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Why Associations Outperform Corporations: Insights from Chris Vaughan

Chris Vaughn, Chief Strategy Officer at Sequence Consulting, reveals powerful insights into why associations often outperform corporations.

In the fascinating discussion hosted by Bhavesh Naik, in the podcast Business Philosopher Within You, Chris Vaughn, Chief Strategy Officer at Sequence Consulting, reveals powerful insights into why associations often outperform corporations.

Drawing on over two decades of consulting experience with top associations such as the American Medical Association and the National Association of Realtors, Vaughn unpacks the unique dynamics of associations, their leadership challenges, and sustainable growth strategies. This article delves into those insights, highlighting how associations build resilient, adaptable organizations by aligning mission, members, and money.

The Platypus vs. Unicorn: Understanding the Nature of Associations

Chris Vaughn offers a compelling metaphor to distinguish associations from corporations. While companies like Google or Apple are often seen as “unicorns”—single-purpose, highly focused entities—associations are more like platypuses: multifaceted and uniquely adapted to their environment.

Unlike corporations that primarily sell products or services for profit, associations juggle multiple roles simultaneously. They serve as membership organizations, publishers, event organizers, and sometimes operate for-profit subsidiaries. This complexity requires leaders to manage diverse functions and stakeholders, including volunteers and members who are also the beneficiaries of the association's work.

"Associations are designed that way for a purpose. They are many things in one, and all parts have to swim in unison like the pieces of a platypus."

Distributed Power and Leadership Challenges

One of the defining characteristics of associations is their distributed power structure. Unlike corporations with hierarchical decision-making, associations operate through consensus among volunteers, committees, and member-elected boards. No one owns an association; instead, it is collectively governed by its members.

This decentralized power requires leaders to be exceptional consensus builders, visionaries, and communicators who can align diverse groups around a shared mission. Leading volunteers who are not salaried employees demands a different approach—one based on persuasion, shared purpose, and meaningful engagement rather than fear or greed.

Vaughn emphasizes that managing this “platypus” requires balancing efficiency with inclusiveness and consensus, a skill set that many corporations might find challenging to replicate.

The Triple Bottom Line: Mission, Members, and Money

Associations measure success differently than corporations. While for-profit companies focus on a single bottom line—profit—associations manage a triple bottom line:

  • Mission: Serving a profession, industry, or social cause.

  • Members: Delivering value and engagement to a diverse membership base.

  • Money: Generating sufficient revenue to sustain and grow operations.

Each of these bottom lines is interconnected. The mission drives the purpose, members provide energy and engagement, and money supports the activities necessary to fulfill the mission. Sustainable growth depends on nurturing all three simultaneously.

Engaging Members: From Transactional to Transformational Relationships

Membership growth is not just about increasing numbers but about attracting the right members who align deeply with the association’s mission and will remain engaged over time. Vaughn cautions against short-term tactics like giving away free memberships or heavy discounts, which may inflate numbers temporarily but do not lead to sustainable engagement.

Instead, the key lies in identifying the association’s unique value proposition—what Vaughn calls the “right to win” or “way to play.” This means understanding unmet member needs and offering unique benefits that no other organization can replicate.

"When associations nail their way to play, addressing unique member needs, that's when the magic happens—tripling growth rates and doubling memberships."

Lessons for the For-Profit World

Many of the leadership and engagement principles found in successful associations have valuable applications in the corporate sector. Vaughn highlights that for-profit companies can learn much from associations about customer loyalty, long-term retention, and creating meaningful team environments.

Associations retain members for an average of nine years, with some boasting retention rates above 85%. This level of loyalty far exceeds typical corporate customer retention and is deeply rooted in shared mission and belonging rather than transactional incentives.

In terms of leadership, engaging volunteers without financial incentives requires fostering a sense of purpose and belonging. Corporations can benefit by moving beyond fear and greed as motivators and instead creating inspiring visions that unite teams around a shared goal.

Building Sustainable Growth

Sustainable growth in associations comes from retaining members who are genuinely engaged and see ongoing value. This contrasts with growth-for-growth’s-sake tactics that often result in high churn rates. Associations that focus on deepening engagement, delivering value, and consistently aligning with members’ missions achieve long-term success.

Vaughn compares this to subscription-based businesses like Netflix, where long-term retention is the key to profitability. The best associations keep members renewing for many years, with some boasting average membership durations of 19 to 20 years.

Why Passion Matters More Than Pay

One of the most insightful observations from Vaughn’s experience is the difference in motivation between association volunteers and corporate employees. Volunteers work hard not because they are paid, but because they believe in the mission and want to be part of something bigger than themselves.

This alignment between personal values and organizational mission creates a holistic, meaningful experience that many employees in for-profit organizations may lack. Vaughn argues that when work aligns with individual purpose, engagement soars and performance follows naturally.

Overcoming Challenges: The Journey of Sequence Consulting

Chris Vaughn’s own career path reflects the values he champions. After years in corporate strategy consulting, he and his wife sought more meaningful work and founded Sequence Consulting, focusing on helping associations grow and thrive.

Their journey has not been without hardship, including near business failure during the 2008 financial crisis and Vaughn’s personal battle with cancer. These experiences deepened their commitment to their mission and strengthened their resolve to help associations succeed.

Practical Tips for Association Leaders

For leaders looking to strengthen their associations, Vaughn recommends:

  1. Turn outward: Look beyond internal metrics and engage with external trends and perspectives to identify opportunities.

  2. Listen deeply: Go beyond surveys to have real conversations with rank-and-file members, understanding their needs and experiences.

  3. Build consensus: Recognize that decisions require broad agreement and invest time in bringing all stakeholders on board.

These habits foster alignment between members’ personal missions and the association’s goals, fueling sustainable growth and impact.

Conclusion: The Power of Associations

Associations are extraordinary organizations that blend mission, membership, and money in ways corporations rarely do. Their unique structure, distributed power, and focus on shared purpose enable them to create resilient, adaptable communities that stand the test of time.

By learning from associations, corporate leaders can unlock new ways to engage employees, build loyalty, and lead with vision beyond transactional incentives. Whether you lead an association or a corporation, embracing these principles can help you build stronger, more sustainable organizations.

Frequently Asked Questions (FAQ)

What makes associations different from corporations?

Associations operate with a distributed power structure involving volunteers and members, have multiple bottom lines (mission, members, money), and focus on consensus-driven leadership rather than top-down control.

Why do members stay with associations for so long?

Because associations align their mission closely with members' personal values and unmet needs, creating meaningful engagement and a strong sense of belonging.

How can corporations benefit from association leadership principles?

Corporations can learn to engage employees beyond financial incentives by fostering shared vision, purpose, and consensus-building, leading to higher loyalty and performance.

What is the “triple bottom line” in associations?

It refers to balancing mission impact, member engagement, and financial sustainability simultaneously.

How do associations achieve sustainable growth?

By attracting the right members who are genuinely engaged, delivering ongoing value, and focusing on retention rather than just acquisition.

What leadership skills are essential for managing associations?

Consensus building, effective communication, vision setting, and the ability to motivate volunteers without relying on financial rewards.

Where can I learn more about Sequence Consulting?

Visit sequenceconsulting.com to explore their work with leading associations and contact information.

This article was created from the video Why Associations Outperform Corporations with the help of AI.


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