AAVSB’s Culture of Innovation and Thinking Like a Startup (S2:E2)

Chrissy Bagby: We have to do something different than we’ve done before. We can’t rely on our historical knowledge on what’s worked well before we have to take a new idea that somebody has, and figure out how it would work. We needed to get, how do you do innovation into our culture not just into our business process and systems, and have it be as somebody’s job description. But how do you take it and put it into your culture and start thinking differently on it?

Carolyn Shomali: On today’s episode of the Association RevUP Podcast, Chrissy Bagby of the American Association of Veterinary State Boards, shares how AAVSB’s isn’t just talking about innovation but actually doing it with the help of a proven framework…. Then, we’ll hear from Elizabeth Engel of Spark Consulting, who will break down how to apply these lessons to your own association—helping you shift your mindset and start thinking like a startup.

Elizabeth Engel: With this method, you are actively trying to prove yourself wrong every day, and in fact, being wrong is fine. It’s a good thing, as long as whatever you were wrong about whatever your experiment showed you, you had messed up, you learned something from that, you measured that, you took that knowledge back and used it for your next iteration through the cycle to more closely approximate a viable solution to a real problem for an audience that you actually can touch on

Shomali: Welcome to Season 2 of The Association RevUP Podcast, presented by Professionals for Association Revenue. I’m your host, Carolyn Shomali.

This season, we’re hearing directly from associations that are using better business strategies to advance their missions—while following up their stories with quick, actionable tools from industry experts, so you can apply those lessons to your own organization.

Let’s dive into Episode 2: AAVSB’s Culture of Innovation and How Your Association Can Act Like a Startup

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Bagby: We had reached that plateau of being an established organization that had key products and services, that the or the industry knew. We were very stable. We had good reserves and good resources, and our board of directors and the new CEO was very visionary and thinking, Well, let’s look at what we need to do to innovate, to stay relevant before we get in a position where we’re behind and we start losing resources. And when they did that we not only tripled our staff size, but we tripled our product offerings

Shomali: If necessity is the mother of invention, then being aware (and acting upon) your association’s own plateau may just be the spark behind innovation…that was the case with the American Association of Veterinary State Boards according to Chief Strategy Officer, Chrissy Bagby. What began as a completely-volunteer led organization 65 years ago is now an association with 35 staff members serving the 63 member boards dedicated to regulating veterinary medicine across the United States, DC, Puerto Rico, Virgin Islands and parts of Canada.

The lesson any association can learn from AAVSB’s approach to innovation is simple: they knew an internal culture shift was just as important – if not more so – than the innovative ideas they’d be creating. To begin, Bagby launched a 2-person innovation team with the focus on achieving staff buy in.

Bagby: We need to do something different. We need to create a product development framework. We need to take these things that are ideas and figure out if they even have legs….before we spend a bunch of money, a bunch of time and invest in them because we have really good people. But associations hire for customer service and relationship building and and working with your members. We don’t act like a startup. We don’t hire or manage in a startup way. And so we could either hire people, which meant. We may have to change our workforce a bit, or we could incorporate a system that lifted everybody’s skill level. And that’s what we decided to do to make this, you know, a cultural change that everybody in the organization could participate in and learn something new from.

Shomali: Bagby leaned into the framework presented by Eric Ries in his book, The Lean Startup: How Today’s Entrepreuners Use Continuous Innovation to Create Radically Successful Business. Ries’ experience as a software engineer turned startup project manager led him to create a methodology for producte development…here he is speaking about it in a 2011 talk presented by Google.

Eric Ries:  The way that we organize new product development is basically wrong…I think we can do something about it.

Shomali: Bagby and the leadership at AAVSB agreed. Their 2-person innovation team decided to adopt the Lean Startup Methodology as a system for innovation….their first step to implementation was bringing on board consultant Elizabeth Engel to help them begin.

Bagby: We 1st had to up our game like we had to read the books we had to. We had to become the on staff experts, but we had a tutor, if you will…a consultant in this case, Elizabeth, who helped us, you know, shortcut like, give us cliff notes version shortcut how this might work.

Shomali: We’ll hear those cliff notes ourselves in just a moment, but before we do, a quick reminder that the insights you’re about to hear about how the Lean Startup methodlogy can help your association came directly from PAR’s in-person conference, The RevUP Summit. The thought leadership and insight that comes out of RevUP each year is some of the best you’ll find relating to association business practices – repackaging those insights in a podcast format is how we ensure ideas for better business extends well beyond the conference itself and to a wider association audience. And we couldn’t do it without the production team VPC Incorporated – PAR knows that the audio and visual component of any event plays a major role in the entire event experience, and it’s for that reason that we partner with VPC to bring the RevUP Summit to life. VPC believes in the work of assocaitions and the work of PAR, which is why they partner with us for this podcast. More information can be found on VPC in the show notes. As Bagby shared moments ago, Elizabeth Engel from Spark Consulting helped AAVSB implement a Lean Startup approach to their innovation goals. And now, she is sharing it with us.

