What is a professional and trade association?
Professional and trade associations exist in many formats. The Encyclopaedia of Business defines such entities as:
“Professional and trade associations are membership organizations, usually non-profit, which serve the interests of members who share a common field of activity. Professional organizations—also called professional societies—consist of individuals of a common profession, whereas trade associations consist of companies in a particular industry. However, the distinction is not uniform; some professional associations also accept certain corporate members, and conversely, trade associations may allow individual members. The activities of both trade and professional associations are similar and the ultimate goal is to promote, through cooperation, the economic activities of the members while maintaining ethical practices.”
So individually, they may be quite different in purpose, structure and membership, but in today’s connected, digital economy, they all face one clear question:
Are they needed, and if so, what future form should they take?
A brief history of professional and trade associations - why did they develop?
Since the craft guilds of the middle ages, professionals have sort opportunities to benefit from association with people who practice the same set of skills. Typically, membership of such an association confers on the participants some sort of rank or differentiation from others who do not possess a similar set of professional attributes. There were many reasons for such historical associations. In a largely disconnected world, it would be difficult to regularly communicate with a group of one’s professional peers. The communication afforded through such associations would allow members to:
- Network and uncover new opportunities to advance their business and careers
- Keep abreast of new developments and thinking in their chosen field
- Socialise with like-minded individuals
- Confer stature and rank on themselves vis-à-vis others in society
Such associations developed into many different formats. For some, in professions where high levels of skill and qualification might be needed, membership of these associations was necessary to become a licensed practitioner in the field. These associations often had their ability to confer practising rights enshrined into the law of their respective countries, and consequently, the ‘exclusivity’ of membership helped to confer further status and confidence in the profession in the eyes of the wider public. Other types of associations did not necessarily achieve these regulatory powers for their professions, but nonetheless, membership was seen as a way of advancement and achieving some level of status over others who, whilst not prohibited from practising, might still not be seen as commanding the same level of expertise or experience from those in their profession who belonged to the requisite association.
Subsequent to the industrial revolution, we see the increasing emergence of trade associations, whose members were usually ‘firms’ rather than individuals. Their prime purpose was to lobby governments for rights in their area of business, either through favourable taxation regimes or to emphasise their economic importance in an attempt to mitigate adverse legislation which might affect industry profitability. Globally, this has spawned a whole new industry of political lobbyists who in countries like the USA have achieved huge influence and leverage over government.
This scenario continued largely unchallenged for several hundred years and key events such as the first industrial revolution merely served to expand the range of these associations as a broad range of new industrial era skill sets were defined.
Challenges to the future of professional associations
However, this comfortable status quo has changed significantly over the last 2 decades. Many professional organizations are now struggling to maintain their relevance and the future of some is in question. Two key factors are contributing to this.
Firstly, where a professional association does not control the ‘right to practice’, is it necessary to have a single physical and structured entity through which individuals within the same profession can meet? The internet offers many channels for both formal and informal networking on a local and global basis. Groups may be long term or transient; may be broad-based or single issue specific. Membership of such groups is usually free, unlike the formal association where annual subscriptions are the norm. This trend is exacerbated by the historic modus operandi of many professional associations. Formal branch structures, often run by ageing or retired, members, coupled with monthly meetings with unexciting discussion agendas are not how millennials choose to live their lives.
Secondly, disruptive forces in industry and commerce are blurring traditional boundaries between industries. This has a knock-on effect for both professional and trade associations. In the world of the professional association, is artificial intelligence an IT or engineering discipline? Of course, it straddles both, and potentially is an emerging discipline/profession in its own right. So how do existing professional associations react, as many will wish to lay claim to this emerging discipline and embrace it within the boundaries of their existing ‘profession’? For trade associations, how do current associations deal with the blurring of boundaries when, for example, companies such as Google enter car manufacturing with a self-driving car?
So, do we need professional and trade associations?
There are always pros and cons in the answer to any such question. Similar debates are taking place in many walks of life, and similar arguments could be made for questioning the future of, for example, public libraries.
Much of our previous logic might imply that the demise of many professional and trade associations is inevitable, and indeed, there is evidence that many professional associations are experiencing declining membership numbers. However, this is counter-balanced by the pressures emanating from the basic human needs of ‘belonging’ and ‘recognition’, and the need for the leverage that such ‘group association’ can bring to bear.
However, perhaps the main argument for the continued existence of the professional and trade association stems primarily for the need for ‘trusted sources’ in a world where disinformation is prevalent. In the future, we will be increasingly challenged to be able to attest to the veracity of information, and therefore a recognised professional or trade association can be one of those prime sources where trust can be inferred. Here, trust may come in many forms – from the trust that a member is qualified and licenced to perform actions; to the trust that published information is true and verified; to the trust that certain standards of professional ethics are being exhibited by members; to the trust that genuine industry knowledge has been accessed and leveraged in wider decision making. All these represent significant and necessary deliverables of a reputable and recognised professional or trade association.
How should professional and trade associations respond to the challenges?
In considering professional and trade associations, the remainder of this article refers only to those ‘legitimate bodies’ who seek to advance the future of their chosen area. In itself, this does not imply that professional and trade associations need necessarily be ‘not for profit’, but it does imply an overarching purpose that is the furtherance and advancement of a profession or industry (however these latter might be defined).
In order to survive and prosper, professional and trade associations will need to take strong steps to develop a compelling purpose and modus operandi. This will require a dedicated and structured approach to organizational strategy – both in its development and implementation.
