Sunday, April 14, 2013

Exit, Voice and Loyalty: Choices for Association Executives, Leaders, Members

Over the last 30+ years in associations and nonprofit organizations, I’ve witnessed:
  • Major donors defect from the organization 
  • Board members yell and debate over seemingly inconsequential matters
  • Members resign in protest over the organization’s policies
With that background, I was astonished to read about Albert Hirschman’s 1970 piece called Exit, Voice and Loyalty” as noted in Roger Lowenstein’s Wall Street Journal review titled The Choice: To Squawk or to Go? 

Some key points:

  • Once you start looking at the world through the Hirschman lens, the paradigm of exit and voice is all around. Suppose you are unhappy at work: Should you complain to the boss or simply quit? Or maybe you are the boss: How much should you mollify employees—or customers—to keep them from leaving? It might depend on the presence of a third Hirschman factor: loyalty.
  • What Hirschman grasped is that the strongest organizations (in either sphere) foster exit as well as voice. Both corporations and school districts have customers or members whom they need to retain—though at some point, it's best to let the dissenters go.
  • If "Exit, Voice and Loyalty" had a broader purpose, it was to make organizations more resilient. Economists, Hirschman noted, didn't worry about organizational decline; in the economist's neat models, a bankrupt firm was replaced by another. For Hirschman, upheaval was more frightening.
  • Hirschman saw that when organizations make it easy to exit, voice is weakened. Yet, for voice to be effective, a possibility of exit must be present.
  • Exit is forceful, but it rules out using voice later. However, the reverse isn't true. Voice, the default tactic in social groupings, is reusable but messy and not necessarily persuasive. When it's easy to bid adieu (say, to a brand of detergent), voice isn't worth the trouble. Firms must rely on the third leg of Hirschman's stool, "loyalty." Or as he put it, "Loyalty holds exit at bay"—a truth not lost on the folks who conjured up airline frequent-flier miles.
  • Since the appearance of "Exit, Voice and Loyalty" more than four decades ago, financial markets and American culture generally have only become more fickle. Loyalty to geography, religion and firm struggles with the pace of modernity. Professional sports are less appealing because players desert their teams; pensions have fallen into disregard because corporations, which once prized their workers' loyalty, now value their exit more. And the Internet enforces an exit bias: Habits of behavior and even "friends" are dispatched at a keystroke.

What questions does this mean for associations and association leaders?

  1. Do you foster exit and voice for your members and board members? 
  2. What does your association do to create loyalty among its members?
  3. How does your association handle descent among board members? Among members?
  4. What does your organization do regarding staff in terms of exit, voice and loyalty?

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