Engel:  We are not operating in a world where there’s a dearth of ideas. You’ve got ideas from yourself, from your C suite, from your staff, from your board, from your board, chair from your committee, chairs from your committee, members from your members. Right? There’s ideas all over the place. The issue is all of those ideas are great things that you could do, that you could build, that you could create, but they’re all based on assumptions about three key things.

Shomali: Engel goes onto say associations make assumptions about our audience, what their problem is, and what the solution should be. The Lean Startup frame work addresses each of those the three assumptions. We’ll use an example from AAVSB as explained by Bagby: The Mobility Assistance Program for veterinarian professionals.

Bagby: So one of the problems that veterinary professionals have is, if they want to go from one state to another, they have to get licensed in the other state……And all of this paperwork to get licensed in 16 States is really a hassle. So so we have services to help them. One of the things we’ve never done is actually tried to reach those licensees through organizations that hire them. the purest form of this product development framework that we’ve put into place so far is to test. Is there something there that we could help a multi-jurisdictional organization to help their employees get licensed where they need to get licensed. But we’re connecting through the organization. What does it even look like? Right? Where is the revenue stream to fund that. Would they pay for something like that?

Shomali: Remember, Engel says the Lean Startup methodology is based on 3 assumptions – our audience, their problem and the solution. To begin, Bagby says they had to decide if the problem AAVAB perceived for its audience was actually a problem. So they did something obvious that is often missed in product development – they asked their audience.

Bagby: We did the 1st experiment we had about 80%. Who said, Yeah, this sounds like something of interest to me right? And then we had to. You go into the next experiment with, okay. Now, what did they do now? They’ve said that they’re interested in the concept. What is what is the thing that we’re going to give them while still maintaining to ourselves? We’re going to reduce our sun costs. We’re not going to put a bunch in development. We’re not going to build out some great tech program for this like we, we’re gonna keep it simple. And we’re gonna do our next experiment.

Shomali: The next experiment set off something Ries refers to as the build-measure-learn cycle. The goal is to get product developers to a proof of concept – it’s a way to test your assumptions of “I think this is a good idea” by actually getting a solution into the hands of of your audience so they can tell you what they think of it. Here’s Engel:

Engel: So this is, this is a build first mindset, and that’s. A bit of a challenge for associations. We tend to like to operate in stealth mode. What do I mean by that? Somebody comes up with a great idea again, C suite, board, committees, staff, whoever right the great idea surfaces, and we’re like, Oh, yes, this is wonderful. We are going to make this and then we go away from weeks, months, sometimes years at a time, until it is perfect, and then when it is perfect, we can finally release it out to our member community. And then we find ourselves in Eric Ries situation, of we’ve just released a thing that nobody wants, right? And so you’re trying to build first. But how do you actually do that without getting yourself right back into the exact problem you were trying to avoid, in the first place, of putting all these resource sources toward doing the wrong thing. The minimum viable product. A minimum viable product is just a fancy name for a prototype.

Shomali: Engel explains a minimal viable product in this way: you’ve determined your audience wants a solution to get from point A to B in a faster way than walking. The solution the product developer creates is that of a car. But to get to the car, the developer needs wheels, axels, a body and an engine…and here’s where products often fail because the solution is too complex and involves too many resources to even know if the solution is the correct one. Using Ries’ system instead, the product developer would determine a basic and simple upgrade to solve the problem to see if it is even of interest. In this case the solution isn’t a car…but a skateboard.

Engel: We need to get from A to B faster than walking. Okay? What’s the simplest way to do that? Skateboard? Stick the wheels on the bottom of a board, off you go. You did get, in fact, hopefully you didn’t fall and bust your butt getting there, but you did, in fact, get from A to B faster than if you’d walk there. So then our audience, who is now using our skateboard, comes back to us and says, you know, I would really like to be able to steer. Can you help me with that? Yeah, sure, we can. But now it’s a scooter, right? We can add a little thing where you can steer, and then, you know, they go and they use that and say, you know, this is great, you know, I like to be able to steer. You know, there’s this technology out there called gears. It’s a force multiplier. Could you maybe give me some gears? Okay, yeah, sure. We’ll make you a bicycle, right? Okay, oh, it was great, you know, like, I’m force multiplier. Now I’m really going fast. You know, there’s this other technology you might want to check out. It’s called an engine. Oh, yeah, okay, we can make you, we can make you a motorcycle. Oh, man, this is great. Now I’m really getting places fast. But, you know, I’d occasionally like to be take, be able to take people with me and or carry stuff. And also, sometimes it rains, can you make me something that’ll protect me from the elements and let me carry stuff? Okay. Well, now we built the car, but our audience was happy right from the beginning, because we were already solving their problem.

