Disruption is not in dispute. Every association is affected by it. Competition is increasing, member needs are changing and markets are being transformed.

Is your association prepared for disruption? As competition increases, members needs change and markets are transformed, associations across the globe need to be prepared. Below provides a snapshot on disruption and its impact on associations.

Embracing Change

The speed and ferocity of change is intense. These are also widely accepted. The question is what to do about them? This chapter is a wake-up call that the urgency is now, and that associations must tackle the threats facing the sector.

Associations must embrace change and evolve if they are to survive and thrive into the future.

In Groundhog Day, Bill Murray plays an arrogant weatherman who finds himself in a time loop, repeating the same day over and over again. He wakes up every morning stuck in the same snowstorm of February 2 in Punxsutawney, Pennsylvania as the day plays out in exactly the same way as it did before. Bill resists and fights against his predicament. He gets angry, hedonistic, frustrated and even suicidal but nothing changes until he does. The future only begins to unfold once he accepts the situation, begins to re-examine his priorities – and embraces change.

For associations, the Punxsutawney blizzard represents disruption. Disruption has arrived as blatantly as a snowstorm in the form of uncertain government policy, changing member needs, increasing competition, market consolidation, sector specialisation and digital disruption. Associations can no longer resist this. They must embrace change if they are to survive and thrive into the future.

Disintermediation is a lofty word that describes critical disruption in markets: the removal of intermediaries from transactions. It occurs when a new company or business model enters a market and cuts out intermediaries like wholesalers, brokers and agents in order to deal directly with its customers. Associations are also intermediaries, which makes them vulnerable to both disruption and disintermediation.

The digitally connected network economy is accelerating the disintermediation of markets because of the speed and ease with which new business models can be rolled out, literally to millions of customers overnight.


How does disintermediation pose a material threat to associations?

Competitive Access

It gives members direct access to products and services they used to rely on associations to deliver. This undermines existing value propositions and lessens the need for membership. Easier digital access makes members more aware of alternative providers, and free online resources erode services that associations used to charge for.

Income Threats

It enables new providers to undercut association services on cost, speed and quality. This increases the competitive threat and reduces the income sources on which associations rely. Market transparency also enables greater competition through access to information, innovation, marketing and lower costs of business.

New Marketplaces

Disintermediation is accelerated by the advent of virtual marketplaces like Amazon where value is added through networks operating on large or global scales. Digital technologies have given rise to new business models like collaborative consumption, where products and services are shared, traded or rented on sites like Uber and Airbnb. This fundamentally alters the nature of markets, and along with it the ever-changing needs of members.

Other forms of market disruption are adding to the challenge facing associations. Market consolidation through mergers, acquisitions and closures is diminishing both the number of organisations and the size of potential membership audiences. This in turn encourages sector specialisation, where smaller, niche providers can compete by catering to ever more segmented audiences. Changes in government policy and uncertainty in funding have accelerated as countries grapple with the new reality. Indeed, Australia itself is being disintermediated globally. Its economic resilience following the global financial crisis has paradoxically made it a prime target for global expansion as a lucrative growth market for US, European and Asian companies.

The National Disability Insurance Scheme (NDIS) is an example not just of changes in government funding models, but also market disintermediation and the increased commercialisation within the nonprofit sector. Previously a government directed scheme, NDIS is designed to be consumer directed in order to deliver fairer, more efficient and more integrated services to more people with a disability. Essentially, government has disintermediated itself. NDIS provides individuals the choice to select their own disability providers. This has thrust hundreds of nonprofit associations absolutely into the commercial arena, where they now must deliver value through their services. Previously they relied on the government as an intermediary. Now they must survive and thrive on their own merits in a fundamentally new and competitive marketplace.

NRMA is an example of a commercial response to disruption and changing markets. As cars get more reliable, and fewer motorists need breakdown services, NRMA’s core service proposition becomes less relevant. By necessity, they are reinventing their model to adapt. NRMA is expanding beyond cars into homes and innovating as a fourth emergency response provider. There are no guarantees this strategy will prove successful. However, doing nothing would almost certainly guarantee failure.

Associations unprepared for a network economy, unaccustomed to competing for relevance or unwilling to modernise are the most vulnerable to the speed and intensity of change disrupting virtually every sector. There is a need for change if associations are to tackle their biggest threats.

