Repurposing Associations for Survival: A Conversation with Terry Howerton, CEO of TechNexus

We are in a time of great and rapid change. From the rise of online networking to the recent shift towards virtual conferences, associations need to keep up with rapidly-changing world dynamics and technology.

To help associations innovate, we hosted a live discussion with innovation expert Terry Howerton, CEO of TechNexus, and Michael Hoffman, CEO of Gather Voices. Together they discussed real-world examples from associations who are making the most of this new COVID-19 reality.

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Michael Hoffman:

Hi everyone. I'm Michael Hoffman, the CEO at Gather Voices, and I'm excited to be here today with Terry Howerton from Tech Nexus, and we're going to get started. So before we start, I want to just do a quick poll so I get a sense of who's here so far. So you're going to see a poll in a second. And you'll have a few minutes, just a couple, a minute, let's say, to fill this out so I have a sense of whether you're with associations or nonprofits, whether you're with small or large organizations, and whether you're in the C suite or you're earlier in your career. Give it another 30 seconds here. While they're doing this, Terry, it looks like a lovely workspace you have there.

Terry Howerton:

It's my one tiny little bit of shade in a sea of sun that I can hide under. So I don't have my haircut currently for a lot of sun, so...

Michael Hoffman:

I have similar haircut.

Terry Howerton:

Yeah.

Michael Hoffman:

Excellent.

Terry Howerton:

Mike, it's a pleasure to join you today. I'm glad to be having this chat.

Michael Hoffman:

That's great. So I'm going to put an end to the poll. Any last minute poll filler [outers 00:00:01:54]? And all right. So it looks like we have about, it's about a third associations, about a third nonprofits, and the rest companies and agency folks.

Michael Hoffman:

So just a little introductions. I'm Michael Hoffman, CEO at Gather Voices. You can read about me there. Terry, why don't you introduce yourself? There's some stuff here, but I think you're uniquely qualified to talk about both business model innovation and as well as associations.

Terry Howerton:

Well, thanks, Michael. I appreciate the opportunity to join you. And I've been an entrepreneur my whole life. I started my first company when I was in high school and I just kind of kept at it, basically been unemployable I think every day since. And in the last 10 or 15 years, I've really shifted a lot of my focus towards the notion of collaboration, how people can be connected and brought together to do more as a single force than they can individually. And whether that was in an association world, we created what became the largest technology association in the Midwest, was a part of creating and on the board of several other national organizations in and around the tech industry, or it was in the nonprofit world, how do we bring together dozens, hundreds of companies to start a public high school or any number of other nonprofit organizations that we've been lucky enough to be a part of or support over the years? How do we collectively use our force to will those things into existence?

Terry Howerton:

And most recently, really around the notion of how do we bring people together for more successful venture activity, more successful commercial activity. So we were able to invest into your company, Michael, for example, and the reason we did so was because we thought it was a great company, bringing in a good product to market, particularly well-timed, given all of this disruption that's happening in the world around events, and conferences, and the way that people bring together and share content. But we also invested in that because we were able to bring corporate partners to the table that had similar interests to those things we just described to help collaborate with you. So big believer in communities, big believer in the power of connectedness and networks, and working together in collaborative ways.

Michael Hoffman:

Yeah, that's great, Terry. And so that's interesting, because you're working with corporations, but you're also working with startups. Let's just talk a little bit about that in general for a second, which is is there something... Why can't the corporation, the big companies, have lots of resources? So what do they lack that startups have? Like why do the big companies need to be looking at tiny companies?

Terry Howerton:

Yeah, they lack a lot of things that startups have. They lack of common language. So 30 years as an entrepreneur now I've been in the room either as the entrepreneur or someone facilitating the conversation between a big company and an entrepreneurial sized business, like Gather Voices, and more often than not, they just talk right past each other. They don't speak the same language. They don't really even share similar DNA. You, as the entrepreneur, are often in the room saying I've got the absolute best thing in the world that's going to solve your problem, and the corporation is sitting in the room and saying he doesn't really understand what my problem is, but I'm not going to tell him what that problem is either because we've got all of these antibodies that exist inside of our corporation that believe that no outside solution, certainly no outside entrepreneurial solution, could solve our problems. We have to be able to solve those things ourselves.

