THE BUSINESS ASSOCIATION DEVELOPMENT GUIDEBOOK

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THE BUSINESS ASSOCIATION DEVELOPMENT GUIDEBOOK

A Resource for Chambers of Commerce and Business Associations

This electronic guidebook was developed by Mark T. McCord, a Senior Manager for

BearingPoint who has more than twenty years of experience in organizational

management, as a mechanism for Chambers of Commerce and business associations to

have access to international best practices. Through narrative, practical examples and

sample documents, the guidebook provides specific information on critical developmental

areas, as well as addressing the methodology used by high-capacity organizations to

achieve sustainability. EDGE created this resource to assist organizational leaders around

the world in transcending theory in favor of a practical approach to sustainable association

development. It is published due to the support of the United States Agency for

International Development, through the Economic Development and Growth for

Enterprises (EDGE) project in Cyprus.

In addition to the guidebook, this compact disc also contains specific samples of

concepts discussed in the narrative. The samples come from Chambers of Commerce and

business associations around the globe, from both developed economies and those that are

in various stages of development. They are just a few examples of programs, services, and

initiatives that are being implemented successfully by organizations around the world. For

more information about this guidebook or to submit examples for future editions, please

contact:

Mark T. McCord, CCE (Certified Chamber Executive)

Senior Manager, BearingPoint

Chief of Party

Economic Development and Growth for Enterprises (EDGE)

Nicosia, Cyprus

[email protected]

TABLE OF CONTENTS

Introduction: The Role of Business Associations in Society

Chapter One: Business Association Development Methodology

Chapter Two: Governance: The Foundation of Sustainability

Chapter Three: Strategic Planning and its Role in Organizational Development

Chapter Four: The Business Association Membership System

Chapter Five: Business Associations and Public Policy Advocacy

Chapter Six: Communications and Marketing for Business Associations

Chapter Seven: Developing Effective Programs and Services

Chapter Eight: Financial Reporting

Chapter Nine: Developing Professional Proposals

Epilogue: Top Ten Ways to Build Organizational Capacity

Examples: Global Examples of Business Association Best Practices

INTRODUCTION

THE ROLE OF BUSINESS ASSOCIATIONS IN SOCIETY

SECTION ONE: OVERVIEW OF THE BUSINESS ASSOCIATION’S ROLE

Introduction: Changes in the Business Association Paradigm

Business associations have evolved over thousands of years into organizations that

promote the collective good of their members. The roots of these associations can be

traced to ancient times, when merchants in the Middle East and China joined together to

form cooperatives in order to increase their power in the marketplace. These cooperatives

eventually morphed into merchant guilds that created local monopolies. Eventually, these

guilds gave way to business associations more like those with which we are familiar today.

Modern associations still retain some of the core elements of their forerunners in that they

continue to defend the interests of business and promote economic prosperity. The

evolution of these associations, however, has shaped them into dramatically different

institutions than their predecessors. This evolution has never been more profound than it

has been over the last thirty years, as significant changes have taken place in the structure

and mission of business associations as well as in the services they provide.

With this in mind, the history of business associations as entities promoting

collaborative action is less interesting than the significant changes that have transformed

and continue to transform these organizations into powerful and dynamic engines for

economic growth. New associations are being formed every day, and their relative

strength is measured not by the size of their budgets but by the results they achieve. The

trend in the growth of associations worldwide will continue to rise over the coming years,

which will make the competitive environment even more challenging.

Not so many years ago, success could be measured by the mere existence of

associations. For instance, beginning in the mid-19

century, business associations such

as Chambers of Commerce began to proliferate throughout the United States. The

Chambers were widely considered to represent the business community and they served as

the focal point for economic growth and prosperity. Over the years, a paradigm developed

within the Chamber profession as to how the organizations should be managed and what

services they should provide. In some communities, the Chamber of Commerce attempted

to “be all things to all people” by providing a cornucopia of programs and services. It can

be said that these associations took a “shotgun” approach to the business of promoting

business; meaning that they tried to respond to every request of the business community

regardless of need or prioritization. Other Chambers evolved into little more than social

clubs that were run by the elite of the community. Many of these organizations, while

meaning well, initiated programs and services based on factors that had little to do with the

needs of members. Even though membership in the Chamber was voluntary, as they were

developed using the private law model, many of the organizations failed to realize the

importance of marketing their programs and services because, quite simply, there was no

competition for members’ money and time.