Disruption is not in dispute. Every single association surveyed agreed they were being disrupted with 48% stating the disruption is high or extreme, and another 42% rating it as moderate. Members are equally affected by disruption, and they need associations to step up and lead them through this time of change. The solution rests in associations embracing change, not trying to hold it back.

When Bill Murray finally accepts his Groundhog Day predicament and embraces change to create value for those around him, the snowstorm subsides. He makes a point of actively helping the Punxsutawney community, who gratefully engage with him in return – much like your association members will when you tackle disruption to help them.

Relevance in a Network Economy

Historically, associations were established to create a nucleus around which markets could communicate and collaborate. This hub and spoke model, with associations at the epicentre, made them indispensable. Markets evolved around associations. But this is no longer true. The traditional hub and spoke model has been replaced by a decentralised network economy. Like the Internet itself, the network economy has no centre and is not reliant on any one entity. It is an interconnected jumble of associations and commercial companies competing voraciously to deliver value. And it has already reached every market within which associations exist.

This makes any single organisation completely dispensable. Bring to mind the most powerful association you know today. What would happen to its market if that association closed? It would continue on regardless. The void would be filled in an instant by numerous competitive alternatives. Now imagine your own association. If you disappeared, what would happen to your members? Their lives and businesses would continue – they would simply look to get their needs met by other providers. Your market would not come to a halt without you, it would continue in a new form.

The most vulnerable associations are those who still think they are the epicentre of the old hub and spoke models, and have not yet embraced the network economy.

Three clues points towards outdated positioning habits.

Vague Value Propositions

Generalist statements like being ‘the peak body’ or ‘voice of the industry’ reflect a bygone era when associations were the hub of their markets. What do these terms actually mean today in terms of value creation? What benefit do they provide the market or to non-members in order for them to want to join an association? Vague statements are not relevant enough to succeed in the network economy, where competitors are offering specific new benefits. Every association needs a clear, compelling value proposition of why it exists and what value it promises to deliver.

Overuse of Acronyms

Associations love acronyms. But beyond your core, loyal members, what does your acronym mean to the rest of the market? Just because existing members use an acronym doesn’t mean new prospective members will recognise it. Big brands like NAB or NRMA can get away with acronyms, but who wants to engage with a bunch of letters they don’t know? Reliance on acronyms can belie a dangerous complacency in market positioning, and reduce an association’s ability to attract and grow new members.

Features without Benefits

It might seem reassuring to have a huge shopping list of membership features, but this is not the answer, and it often disguises a lack of unique selling points. Members are no longer tempted by a dozen average features. What they need are one or two powerful benefits that solve their problems and justify the cost of the membership fees. What is the one benefit your association provides that is essential for members or that they can’t get anywhere else?

Quality beats quantity in the network economy. Simple is better than complex. And clear is better than vague. Associations going to market with old positioning statements can reflect a mistaken belief that they are indispensable. The illusion of invulnerability can create a culture of complacency, and it is complacency that kills progress. The mindset shift is once you accept you are vulnerable, you have to do something about it to make yourself more relevant.

Paradoxically, it is honesty in admitting weakness that creates strength in progress – to create a compelling new value proposition, to compete against powerful new competitors and to innovate and deliver on changing member needs.

So, who are these competitors seeking to fill your void today? Which new disrupters, challengers or competitive models want to control your market in the future?

Corporates v Nonprofits

Capitalism used to be so simple, with clearly divided lines. Corporate sector companies would focus on profits and prosperity, leaving nonprofit organisations (including 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 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 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. Their relentless drive for commercial growth reveals new opportunities in every facet of association services from revenue generating exhibitions, conferences and publications to replicating the top four reasons members join an association – networking, education, information and advocacy. The transparent digital global 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.

It is no co-incidence that the two greatest challenges facing associations outside of government policy/funding are Changing Member Needs and Increased Competition. This double-whammy for associations is a direct result of the competitive onslaught brought on by the collision of sectors. Many associations are unaware or unprepared for this assault on their traditional domains by growth-hungry corporates, and the increasing risk this brings to their long-term sustainability. Many do not have the competitive mindset, strategic vision or operating efficiency to deal with this threat. But the truth is associations must transform themselves and become more competitive to take on their commercial rivals.

