Sunday, December 9, 2012

4 Ideas Associations Can Glean from P&G’s 175th anniversary

I once managed an organization through its centennial celebration as well as a major foundation grant to help determine its future. Unfortunately, its leadership chose not to make changes toward the future and the nonprofit flounders and struggles to remain relevant.So, I read with great interest the story of Procter & Gamble’s 175th anniversary and its future path.

"I think the issue for Procter is that it has to respect its past but be more adaptive to the changing marketplace and be quicker to market," said Matt McCormick, a portfolio manager with Bahl & Gaynor, a large P&G shareholder with nearly 5 million shares. "They're not going to be able to rest on their laurels."

Associations can learn from the four challenges P&G faces and its solutions.

Here goes:

1. Innovate, Innovate, Innovate
"We're going to want to strengthen our innovation program so that there are no gaps ... so that we're constantly bringing new products, new brands, new categories to market," said P&G President Bob McDonald. P&G ranked eighth last year on a list of top innovators by Booz & Co., a global consulting firm. Apple and Google took the top two rankings.

  • For Associations: Do you have an innovation process? Do you track trends impacting your members? Are you researching your members and your non-members? Will Rodgers was right: “Even if you are on the right track, you’ll get run over if you just sit there.”
 2. Prune your portfolio
In the past decade, P&G has shed more than 30 brands and completely exited the coffee, pharmaceutical and snacks businesses since 2009. The company says it reviews the structure of its business constantly and its portfolio annually.

  • For Associations: Depending on their board of directors and/or staff, associations tend to keep doing the same things the same old way (another way of saying “rest on their laurels”). Many associations add new programs/services but think of the last time you convinced your board to stop doing something? When do you know when to drop a program or service? How do you get your board to help with the annual review and pruning?
3. Please fickle consumers (members)
P&G's longevity has been built on a proven ability to anticipate and create products that consumers want and need. "You have your stars that are very profitable, and people will continue to purchase regardless of the economy. But you have to have products that are reflective of changing consumer tastes," McDonald said. "There can't be a one-size-fits-all mentality. People are going to be very fickle going forward."
  • For Associations: Our members come in different “sizes” and have different needs and wants. On top of that the huge generational shift in the work place means younger professionals could become a major chunk of your new members. Are you ready for them? Have you worked with your young professionals to see how you are going to get volunteers from the Millennials? How are you planning to work with retiring Boomers?
4. Doing more with less
Core to the changes underway at P&G is a mission by its top leaders to improve productivity. This month, the company created a new executive post: Productivity and Organization Transformation Officer. “A leaner, more nimble P&G is key to competing short and long-term,” said Connie Maneaty, an analyst with BMO Capital Markets, a financial services provider.
  • For Associations: Yes, we’re nearly through the impact of the recession. Yet many industries and professions will continue to face pressures to maintain or reduce dues and to hold the line or decrease registration fees. Like P&G, we need to find ways to do more with less. It won’t be easy.
As you think about your association, what other major challenges are you facing? How are you working to solve them? What can you share?

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