Why Organization's Fail

Organization failure begins at the top. Rotary did not stop growing because people were not interested in joining local Rotary clubs. The number of people joining Rotary clubs proves that. It stopped growing because its leaders assumed it was in the business of supplying humanitarian services rather than in the business of creating Rotarians; they were product oriented instead of member oriented.

Red Text Note

==============Red text has a link to a previous Rotatorial or referenced document.==============

Saturday, March 29, 2014

In Rotary, Are Boards of Directors Useful?

    YES, providing the Directors know what they are supposed to do and do it!! 

    The primary function of all Boards of Directors is to ensure that the organization continues to fulfill its mission - its purpose for existing.  The only purpose of Rotary International (R.I.) and its member clubs is to create Rotarians so clubs, individually and collectively, can accomplish Rotary's objective - advancing the Object of Rotary.     In large organizations such as R.I., directors should not manage the organization, but they should be satisfied that the organization is effectively managed.  In small organizations, those without staffs, the directors are usually heavily involved in operations.  But whether the organization is large or small, the directors should:

  • be solidly behind the organization's differentiating purpose and objective,
  • ensure that the organization has sufficient leadership and resources to achieve its objective, and
  • have readily available metrics so they can ask enough critical questions to ensure that the organization is headed in the direction it should.

    Only with full, objective transparency can directors fulfill the reason for their existence - providing informed advice, guidance, and differing viewpoints.  For member type organizations like R.I. and its member clubs, the critical metrics relate to creating Rotarians - membership.  The prime membership metrics are Retention and Growth rates. When combined, these make up a key metric - the RG Index.  These are the only universal easy-to-understand metrics regarding the effectiveness of any Rotary club in any social fabric. 
 These metrics should be available to all levels of Rotary leadership.  Are they?  Since all necessary information is given to R.I., making this information transparent to all Rotarians would be an invaluable service R.I. could deliver.

Monday, March 24, 2014

Membership - A Chilling Analogy


Jim Henry created this Rotatorial for the All Florida 2009 PETS Membership breakout, after which it was posted on Rotary Zones 33-34 Membership Blog, created by Bevin Wall, then Zone 33 Membership Coordinator.  With Bevin's expert tutoring, Jim Henry created Zone 34 Retention Central, then changed its title to Retention Central because it is addresses issues that may be of concern to all Rotarians.. 

      Rotary clubs are in the business of advancing the Object of Rotary.  They have done it by satisfying the networking, friendship, and achievement needs of business, professional, and community leaders.  Effective Rotary clubs, those that have stable or increasing membership, satisfy these personal needs.
     What about the districts and clubs that are losing members?  Too often they waste time, treasure and talent on convenient diversions rather than examining the more difficult issues that sometimes require systemic and attitude change.  Perhaps this brief analogy will encourage more critical thought and discussion about membership development.

 The Analogy
            A successful organization is, or was, an entity of dynamic growth.  It aggressively adhered to core principles, attracted customers and grew by satisfying their customer’s needs. 
            An effective Rotary club is, or was, an entity of dynamic growth.  It aggressively adhered to core principles, attracted members, and grew by satisfying their member’s needs.
            General Motors, for seventy-five years, was an entity of dynamic growth.  It started out aggressively producing low cost transportation, buying competitors, and developing a dealer network.  General Motors dealers attracted customers who could afford to advance their personal transportation needs.
            Rotary, for ninety years, was an entity of dynamic growth.  It aggressively advanced the Object of Rotary by starting Rotary clubs throughout North America then around the world.  The clubs attracted business, professional, and community leaders by advancing their networking, friendship, and achievement needs.
            Then General Motors leaders, with good intentions to maximize profits, made what may be a fatal mistake.  General Motors executives centered their energies and resources on maximizing efficiency in car and truck production.  Years later, sales and profits began declining.  Corporate leaders decided to concentrate their expertise on factory and labor processes to produce vehicles at lower costs while investing in advertising campaigns; all in hopes of attracting more customers.
            Then Rotary leaders, with good intentions to emphasize the impact Rotarians have had worldwide, made what may be a fatal mistake.  Rotary leaders centered their energies and resources on maximizing the wonderful programs and projects Rotarians accomplished through their desire to achieve.  Years later, membership began leveling out, then, in many areas, declining.  Rotary leaders decided to concentrate their expertise on more programs and projects while investing in membership drives; all in hopes of attracting more members.