Terry Howerton:

Truth is it's not a great time in America to be a large company. It's not a great time in the world to be a large company, Michael. And I'm not talking about just in recent months. The last 10 years, 734 of the companies that were on the fortune 1000 lists 10 years ago aren't on the list today. 74%, 74% of the largest companies in America have turned. Now they've turned because they've consolidated, they've turned as they grew bigger and combining, but an awful lot of those companies, in fact, an awful lot of those industries are no longer relevant, are no longer in business today, or have slipped from the largest companies in the world. Some of those were very, very old companies that had success over decades. And then in a matter of just a few years found the product, or the service, or their entire business model, their entire industry even rendered moot.

Terry Howerton:

And a lot of that was disrupted by entrepreneurial activity, entrepreneurs bringing new ideas, new solutions to market that said hey, this is a better way to do that. So today we spend most of our time at the intersection between those corporations and entrepreneurs figuring out how they can grow stronger together. How does the entrepreneur actually hear the specific problems that corporation needs to see solved or that industry needs solved? How does the corporation trust, and communicate, and get value out of working with a bespoke curated community of entrepreneurs that solve specific problems that they've already identified in advance? And how do we all grow stronger, and survive, and thrive as a result of those collaborations?

Michael Hoffman:

Yeah, that's really interesting that the, speaking from the small company side, there's a lot that those big companies can bring us in terms of going to market and they have technologies, or resources, or other things that have been invested in heavily for a long period of time.

Terry Howerton:

Absolutely, absolutely.

Michael Hoffman:

So, yeah, so that's really interesting. But what that really brings up to me is it seems like there's incredible disconnect when you say it's not a good time to be a large company, because we look at the stock market and you see these massive companies, and maybe there's just less of them, but just sitting on so much cash and this real, almost a break from the market's relationship to the broader economy. So that seems weird. Like what's going on there? Because it feels like... I think most people, if they didn't know about that churn you talked about, they think the big companies are in a good and a good spot compared to small business, let's say.

Terry Howerton:

Well, several of them are and I think there are some really, truly innovative companies amongst the largest in the world that are constantly reinventing themselves, that have a culture amongst the team that they were able to bring, the people that they're able to attract that is in and of itself very entrepreneurial. That's a very rare thing though, to be able to maintain it at the corporate level, to be able to maintain that entrepreneurial spirit, just to reinvent yourself, to disrupt yourself is difficult.

Terry Howerton:

And I think that the companies that you see that everyone can list that have done that well over the last 10, 20 years, the Apples and the Googles, are not just even in the technology industry, I think there are a lot of very innovative companies that have used technology and decidedly non-technology industries that have also been able to innovate. A lot of those that are famous for that innovation, for that ability to stay ahead of the game have done so intentionally by creating this engine of innovation, working with entrepreneurs, bringing in new products and services, maybe acquiring those new products and services from the marketplace. And the ones that have not been successful, which by and large, 74%, that's the majority, are the ones who think the status quo is acceptable, are the ones who think that the way they have done business is the way they can continue to do business. That's just not the case and it's less and less of a case.

Michael Hoffman:

Yeah. It's such a dilemma because whatever you did originally that was working, you get in the habit of doing that and you think that's how we do things. And things change around you, but the culture of organizations don't necessarily change. I've seen that up close in large organizations, and it's sometimes shocking how disconnected those people are in what they do compared to what's happening out in the broader world, or market, or the... And I think that takes a certain kind of leadership to cultivate that.

