Why Organization's Fail

Rotary didn't stop developing membership because people were not interested in joining local Rotary clubs. Recent membership metrics have proven that. It stopped growing because Rotary and its member clubs became product oriented instead of member oriented. They marketed the results of the Object of Rotary instead of its value to its member clubs and Rotarians - its customers - those who fund its operations.

Red Text Note

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Friday, January 10, 2014

Rotary International - Create or Die!

Several responses to the previous Rotatorial challenged the concept that the sole purpose of any organization was to create supporters, be they customers, members, donors, etc.  Here is why that is a basic fundamental:  Organizations (businesses, charities, etc) are entities of the society in which they exist and are created through that society's accepted customs, institutions, and processes.  If an organization has no supporters (customers, members, donors, clients, etc), it has no one to serve, no one from which to derive its operating capital.  It must create supporters, or have them existing when the organization is created, or the organization will die before it can attain its objective.  Therefore the sole purpose of all organizations is to create supporters. 
    To create supporters, organizations must have objectives that attract those who want what the organization provides.  To attain the objectives, organizations have two, and only two, basic functions:  Marketing and Innovation. Marketing communicates the organization's objective and its differentiating value to supporters.  Innovation enhances that which delivers value to supporters, not just ordinary value, but better value than supporters can get elsewhere, i.e., excellence in service and/or product.  Organizations must be successful in Marketing and Innovation otherwise they will lose supporters (customers, members, clients, donors, etc.) and not be profitable, i.e. the ability to sustain attaining their objective.  Organizations get into extreme difficulty when obtaining objectives overtakes creating and serving supporters in importance, which is another way of saying allowing attributes to overtake the organization's brand in importance.  
   For Rotary International (R.I.) and The Rotary Foundation (TRF) this translates into the sole purpose of each, respectively, is to create Rotarians and donors.  The objective is to advance the Object of Rotary.  I have been told that, in Fiscal Year 2012-13, R.I. had an operational budget of $103,000,000 US.  Of that, $9,000,000 US (8.7%) was expended to support TRF's annual fund (an attribute) and $3,000,000 US (2.9%) was expended to support membership i.e. create supporters.  This, along with existing membership data, indicates that R.I. and TRF have allowed attaining the objective to overtake creating Rotarians and donors in importance.  That raises some questions:

  • Why isn't creating members R.I.'s highest priority as the Code of Policies says it should be?
  • If creating members is not R.I.'s highest priority why should it be in its member clubs?
  • Should member clubs and Rotary districts follow R.I.'s lead and devote three times as many resources in support of TRF's annual fund than in retaining and attracting members and creating new clubs?
  • Are R.I. and TRF being fully transparent on how TRF's funds are managed?
  • Are member clubs expected to be collection agencies for TRF's annual fund?
  • Would not $12,000,000 US be a respectable starting budget for a Marketing group that centered on Marketing to Rotarians and donors?
Membership will continue on its present course unless the Rotary world centers all activities on creating Rotarians and donors.