The Mistake
            With good intentions, General Motors inadvertently switched from being in the business of advancing personal transportation needs to that of creating efficient factories and producing vehicles – vehicles that no longer satisfied their customer’s transportation needs.
            With good intentions, many Rotary clubs inadvertently switched from advancing the Object of Rotary to being volunteer service organizations – organizations that no longer satisfied their customer’s networking, friendship, and achievement needs.
            General Motors began, grew, and became a giant in the personal transportation industry.  Their customer – all levels of the public.  Their industry – not cars – not trucks – not aircraft – not trains – but satisfying personal transportation needs.
            Rotary clubs began, grew, and became a giant in the personal satisfaction industry.  Their customer – business, professional, and community leaders.  Rotary’s industry – not service projects – not volunteerism – not educational programs – but satisfying personal networking, friendship, and achievement needs.


Fishy Fantasies
(Author’s note – A fishy fantasy is a slang statement representing a deterrent that hinders addressing paramount issues.)
            Fishy Fantasy One – By getting better at what they are doing, they believe their customers will continue to demand their product or service.  Organizations, believing that they are the best at what they are doing, tend to become arrogant, lazy, and gravitate toward mediocrity.  These conditions will become their enemy because customers will eventually find a way to achieve higher levels of satisfaction.  As the famed psychologist Abraham Maslow concluded, “Humans are needy, achievement oriented organisms.”
            Fishy Fantasy Two – It costs too much.  A fundamental principle of any successful marketing campaign is that if the product satisfies the customer’s needs, they will find a way to pay for it.  Obviously there has to be a reasonable cost/value ratio, but price is seldom the primary reason people do not buy what an organization sells.  Customers are lost primarily because they do not believe they will receive, or are not receiving, satisfaction proportional to what they are being asked to contribute in time, treasure, and/or talent.  (Author’s note:  Between 1930 and 1950, Rotary membership more than tripled.  From 1995 through 2007, years of tremendous economic expansion and increases in personal wealth, North American Rotary club membership declined more than 10%.  The cost of Rotary is not the primary reason clubs cannot attract or retain members.)
            Fishy Fantasy Three – An increasingly affluent society will ensure the organization’s growth.  In this type society, organization’s leaders often assume that they do not have to be creative about their business or industry.  Instead they tend to concentrate on improving what they are already doing.  What actually happens is that they get better at their deed rather than improving their deed’s value to their customer.

The United States Government bailed out General Motors.  What is going to happen to Rotary International if it continues being a volunteer service organization that wants members?

Sunday, March 16, 2014

Recruit/Attract - To Interest a Potential Spouse/Partner, Which Attitude Is More Effective?

