UK: TRADE BODIES PUNCH THEIR WEIGHT.

UK: TRADE BODIES PUNCH THEIR WEIGHT. - Gone are the days when a seat at the top table of a trade association was regarded as a task for time-servers. High-powered, industry-wide lobbying teams, backed by top companies, are becoming the order of the day.

by Martin Vander Weyer.
Last Updated: 31 Aug 2010

Gone are the days when a seat at the top table of a trade association was regarded as a task for time-servers. High-powered, industry-wide lobbying teams, backed by top companies, are becoming the order of the day.

British trade associations, like many other facets of British business, are burdened with a reputation from the 1960s and 1970s which has taken a long time to shake off. The indications are, however, that many of them have done just that, emerging from the trials and tribulations of the past 15 years with a great deal more professionalism and focus than they are generally given credit for. The influences of foreign competition, recession and modern theories of management have combined to bring about a dramatic change for the better just as has gradually happened within the industries they exist to support.

But first, let us sketch in caricature a reminder of the bad old days.

Imagine the scene circa 1981: a delegation from the BWMA (that splendid body of men, the British Widget Manufacturers' Association) arrives in Brussels for discussions on a European-standard widget connector. Leading the British team is the association's president, the stout vice-chairman of a medium-sized, Midlands-based company founded by his grandfather but recently taken over by a hungry conglomerate: the new owners have allowed him a last year on the board while he serves out his presidency of the BWMA, an organisation he has already served at every level from branch treasurer upwards. He has brought with him to Brussels both his chain of office and his wife, who is hoping to have a word with the British ambassador about her husband's lack of a knighthood. He has also brought his director-general, a failed widget salesman but keen freemason, who has vague responsibility for technical matters within the association.

None of the British party speaks a word of any language but English. They consider the concept of European co-ordination to be at best an excuse for a slap-up dinner and at worst a bit of a nuisance; it has yet to occur to them that it might be a serious threat.The all-powerful German Institute of Widget Technology, meanwhile, has sent a team of its most highly qualified multilingual engineers who have already struck quiet deals with the French and Italians in favour of a German-based standard, incorporating multiple safety features unheard of in Coventry or West Bromwich. At the negotiations the German proposal is adopted almost before the Brits have tuned their earpieces to the correct interpreter channel. Returning to their association's palatial headquarters, they report this outcome as a typical piece of Brussels interference, to be resisted by their members for as long as possible.

Resistance, however, turns out to be futile. As the president collects a consolatory CBE and retires to his golf club, European export orders begin to dwindle even faster than membership of the BWMA; cut-price, high-quality, Euro-standard Taiwanese widget connectors flood the market. And another fine old British industry shuffles into terminal decline.

Sounds all too familiar, doesn't it? But thankfully, it is a scenario which really does belong to the past. The best of our trade associations have gone through a process of self-appraisal in recent years, with vigorous prompting from the Department of Trade and Industry. The 1996 successor to our fictional president is likely to be quite different in calibre and outlook. His organisation (by now amalgamated with several other widget-related pressure groups) is - or should be - right on top of regulatory and PR issues, electronically networked and internationally connected, operating from modest premises, and generally in tune with the spirit of the 1990s.

'Ten or 12 years ago a lot of trade federation activities were still being undertaken by elderly managers who had basically been put out to grass by their companies,' says one senior executive in the electronics industry. 'In those days there was enough slack in the system to let it happen, and the Buggin's Turn principle was pretty widely applied. But these days, a tightly run company simply doesn't have senior managers with time on their hands; they've all been weeded out. Efficiency and quality are paramount considerations in business, and have become so in trade associations. The people who have made it to the top of an industry will only commit their time to these organisations if they find them worthwhile, so that in itself has a galvanising effect.'

The DTI's contribution to this reinvention process has been to publish a best practice guide for the model trade association which urges members of real associations to 'question whether they are best served by continuing with their current arrangements'. Among other things, the guide invites associations to put forward to government the kind of well-researched and cogently argued case which makes for better ministerial decisions.

It urges them to co-operate on international standards development (which is certainly happening) and to commission pre-competitive research on behalf of their sectors (which, in most industries, remains in the realm of wishful thinking, despite the availability of DTI funding through the European Framework Programme). The emphasis throughout the DTI guide is on competitiveness, professionalism and best practice.

Interestingly, the guide also urges associations to learn from their overseas competitors - a suggestion which would certainly have fallen on stony ground in the era of our fictional example. But the Germans gained their lead in European trade by taking these matters seriously long before the British, making membership of the appropriate association virtually compulsory in order to maximise the degree of cohesion, for example.

Specific comparisons quoted by the DTI come from the US and Japan. The Japanese model is certainly formidably effective but impossible to replicate within a western business culture. A Japanese trade association is usually chaired by a former civil servant 'sent down from heaven', whose role is to see that companies toe the line of rigid guidance from Tokyo's Ministry of Trade and Industry; it is also likely to favour the interests of the biggest conglomerates, on the basis that smaller companies are also allowed to thrive, but only if they accept that they must conform within a feudal corporate hierarchy.

Perhaps the best example of a home-grown organisation which has learned from foreign competition while retaining its British character is the Society of Motor Manufacturers and Traders (SMMT), which was founded in 1902. The SMMT nowadays includes a Japanese representative from Honda among its officers. It has had to learn to operate in an industry in which 99% of British carmaking is foreign-owned, but it is now said to be considered by deputy prime minister Heseltine himself to be 'a shining example' of how to do just that.

