Innovate or evaporate.

MAKE INNOVATION A REALITY IN YOUR ASSOCIATION. HERE'S HOW YOU CAN AND WHY YOU SHOULD.

When a new product at Owens Corning fails, no one gets fired. The company celebrates the failure by throwing a party and giving each team member a savings bond. Why?

To demonstrate the company's commitment to innovation. By embedding innovation in its culture, Owens Corning allows employees to take risks without fear of reprisals. Associations can, too.

WHAT IS INNOVATION?

Think of innovation as a mind-set, a pervasive attitude, or a way of thinking focused beyond the present into the future. Think of innovation as more than rolling out new products. It can be initiating new processes, dreaming up creative ways to deliver services less expensively, or paving uncharted paths for member involvement.

Consider the experience of the Minnesota Orchestral Association (MOA), Minneapolis, which in 1996 initiated a new business process. A team of board members and community leaders met and brainstormed more than 100 ideas, leading to the launch of animated videotapes of the orchestra's music. Called "story concerts," these videotapes have received national acclaim and won multiple awards. MOA leaders anticipate that annual profits from this venture will cover up to 10 percent of the association's operating costs.

Other nonprofit organizations are tapping new sources of income through innovative endeavors. Share Our Strength, an organization in Washington, D.C., devoted to fighting hunger and poverty, joined with New England-based manufacturer Cains Foods to develop and brand Taste of the Nation food products. Cains is producing, marketing, and distributing the product line; Share Our Strength is receiving a percentage of the sales.

Chicago Television Workshop licenses Sesame Street products to help generate gift shop sales. Harlem Textile Works, New York City, sells artwork and licenses its own designs to outside vendors. And Save the Children, Westport, Connecticut, sells a line of men's neckwear. The common denominator in each of these examples is that the leaders in these organizations were able to think beyond their current offerings and ponder future possibilities.

Are you ready to follow the example set by these organizations and embrace innovation within your association? If so, you'll need to develop an innovation plan that clarifies what your association expects innovation to do, how it will do it, and who will do it.

Activating the following three-phased innovation plan will get your association well on its way to developing an innovation mind-set. It requires a change of attitude, focused on the future - one that says, "If we do not do it, someone else will beat us to it."

1. Define your association's vision and objectives. The vision sets the tone for what your association wants to become, while the objectives establish measurable goals for tracking innovation success. With this blueprint in place, you can develop strategies for accomplishing the goals, as well as roles and screens.

The roles are what you want innovation to do for your association. What roles do you want innovation to play? Do you want to be more responsive to member needs? To grow revenue? The screens help filter and prioritize ideas. For example, you might want to set up a financial screen - "any new product or service we create must be able to generate at least $100,000."

2. Create cross-functional teams to lead the innovation efforts. To nurture this team-based environment, your association will need to establish a reward system based on your association's new values and norms. For example, a new value in your association might be: "It's OK to fail, because we're not going to grow unless we take some chances." The corresponding norm would be: "You won't get fired if you launch a new product or service and fail."

3. Develop and activate a stage-gate process that supports innovation. Typically, this is a multistep process requiring that each step be completed before moving to the next step.

One key to success in this phase is to ensure that the process is externally focused. For example, when the leaders of Willow Creek Community Church, in Barrington, Illinois, wanted to increase attendance, they looked outside the church for answers. In one-on-one interviews and focus groups, church leaders learned that non-churchgoers were often intimidated or simply bored by church. In response, Willow Creek developed a host of successful programs, including separate Sunday services featuring upbeat music and increased emphasis on drama and humor.

MORE ABOUT THE PROCESS

Although it may celebrate new product failures, Owens Corning doesn't succeed as a business by launching foolish ventures. Neither should your association.

The American Medical Association, in Chicago; the Chicago Children's Museum; and many other nonprofit organizations have used the following eight-step process to support their innovative efforts. This eight-step, stage-gate process will help focus the efforts of your association when launching new product or services. This process could take you anywhere from four to six months - maybe more if the product or service is particularly complex. To optimize your chance of success, ensure the process is directed at determining the needs and wants of your target audience.

1. Determine a clear strategic role. For example, the nonprofit Share Our Strength decided its strategic role should be "to build community resources by building community wealth - resources generated through profitable enterprise to promote social change." It is realizing this role through business ventures, cause-related marketing partnerships, and licensing.

When you determine a strategic role, you will need to revisit your association's innovation vision, goals, objectives, and strategy. Setting new product roles - such as acquiring new audiences, considering new procedures that will benefit members, or generating nondues revenues - will help to focus new product efforts.

2. Assess customer needs and wants. Successful new product efforts explore customer needs and wants. What problems and unmet needs and wants do your members have? What are the strengths and weaknesses of your association's current offerings?

Asking these questions before brainstorming new ideas helps to ensure your new products are market based and focused. About 80 percent of your research should be external - examining customers (past, current, and potential), members, industry experts, competitors, and so forth. You might be surprised at what you discover.

When the American Cancer Society of Boston asked, "What do you want from this charity?" it discovered that its donors most feared breast cancer. To address those fears, the society changed its annual Boston walkathon from an event that focused on all types of cancer to one that concentrates solely on breast cancer.