Rotary International (R.I.) and The Rotary Foundation (TRF) continue to be seduced by the enchanting rhythm of the Recruiting Death Dance.  Both continue to encourage clubs to do whatever they can to recruit members and donors.  And, for both, recruiting is simply the wrong attitude, which fuels ineffective approaches. 
  Recruiting is a common practice and an industry accepted standard when organizations want to fill positions with qualified people.  Most organizations continually recruit employees; colleges continually recruit athletes and students, etc.  Those being recruited usually have a specific value the organization is seeking.  The recruiting approach centers on what the organization needs and/or wants.
  Successful businesses and charitable organizations continually search for new customers, donors, or volunteers.  Those that achieve the most long term success do so by striving to attract them because the attract approach centers on the needs and/or wants of those they wish to attract.
  The difference between recruit and attract is subtle, real, and extremely important because it resides in the thought processes of the decision makers - those seeking to exchange resources for needs and/or wants.  Recruiting organizations seek value and make decisions on the resources they are willing to exchange for desired values.  Attracting organizations understand that those they target will make the decision on how many personal resources they are willing to exchange for the value they expect an organization to deliver, whether it is a product, service, or opportunity to contribute to society.
    Perhaps the most important result of this subtlety is the influence each approach has on personnel attitudes throughout the organization, which affects everything the organization does.  The recruit attitude centers on the organization's wants and needs, i.e. "The organization wants what you have to offer."  The attract attitude centers on the customers, members, and/or donors needs and wants, i.e. "The organization has something to offer you."
   The recruiting attitude and approach is arguably the major reason R.I.'s retention rates are declining.  Recruiting generates interest, but interest is easily diverted if much of a commitment is expected or required, or when a new interest comes along.  The attract approach generates interest and, once the attracted target commits, they expect to have the reasons they committed to be met with an equivalent or greater value proposition.

As a final argument, examine historical membership data.  Over the last twenty years, the recruiting attitude and approach has neither halted North America's membership decline nor jogged loose worldwide membership.  It is shear stupidity to expect different results without changing attitudes and approaches.


Sunday, March 9, 2014

The Rotary Foundation - Is It Protecting Its Core?

The 2012-13 Annual Report, worldwide membership data according to Rotary Club Central, and R.I. Board minutes reveal a simple set of facts:

  • North American Rotarians account for sixty-one percent (61%) of the contributions to The Rotary Foundation.  Of this, seventy-one percent (71.7%) is used to finance projects in regions other than North America.  For the mathematics impaired, that means that North American Rotarians contribute 43.7% of the funds used to finance projects and programs in other regions.
  • North America's long time (Retained) Rotarians account for the majority of the North American contributions. 
  • North America's long time (Retained) Rotarians are dying off and are not being replaced. 
  • Rotary International and The Rotary Foundation say that creating Rotarians - membership, replacing North American Rotarians that are leaving for whatever reason - is strictly a club responsibility. 
  • Rotary International and The Rotary Foundation say that they cannot devote more resources assisting North America in creating Rotarians because it would not be fair to other regions. 

Does anyone but The Angry Rotarian question this logic? 

Friday, March 7, 2014

Protecting Rotary's Core - not its Core Value, its Core Supporters

   All successful businesses know that to succeed their top priority must be to protect and preserve the loyalty of their core customers.  The resources dedicated to doing so is minuscule compared to the resources needed to replace their loss and develop new customers.
   But Depending on core customers alone can be a death knell.  Those same successful organizations know that delivering renewed value to core customers will retain them, a valuable resource when it comes to attracting new customers.
   How does this relate to Rotary International, The Rotary Foundation, and clubs?  Here are some interesting facts that end with a rhetorical question from The Angry Rotarian:

  • Rotary International's (R.I.) core customers are its member clubs.
  • Clubs core customers are existing Rotarians.   
  • The Rotary Foundation's (TRF) core customers, core supporters, are retained Rotarians.
  • R.I. does not have a grasp on the rate core customers are walking away.
  • R.I. does not have a grasp on the rate core customers are being attracted. 
  • TRF does not have a grasp on the importance of retained Rotarians.
  • Neither R.I. nor TRF have established realistic desired rates on retaining Rotarians.
  • Neither R.I. nor TRF have established realistic desired rates on attracting new Rotarians.
  • Neither R.I. nor TRF have realistic historically accurate data to use as reference in trying to establish realistic desired rates.
  • R.I. and TRF say that neither have influence on the above because all are club responsibilities.
  • R.I. and TRF say they can offer little meaningful club support in retaining and attracting Rotarians because revenues to do so are declining.
  • Neither R.I. nor TRF have creating Rotarians as its top priority.*