New trends in EU trade associations

By Carel du Marchie Sarvaas

Introduction

Brussels hosts over 1,000 European trade federations that represent the interests of companies and national vis-a-vis the EU institutions. They range from small one man operations to large federations with 100 or more staff. But representing companies and federations in Brussels is changing fast, and trade associations are starting to embrace these changes in order to stay relevant and influential. This article identifies seven new trends and considers what’s driving these. These are:

  • Increasing professionalisation of management,
  • Better integration of traditional public affairs and communications activities,
  • More coalition-forming and joint campaigning,
  • Increased dual company and association representation,
  • Outsourcing of selected competencies,
  • Wider benefits communications,
  • Digitalization and new media tools.

What’s driving change?
These trends are driven by a complex range of interacting levers. First, the nature of legislation and regulation decided in Brussels is increasingly complex and cross-sectoral, which, by implication, involves a larger, more diverse assortment of influencers. Decision-making processes are more complicated and the number of member states involved has increased dramatically. A few years ago, just one Commission DG, one Parliament committee, a few influential national government officials and a couple of leading companies and NGOs could decide an issue. Nowadays, legislation involves many DGs, multiple committees and political group representatives in Parliament, and a wide range of business and civil society players – all under the glare of the media. The transparency provided by the recent codification of lobbying rules may also have influenced some organizations lobbying.

Another driver is association members themselves. The financial crisis has pushed many companies to pursue greater cost-efficiencies. External costs like membership dues have come under more scrutiny. There is pressure to do more and better with fewer resources and to show better value to members. People’s time is also increasingly under pressure – many companies can no longer participate in the day-to-day work of trade associations in the same way they used to.

Finally, the success of many civil society groups - particularly environmental and consumer affairs groups - in influencing law making through traditional lobbying integrated with communications, has served as a wake-up call for many associations. Forward-thinking associations are starting to “smarten up” and are applying some of the successful strategies and tactics their opponents are using: more impactful external communications, use of new media, and better use of external resources to engage and influence stakeholders.

Seven trends observed at modern trade associations
Many of the trends seen in Brussels follow those set by associations in Washington DC.

Trend 1: Professionalisation of management. There is increased professionalism in the management of many trade associations. The days when a technical manager, or an end-of career company representative, with little or no public affairs or communications or management experience, or Brussels network, was parachuted in to manage a trade association, are ending. Instead, there is a new generation of PA professionals starting to lead associations. This new generation, schooled in “Brussels ways”, better understands the tools and needs of modern interest representation: integrated issue management, benefits communication and public affairs.

Trend 2: Increased dual company and association representation. This trend is in part a response to the changing nature of associations: companies, and especially the larger ones, are increasingly powerful within associations, most often at the cost of the power of national associations. More and more, companies are dominating and running specific lobbying initiatives. The traditional Brussels association - with cumbersome decision-making structures, governance structures and lengthy consensus-building where national federations set the tone – is disappearing.

Trend 3: Integration of traditional public affairs and communications activities. Well-advised associations have integrated their communications and public affairs outreach, ensuring that their activities around legislation and regulation takes place in a more favorable environment - or at a minimum that their positions and issues are known. This is driven by the behaviour of Brussels’ political actors - MEPs, Commission and Council – who are more and more sensitive to perceptions of what they do. MEPs face public opinion and the Council and Commission are careful that their proposals and decisions are not too unpopular.

Trend 4: Coalition-forming and campaigning. Increasingly, industries groups realise that they need to work together more with others to achieve their goals. Common campaigning is a tactic that is much more common in Washington DC and in the EU has long been applied by the NGO community. Broadly, this is happening in two types of coalitions. First, wider coalitions of cross-societal and sectoral interest – like the coalition of energy companies, utilities and environmental NGOs that campaigned for EU funding for Carbon Capture and Storage. Secondly, in supply chain coalitions – like the loose coalition that brought together companies and organisations from all parts of the food chain to campaign together when GM traces were found in imported commodities. In the chemical industry, in response to reputational and de-selection challenges, value chain teams are now being created to specifically address the concerns of brand owners and retailers. These coalitions are ad hoc and were set up in reaction to legislative or regulatory action, campaigns by other groups, or unforeseen incidents and events.

Trend 5: Outsourcing of selected competencies. As part of the professionalisation process, associations are outsourcing selected competencies. These differ and range widely per association. Recognizing the benefits of external specialists in a wider range of areas, some outsource basic secretariat functions, whilst others outsource the whole membership management to specialized association management companies. Whether in coalition or operating alone, associations are using more technical and regulatory specialists or lobbying and communications experts. As many associations have realized, the benefit is not just specialist expertise resulting in increased impact, but reduced staff and other costs coupled with greater efficiency and flexibility.

Trend 6: Sustained benefits communications. Legislators and regulators consider the impact of their policies on citizens, governments, businesses and the environment. Modern associations understand that it is essential to influence the context in which they make their political decisions. Following in the footsteps of their US counterparts, EU trade groups are instigating longer-term and sustained communications about the benefits of their products and services. Such “permanent campaigning” often starts as a reaction to a threat - whether societal or political - but sustained opposition from civil society, legislative and regulatory action or tough competition from rival technologies or product types, necessitates longer term thinking and communications. A good example is the natural soy industry – which, on the back of regulatory challenges, understood the need to communicate the benefits of soy and continues to do so successfully.

Trend 7: Digitalization and use of new media tools. The new tools available for modern campaigning – whether when lobbying or for wider communications – are rapidly changing the way associations communicate. NGOs, and particularly environmental NGOs, have used electronic tools efficiently to communicate internally for some time – and companies and associations are catching on. The tools available range from simple electronic newsletters, user friendly member-only sites, “smart” databases, to blogs, twitter, electronic campaign tools. A good example of this is the pesticide industry. During the revision of the legislation governing their products, they hosted web conversations that allowed pesticide users – i.e. farmers - to express their opinions to the Parliament, Commission and national ministries.

Conclusion
However large or small, Brussels EU associations are being forced to constantly adapt and modernize due to circumstances and competition. Associations that recognize the identified trends and adapt their operations accordingly, will achieve more impact and therefore greater influence. Those that don’t, risk eroding their capacity to influence the political process. As some industry groups have witnessed, diminished influence can result in real threats to companies’ license to operate.

Carel du Marchie Sarvaas: Is a senior PA and communications expert with many years experience of working in Brussels.

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