Some commentators claim to find the foreign takeover of the British car industry a matter of shame, but the point about this phenomenal tide of inward investment is that it has revived production to levels last seen in the 1950s, creating a wealth of opportunity for several hundred SMMT members in the component supply business. To win the orders, however, the component makers have to match, or improve on, the exacting quality standards of the Japanese and the Germans. Among the SMMT's quality initiatives is the Motor Industry Forum, a team of 35 engineers - 12 of them from Japan - who visit member companies to 'hot-gospel best practice in the component industry', according to Roger King, SMMT director of public affairs. 'We're after people's minds and attitudes as well as their membership fees,' he says.

The society's president is George Simpson, former head of Rover, now chief executive of Lucas, and about to move on to GEC. Simpson believes that trade associations as a breed have re-emerged 'as important elements in industrial life and industry-to-government communications.

Their nature is fundamentally changing as they deal in a business world which is increasingly international; the focus has moved towards direct involvement in their industry's competitiveness, getting away from the simple representational role.' But these changes make big new demands on the associations themselves, Simpson says. 'They need to be staffed with higher skilled, higher paid people. Senior managers from association member companies need to devote more time to them.'

Electronics is another British industry which, in this context, has responded well to challenging new circumstances. The world may have changed to Britain's disadvantage but we remain the fifth-ranking nation in terms of total electronics-related turnover including software services. The Federation of the Electronics Industry (FEI) is an umbrella organisation which in recent years has begun to provide a single voice for interest groups in telecommunications, information technology, software avionics, defence equipment and electronic components. FEI spokesman Roger Charters speaks of the crucial need for 'strong representation' on a myriad of European committees and bodies, and for the nitty gritty of work on detailed, practical issues on behalf of different segments of the industry. Recent federation successes include the negotiation of new spectrum allocations for high-frequency transmission for the avionics industry, for example, and the winning of government funding for research in the next generation of satellite technology for commercial broadcasters.

Former DTI undersecretary John Thynne, now an executive council member, New Bridge Networks, a supplier to BT, helped to establish the FEI and to focus efforts to persuade Japanese electronics plants in this country to source more components from UK companies. 'Of course you could say that it would have been better if it had been done earlier,' he says.

'But it's not been my experience at any time in recent years that we have suffered in representation by the quality of the people taking part. These are people of real standing in the industry which is in a much better position to punch its weight now.'

The presidency of the FEI has just changed hands between two such men of standing: the outgoing head was Alan Stevens, a divisional managing director of Electronic Data Systems, the giant supplier of government systems. Stevens says that 'if I didn't believe spending part of my time on FEI work was fulfilling, I wouldn't do it: working with industry colleagues is the only way of progressing towards a better state of competitiveness for all of us'. His successor Keith Chapple, managing director of Intel Corporation (UK) and one of the busiest men in the industry, concurs: 'If the large companies aren't prepared to take a leadership role, then who is? It's only by this kind of networking that you can become more alert to what's going on in every aspect of your business environment.'

The plastics industry offers a similar story. The British Plastics Federation (BPF) is the combined voice of some 400 raw material producers, processors and plastics machinery makers, whether British-owned or otherwise. Its outgoing president is Ed Weeks, head of the British operations of German conglomerate BSF. The BPF seeks fruitful relations with rival organisations abroad, and 'without question, we're a match for all of them,' claims Simon James, the federation's communications director. Among the BPF's priorities is the encouragement of 'supply chain partnerships', making sure that plastics producers have the information they need to compete for contracts to supply big inward investors like Samsung, the Korean electronics giant now established on Teesside. Related to that, efforts are being made through a series of regional meetings to encourage some 3,000 smaller plastics companies to join the federation.

Umbrella organisations, employing small teams of expert lobbyists, are clearly the most effective channel by which disparate industries can get their message through to government bureaucrats and the mass media. The British Roads Federation (BRF), for example, has only nine staff, but the 'roads lobby' is spoken of with awe for its ability to persuade successive governments to minimise cuts in the road-building programme. Its includes among its membership a wide spectrum of groups which have an interest in more and better roads, from the AA and the Caravan Club to the Freight Transport Association and civil engineers' groups.

The Food and Drink Federation (FDF) has an even wider spread of specialist groups. It has adopted an increasingly high profile in recent years as manufacturers, growers and breeders contend with matters as serious as the recent BSE scare and developments as absurd as attempts by Brussels to define restrictive standards for sausages and ice cream. The FDF's officers are senior executives of companies such as Weetabix, Nestle and Unigate, and it speaks for 11 major trade associations within the industry. It also provides facilities within its offices for another 30 smaller associations, covering everything from dehydrated potato or pickles, to caramel or prepared fish.

Strength in numbers seems to be the name of the game, both in terms of high levels of membership to ensure that industry groups speak with one voice and in terms of specialist interest groups banding together to support high-powered, industry-wide lobbying teams. Delivering the right message in the right place in Brussels or in Strasbourg or negotiating successfully with powerful government-backed trade groups from Seoul and Tokyo requires sophisticated skills. It is no longer a task to be entrusted to convivial timeservers who regard seats at the trade association top table as an accolade rather than a serious job. To be done properly, the work requires highly professional researchers, lobbyists and PR people, led by top industrialists who are prepared to spare part of their executive time for the greater good of their sector. 'The work that we do now knows no boundaries,' says King of the SMMT. 'In the competitive world we're in today, of course, we've had to change.' It is a world which our widget-makers' president might find decidedly less congenial, but one in which change has been very much to the advantage of British business.

Martin Vander Weyer is an associate editor of the Spectator.

Find this article useful?

Get more great articles like this in your inbox every lunchtime