The leaders within a community typically

gravitated to these organizations, but relatively few built strong grassroots support for their

programs and services, as many of the members, while still paying their annual dues, were

detached from the day-to-day operations.

Even so, private law Chambers of Commerce continued to flourish in America

largely due to perceived lack of other options. Because they were not highly regulated by

the state of federal governments, they had maximum flexibility to design and launch

demand-driven programs. The market dictated the success or failure of these programs

that required organizations to remain focused on member needs. In some cases, the

Chambers failed to position themselves to serve the greater business community, which

precipitated the creation of new business organizations that focused on gender, race,

business sector, or geographic area. Since 1980, over hundreds of thousands of business

associations have been created in the United States alone, which generated competition for

the business community’s money and time.

Many private law Chambers use a combination of volunteers and paid staff

members to conduct their programs.

This provides for effective implementation of

programs and services, but it also creates a need within the organization to remain vital

through marketing its programs and services. Many of these Chambers have found a niche

in public policy advocacy, using a reform mentality to recruit and retain their membership

base. In the private law system, government cannot regulate the type of programs

associations provide, nor can they “assign” to them tasks that must be implemented.

In Europe, Chambers of Commerce and other business associations have been in

existence for hundreds of years. In most European countries, Chambers of Commerce are

organized according to public law, under which businesses are required to pay annual

dues.

It should be said the public law status does not necessarily dictate mandatory

membership, but under the Continental Model, law requires obligatory membership for all

self-employed persons and legal entities that run businesses within a legal district.

Obligatory membership includes a regular and mandatory financial contribution to the

Chamber. While this provides stable income to the organization, it also requires Chambers

to fulfill certain tasks defined by law and it sometimes includes supervision of the

organization’s activities by the government.

Private Law Chambers are those that exist not through a law passed by government, but rather through

demand of the business community. Membership is voluntary, which requires these associations to provide

programs and services based on member demand in order to remain competitive. The private law model is

most usually referred to as the Anglo Saxon model. For more information, refer to chapter two of this

guidebook.

Volunteers in this context are defined as business owners, managers, and/or entrepreneurs that provide their

time free of charge to serve on committees or otherwise assist in the implementation of programs.

Public Law Chambers are those that exist under law. Membership is usually mandatory and the

organizations usually serve a geographic area that is set by statute. Many have advisory status, vis-à-vis the

government and are supervised in some form by the government.

The Continental Model is a term widely used to define the public law chambers of commerce on the

European continent.

Outside of Europe, and especially in developing countries, the public law model

has proliferated. This is especially true in countries that formerly maintained tight control

on all aspects of society. In Latin America, for instance, some governments have

negotiated broad-ranging agreements with unions and business groups that establish

targets for wages, prices and other economic indicators. While these agreements promote

stability within the economy, they at the same time restrict markets from responding to

changing conditions. Under the close scrutiny of the government, many business

associations are reluctant to adopt a reform mentality, even if the business community

supports such a position.

This is not to say that public law organizations are inherently opposed to economic

reforms or are incompatible with a market-based economy. However, their role as agents

for the State must be balanced so as to diminish any anti-reform tendencies they may have.

In Western Europe, and increasingly in other countries as well, balance between State

control of associations and the demand for reform is achieved by the emergence of private,

voluntary-membership associations that represent their members’ interests.

In addition to the Anglo-Saxon (private law) and Continental (public law) models,

there is rapidly emerging a hybrid form of business association that contains certain

elements of each model. Two of these sub-models are the Eurasian and Asian Models.

Most of the organizations utilizing these models embrace voluntary membership but differ

from the traditional Anglo-Saxon model in that they have a law that protects their interests.