Commercial performance is as critical for associations as it is for corporates. Both need the revenue as much. The only difference is that the income generated is used to support members, markets and mission instead of as profits distributed to shareholders. Nonprofit or not-for-profit is a misnomer – associations need a profitable businesslike approach to revenue generation.

When it comes to commercial strategy, associations can learn a thing or two from their corporate competitors. The benefits of clearly defined targets, robust strategies supported by tactics, efficient alignment of resources to objectives, an innovation focus, consistent marketing and persuasive market positioning apply as much to associations as they do to corporates.

However, the greatest opportunities lie in the nexus between the two sectors. The aim should be to take the best traits of each and create a new model which combines the benefits nonprofits bring to the market with the organisational effectiveness and commercial perspective of corporates. Associations have a ready-made opportunity to leverage selective corporate skillsets to help them respond to disruption, embrace change and sustain competitive relevance into the future.

My previous book The Trust Future outlined what corporates can learn from nonprofits including purpose, values and stakeholder alignment. More companies are realising that they must deliver more than just profit to meet the changing needs of customers, and are taking on the attributes of nonprofits to do so.

Similarly, nonprofit associations taking a more businesslike approach to commercial strategy can stay ahead of changing member needs, and keep rivals at bay.

The New Disrupters

A disrupter is simply an innovator bringing new ideas and concepts to market. Here are a few ‘disrupters’ challenging corporates and associations alike in the nexus between the sectors:

Conscious Capitalism

This global movement is transforming capitalism by bringing social value into companies who want to make the world a better place. By endearing themselves to customers and aligning the needs of multiple stakeholders, these ‘conscious’ companies are also accelerating performance and profits. They are companies with a heart that build love, authenticity, empathy and joy with customers – much like engaged members.

B Corps

B Corporations are to business what fair trade and organic standards are to food. They are certified to meet rigorous standards of social and environmental performance, as well as accountability and transparency. They share a commitment to redefine that success in business is more than just profits – much like accredited associations.

Creation of Shared Value

CSV redefines the role of business in society to one where multinationals make money solving the world’s social problems. CSV links the performance of companies to the health of the communities and markets they serve, making them mutually dependent – much like associations should be.


Start-ups like Chuffed are disintermediating charities by bringing donors closer to specific causes. This fast, accessible model to alternative finance is attracting social entrepreneurs to community oriented projects, and enabling new concepts to take hold. Think of it as easy finance for anyone who might want to launch into your market.

Collaborative Consumption

The sharing economy is bigger than Uber, and includes dozens of product services systems and redistribution markets. These self-created de-facto membership organisations empower consumers as both ‘obtainers’ and ‘providers’ and generate a sense of community and belonging based on trust and technology.

These disrupters are responding to the changing needs of customers through innovation, integrity and impact. Research your market to find out which innovators are disrupting the link between your association and your members. Ask members what appeals to them about these companies, and what more you can do to meet their changing needs directly.

Competition can bring out the best in us if we choose to accept its challenge. It can be a catalyst for associations to compete more effectively against corporate rivals.


Four clues point towards a lack of competitiveness against corporates:

Lack of Market Share Analysis

Corporates track competitors and market share movements as a fundamental benchmark. Advance notice of a drop in market share or the arrival of a new competitor is a valuable early warning signal that something needs to change. And fast. Market share monitoring is less common in associations, which means some may never know what happened to lapsed members, why they really left or where they took their business. In order to track what the market wants, it is critical to track the competition. Understanding changing market trends allows associations to measure the value of their own service offerings, and identify which competitive services are stealing their market share. It can reveal which services are essential and which are redundant to members. It can highlight which service needs are growing and which are declining – and how competitors are positioning themselves for future growth.

Lack of Market Driven Services

Associations with a list of supply-driven services they are comfortable in delivering cannot compete in the network economy. For efficacy, all services need to be demand-driven in meeting the current and future needs of members. Adding more services members don’t want is not the answer. Refining the service offering so it’s perfectly tailored to what members need is. Any services not supporting the value proposition should be dumped for two reasons – for not adding value and for consuming precious resources. There is no purpose in maintaining long lists of services that members don’t use. All they do is take up precious resources and clutter the key value proposition. To compete effectively, associations must deliver only the services the market needs, and no others – and deliver them well.

