B2B without the BS

All Muscle, No Bone

Posted by Robert Bell under Associations

The trade association was in a tough corner.  The bank account was in an unhealthy state.  Membership had fallen off.  The Board was having discussions about whether it was worth the risk and labor to organize its next annual conference.  Would it be better to just have virtual meetings by conference call than make people travel?

That question, at least, was easy to answer.  No, it would not be better to have virtual meetings.  This association had long been influential in areas of technology policy. . For it to continuing having influence, it had to be seen as a going concern.  Let people think that the lights were going out, and its influence would evaporate.  A decision to further narrow its sites was essentially a decision to padlock the door and walk away.

We had been engaged to review the association’s current status and future potential. Where had it gone off the rails?  What was necessary for it to return to financial sustainability, on which all of its good work depended?

Earlier posts contain our analysis of where the association lost its way, and I won’t repeat it here.  I want to focus now on our strategy for the return to health.  In essence, we concluded that the association was in trouble because it was all muscle and no bone.   All of the association’s activities were in support of its mission.  Sounds ideal, doesn’t it?  But financial sustainability requires a balance between serving the mission – the organization’s muscle – and serving its structure – the bone.  So we recommended a new operating model and a new funding model.

Operationally, the volunteer Board had always functioned as the beating heart of the association.   That sounds great on paper, but in reality, the Board was so busy doing things it had little time to think about the organization and its future.  There was anyway no structure in place to implement the ideas that the Board did come up with.  So we recommended a bit of hierarchy: placing the Board at the top of the organization and creating a management structure beneath it.

To pay for that hierarchy, we called for a new funding model. The association had always lived off individual member dues and the surplus from its annual conference.  With the conference having shrunken to breakeven (at best), dues paid by individual members were barely keeping the group on life support.  It is our experience that, for an association serving an industry niche, individual dues can never pay for operations.  It takes corporate support to close the gap, and we proposed a sponsorship program to do just that.

But reviving the association will take faith.  Faith from the Board in this new vision.  Faith from prospective corporate sponsors, who would be asked to fund the revival before the results were known.  Faith from current members to support the change.

Will it work?  Only time will tell.

What’s the Competitive Advantage?

Posted by Robert Bell under Associations

Jason Cohen, founder of Smart Bear Software, is writing a series of blogs for entrepreneurs dealing with early-stage investors.  He focuses on the issue of competitive advantage: what it is, what it’s not, and how to acquire it.  The blogs are worth reading for any organization facing a situation in which the people with the money – be they investors, customers, members or sponsors – have more than one choice of where to spend it.  In other words, for any organization except the ones that collect taxes.

He has a long list of claims he has seen in business plans that are not competitive advantages.  Having the most features.  Having a particular feature.  Patenting that particular feature.   Being better.  Being passionate.  Working hard.  Being cheaper.  They are not competitive advantages because they are easy for an organization with more money to copy and improve.

I particularly like his list of meaningful competitive advantages because they are so basic. They are the kind of thing your grandfather may have told you.  Really and truly understanding your customers’ problems (because you come from their world).  Devoting your organization to obsessive excellence at one big thing, like Apple’s obsession with design.  Developing what I call the “guru effect” – being recognized as the authority on the subject.

I have been writing about a small association in search of a new mission.  Reading Mr. Cohen’s posts, I realized that the association surrendered its competitive advantage because the founders did not clearly understand what it was.  Returning the association to health means rebuilding what has been lost.

The association prospered as a meeting place where technical experts at a particular group of companies came to resolve issues, which – left to the tender mercies of trial attorneys – would have stopped the growth of the market in its tracks.  They built that position over many years.  They thoroughly understand their customers’ problems, because the participants in the association were also the customers for its output.  And they were recognized in their sector as the top authorities when it came to technical implementation of regulatory decisions.

This competitive advantage faded and failed because the association succeeded too well at its original mission – at least as the founders understood it.  They resolved the tough issues within the industries they served but never sought out new industries with equally tough problems to solve.  By resolving those issues, the association helped the market grow – but it gradually wasted away as it ran out of issues to address.

