How to Build a Business-Minded Board
To be innovative, nimble, and generally "more like a business," associations need board members who represent everything the industry touches—and a pipeline that gets them to leadership quickly.
When it comes to trade association governance, Daniel A. Varroney has two seemingly contradictory recommendations. One, get bigger. Two, slim down.
First, about getting bigger. In his new book, Reimagining Industry Growth, Varroney, CEO of Potomac Core Association Consulting, explores how companies in a variety of industries have effectively responded to challenges brought on by COVID-19 and other headwinds. His observation is that those companies—in industries as diverse as recreational boating, baking, and frozen food—have succeeded by partnering with associations that are willing to be ambitious and collaborative.
“[Company] executives are more likely to engage with a trade association if they see it reflects their challenges, their outcomes, and their values,” Varroney says. “They need to see that a trade association has the same level of business acumen about the industry they represent that they have.”
But to arrive at that kind of acumen—the sort that leads to advocacy wins and successful marketing initiatives—associations need to cultivate leaders who come from throughout it’s industry ecosystem. When it comes to recruiting board members, Varroney says associations need to ask, “Who needs to be at the table? Who’s in the value chain, and who’s missing? From there, you can come up with a board design that represents the entire industry. You’re not just looking at companies. You’re looking at manufacturers, suppliers, distributors, sometimes even the retailers.”
But to appeal to that wide swath of industry stakeholders, they need to be treated like they actually have a stake in the direction of the association. In the foreword to Reimagining Industry Growth, Steve Heese, chair of the National Marine Manufacturers Association, implores business leaders to engage in board work: “Joining your industry association and committing yourself and your organization to actively supporting it will pay you back at least 10-fold,” he writes. Joining can be frustrating, though, if an association has a long leadership ladder that requires business executives to serve extended committee terms before a board seat comes into sight.
That’s where slimming down comes in. Varroney points to the example of the National Asphalt Pavement Association, which shifted from a bulky governance model focused on state representatives to a more streamlined approach that was more effective and generated more engagement. (I wrote in more detail about that overhaul last November.)
Every association will have to determine for itself what its own streamlining process will look like. But Varroney notes that clarity with potential volunteer leaders is essential to making it effective: “If there’s visibility, if there’s that transparency, then executives are going to say, ‘Oh, I don’t need to wait 15 or 20 years, there can be an opportunity.’”
Varroney anticipates that the current historical moment will intensify the need to both diversify the core of leaders at an association and make its leadership activity more responsive and business-minded.
“We are in a period of chronic uncertainty, and it will never be anything other than chronic uncertainty,” he says. “There is the broadest possible recognition by industry executives in all industries that I’m speaking with that they cannot do it on their own. They see the ability of the trade association, through these ecosystems, to far extend their reach to get the whole of the industry to build solutions that they can’t build on their own.”
(Igor Kutyaev/iStock/Getty Images Plus)