So, let’s look at some of the strategic options, recognising that strategy is about making choices and that a single, ‘cookie-cutter’ strategic solution is not appropriate for every association. Indeed, it is the action of making choices that defines the uniqueness of a strategy and each professional and trade association should craft a strategy that is specific and provides a distinctive flavour to its future.
However, there are a number of factors that each association should consider in developing their own unique strategy.
Firstly, the association should focus on developing a ‘statement of purpose.’ A statement of purpose defines the key reason for existence of the association. It is here that the association will need to address whether they are primarily a ‘members’ organization (either individual, corporate or both), and/or whether they will act as an industry research and lobby group.
I have found that this debate is often one of the most difficult for associations to address, and subsequently one of the most difficult issues in which to achieve an appropriate balance of action in day to day management. However, it is critical that this debate is concluded before more detailed strategies are developed, as otherwise it will continue to resurface and become at best a distraction, or more likely, a source of confusion and rancour in subsequent decision making.
Where the prime ‘purpose’ is that of a members’ organization, I have found that such organizations become largely fixated by the value that membership delivers, whether by way of access to discounted services, member events etc, or other benefits that justify the annual fee. This type of purpose can be unduly associated with a need to justify membership cost as a ‘net gain’ for members and can lead to an excessive ‘control’ of the association by, and for, members with decision making being overly focused on member benefit to the exclusion of wider ‘influence’ on third parties or potential ‘societal impact’ of the industry or profession. Essentially it becomes a members’ club.
More progressive association strategies are increasingly seeking a balance between industry/profession advancement and services provided to members. Here the desire to be associated (‘membership’) stems not only from the personal value of services available but also the association with an entity that is seen to be a significant influencer in its chosen sphere of activity.
Perhaps a good example of such a progressive association purpose can be seen in the strategy map of the ACS (formerly Australian Computer Society). On its website ACS sets out a clear purpose for its existence. Traditionally a member focused organization, the ACS 2017-2022 strategic plan sets out a very broad purpose statement to drive its future raison d’etre.
A bold vision and mission statement then lead to a comprehensive strategy map where a more granular level of strategic objective is described.
The strategy map shows objectives which range from development of resources in the profession (capacity); to developing professional skills of individual practitioners and organizations leveraging ICT (capability); through to sparking innovation and realising benefits for the wider Australian economy (Catalyst).
As stated earlier, there is no one ‘cookie-cutter’ approach to developing strategy that will necessarily suit every professional or trade association need, but all such associations need to, first and foremost, address the ‘relevance’ question as they plan their strategic future. The ACS example addresses this through a seemingly effective and ambitious approach that adds value at all levels within the Australian ICT ecosystem.
With a clear strategy in place, what are the likely next challenges?
One of the biggest challenges likely to be faced in implementing any new association strategy will be that of ‘governance.’ Many long-standing associations face arcane governance models that, if not revised, will inhibit the implementation of the new strategic plan. Tackling these governance issues will not be easy. Existing narrow power bases, either of individual members or dominant corporate members, may see the new strategy as a ‘disenfranchisement’ of their current power base within the association. Its difficult to give generic tips for tackling this, as each association will be different and governed by differing forms of structure and charter. However, the revision of association articles and governance frameworks is likely to be the key barrier to effective strategy implementation. Management guru John Kotter talks about the need to establish a ‘burning platform’ for change. Hard facts on membership trends, future financial viability and declining industry influence levels may all need to be collated and driven hard in difficult discussions to produce a necessary wake-up call within the management of the association.
Organization structure, process design and financial viability
With strategy and governance tackled, the management team can now move to the practicalities of a redesigned organization structure to support a new process value chain. This will mostly likely involve a significant overall of the existing organization chart. The new strategy may well require skills which do not currently exist within the association, and so a clear workforce plan with accompanying identification of competencies will be necessary. Essentially this will require a ‘corporatisation’ of the association with accompanying disciplines such as performance goal setting and rewards being put in place.
Critical to this is the development of a viable financial model for the future. If, as seems likely to meet the future relevance tests, the scope of association activity is substantially broadened, then a new funding model will be necessary. Almost certainly, financial viability will not be achieved through existing membership subscriptions or ad-hoc philanthropic donations. Consequently, the strategy must encompass the identification of a range of revenue generating products and services which will need to be run professionally, and on a sound, profit-generating commercial basis. These may include sponsored research, training services, third party course accreditations, industry recruitment portals, event management, publications and acting as an agency for resale of member services e.g. professional indemnity insurance. As outlined above, many of these revenue generating options are likely to require recruitment of appropriate professional skills, hence the need for a fully costed workforce plan.
In conclusion
Any individual professional or trade association has no universal right to exist.
Indeed, today’s connected economy poses many threats to their continued role within their chosen industry or profession. Justifications for existence based on ‘enforcing’ membership through ‘licensing of right to practice’ will ultimately fail and build resentment rather than engagement from members. Instead successful professional and trade organizations will find ways to position themselves at the front end of their industry’s growth curve – serving as the trusted and admired body of industry knowledge and advancement. Associations will achieve this through strategy, governance, organization design and people-processes that place them as an equal in best management practice to anything that exists within their industry or sector space. These associations will be commercially savvy and revenue generating. Membership will be sought after, and they will be acknowledged as having significant impact on the positive growth of their industry or profession.
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