Also, they have protection of territory (meaning that no other Chamber or business

association can compete with them in their own region). The Russian Federation Chamber

of Commerce is an example of the Eurasian Model, while the Chamber of Commerce

systems in Indonesia and Japan are examples of the Asian Model.

While organizational models of global business associations tend to vary, one clear

trend has emerged that affects organizations regardless of their geography or governance.

This trend, simply, is one of member demand. Even in countries where public law

Chambers are prevalent, they have come under constant pressure from emerging private

sector associations that are winning the hearts and minds of the business community. It is

as if members in these countries are saying, “You can force us to give you our money, but

you can’t force us to give you our support”. This trend has been prevalent in countries

with private law Chambers for years, but it is now emerging even in transitional countries.

As business communities become more empowered both educationally and economically,

this trend will only increase, putting increasing pressure on aging and outdated

organizations, as well as those that for whatever reason cannot adapt to changing market

conditions.

For years, business executives in transitional countries have regaled the lack of

business association mentality that exists within the business community. While this

complaint makes sense on a tertiary level, in reality it cannot be substantiated, as even in

countries such as Bhutan and Afghanistan, where business associations were virtually

unknown until recent times, the private sector quickly embraced them once it was provided

with a basic understanding of their purpose. It has become obvious that the problem was

not within the business community as much as it was within the organizations themselves.

While they struggled to understand their own purpose, the private sector was left twisting

in the wind of change only to eventually anchor itself to the first organization that could

provide significant services.

SECTION TWO: ESTABLISHING A PURPOSE

Many business associations have difficulty because they lack an understanding of

why they exist. Because they don’t understand this basic element of organizational

development, they fail to develop demand-driven programs and thus cannot recruit

members. Organizations that don’t understand their purpose are like rudderless ships that

pound through an angry sea with little sense of direction or accomplishment. This being

said, regardless of a business association’s age or size, it must have a complete

understanding of why it exists. This is the foundation on which success is built.

There is little doubt concerning the importance of business associations to private

sector growth. The question, then, is why are they so important? When analyzing global

organizations, the following factors emerge as the most common reasons why business

associations must exist:

 Strong business associations harness the capacity of private businesses.

Owners and managers of private businesses have realized for many years that there

is strength in numbers. Few companies, even those that are considered large by

global standards, can accomplish their goals without the assistance of outside

sources, such as business associations. That’s why companies like Compaq,

Microsoft, and Coca Cola are great supporters of business associations around the

world. They realize that associations provide them the best opportunity to network

with each other and to enhance their economic, social and political interests. The

capacity of small and medium-sized companies is also increased because of the

services that business associations provide, and due to the fact that associations

provide them a collective strength that they do not have on their own. In other

words, the power of “me” becomes the power of “us”.

 Strong business associations create business opportunities. One of the major

reasons for the growth of business associations is that they provide business

opportunities for their members. Whether through contacts with companies in a

specific region or around the world, business associations are one of the best

conduits for information and collaboration. This collaboration is a key component

to the development of business opportunities.

 Strong business associations protect the interests of both companies and

employees. By harnessing the collective power of their members, business

associations protect the interests of the private sector by developing dialogue with

government. Until recently, many business associations believed that public policy

advocacy (the process of defining issues, developing a position on them, and

advocating this position) was not a service that they could or should provide.

However, over the last several years, this attitude has changed as business

associations have come to realize that government simply will not respond to

businesses unless they have an advocate. Business associations are natural

advocates for the private sector, and have learned to use the collective strength of

their members to ensure the views of businesses are heard, and that pro-business

legislation is passed. When this occurs, business associations gain credibility

because they have provided a valuable service to their member companies;

companies benefit because their interests have been protected and pro-business

legislation has been passed; and employees win because stronger companies

provide better job security and more opportunities for advancement. Around the

world, governments are beginning to respond to this approach because they have

come to realize that business pays all the bills, meaning that when businesses

prosper, workers prosper and when workers prosper the government prospers

through increased tax collections, decreased need for social and benevolence

programs, and growing societal harmony. The taxes paid by companies and

workers provide the revenue for government to fund its operations and to provide

assistance for the less fortunate in society. From this standpoint, business really

does pay all the bills, and therefore needs business associations to serve as its

advocate.