The irony is that there are plenty of companies entering the same market space with new conflicts that need resolution.  But they don’t know this unique meeting place exists.  They are not presently at the table when it comes to resolving problems.  And for good reason, they do not yet recognize its authority.

The good news is that it should be possible to renew that competitive advantage in far less time than it took to create it. Reputation has power.  Legacy conveys legitimacy. And the founders are really smart people.

To be continued…

Stop Doing, Start Building

Posted by Robert Bell under Associations

In the last post, I wrote about a small association that is struggling to master change.  For over 25 years, this association has performed very valuable service in bringing together competitors who have to share an asset that is owned by the American people.  Only by sharing it, in accordance with rules set by the government, can those competitors stay in business.

The government regulations only go so far, however, so technical and operations executives at these competitors have to hammer out the details.  For more than a decade, they did their hammering-out in working groups of the association.  The compromises they reached then make possible services that you use every day.

But then, the activity began to fade away.  The big fights were fought to satisfactory ends.  Increasingly, the competitors contacted each other directly to work out small stuff.  Or they engaged consultants to help them, and the consultants negotiated on their behalf.

The association was left with the crumbs: minor issues that companies brought to them for resolution, updating past recommendations to the government regulatory authority, and putting on an annual conference that attracted fewer than 100 loyalists.

But here’s the strange part.  Today, there are lots of new conflicts among users of this shared asset, with billions of dollars hanging in the balance.  There are big hairy issues that need resolving.  An independent third-party – able to address the technical and implementation aspects – is just as important now as it was then.  But the association is not getting a piece of it.  Why?  Because the conflicts involve companies that are relatively new to the market and have never even heard of the association.

In other words, the market changed and the association did not change with it.  They have been losing money for a decade because their leaders have been devoted to doing – to understanding problems, defining solutions and crafting consensus.  That’s what they are passionate about.  Their passion has benefited the industries they serve – even ones that don’t know they exist.

But they have not spent enough time building.  What the association lacks is a structure that ties its technical achievements to financial success and that prepares it for a future of constant change.

It was the management consultant Peter Drucker who wrote that today’s business is the enemy of tomorrow’s.  Most of us are so wrapped up in solving today’s problems that we neglect the vital work of thinking about tomorrow and taking steps now to prepare for it.  The future of this small association hangs in the balance but these smart, dedicated people have the opportunity to build a truly sustainable organization – if they will just stop doing and start building.

Next… What we recommend

Renewing the Mission

Posted by Robert Bell under Associations

A Chinese emperor, so the story goes, once called together wise men from throughout his realm.  He charged them to come up with a statement of truth that would be unchanging throughout all of time.  After long days of work, the wise men finally had their product.  The eternal truth, they said, took just five words.  “This too shall pass away.”

It was probably not what the emperor had in mind.

Human beings are hard-wired to demand, in the face of all evidence, that things endure.  Which is why we tend to be bad at handling change.  It is also why organizations, including nonprofit trade associations, get into trouble.  In fact, nonprofits are more vulnerable than most, because so many of their leaders are volunteers who can only afford to give a portion of their attention to leadership.  It is a lot harder to be a part-time leader when everything is in flux.

We are working right now with a small association that is struggling to master change. It was founded in the 1980s to help companies deal with a large scale change in government regulation.  It became the go-to organization in the US for vendors and their customers to collaborate on implementing the new regulations.  Through that collaboration, association members were able to avoid the legal and regulatory battles that would otherwise have stymied development of new markets and blocked opportunity for all.

Two decades later, however, this is an organization in search of a mission.  The particular battles that threatened to disrupt the market have been settled.  The major players have learned to cooperate among themselves, and a consulting company has introduced services that make this cooperation fast and efficient.  The association has not issued a new regulatory recommendation for years.

Yet the association’s expertise still has great value.  The market faces new, complex and contentious issues that need to be addressed.  They are just different issues and involve different companies than the association is used to. Lead by very bright, capable people, the association has, so far, lacked the institutional capacity to pivot toward the new opportunities.