The walkathon now features speeches by breast cancer survivors and site locations where people can place messages to friends or family members who have died from the disease. These changes increased profits from the event from $130,000 to $2 million.

3. Generate ideas. This is the time to dream up new concepts that are solutions to existing problems. This step can take many different forms: internal brainstorming sessions, idea-generating focus groups, and member suggestions. You might want to follow the example of the American Medical Association, which uses both member and nonmember brainstorming sessions to help generate new products and services for physicians.

4. Develop and screen concepts. Now that you've brainstormed hundreds of new ideas, you are ready to prioritize them, deciding which ones to pursue. Your goal is to winnow the list down to the top 15 to 20 ideas, which you can then expand into specific features and benefits statements that your members can discuss anti evaluate.

5. Obtain member feedback and set priorities. Through focus groups and individual interviews, your members can react to and help shape the concepts. To promote its legal technology services to members, the American Bar Association, Chicago, turned to members and nonmembers to shape potential offerings. The input helped the association determine and prioritize the most important features and benefits of the new services.

To allow for testing and refining the concepts, it usually is wise to incorporate several rounds of iterative research. Once the research is complete, you will be ready to re-rank the top three to five concepts - using your association's predetermined screens - and provide a detailed business analysis of each. Considering potential costs and revenues of each idea will help you determine which to move forward into prototype development.

6. Develop and test prototypes. Now your association is ready to turn theories into reality by developing actual prototypes of your new products or services and testing them on groups of customers and members. In some cases, you may choose to show members mock-ups of your concept, such as a new publication or a software application, rather than a full-fledged prototype.

Once this final sanity check is performed, the offering is ready for rollout.

7. Roll out the product or service. To successfully introduce your new product or service, you will need a marketing plan, as well as a comprehensive communication strategy to build awareness.

By now, you should know exactly who your target customers are. During this step, you want to create unique selling messages that will attract them to buy your product or service. What marketing levers - such as pricing, promotion, packaging, and distribution - can you pull that will distinguish your product or service in the marketplace, make it an attractive buy, and satisfy your customers' needs and wants?

8. Measure impact. Is your new product or service meeting its predetermined goals and objectives? What corrections are necessary to ensure the viability of your new offering? What is the impact on your members? To find the answers to these questions, you will need to set up an ongoing process to measure your new product. To allow time to get the glitches out, measurements typically start six months to a year after the product launch.

DEVELOPING AN INNOVATION MIND-SET

As a chief executive, you play a vital role in the success or failure of innovation within your association. For it to have a chance, you must embrace innovation as a key pillar in your association's strategy; commit people, time, and dollars to support innovation efforts; and nurture a belief in the powers of innovation from frontline workers to the executive suite.

Innovation and new product success start with you - plain and simple. Here are 12 actionable steps you can take to help make innovation a reality.

* Set innovation as a top priority.

* Tell the board about the role of innovation within your association.

* Adopt innovation as a personal value.

* Distribute articles that discuss innovation to key managers.

* Schedule time to attend new product team meetings.

* Attend member focus groups.

* Send congratulatory memos to innovation team members.

* Hold awards banquets that recognize top-performing new product teams.

* Recognize efforts and celebrate failures.

* Put in place a reward system that provides incentives for innovation and new products.

* Avoid cutting innovation or new product budgets.

* Schedule innovation lunches.

Test Your Association's Innovation Mind-Set

How innovative is your association? Find out by taking this quick test. Score 10 points for each statement with which you completely agree and 5 points for those with which you partially agree.

1. Innovation and creativity are part of everyday conversation at my association.

2. We have an organizational process for innovation.

3. Risk taking is seen as a positive attribute for our individuals and teams.

4. My association recognizes that yesterday's solutions will not fuel future growth.

5. Audience, customer, and member considerations are key in innovation endeavors.

6. "Free thinking" is encouraged to explore new ideas and solutions.

7. Employees take time individually and in teams to have fun.

8. Information is shared freely across my association.

9. Cross-functional teams are recognized for their power to come up with innovative solutions.

10. Senior management believes in the power of innovation and the positive effect it can have on all stakeholders.

Scorecard

75-plus: Awesome. Your association has a strong, supportive innovation mind-set. This atmosphere should allow you to accomplish great things. Keep up the great work.

50-74: All right. Your association knows about innovation but still has some work to do to make it a reality. What can you do to help?

49 or less: Awful. Your association does not recognize the power of innovation. Make copies of the article, and give one to all senior managers - before your association evaporates.

Knock Down Innovation Barriers

Even the most successful associations will have new product failures. No process is guaranteed. Failures happen. That's how you learn.

New product and service teams often attribute their failures to barriers that prevented product success. The best way to knock down these barriers in your association is to make sure they do not go up in the first place.

Barriers to watch out for are

* lack of process or no process at all;

* unclear accountability - both on the team and with senior management;

* little or no commitment by senior management;

* not enough market research or testing;

* little motivation or reward for succeeding; and

* unrealistic staff workloads.

Barton Tretheway (e-mail: [e-mail]) is managing director, principal and Steve McDougal (e-mail: smcdougal@ennovate .com) is a consultant with Kuczmarski and Associates, Chicago.