Shomali: Here’s Bagby on the minimal viable product being tested n the example of AAVSB’s Mobility Assistance Program.

Bagby: So we had a concept of, okay, let’s maybe give them a a concierge, somebody that they can expert that, you know, there’s a red phone to this expert when they have a question, or one of their employees has a question about regulation or licensure. They can call us, and we can help guide them through the process. That was the idea. 29:25 We see there’s something to the idea. But now, does it fit our business model? What does it fit? What we need it to do TO Keep it running, and we can give that assessment to the board. 29:40 So now we’re in this cycle of trying to get to market ready. And then if all of that works out, then you have a market ready and you actually launch it. You put it in your operational budget. You start counting on revenue. You do all that, but we are right now testing the Mvp. To see if it can be market ready.So the goal at the end of this year is to be able to go back to the board of directors and say. Can this generate revenue for us? How much revenue does it look like it’s going to generate for us, compared to how much cost and resources we’re going to have to use and let them decide if that’s enough of a profit margin for us to continue the program.

Shomali: Bagby and team have been testing the Mobility Assistance Program idea for nearly a year and a half. If you’re listening and thinking that feels like an eternity for your association that needs new revenue ideas now, you’re not alone – in fact, Bagby says the operational change you are asking your association staff to commit to is the toughest part of Lean Startup, but also, the most vital. To begin the shift, she says it’s wise to begin by using the framework to generate a quick win…in AAVSB’s case it was using the framework to sunset an existing program that was a time and resource warp.

Bagby: Don’t necessarily start with the longest project. First.st Right? Try to find your quick win, and then people are going to be like, Oh, great! We were able to figure out that wasn’t going to work. And you took it off my plate. And we don’t have to think about that thing anymore. that will start to make your cultural shift for you when it starts to impact every person in the organization like, okay, this helps me understand what leadership wants, and help me make sure I don’t waste my time.

Shomali: Secondly, Bagby says to use entrepreunerial management to create a shared vision for your staff by empowering each of them to generate ideas.

Bagby: What nonprofits typically do and associations typically do? Is the ideas come from top down, not the bottom up. right? So we haven’t necessarily empowered our entire staff, or even trained them. And how to think about these experiments so they can be trying stuff and bubbling it up. The ideas are pushing down from the top. and then they’re asked for middle managers and frontline staff to execute, and they don’t know how, because that wasn’t my idea. What is the vision? I don’t understand it like, Okay, you’re telling me to do it. I’m going to do it to the best of my ability, and they do, but we haven’t equipped them to do it. And it’s not their vision. They haven’t been doing the experiments they haven’t been seeing what’s working.

Shomali: One final point on the lean startup methodology and what it may look like for your organization – what about the board? In the case of AAVSB, Bagby says this:

Bagby: And one thing I do want to mention is, our Board of directors loves this process. They love it. Because not only does the staff have a shared understanding of what we’re doing. We have a communication plan for how we report back to them and they know their own ideas are going to be put through it.  We ran through the whole process. It’s all fair, right? So it helps the board even with their own ideas. Sort of go. Okay. Well, now, I’ve seen the work you’ve done. We’ve shown the work, and yes, it will work or no, it won’t. But it’s not just somebody says we have to do it, and so therefore it must be done.

Shomali: That’s it for this episode of Association RevUP. Throughout this second season, we’ll be hearing from associations who are utilizing business to drive their mission forward. And, we’ll share quick tips on how your association can do the same. Episodes are brought to you by VPC Inc, the production company behind PAR’s in-person event, the RevUP Summit. Check in with their team the next time you need production support at your annual event.

And, my thanks to the PAR Pathway Partners: Association business development is changing rapidly and the Pathway PARtners share PAR’s commitment to association business. Learn more about MCI, Popshap, Matchbox, Swapcard, Multiview, and Yes & on our website.

PAR is a member community – join us! Until then,I’m your host, Carolyn Shomali, and I’ll see you next time.