Our job is to diagnose the condition and recommend what to change.  There is no question in my mind that they can succeed – but only if they redefine what they do and who they do it for.  The market as they know it has passed away.  The market they will address – one that sooner or later will also pass away – has yet to emerge.

To be continued…

How to Be a Big Fish, Part Three

Posted by Robert Bell under Uncategorized

The key to being a big fish is to be careful about the size of the pond you swim in. If you are a multi-billion-dollar multinational company, you can go to the biggest trade shows and count on making a splash.  But if you’re not, you can find yourself shrinking to minnow-size when it comes to getting the attention of customers and prospects.

Fortunately, you can also produce your own events that put your company on center stage and cost-effectively target the people who can have the biggest impact on their business.  I have been writing about the right and wrong ways to do it, and here is #5 in my list of key things to get right.

Make it a priority for sales and customer service people. The toughest part about producing your own event is getting a high-quality audience into the room.  You can do email and print invitations and have a great registration Web site.  But if you are asking marketing to do all the work, you are fighting with one hand tied behind your back.  You need to involve your sales and customer service people as well.

They may well think that they have more important priorities.  But a good workshop or summit is a fantastic opportunity to create relationships, strengthen bonds and position your company as a thought leader.  It also gives you a chance to get feedback from the people who matter most.  That’s why it needs to be a sales and customer service priority, and why they need to call customers and prospects with a personal invitation followed up by a personal email.  The vendors or sponsors involved in your event should do the same, because they have as much to gain from the event as you do.

In January, we will produce a one-day seminar called “NextWave for the New Economy” for PaulHastings, an international law firm.  It focuses on what companies should do today to prepare for the economic recovery now taking shape.  And attorneys at the firm are doing their part to invite speakers and talk up the event to clients.  That’s smart.  But then, what else would you expect from people whose time is worth $400 an hour?

To learn how Alan/Anthony can help you create a unique educational and networking event – or even an ongoing special interest group – for customers and prospects, visit the Association & User Group Management section of our site.

Preparing for the Next Wave of Growth

Posted by Robert Bell under Events

Back when it looked like the global financial system was circling the drain, I kept seeing news stories that spoke of the future as though it might not happen.  “If we recover from this crisis” was the usual phrase.  And my usual response was to shout back, “Of course we’re going to recover, you idiot!”   It’s one of life’s few certainties: when times are good, they will get worse.  When times are bad, they will get better sooner or later.  Of course it never feels that way, but then, feelings are not facts.

We’re all a bit more confident that “when we recover” can now take the place of “if we recover.”  But the leaders of the next wave of growth will not be companies that stand on the sidelines, waiting for certainty.  They will be companies that make rational bets on the direction of government policy, business restructuring and social trends.  On January 27, Alan/Anthony will present an event for those companies, focusing on what they should be doing today to position themselves for the recovery tomorrow.

“Next Wave for the New Economy: Preparing Your Company for the Next Wave of Growth” is a half-day forum that we are proud to produce for the telecom, media and technology practice of PaulHastings, the international law firm.  On the morning of January 27, a select group of 60 decision-makers will assemble at PaulHastings’ New York office to listen to experts including:

• David McCourt, venture capitalist and creator of the competitive local exchange industry
• Aryeh Bourkoff, Vice Chairman, UBS
• Paul Brubaker, Senior Director, Internet Business Solutions Group, Cisco Systems
• Gordon Kroft, Senior Managing Director, Barclays
• Eric Riddleberger, Strategy & Transformation Practice Leader, IBM Global Business Services
• Richard Bendis, Founder & CEO, Innovation America

In four hours, we will explore such issues as:

• How the Federal government’s more aggressive role as lender and regulator will impact telecom, media and technology (TMT) markets
• Profiting from new public policies and government investment in broadband infrastructure
• The unexpected opportunities and challenges for post-recession financing
• How telecom and technology companies will power the drive for energy efficiency and carbon reduction
• What emerging markets will present the best growth prospects, and the biggest hurdles, in telecom, media and technology

NextWave is the first of an annual series of invitation-only events.  If you would like to be considered for an invitation, please send an email to me rbell@alananthony.com.  It promises to be the four best hours – professionally-speaking – you will spend in 2010.

