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

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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?