Relaxed rules, Evolutionary governance: moving governance processes toward a more nimble model.

IT'S TIME TO RETHINK ALL OF our assumptions about how associations are organized. Associations, which blossomed in the mid-1800s, established a structure that basically remains unchanged today. Sure, there have been tweaks: a committee deleted, a board slot added or dropped, an occasional reframing of the mission, or a redefining of the membership categories; but the underlying structure--boards of directors or houses of delegates, elected officers, large and often cumbersome volunteer infrastructures--has survived. It is a hierarchical, command-and-control, machine-modeled form.

This structure met the needs of the generation that created it and a few generations that followed. But, across time, committees accumulated, rules and policies proliferated, obsolete programs resisted being cut from the budget, and all of them built on one another like coral reefs resting on the skeletons of their ancestors. Most of today's associations are slow and plodding in a world that requires fast and nimble.

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For example, suppose you want your association to adopt a new initiative. In the traditional association, you must take your idea to the relevant subcommittee, which, because it only meets a few times a year, may take quite a while to make its recommendation to the full committee. That committee will probably--during its next couple of meetings--discuss the idea and its implications. Then, because the proposal has fiscal consequences, it will be referred to the finance and budget committee, which will discuss the issues all over again. Next, it's on to the executive committee and the full board--with a probable detour along the way to some other committee that needs to be consulted.

By the time consensus is reached, the opportunity is lost. I may be overstating the case, but not by much.

Motivating change

The world in which American associations operate is changing in fundamental ways brought about by a number of trends and realities evidenced in the private, public, and nonprofit sectors.

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Private-sector patterns. Hard-hitting realities are changing the landscape. Some important ones are globalization, industry consolidation, rapid technological shifts, more demanding memberships, increased time demands, an increased sense of uncertainty due to terrorism, and the state of flux in many major sectors (health care, technology, and financial services, to name a few).

At the same time, evolving governance forms and models provide some clues about adapting to the new environment. If you follow business literature at all, you are probably familiar with or have seen reference to these items:

* the Internet;

* employee leasing;

* the use of technical and professional temporary workers;

* one-to-one marketing;

* the shift from wealth as land in the agricultural economy to wealth as capital in the industrial economy to wealth as knowledge in the information economy;

* flexibility and speed to market as organizing principles;

* empowerment;

* the chaordic organization;

* the growth of franchising; and

* outsourcing.

Public-sector developments. Changes in our government and in the international arena are also creating a ripple effect. Several significant trends:

* A shift of power to the states through federal block grants.

* Similar power shifts in other countries. For example, devolution of the power structure in the United Kingdom has resulted in more power and autonomy in many areas being shifted to Scotland and Wales.

* Use of market forces to help regulate the environment. For example, the sale of carbon dioxide credits by companies helps keep carbon dioxide emissions declining at a predictable level.

* Privatization and outsourcing by federal and state governments.

* Current challenges to the traditional rigidities of civil service.

* Failure of command-and-control economies, which has led to the rise of nongovernmental organizations in many countries, especially in Eastern Europe and the former Soviet Union.

Nonprofit-sector trends. More important for those leading nonprofit organizations, we've seen acknowledgement of steadily increasing changes, adoption of some of the private-sector concepts, and adaptation to the new and more volatile environment. These actions provide clues to underlying trends that you may be familiar with or have already taken fully into account in your association's activities. Significant trends include the explosive growth of special-interest groups within existing associations. Other trends of note:

* The growth of specialty associations and the concomitant problems facing multispecialty or umbrella organizations. For example, the membership market share of the American Medical Association, Chicago, has been dropping steadily during the past few decades. At the same time, medical specialty societies have seen prolonged and rapid growth.

* Increased use of outsourcing. The Entomological Society of America, Lanham, Maryland, for example, has decided to focus on the core activities and competencies of the organization: the scientific content of its annual meeting and its periodicals. Consequently, it's looking to outsource member services, professional certification, annual meeting management, and the copyediting of four journals and a magazine. Similarly, the Commercial Law League of America, Chicago, completely changed the way it does business by eliminating virtually all staff (except for the executive vice president and one administrative assistant) and outsourcing every other member service.

* Unbundled dues. Associations have gradually moved away from the model in which dues cover virtually all of the association's member benefits. Replacing it: a system based on the idea that dues, instead, entitle the member to a significant discount on a variety of goods and services. Once the dues are paid, the member uses only the products that meet his or her needs. Individual products succeed or fail based on use.

* Realignment of chapter relations in such a way that more power and responsibility flow to the chapters. In part, this is a result of the use of federal block grants and other resources that have strengthened the role of state government and led to the need for more potent state associations.

