You can’t swing a dead cat in Washington, D.C. without hitting a trade association or someone who works for one. With nearly 8,000 national trade associations in the United States—2,000 of which are headquartered Inside the Beltway—nearly every industry and business in America has someone looking out for their best policy interests with lawmakers and influencers.
There is a fair amount of debate over what makes an effective and powerful trade association—how do different attributes work for or against them?
Size—Trade groups come in every shape and size. Some of the smaller trades have a half-dozen members, while larger trades have hundreds. There are even a handful of behemoth associations that average members in the hundreds of thousands, which translates to a healthy balance sheet and a lot constituents knocking on a lot of Capitol Hill doors. However, while “big” can often mean “powerful,” large trades have to juggle competing views from a myriad of members, which can lead to watered down priorities and messaging, or a lack of general consensus on even significant issues. On the flip side, while one would assume that it’s easier to reach a consensus in the smallest trades, members may believe this structure affords them more opportunity to dig in their heels in support of their own positions.
Scope—Trade groups that represent various factions of industries also have to deal with splintering issues. U.S. vs global, big vs little, manufacturer vs supplier—while these groups may fall under the same “industry”, they likely have opposing policy objectives and competing interests. Yet, when these groups reach a consensus, their vast footprint carries serious clout.
Member Engagement—The jury is still out on what “level” of membership engagement is the most effective for trade groups. The trades that engage almost solely at the CEO-level, for example, are usually well-positioned to move quickly by going straight to the top for decisions. However, in many cases, engagement from non-C-Suite employees can increase the effectiveness of the trade. Just a few levels down from the top, employees often have a more granular scope, and those details can greatly impact message, ability or outcome.
Representation—Some trades, by virtue of their membership, have a built-in advantage. Representing a popular political constituency, such as small business, vs. a less popular constituency often allows them to start off on friendlier footing; however, no organization can take any advantage for granted. They have to deliver for their members and maintain their clout on Capitol Hill.
Regardless of the trade group attributes, one thing is certain: those who are working hard to be effective and relevant don’t have an easy task.
Advocating on behalf of an industry—particularly a highly-regulated industry—can be extremely technical and constantly demanding. Trade group employees are part negotiators and part policy experts, trying to zero in on the path of least resistance and make their members happy, all while moving the legislative or regulatory needle and keeping the media headlines positive—or, let’s be honest, even neutral. They receive calls at all hours of the day and night, have hostile reporters shuffled their way, and often have to defend business decisions or practices they didn’t create. Case in point—when an industry is in hot water, who appears on 60 Minutes? The trade association. All the while, they may get flack from their members or be held to impossibly high standards. And did I mention that trade groups with overlapping membership are in stiff and constant competition with each other?
So, after painting this challenging picture—is there an upside to industry trade groups?
By representing an entire industry, trade groups are seen as reasonable (albeit biased) experts. Influencers trust them because they aren’t carrying the water for any one person or company, but are advocating for the greater industrial good. Moreover, trades are able to see the forest through the trees and tell a positive, collective story, whereas individual companies can get tripped up by day-to-day news or minutia.
The most effective trade groups go after top-notch D.C. talent, employing experts with tremendous reach into the halls of Congress, the regulatory agencies or with influential media. Highly-effective trade associations have significant resources and understand how to deploy that influence in Washington, taking on legislative challenges—not to mention actual lawmakers—that individual companies could never do alone.
Some trades are considered so influential, that some organizations—even some on the Fortune 500 list—have decided to forego establishing their own offices in Washington, and rely solely on trades to represent their views with policymakers.
Finally, trades have an opportunity to build goodwill and strengthen an industry’s status across-the-board, something that is invaluable if—ok, when—that industry is facing strong regulatory, legislative or reputational headwinds.
So, whether you’re represented by the American Petroleum Institute or the American Pyrotechnic Association, the role of trades as effective advocates for almost any interest should not and cannot be discounted.