In 2017, Toymaker LEGO announced that revenues had hit a record high, rising 6 per cent to DKr37.9bn (stg£4.4bn) – the highest ever annual level recorded in its 85-year history. Profits were also higher, with operating profit up 1.7 per cent to DKr12.4bn and net profit up 2.2 per cent to DKr9.4bn.
LEGO is a remarkable success story considering that, almost 15 years ago, the company was on the brink of bankruptcy. Though it was a transformational strategy, led by CEO Jorgen Vig Knudstorp, which sparked the unprecedented turnaround in fortunes, significant emphasis was placed on the contribution that customer insights played in the turnaround.
“We never take customers’ enthusiasm for granted. We reward them by showing that we listen to and care about their feedback. I also tell customers that they fulfil another vital role: They are an avenue to the truth. And in today’s world, a CEO needs every avenue to the truth that he or she can find.”
From my experience, the majority of club leaders stress the importance of understanding their members in order to stay relevant in today’s fast-changing external environment. So why is it that so few clubs seek to systematically listen to their members and as a result, are constantly reacting to change rather than planning for it? Why is it they are reluctant to travel this “avenue to the truth”?
To be truly member-centric, club boards must use member insights in major strategic decisions and core processes, not just member-facing ones.
Our analysis indicates that, actually, this is rarely the case. A recent global survey, undertaken by GGA, examined several hundred clubs to find which conducted annual member research. The reported benchmark range for clubs who do conduct annual member research was found to be between 10%-20%, with the norm being just 15%-16%.
Member insights provide an essential window into the change that lies ahead through their perceptions, needs, preferences, behaviours and attitudes. Gathering, tracking and applying such insights can empower a club to lead rather than react. It allows them to match strategy and implementation to their environment, and to prepare for change rather than responding to it.
In his book Good to Great (2001), management guru Jim C. Collins cites 5 elements of member-centric associations;
- Culture. A documented, shared understanding among all staff, embraced and touted by leadership, which defines expectations on how the association interacts with members.
- Metrics - Tracking, measuring and responding to data that defines success through the eyes of its members and for the organization. One of the 7 Measures of Success pillars is being data-driven.
- Knowledge - Belief and practices on collecting, sharing and responding to the challenges, needs and expectations of members.
- Technology - Planning, managing and leveraging tools (e.g., database, social media) to collect, share, and deliver information to all stakeholders in a timely manner.
- Segmentation - Developing profiles of and understanding specific groups, or segments, of members to deliver on their expectations and to increase retention rates.
How does your club score in relation to these member-centric qualifications? Think back on recent “leadership” or “planning” meetings you attended at your club. In how many instances did member insights, measured evidence, inform a final decision?
In the oft-quoted words of Wayne Gretzky, leaders will find deep and relevant member insights will guide a club in “skating to where the puck is going, not to where it’s been.”
Rob Hill is a Partner at GGA’s EMEA Office, based outside Dublin, Ireland.