Michael Hoffman:

So I want to dive specifically, I think all of this is really relevant, but I want to dive specifically into the world of associations because that's what we promised our [inaudible 00:11:16] talk about. And I think this is obviously true to broader nonprofit market companies and all that, but the associations in particular are feeling the pain. And this was in Associations Now yesterday basically saying 70% of associations are going to dip into their reserves because of what's happening. That's a really large number of organizations that are spending money they didn't really intend to spend. And just from this, there's a threat, and a lot of that's due to the cancellation of events and things bring real revenue there. But I think you are, we've talked a little about this, it's not just this, right? This piles on top of a much bigger and more fundamental threats.

Terry Howerton:

Absolutely. But again, just in the same way that the statistic I gave you earlier in the churn of the fortune 1000 isn't a recent occurrence. It's a accelerating recent occurrence, but it's been going on for a long time. I think the disruption of the association model is been going on for a very long time too. And look, this isn't any particular great insight. Everyone can look around and see this happening.

Terry Howerton:

15 years ago, when we created a trade association for the tech community, we did so because it was literally the best tool in the toolbox for achieving the goals. The goals were to be ready to network. Not just bring people together, but bring together people that can help each other, a network that can amplify each other. The association model was the best tool in the toolbox to do that. It was the best tool for creating content and sharing content, curating that content and sharing that out amongst that community. The association model was great for that. It was great for programming events and opportunities to physically be together and to connect with each other. It was great for even the ability to do certain types of trainings, and certifications, and other types of things. That was the best model that was available to us 15 years ago.

Terry Howerton:

Well, wow. Look how much the world has changed in 15 years, right? I don't need an association to curate a network of people to do this with anymore. There are dozens of solutions, technology and others, that allow me to go and network with people. I can maintain hundreds, thousands of business relationships in ways today that I couldn't have done 15 years ago. Certainly the ability to access bespoke curated content from thought leaders, I don't need to be a part of an association, a member of an association in order to be able to get that. Arguably, certifications, training, those types of things, something that I can only get from that one source, I think those associations have continued to thrive and do well by being able to sell that to their members or require that of their members.

Terry Howerton:

But by and large, I think a lot of what the association happened to be the best tool in the toolbox to achieve 15 years ago are often better achieved with other tools in the toolbox now. And so the reinvention of the association model, why do we exist? Why do people want to be members of our group? I think has long been coming and some good examples of where people are achieving that now, but many are going to struggle.

Michael Hoffman:

Yeah. Yeah, And I think that relates to something that I've talked about and counseled my clients and others around, which is a kind of move from a transactional approach to a more relational approach. The idea that we have the set, you're a member, you pay money and you get this stuff. And as soon as you can get that stuff elsewhere, or it feels like the value thing is out of whack, then it's like, what have you done for me lately? And it's built on a very flimsy kind of foundation. But people want to be part of a cause, and if really what you're developing is community around a purpose and around a cause that has these elements but it's not sold in this transactional way, you have a much stronger core to build on, right?

Terry Howerton:

Right. Yeah. I think the king is dead, live the king, right? So the association is dead, but hey, maybe the core purpose of the association still exists and could still become enormously valuable. If you think that it is about being a part of that common cause you just described, it's just maybe the cause has changed a little bit. Maybe the cause isn't that I just need to be able to network with people to do business with, or have the ability to access premium content or curated content. Maybe the cause is collective action.

Terry Howerton:

So two examples; obviously the whole world right now is hyperfocused on matters of diversity and inclusion. How can we make sure that our businesses, that our economy, that our society is really inclusive of everyone, is as open opportunity to everyone and that we're building diverse teams? I know that's something that I'm very focused on in our company. It's something that we encourage our hundred plus ventures in our portfolio to be very focused on and to be thinking about. But I think an association is in a unique position to take up a common cause like corporate social responsibility, and diversity, and inclusion and provide not just the thought leadership on that, Michael, but to be the platform for that. I have to be a member of this organization because this organization is the platform that helps me achieve a goal that I have here for diversity, and inclusion, and equity.

