Leadership key to trade associations' power
- 01 April 2011 -
Stronger leadership from director-generals and board members is required if European business associations are to improve their effectiveness in influencing EU policies, according to industry experts surveyed by a Brussels-based consultancy.
Many companies join EU-wide business associations in a bid to make sure that their voices are heard in the Brussels policymaking arena.
But recent years have seen industry federations face increased competition from individual companies in influencing the EU policymaking process.
In March, public affairs professionals from a wide variety of industry sectors discussed at a conference organised by the European Centre for Public Affairs (ECPA) in Brussels how PA firms must evolve to find their place in the post-Lisbon Treaty institutional environment.
The Lisbon Treaty's entry into force has seen the European Parliament increase its power and has heralded new innovations like the European External Action Service and the European Citizens' Initiative.
Participants also agreed that PA companies are yet to fully find their place in Europe's post-crisis economic landscape, with many firms having cut non-essential expenditure in a bid to slash costs and recover from the turmoil of the recession.
Other key factors in the success of European trade associations are proactive EU public affairs driven by a politically aware secretariat, integrated communications lead by a director and demonstrable value of membership.
The findings are drawn from a survey of 70 industry experts conducted by consulting firm Ellwood and Atfield and circulated in Brussels policy circles last week.
Consensus-building 'main challenge' for associations
"The main challenge for European associations is finding consensus between corporate members who compete with each other for market share, and national associations with very different cultures," said Ben Atfield, a partner at Ellwood and Atfield, commenting on the findings of the report.
The consultancy estimates that Brussels is home to around 1,500 European business or trade associations, approximately three fifths of which are "traditionally pure federations" composed of national associations.
A quarter of them are composed of both national associations and corporations, while around one sixth count only businesses among their members, according to the researchers.
"Our research found that in the wake of the financial crisis there is an expectation for stronger association leadership among their members. Companies are taking control away from national associations, and traditional minute-taking 'secretary-generals' are increasingly being replaced by 'director-generals' who are strategists, industry experts and EU players," Atfield said.
The report, entitled 'Key Success Factors for European Trade Associations', reveals that the ability to influence EU policy and protect their members from regulatory threats, as well as offer specific expertise and presence in the Brussels policymaking sphere, are among the most important ways in which European associations are seen to add value.
"The survey findings reflect the increasingly complex environment in which trade associations operate and the need for clear leadership in driving forward their agenda effectively," Alain Beaumont, founder of AGEP Association Management, told EurActiv.
"In particular I would agree that integrated communication across all stakeholders, both internal and external, is essential in continuing to deliver value to members," said Beaumont, who is also secretary-general of the Union of European Beverages Associations (UNESDA).
Members value the contacts they make with colleagues from other companies at association meetings, the industry-specific data that associations provide, and the access to best practice and industry guidelines that they offer.
Such exposure to colleagues helps companies to build coalitions around particular issues, the survey found.
Moreover, members attach great importance to associations' ability to shape media and public perceptions of an industry. "With so many business interests competing for attention in Brussels it is important that an association has a clear identity and message," the report states.
Strategic and communications skills crucial
The leadership of individuals is seen as a crucial indicator of an association's influence over EU policymaking, with director-generals tending to replace secretary-generals as the day-to-day leader in charge of the organisation.
Persuasive diplomacy skills, strategic leadership, excellent communication skills, dynamic networking ability and industry expertise were singled out as key attributes of a successful director-general.
"A vision, the ability to generate consensus internally, and the ability to design and sell industry's solutions externally: these are in my experience the key features of a successful association," said José Lalloum, managing partner of Logos Public Affairs, which specialises in PA, association management and consensus-building.
"With this in mind, I do agree with the study's findings that strong leadership, including a director-general with the ability to listen and who does not shy away from lobbying, is a crucial success factor," Lalloum told EurActiv.
"The other vital feature of European associations is the quality and involvement of their members. Members of associations, with their specific vision, distinct monitoring mechanisms and the trust they have built with stakeholders are key assets in the wealth of an association," he said.
"When these assets are put together in a collective effort, with a strong consensus and a common vision, everyone benefits," Lalloum added.
