Sisyphus Complex - Who is Rotary's Customer?

     The first Sisyphus Rotatorial asked the all important question, “What business is Rotary in?”  Continuing to chip away at the Mound of Basic Factors, this one asks, “Who is the customer?”  The dues Rotarians pay cover club expenses, district expenses, Rotary leaders’ expenses, Rotary International staff salaries, entitlements, and expenses.  Rotarians, without doubt, are Rotary International’s primary customers, and they will remain Rotarians only if they find their interactions with Rotary relevant, and the relevancy seed is implanted by local Rotary clubs.

   But do local and International Rotary leaders really know their customers?  The North American membership trend, Rotary’s Early Warning system, indicates that many do not because clubs are losing market share.  One of the major causes could be that Rotary in general has been concentrating on present and future members’ demographic profiles rather than on their universal psychographic characteristics. -- Only by understanding who Rotarians are and what they value will clubs be able to implant relevant seeds in their hearts and minds.

    The easiest way for clubs to begin to understand who Rotarians are is to help them develop relationships with one another, or, in simpler language, to talk with one another, to share values.  And in case you haven’t figured this one out, this is the first, and perhaps the most important, step in making a distinctive difference in members’ lives – the First Object of Rotary.  If members do not develop relationships, they simply will move on, and recent data indicates that universally many, particularly new, regardless of their demographic profile, are doing just that. 

    Rotary International and its member clubs must know what business they are in and who their customers are.  Otherwise, the Mound of Basic Factors will remain unchanged.  The next Sisyphus Rotatorial will discuss what Rotarians value.

(Important Note:  The Angry Rotarian is trying to crack a smile because RI is beginning to chip away at the Mound of Basic Factors by undergoing a revitalizing initiative.  Stage 1 – Research is complete.  The 167 page Seigel+Gale Research Findings presentation is available on the right sidebar or at this Rotary Club of Sarasota link.  The fundamentals apply to local clubs as well as RI, so Rotarians interested in Rotary’s future should consider taking the time to review Seigel+Gale's findings.)

Are Rotary Leaders Cursed with the Sisyphus Complex?

Rotary’s senior leaders seem to be cursed with the Sisyphus Complex because they continually struggle to grow membership doing the same things over and over again when they should be chipping away at the mound of basic factors that hinder membership growth.  Perhaps the most important factor is recognizing the business Rotary clubs are actually in.

All organizations exist to achieve an objective.  That objective is their mission – the core of their business.  One fundamental that exists in mission statements of virtually all successful entities is that the organization intends to make a distinctive difference in the lives of individuals and society.  According to the Constitutions of Rotary International and member clubs, the core objective of Rotary is to advance the Object of Rotary.  Core objectives should remain fixed while specific practices change as organizations modernize, expand, decentralize, globalize, and diversify.

Rotary International’s core objective has not remained fixed.  It has been eroded because senior leaders have inadvertently forgotten that Rotary and its member clubs are in the business of making a distinctive difference in the lives of Rotarians – not the community, not the world – but Rotarians.  It is Rotarians who utilize the many attributes the Rotary network offers to individually and collectively serve society.

Rotary clubs are in the business of making a distinctive difference in the lives of Rotarians.  Rotary clubs are not service-based organizations; they are member-based organizations that impact their communities and the world.  Rotary leader – do you understand and acknowledge this?  Does your club acknowledge this?  Does Rotary International acknowledge this?  If not, the mound of basic factors will remain unchanged because everything Rotary does is dependent on knowing what business Rotary clubs are actually in.

Next in the Sisyphus Complex series is recognizing who Rotary’s customers are i.e. who Rotarians are; who it is that pays the salaries and expenses of Rotary International staff and leaders.

Why Invest in a Rotary Club?

     Everybody, regardless of their wealth or lack thereof, invests in products and services to help them accomplish specific purposes.  Everyone invests in food and water so they can live another day.  Many people invest in some mode of transportation to help them get from one place to another.  Companies invest in computers and software to help them accomplish specific tasks.  Surgeons, after they have invested in medical schools to become surgeons, invest in scalpels to dissect soft tissue and electrocautery devices to control bleeding.  Business leaders invest in employees, tools, and equipment to help them serve their customers.  Professionals invest in training, people, equipment, and tools to help them serve their clients and patients.  Community leaders invest time, talent, and treasure to help them serve their constituents.

     Why would anybody invest in a Rotary club?  For one simple reason – to gain social capital.  Their gain in social capital comes because of the friendships developed and the greater impacts they make in their community and the world.  Rotary’s high attraction rates indicate that people are still under the impression that investing in a local Rotary club will give them a satisfactory return in social capital.  Low retention rates indicate that clubs are not delivering satisfactory returns.

     Effective clubs have high RG Indexes because they know Who Rotarians Are and why their members are investing time, treasure, and talent in their clubs.  Successful clubs strive to make good on members’ social capital investments by selectively sustaining Who Rotarians Are while advancing the Object of Rotary.

What is Rotary's Business?

What Business Is Rotary International In?  

What Business is your Rotary Club In?

       The five most important questions Rotary International and all members clubs could ask are:

1.                  What business are we in?

2.                  Who are our customers?

3.                 What do our customers value?

4.                  How do we measure results?

5.                  What is our plan?

       Successful organizations concentrate on making sure their core business satisfies their customers.  To do so, organizations must know what business they are in and what their customers value because customers, and only customers, validate the organization’s business.  All too often organizations falter because leaders failed to concentrate on their business, continually monitor customers varying values, and/or accurately measure results.

      North American membership results could very well be forecasting Rotary’s future.  To change the forecast, the entire Rotary organization must, in proper order, seriously address all five questions. Successful plans can be drafted only after the first four questions have been addressed and agreed upon by the organization’s influencers.

     If you happen to think this is an elementary level exercise, try getting agreement on the first three questions with five or more leaders in your club, district, and zone.  After doing so, discuss how you would measure results.

Rotary - Which is easier - raise dues or improve retention 1.92%?

Raising dues by US $1 increases Rotary International's (RI) annual revenues just over US $1.2 million.  Retaining 23,076 members, at $52 annual dues, would have produced the same amount and started RI membership growing once again.
Are Rotary's leaders leading or merely sustaining institutionalized customs?
 PRID John Smarge, in his landmark 2011 International Assembly presentation, made Rotarians aware that, worldwide, member clubs inducted and lost 1.1 million members from 2002-2009. 
That’s 157,000 Rotarians walking away from Rotary each year. 

The RG Calculator work sheets show that improving the average retention rate from 86.92% to 88.84% would start membership growing again and increase RI's annual income by $1.2 million! 

   The recent dues increase raises annual revenues but decreases the sense of urgency RI senior leaders, including staff, directors, coordinators, district governors, etc. seem to need to ‘focus on all aspects of membership’ as RI should have been doing since at least 2003!
   Improving retention requires more than setting net gain targets; more than 'improve retention' rhetoric; more than creating motivational annual themes; more than doing what has always been done.  It requires continuous, consistent leadership, communication, and education.  It also requires demonstrative non-verbal communications that continually telegraphs to member clubs the importance of retaining, attracting, and engaging members.  One of the many beneficial, highly visible actions RI could take would be to furnish Retention rates, Growth rates, and RG Indexes for all clubs, districts, zones, and regions for years to come.  All necessary information to perform this service for its only customers rests somewhere in RI's cyberspace.

Or is it just easier to get dues raised than it is for 'leaders' to actually lead?

Note:  The RG Calculator is an Excel worksheet.  You can get it by clicking on this twitter link and send a direct message.  Its creator will send it to you.