Terry Howerton:

That's one example of probably dozens that we can think about that individually as a company, individually as a member, I'm not able to achieve as well as I can collectively as a part of an association.

Michael Hoffman:

That reminds me, I did one of these conversations about advocacy and associations advocacy, and most many, or if not most associations have an advocacy arm. They have policy issues that they care about on a state level or national level, but they've mostly, for the most part, what we see is a kind of lobbying approach, which is a very top to top kind of approach. And part of the point of the conversation that we had was that first of all, a bottom up approach, creating that community around that issue, is much more powerful to get the results you want because policymakers pay attention to voters and that. But it's also the collective action that is member engagement. The member engagement is the Holy grail, it's what these organizations want. But when you're always looking at this transactional thing, you kind of miss that, and so the purpose of the advocacy from the bottom up is something that creates really incredible engagement that creates that powerful sense of cause and community. So it kind of creates a loop, and what you just said reminded me of that.

Terry Howerton:

I think it's a really good point, Michael, that, and I think it's a great example of what you mean by transactional versus relational. I think, as I said, I've been a part of many national organizations, organizations where public policy advocacy is on the agenda and organizations where it leads the agenda, where it's the most important reason that we're together there. And almost, I think to a fault, all of them struggle because they're very transact or have been very transactional. What's the issue that needs to be dealt with right now? What's the policy matter that we need to go and lobby for or advocate around? And a lot of them have struggled to kind of step back and be more directional thought leadership around what's the more holistic view of why we're advocating for public policy on this particular issue?

Terry Howerton:

The tech world, we can very quickly go to DC and respond to issues around privacy, or trade, or immigration, and all of those are enormously important policies advocate around, but how do we collectively make sense of why all of those policies are good for our industry, are good for our society? I think being more thoughtful on that.

Terry Howerton:

I think the notion of collective power of an association around issues like this advocacy, I think another one is that we think is going to increasingly be the role of the association is around innovation. It's around creating the marketplace in the future. And it's interesting, it's similar to what we do today, right? So we spend a lot of our time talking with big fortune 500, fortune 1000 companies that we formed these joint ventures with, partnerships with, and say we're going to go off into the venture ecosystem, and we're going to curate dozens of entrepreneurial sized companies that are solving specific problems that you have, or creating specific opportunities for you. And we do that today in the aviation industry and the marine industry, we do that today with everybody from the largest fire truck maker in the world to the people who make this microphone that I'm talking into right now.

Terry Howerton:

But I actually think that those companies that we're working with are also exceptional and sort of rare in their ability and appetite to go do this on their own. But collectively the power of an association to think about what really is the innovation that the aviation industry needs to see, and how does entrepreneurial activity drive that? How does it become the most important driver of that? If I were running an organization or an association that was relevant to the aviation industry, that would be pretty high on my list right now of things that I would be thinking about, how do we collectively bring our members together where they feel like they're driving innovation for the industry and for themselves? And they can't do it on their own nearly as effectively as they can collectively.

Michael Hoffman:

Yeah, and I think that's a really great point. It reminds me of the National Association of Realtors is rare I think, in that they have a tech team that they've tried to build in house. And really, because that is an industry that's undergoing major disruption, they're the realtors association, are we going to need realtors in a few years? What does that mean? And being under threat in that way, having the whole profession be under threat in that way, spurred them to think about we need to be collecting, and leading, and seeding, and investing in these alternatives and opportunities to help the entire industry. So that's really what you're talking about there, right?

Terry Howerton:

Yeah, it is. And it can seem obvious, right? An example like you just gave there. But one of the reasons why that I think maybe was able to get traction in the aviation industry, or I'm sorry, in the real estate industry, in the example you just gave was for the most part, that's a whole bunch of really tiny individuals, or really small companies that have banned together to become this very powerful, very large industry. They weren't dominant players. There may be some dominant brand names inside the real estate industry, but there weren't dominant players that could really provide the need there. So that was a natural. No one felt like they had the upper hand, so collectively everybody had to work together to be able to create or at least preserve their future.