* Revisiting committee structures. For example, several years ago the American Animal Hospital Association, Lakewood, Colorado, shut down virtually all of its ad hoc committees. Across time, AAHA found that the ad hoc committees were coming up with so many good ideas that the association had insufficient resources to move many of them forward--a frustration to those serving on the committees. Now, task forces are more likely to be used to accomplish specific goals. This kind of reevaluation of volunteer work groups is a definite trend in association governance.

* Open-space technology as a conference process. Open space is a mechanism that allows conference participants to take charge of their learning. In a sense, by providing venues that allow participants to self-select their learning groups, create agendas, and drive content of sessions, the process enables the hallway conversations that are the source of most of the real learning that takes place at meetings.

* Distance learning implementation. Both synchronous and asynchronous education programs are burgeoning learning tools thanks to conference-call technology and Web-based systems.

* Use of John Carver's Policy Governance model. In thinking about board-staff roles and relationships, the traditional division has been that the board makes policy and the staff executes policy. Given the looseness of some definitions of policy, it is fair to argue that typically the board says to the staff, "Don't do anything until we say it is OK. Anything not permitted is forbidden." On the other hand, one of the central ideas of Policy Governance is that the board should clearly articulate what it thinks are unethical (in dealing with people) and imprudent (in dealing with resources) actions and say to the staff, "Anything that can reasonably be interpreted as being within these ethical and prudential boundaries is permitted, but we hold you accountable for achieving the goals we have set." This gives significant authority to the staff. For a fuller analysis of this concept, see the references in the sidebar, "Resources for Redefining Governance."

Forging a new governance framework

What is the underlying concept that all of the bulleted items reflect? It is a move away from command and control operations to a more open evolutionary, biologic model. Boundaries are set and clearly communicated, but within the boundaries, considerable leeway is permitted. Such a concept is not easy for organizations to implement. It runs counter to our natural aversion to risk and our discomfort with uncertainty and ambiguity. It is, most threatening of all, not the way we do things around here.

It may be that your association is in a stable environment, that you do not see significant challenges ahead, that your industry or profession is unthreatened and vibrant with positive energy, and that you have a lock on the future. If so, either you need to look again or I'd like to work for your organization.

For the rest of us, the common thread of these trends points the way to the crucial question that needs to be asked as associations seek to thrive in the emerging new world: What is the minimal amount of rules and structure necessary to avoid chaos and promote self-organization?

Some specific examples of the application of this core question include the following:

* Is the authority of the staff all that it should be? Are the boundaries of staff discretion adequately broad?

* How clear are the charges to committees, and do they understand the range of their authority to make decisions without checking back with the board?

* How many deadwood committees and committee members are there?

* How easy is it for members to organize into networks, and how quickly are they able to dissolve?

* How can staff be organized around this principle?

Your answers to these questions will guide you to the steps that you, the board, can take to move your organization toward a governing model that minimizes rules and maximizes results. Here are several actions that some associations are finding effective:

1. Research new approaches to governance. Read the references in the accompanying sidebar, "Resources for Redefining Governance." Visit the related Web sites and dig deeper into the details. Begin to educate your association staff and volunteer leadership by sharing these and other resources and by implementing board and leadership development programs.

2. Ensure that board directors understand the distinct roles of staff and volunteers. Boards must

* be clear in the kinds of responsibilities that they delegate to committees, focusing on the strategic rather than the operational;

* understand that it is the staff role to make decisions about goods and services (note that the board can be the world's worst focus group), using volunteer input on content but being solely accountable for product details, logistics, and pricing; and

* empower volunteers to resolve conflicting interests and to take public policy positions.

Envisioning the evolutionary association

What might an association look like after taking this new governance paradigm seriously? It would, of course, demonstrate some of the features already mentioned, along with these others:

* A governance system based on Carver's Policy Governance or one of its near-clones.

* Extensive use of the open-space approach for meetings and association conferences.

* Wide use of ad hoc committees and other task forces and teams.

* Empowered chapters with clearly understood roles and responsibilities.

* Lots of special-interest groups that form and dissolve as necessary to meet member needs.

* A mechanism for rapid dissemination of information, probably through the Web, with an equivalent mechanism for collecting member and customer data and opinions.

* A board composed of individuals selected on the basis of competency who focus on resolving differences on public policy and setting the strategic goals with the advice of staff.

* A staff that is free, within broad boundaries, to meet needs for goods and services by creating new products and eliminating unproductive ones.

* Wide use of outsourcing, partnerships, and affiliations with vendors.

Clearly, significant changes are affecting the association world and the environment in which nonprofit organizations operate. Modifying the governance process in ways that enable an organization to quickly evolve is the new imperative. Are you ready?

BY HENRY L. ERNSTTHAL, CAE 

Henry L. Ernstthal, CAE, is a trainer, speaker, and consultant at Ernstthal and Associates, Washington, D.C. E-mail: [e-mail].