Leading for Member or Industry Interests

by | Aug 10, 2020

We like to think that industry representative organisations act in a principled way for the interests of an industry as a whole. It’s just not true.

The reality is that peak bodies tend to act first for their members, or for particular types of member businesses (e.g. small, large, different sectors of the supply chain, different geographic locations). It frames a contest between the views of those businesses and others in the industry.

Rather like what’s happening with political parties today, playing to particular interests and ideologies can get short term wins for a few, but it risks polarisation and creating a distrustful silent majority. 

My sense is that these ‘industrial age’ industry representative models are losing currency. Progressive businesses and business communities are leaning towards organisations with a ‘value to all’ purpose.

A recent Harvard article about flaws in the U.S. political system conducted a survey in 2019 of 5,000 business school alumni, many of whom are now in leadership roles. It found that 69 percent of respondents considered that trade associations should focus more on improving the overall business environment and less on advancing the interests of member companies.

The hard truth for peak bodies, is that acting in the best interests of an industry as a whole means they risk unpopularity with some. Leaders risk losing support for being re-elected and their organisation could lose income.

Acting in the interests of an industry as a whole is also hard work. You need to be transparent and concentrate on finding solutions to important, complex problems in the business environment. 

It is much easier to amplify the opinions, priorities and problems of a few, while positioning those with other views as enemies. Polarisation is what follows. 

Next time a peak body claims to represent an industry, always ask about their membership. Then you will have a sense of who they really represent.

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