Terry Howerton:

I think other industries are going to feel that too. The aviation industry example that I gave earlier, there are giant companies like Boeing, for example, that exists out there that have obviously been driving innovation for a long time, and entrepreneurs banging on the door of companies like Boeing saying hey, I've got a much better solution for your industry. And it was impossible is as an entrepreneurial sized company to go and do business with a company the size of Boeing.

Michael Hoffman:

But you're saying the association could play that role?

Terry Howerton:

The association could be, I think the association can be a gateway. There's a difference between a gatekeeper and a gateway, and I think that thinking of the association as the gateway, the matchmaker, that bridge between larger companies that are a part of it and the entrepreneurial upstarts that are trying to disrupt it, that those industries harness those powers, turn those things into collaboration where they work together and create a brighter future as a result of that for each other's businesses, not just thinking of it purely from a competitive perspective.

Michael Hoffman:

Right. Well, Gretchen Powers has an interesting question, says, "It's very intriguing points about bringing together members for advocacy for collective innovation, but what about getting competitors comfortable with that?" Right? Because isn't that what's in an association, a bunch of companies that are in fact competitors with each other?

Terry Howerton:

It is, and it's always been this weird... I can tell you back from personal example, and I'm sure this rings true for many of the association managers that are on the call, I remember 15 years ago when we started the trade association for the tech industry here in the Midwest, we used to have a heck of a time. It was really easy to get CEOs together. CEOs would get together at round tables, and they would share ideas, and they would talk about things. But the moment in the beginning, the moment when we would say hey, why don't you send your head of engineering to go meet with the head of engineering of other companies and let them connect peer-to-peer, that was a radical idea 15 years ago, because at least in Chicago, where that was headquartered, a lot of those companies were afraid that they were going to lose their head of engineering, right? Like I don't want my head of engineering talking to somebody else. I've done everything I can to protect that asset and make sure that they stay focused here.

Terry Howerton:

And so that cross pollination of ideas just really seemed antithetical to the way that a lot of the companies had done business over the years. We worked really hard I think for as community leaders, as association leaders over the next 15 years to say guys, that's not the best way to do business. The best way to do business is actually to figure out how to cross pollinate and to collaborate. And yeah, there is competitive advantage. There are things that are proprietary, but by and large, that's much, much smaller than the opportunity to grow stronger together.

Michael Hoffman:

Yeah. No, and that's a really, that's a great point. And I think that's part of what we're doing in this industry as Gather Voices is the idea of being able to have a lot more voices. We're called Gathered Voices and not Gather Video because it's all about all of those people and how do you connect them to each other when they can't necessarily be in the same room, when they can't necessarily be on a Zoom call or some synchronous thing, and how do you raise up a wider variety of voices to do that kind of thing around innovation, or to do representation around diversity and inclusion, or around advocacy?

Michael Hoffman:

Kathy Radford asked about they have a Capitol Hill day, but what other ways are there to do advocacy that isn't top heavy, and one of those ways is is we're doing that with our clients using Gathered Voices to collect video from a large number of stakeholders and to share those out in a whole variety of ways to make people feel like they have a voice, even if they can't get on a plane and do that Hill day thing. So just the idea of using technology to be more inclusive I think as part of that, how do you get people together question. And the associations can build those frameworks, right?

Terry Howerton:

Yeah [crosstalk 00:28:15].

Michael Hoffman:

Terry, when you talk about getting people together, it doesn't necessarily mean they're in the same room. It means that the association kind of built the model or the framework to allow that to happen.

Terry Howerton:

Okay. I agree and I want to address Kathy's question specifically and I'll come back to that in just a second. But if you think about The original value proposition of an association, at least the one that I thought that the value proposition was when we were building associations 15 years ago, it's network, it's membership, it's being in the club. I want to be in a club, the club, I want to be collective. It's events and the convening power of associations. It's that curated knowledge, that knowledge sharing. All of those things were the original goal. And I think all of those things can still be the goal. The network is still the king, right? Network is still the most important thing to being successful in business. How good is your network?