 Strong business associations promote civil society. For many years, researchers

have sought to develop a link between the strength of business associations and the

development of civil society. The strongest argument in favor of this assertion is

that when business associations provide services to their members, including

encouraging the government to be open and transparent, the framework of civil

society is strengthened. Business associations provide a mechanism in which

legitimate businesses can work together to benefit society.

 Strong business associations enhance the business climate. Associations around

the world are embracing public policy advocacy as a way to enhance the business

climate. Movement toward this reform mentality has been largely generated from

member demand for an organization that will protect their interests.

 Strong business associations combat corruption: Increasingly, business

associations have become involved in anti-corruption programs, realizing that

corruption costs countries hundreds of millions of dollars while at the same time

eroding competitiveness. The Institute for Private Enterprise and Democracy

Foundation (affiliated with the Chamber of Commerce and Industry of Poland)

established a Business Fair Play program that encourages transparency and ethics

in business. Other organizations, such as Confecamaras in Colombia, are battling

corruption in both the public and private sectors through public policy advocacy

campaigns and informational programs.



SECTION THREE: FUTURE TRENDS

It has been said that humans can never change the way they act until they change

the way they think. Analysis of business associations over the last twenty years has

proved the applicability of this statement to organizational development as well. In

countries around the world, associations have either progressed or been marginalized

because of their ability to adapt to changing economic, political and social circumstances.

Embracing change is typically not as difficult for young associations, as long as they are

formed because of demand and adopted an appropriate governance structure, but it is

sometimes traumatic for older, more established associations that have spent years either

under State control or mired in an archaic governance process.

Over the past ten years, an effective method has been developed to conduct a

thorough analysis of business associations using an evaluation model based on

international best practices.

Through this analysis, it has become apparent that the

emerging paradigm for business association success will focus on the following core

principles:

1. Embracing strategic planning as a value added process. Increasingly,

successful business associations are viewing strategic planning as a necessary value

added commodity to the development process. A strategic plan, which is most

often defined as a three to five year compendium of an organization’s goals and

action steps, is a “roadmap” to achieve specific and measurable results.

Strategic planning typically involves five primary steps. First, comes the

development of a vision statement, which defines the end state that the association

wants to achieve during the planning period. Secondly, it is the development of a

mission statement that briefly outlines the association’s purpose. The third step is

the development of quantifiable goals and objectives in order to determine the

results to be achieved during the time covered in the strategic plan. The fourth step

is the development of action steps to achieve the goals and objectives and the fifth

step is evaluating the results achieved.

Through utilization of a strategic planning mechanism, successful business

associations can achieve significant results within a specific timeframe. It is

essential, of course, that associations gain input from their members prior to the

development of the strategic plan, and it is likewise important for the organizations

to segment the three to five year strategy into one year increments, sometimes

called a “Program of Work”. Some of the most successful business associations in

This model, called the Business Association Diagnostic, assesses organizational strength in ten essential

developmental areas. The evaluation, while not a test, does allow for comparison of business associations to

an international best practices model. The diagnostic focuses on 1) mission and objectives; 2) governance;

3) organizational structure; 4) programs and services; 5) organizational staff; 6) financial planning and

reporting; 7) membership development and retention; 8) communication; 9) public policy advocacy and 10)

information management. It was developed by the Center for International Private Enterprise (CIPE) and

adapted for use in transitional economies.

the world use strategic planning as their first and most important building block for

success. As one association executive in the Czech Republic stated, “It only makes

sense to know where you want to go before you start the trip”. Strategic planning

allows associations to know where they want to go and how they are going to get

there.

2. Changing the membership development paradigm. Few changes in the

business association arena over the last twenty years have been more dramatic than

those in membership development. This is especially true for organizations in

countries that have adopted the private law model, since this usually assumes that

membership is voluntary. Changing demographics and processes have also

affected organizations in countries that favor the public law model, in that private

sector organizations have used new approaches in membership development to

create an important niche within the business community.