How to Be a Big Fish, Part Two

Posted by Robert Bell under Events

Did your last trade show or conference make you feel like a small fish in a big pond?  If so, you’re not alone.  More and more companies are expressing frustration with exhibiting at big shows and are finding it more cost-effective to produce their own summits and workshops for customers and prospects.  They aren’t abandoning the “must attend” shows entirely but are cutting back their presence and focusing on engaging directly with the people who can have the biggest impact on their business in the short-to-middle term.

From my point of view, it’s an inevitable outcome of globalization.  The pond really is getting bigger.  When marketing becomes global, it tends to favor companies that can operate on a global scale.  Fortunately, it also creates countless niches where smaller companies – meaning all those that are not multi-billion-dollar multinational conglomerates – can prosper.  They just have to avoid playing by the rules of the biggest fish.

If you choose to product your own event for customers and prospects, there are five key things to get right.  I talked about two of them last time.  Here are two more:

Mix business and pleasure
We have worked on events that started out as golf outings,  dinners and after-dinner booze-fests.  We have also produced straight half-day seminars starting with a quick cup of coffee.  Whatever the format, you need to strike a balance.  It took the invention of online social networking to remind us that we are social animals at heart, despite our best efforts at business discipline.  People will come to your event to learn but also to network, to gossip, and to relax just a bit.  Find a way to combine both in your event, by starting with a nice breakfast, ending with plated lunch or a cocktail reception or holding a pre-day sports fest.  Respect people’s valuable time – but don’t miss a chance to let them get to know you and each other.

Share the wealth
There’s no reason you have to bear all the costs or receive all the benefit of the event.  It will actually gain depth and interest if vendors and strategic partners serve as panelists and speakers.  And your bottom line will benefit if they contribute by sponsoring the program.  You have to design the program so that what they have to say fits into your message.  You also have to make sure they understand that self-promotion is not the goal, because it takes just one speaker droning on about how great his products or services are to ruin a workshop.  But approached properly, this is one of those situations where everybody really can win.  Your customers and prospects will benefit from different perspectives and expertise.  Your vendors and partners will benefit from the exposure.  You will have a more satisfied audience, build strong relationships with your vendors and partners, and save money.

How to Be a Big Fish, Part One

Posted by Robert Bell under Events

As they are preparing to leave for college, work or other adventure away from home, millions of young people each year receive the same words of wisdom.  “You have been a big fish in a small pond, my son (or daughter).  But now you are heading into a much bigger pond.  Don’t be surprised if you feel like a small fish for a while.”

For most of us, that small-fish feeling doesn’t go away.  If you really want to experience it, just book an exhibition booth at most industry trade shows.  Unless you are a multinational giant with a booth the size of a small city block, you feel minnow-size.  You look minnow-size.  You are one among hundreds, whereas the whole point of targeted B2B marketing is to be seen as one of a kind.

That’s why more and more companies, while continuing to go to the “must attend” shows, are going into show business for themselves.  They are producing summits for their customers and best prospects that focus on the burning issues in their particular sector of the business.  Rather than “mile-wide, inch-deep” engagement with their market, they are targeting the people who can have the biggest impact on their business in the next year, and creating an intimate opportunity to share knowledge and break bread.

Lots of companies are doing it, but as usual, not everyone is doing it well.  There are five key things to get right.  Here are two of them:

Make it about them, not you.
Your overall goal is to have guests walk away thinking how great you are.  But the quickest way to defeat that purpose is to focus on what your company does rather than on what your guests want, need or are worried about.  Forget a 15-minute overview of your products and services.  Feature a conversation with a satisfied user of one instead.  Don’t talk about benefits and features; discuss the three biggest problems and opportunities in the industry and tell the story of how your products and services helped a customer to address them.

Let them know this is not a sales pitch.
Your audience’s first assumption is that you want to get them into a room to sell them something.  (People always know us better than we think.)  Everything you do to market the event must counteract that assumption.  Invite customers to speak.  Get a recognized expert to keynote.  Publish a program that is long on issues and social events and short on telling your company’s story.