Terry Howerton:

The problem is that associations that aren't focused on making sure that the network that they're enabling or connecting is really powerful, really curated, really connected, those are the ones I think that ended up finding that they struggle. So as that relates to Kathy's question from a advocacy perspective, I've been a part of those Hill days myself. We go up there all the time on various different issues that are important to the tech industry.

Terry Howerton:

And it always smarter boggles my mind when we leave there and I think here I am literally sitting next to the CEOs of some of the leading technology companies in the world, the people who have demonstrated that they are better at building social networks, connecting people, collectively giving voice to people, and yet as an industry we don't use any of those technologies for an advocacy purpose. We're still doing it the old fashioned way where we're walking in with big printed books of talking points and spending time face to face, talking to Hill staffers, and congressmen, and senators, and others about the policy issues that are important. We didn't walk in the door with any kind of mass collective voice. We didn't walk in the door with lots of voices ready, mobilized, ready to be a part of it.

Terry Howerton:

I think over the last several years, one of the things that I've seen most powerful, Kathy, is that we have, at least within our organizations that I'm a part of, when we do those fly in days, we have learned to make sure that we're being more diverse in the people that we bring to the table. And I don't mean necessarily diverse in the same way that we were talking about earlier, although that's obviously important part of it as well, but for years, one organization, I'm a part of, it's leading CEO's of the technology industry, used to fly to DC, and they would get a commanding audience with dozens of senators that were very anxious to hear what they had to say.

Terry Howerton:

And the first time I was in the room, I was able to say, "Oh, by the way, I'm an entrepreneur from Chicago," and you you'll never... I mean, the heads that turned, right? The heads that turned from the senators who said wait a minute, hold on. You're not a giant company and you're not from Silicon Valley, and you're going to talk? That got their attention. The heads also turned from a lot of the giant company CEOs from Silicon Valley who looked and said wait a minute, who the hell are you and why are you talking? Because that's not the way we do these things. But the more diverse the room became, the more we were able to say the technology industry isn't just these 15 large companies that are brand names that everybody knows they're headquartered in Silicon Valley. It's also entrepreneurs in Chicago and Cincinnati, and it's people building companies like WeGather, and it's that diversity of voice, I think, made a big impact on people's willingness to listen from a public policy perspective.

Michael Hoffman:

Yeah. I can't believe our 30 minutes is gone. I could talk to you all day.

Terry Howerton:

We're just getting started.

Michael Hoffman:

We are just getting started. So I'm going to have to have you back to dig in more here. And it's funny because we have some clients that are using Gather Voices where they'll walk into an office, a Hill office with an iPad, and I'll say there's three people who are constituents of yours who couldn't be here today that I want you to hear from now.

Terry Howerton:

That's neat, yeah.

Michael Hoffman:

And I'll walk in with those videos.

Terry Howerton:

Powerful.

Michael Hoffman:

And that's a way to increase the kind of diversity of who you can bring when it's not always easy to do in person.

Terry Howerton:

[crosstalk 00:33:04].

Michael Hoffman:

But so Terry, thank you so much for coming here. I'm going to just end this with sharing our contact information. So feel free if we didn't get to your question or comments to send us a note or email, and we're going to take this and we'll have it up online so people can watch it again or share with people in their organizations. But I think just for me, the thing that you said about innovation and really thinking about what's your role here, what's a role that you can play that's lasting and important in your industry, and getting out of that transactional kind of approach is absolutely critical for these organizations to survive and thrive.

Terry Howerton:

Yeah. Michael, thank you for allowing me to be a part of your Gathered Voices and I'm happy to be a part of the conversation.

Michael Hoffman:

Excellent. All right everyone, have a terrific rest of your day and I will see you at the next conversation, which will be soon. Check your emails. Thanks again, Terry.

Terry Howerton:

You bet. Bye-bye.


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