Lack of Critical Performance Measures

The passion and well-intentioned activity that underpin associations are admirable, but insufficient as performance measures. Relying on these can inadvertently lead to associations believing they are performing better than they really are – which is when a culture of complacency can take hold. Implementing specifically measurable outcomes against agreed benchmarks is essential, as it keeps an association on track, regardless of internal perceptions. The choice of measures is important. The key is defining the critical markers to be measured in order to lead the association towards its objectives. Associations also need to measure resource capacity and; most critically; commercial outcomes. These include quantitative targets for financial and non-financial metrics, percentages for market share and service uptakes, and research on satisfaction, loyalty, net promoter scores, member needs and performance gap analysis. These objective measures tell an association how well it is really performing – against its competitors and its own objectives. Co-incidentally, what’s measured usually increases – the very act of measurement can enhance competitive performance. However, choosing inappropriate measures can inadvertently promote the wrong behaviours through the law of unintended consequences – which is at the heart of many corporate failures. Measure wisely.

Lack of Commercial Focus

Associations that don’t take commercial performance as seriously as their corporate rivals are unlikely to be able to compete effectively against them. Corporates have one overarching purpose – commercial success to drive shareholder wealth creation. Everything about their operations is usually optimised on winning competitively, while associations often have to spread their focus across multiple mission, vision and objectives. To maintain a competitive edge, associations must revisit commercial strategy, refocus on their unique selling points and respond to disruption in markets.

Improving competitive effectiveness has another benefit for associations – it can improve their member service offerings and better engage them with members. And in learning how to compete better from their corporate rivals, associations can keep them at bay.

Responding to Disruption

The first step to develop a clear plan of action is to examine what the market will look like in five or 10 years. This requires a commitment to creating value for members, and helping them to thrive rather than trying to be successful yourself.

To get started, measure the baseline health of your association by gathering quality data and insights on member needs, market trends, competitive forces and future threats and opportunities. The findings may be surprising. Without the tangible benchmarks of statistically relevant and meaningful data, anecdotal evidence of success can present a misleading diagnosis. By conducting research, some associations may discover they are not performing as well as they had believed. Even the most ostensibly stable associations may identify future material threats to their success. At the very least, a baseline health check will reveal the potential performance gaps and changes required to better meet the needs of members.

It takes accountability to report back to the market. It takes courage to tell members the truth. And it takes initiative to act in the interests of both. Openly sharing the results with members inspires a collaborative approach to resolving them together.

One way of doing this is a nationwide roadshow to speak to members directly and personally. Meeting with broader stakeholders, including other allied associations, industry and government acknowledges the fact that the market may be bigger than just your immediate members. Consulting disaffected or lapsed members can provide another valuable perspective, as can engaging with new, younger audiences who often have fresh ideas. The benefits of a wide and transparent engagement are that it helps an association identify future member needs, and enables it to respond with agility to its own. Both inform the strategy.

It is critical to provide the consulted stakeholders with immediate feedback on the findings. Consultation without acknowledgement and action can create frustration. Responding directly provides confidence, trust and buy-in. Feedback is both necessary and inevitable, if an association is to succeed. This feedback can come in the form of a report, a market update or a needs analysis for the future. It does not need to have all the answers. Expecting it to be perfect can compromise integrity as there will always be some unresolved issues. The purpose of the feedback is to uncover some (or many) of the immediate obstacles that members face as barriers to their success. It will also clearly reveal what members expect from your association for the future. These will differ from association to association, but typical demands will include a vision for the future, the resources to succeed and a plan of action to create progress, change and influence. Trust, transparency and outcomes are givens.

There is a difference between understanding a need and delivering on it. It is no easy task to transform good intentions into a great plan. It starts with redefining the key member expectations into clearly measurable outcomes to achieve. For example, if the member expectation is for a vision for the future – what does this look like? What will your association do to deliver it?

Limit the number of priorities to three or four only. It is better to do a few things brilliantly, than a lot of things poorly. Each of these priorities will require a predetermined strategy that includes the tactics required to achieve them as well as defined benchmarks of what success looks like. These will be both financial and non-financial targets. The targets keep the focus on the priorities, and make the association accountable to deliver them.

These simple and bold actions ignite a powerful vision for the future, and set in motion a virtuous cycle of progress and innovation.

Every association is a hybrid – both as a member-serving organisation and as a business striving for success in its own right. The two concepts are not opposed. Success today comes from merging the best traits of both to deliver value for all into the future. It starts with taking action.

