 8 on November 25 and 26, 2020 with the theme, “Leading with Agility.” The two-day virtual event is supported by Adfiap, the Tourism Promotions Board and the PICC. E-mail inquiries@adfiap.org for more details on AS8.