To secure media coverage of their points of view, associations must put in place an effective digital communications strategy and respond more rapidly to journalists' requests for quotes, survey participants agreed.
But difficulties in finding consensus between their member associations or companies means representatives European federations are not quoted in the press as often as might be expected, they admitted.
Associations slow to adapt to social media
"European associations are generally lagging behind their members and stakeholders in their digital communications capability," Ellwood and Atfield found, concluding that "a significant group" of associations are "adopting a wait-and-see strategy with social media, or are even philosophically opposed to it".
Meanwhile, many Brussels-based associations have been under pressure in recent years as companies under financial strain from the economic crisis reassess costs, including membership fees.
"More and more […] companies are scrutinising the value of their memberships [of] trade associations […] Companies seek competitive advantage and an impact on their business and bottom line," Nikki Walker of the MCI Group told the researchers.
Indeed, European associations have been forced to justify their existence to members by attempting to offer more for the same or less money, the survey revealed.
"As a consequence associations must operate with more of a business mindset and continually reassess, rethink and reinvent their value proposition to the professions and industries they represent," Walker said.
However, participants also stressed that the increase in regulation coming out of Brussels in the wake of the financial crisis meant that many members felt they could not afford to scale down their EU representation, thus preventing a collapse in funding for European associations.
As for the European Commission's lobby register, launched in 2008 by Commission Vice-President Siim Kallas, most participants in the survey claimed it had not affected the way they operate.
However, the majority did concede that data collection and the need to comply with the register's requirements had led to closer consultation between trade associations and their members.
The Commission and the European Parliament hope to get a joint lobby register up and running by June.
EurActiv published the findings of its own survey of European federations in 2009.
"In the same way that you know an underperforming association when you see it, some associations stand out and add a great deal of value to their members. Typically the best associations have excellent people within the leadership teams of their secretariats, at the level of director-general, director of communications, or head of public affairs," said Mark Dober, senior director at Ellwood and Atfield.
"Working together they communicate effectively internally and externally, and deliver favourable EU policy outcomes for their members," he added.
Prominent figures from the world of Brussels trade associations were asked by Ellwood & Atfield to respond to the survey's findings.
"The increased frequency of pre-legislative agreements and agreements at first reading really does put the spotlight on trade associations," said Michael Burrell, vice-chairman for Europe at Edelman.
"They need to be plugged into the process early, they need to be able to respond quickly and flexibly, and above all, they need a sufficiently intimate relationship with the key players in the Council presidency, the European Parliament – especially the rapporteur – and the Commission," Burrell said.
"In a well-run association, there is a good balance in roles and responsibilities between the board and the executive staff. Both need to be strong but understand and respect the role they fulfil for the association," said Alfons Westgeest, managing partner at Kellen Europe.
"Board members should focus on the association's strategy and decision-making. The director-general needs to be empowered to run the daily operations of the association so that the board or its members do not start micromanaging," Westgeest said.
"Today's director-general needs to have a portfolio of skills, and although knowledge of an industry sector can be useful, it is rarely a necessity," said Alisdair Gray, director of European affairs at the European DIY Retail Association.
"There is increased professionalism in the management of many trade associations. The days are ending when a technical manager, or an end-of-career company representative, with little or no public affairs, communications or management experience, or Brussels network, was parachuted in to manage a trade association," said Carel du Marchie Sarvaas, director of EuropaBio.
"Instead, there is a new generation of PA professionals starting to lead associations. This new generation, schooled in 'Brussels ways', better understands the tools and needs of modern interest representation," he said.
"The decay of national presidencies, pre-legislative agreements, agreement at first reading the avoidance of conciliation are some of the EU institutional changes that will impact upon the activity of trade associations," said Tom Spencer, a former Conservative MEP and executive director of the European Centre for Public Affairs (ECPA).
"Internal communications are very important and have to be kept at a minimum. We have very sophisticated tools but at the end of the day members want information summarised in an email with attachments," said Françoise Humbert, executive director of communications at Cefic, the European Chemical Industry Council.
- June 2011: Date by which Commission and Parliament hope to get joint lobby register up and running.