What’s your next move – will you resist change or embrace it?

Case Study: Disruption

Association: Association for Data-driven Marketing and Advertising (ADMA)

Size: 600 Member Companies, 45 Staff & $8 Million Annual Revenue

It is not a weakness, but true strength to realise that your association is not representing the industry in the way it should. Jodie Sangster’s defining moment came shortly after she had been appointed as CEO of the (then) Australian Direct Marketing Association in a meeting with the CEO of LinkedIn, who told her: ‘We’re not direct marketers!’

Her epiphany that the language of her association was not resonating with its members left her with two choices: to re-educate the industry on what direct marketing was, or to bite the bullet and transform the association for the reality of a very different data-driven marketing and advertising future. It never crossed Jodie’s mind to ignore the problem. ‘If an association is held up as an expert in the sector, you cannot stand up with credibility unless you can tackle the challenges and find solutions yourself,’ she says. Her ethos is that if you believe in something passionately, it’s incumbent on you to do something about it.

Step one was to change the out-dated name, so she went to the board with a new one. They said no. Two lessons were learnt here. One was in understanding the reasons for the board push back and that a name change doesn’t change everything. The second was the need to have strong consultation and supporters on the board. The eventual upshot was a stroke of sheer genius. Together, they maintained the continuity of the well-respected acronym ADMA but changed the terminology from the redundant ‘direct marketing’ wordage to the contemporary and future focused language of ‘data-driven marketing and advertising’. Jodie was now CEO of the confidence inspiring Association for Data-driven Marketing and Advertising (ADMA).

Step two was to clearly define the footprint and remit of the association. All associations ultimately win or fail on the things they do, so Jodie avoided two of the most common pitfalls for association relevance – trying to be all things to all people, or bolting on disparate products and services without a clear value proposition. She defined the new remit to revolve around the customer experience in four select areas – data, technology, content and creativity. The aim was to become a customer-centric, always-on, member organisation.

Member value and differentiation defined step three, the creation of a powerful value proposition. The core question underpinning any value proposition is ‘Why does someone need you?’ ADMA articulated its differentiator as its global perspective, enabling its members to learn what’s happening globally and capture key trends. Jodie and her team than created a matrix of member value, both by sector and by job title, from the C-suite down to emergent new marketers. An added benefit of the matrix was the structure it provided, which facilitated the knowledge and skillset development of the ADMA team itself.

Critical to the success of ADMA’s transformation was to bang home the message of the new name, new footprint and new remit at every opportunity. ADMA engaged a new PR person and Jodie hit the speaking circuit. Being professional marketers, they knew that the communication of the message was just as important as the message itself. Like any association, ADMA’s members had become accustomed to the old brand and image, and it took 18 months of marketing reinforcement and implementation for members and other stakeholders to identify with the transformed ADMA.

Along the journey, ADMA experienced huge staff turnover. People are either accepting of change or resistant to it, and for many traditional employees, the change was too much for them to handle. This was no surprise to the board. They had brought Jodie in to lead the transformation, and knew that a future focused association needed people with progressive skillsets and an aptitude to change and flourish – just like the industry itself.

Six years into the job and Jodie’s enthusiasm is as strong and enticing as her first day. The second phase of her remit, as she sees it, is to deliver a future focused association with a one-on-one relationship with 40,000 marketing individuals. Her vision is to deliver to every member exactly what is of most benefit personally to him or her, and to do this, she is creating the CRM infrastructure, the marketing automation tools and content-led delivery that will enable it. She is also tackling the two biggest issues the industry faces in the future – a skills gap and a skills shortage.

ADMA is transforming the future of the industry with a brand new Marketing Education Program to reach marketers wherever they are, and to help them grow. So far, ADMA has partnered with eight associations in sectors as diverse as retail, fundraising and clubs to expand the reach of the program. This smart commercial move sees ADMA serve the needs of the entire marketing discipline, and take a revenue share from other associations to invest back into their own member services offering. In 2016, it also acquired the Australian Interactive Media Industry Association (AIMIA), effectively adding ‘digital’ to its growing footprint.

This is truly a time of partnerships for Jodie Sangster and ADMA, as she stretches out her future vision to engage, assist and inspire everyone involved in data-driven marketing and advertising.