Within the last twenty years, the membership paradigm has changed from a

“campaign” mentality to a “process” mentality. Through the mid-1980s, business

association executives in the United States were trained to conduct a membership

campaign every year in order to “recruit” new members. These campaigns, which

typically ranged from a few days to a few weeks, used focused marketing,

testimonials, and other sales tactics to “convince” members to join the

organization. In the late 1980s, organizational executives such as Jerry Bartels,

who at the time was President of the Atlanta, Georgia Chamber of Commerce,

began to view membership in a different way.

Over time, other organizational

executives joined the discussion and by the mid-1990s the trend in membership

development for the most aggressive business associations swung toward the

implementation of an overall membership system.

The membership system establishes membership recruitment, retention and non-

dues income generation as a tripartite process for organizational growth. Through

this system, membership is “institutionalized” through the involvement of every

facet within the organization. From the President to the receptionist, membership

development is considered of paramount importance and it becomes everyone’s

“job” to increase the organization’s support. Within this system, membership

retention has the highest priority, while the old paradigm of membership

campaigns is relegated to just one of many processes that may be used to recruit

members. Non dues income, defined as income generated by any source other than

membership fees, is the third element for success, as it generates revenue and

support to augment membership dues.

Jerry Bartels was one of the initiators of the “Total Resources” strategy, which focused on membership

retention, recruitment, and non-dues income generation as a way for business associations to obtain the “total

resources” necessary to conduct their operations, programs, and services at one time during the year, versus

using the old paradigm of raising funds all year long. This method is still used by many business

associations today.

Business associations around the globe have adopted this system to adapt to

changes in marketplace. Even organizations that have mandatory membership are

using elements of the system to upgrade services and to create more revenue

through non dues sources. This system will provide successful business

associations in the twenty-first century with a mechanism to sustain membership

and financial growth.

3. Establishing transparent financial systems. In transitional countries, where

financial systems even at the highest levels of government have been suspect at

best, business associations have struggled to implement financial processes that are

both transparent and effective. The reasons for this are numerous, but the lack of

adherence to international accounting standards is one of the most obvious. Also,

technological limitations in some countries have made the establishment of such a

system fraught with challenges.

Increasingly, however, donors, association leaders and members have pressured

associations to adhere to international standards as far as financial reporting is

concerned. In response, many associations developed a financial system that

includes the approval of an annual budget, the generation of monthly financial

statements, the allocation of expenses through a general ledger, and the creation of

an income statement to track assets. In addition, many have adopted financial

procedures manuals that outline specific processes that must be used to ensure

financial accountability and transparency. Successful associations rely on

transparent financial practices to instill member confidence and to build credibility

within the business community.

4. Embracing public policy advocacy in support of member demand. Within the

last twenty years, there has been an explosion in the number of business

associations that are involved in public policy advocacy. In fact, after the breakup

of the former Eastern Bloc, a number of emerging associations within Eastern and

Southern Europe made a focus on advocacy a priority item in their strategic plans.

In doing so, they determined, quite rightly, that advocacy is a major reason for

businesses to join associations. On their own, businesses may have little access to

information and little recourse against government regulations, but as part of an

association, they have a collective voice.

As new associations emerged around the world and existing associations made the

transitions necessary to address private sector demands, they benefited from a new

paradigm in public policy advocacy that was developed and promulgated based on

research conducted by a number of organizations. Known as the “advocacy

system” this thirteen-step process institutionalized public policy involvement

within the associations’ strategy. In many countries significant structural changes

in government resulted from the ability of business associations to use this process.

In this century, success in advocacy will no longer be measured by whether or not

an organization is involved, but how successful it is and what process it uses.

5. Focusing on economic development as an economic building block. The term

“economic development” has been overused and over analyzed. In its most basic

form, economic development simply means “the creation of wealth”. Any function

that creates wealth develops the economy and increases competitiveness.

It is clear that successful business associations in the twenty-first century will

continue to focus on creating wealth within communities. In January 2002, Juan

Camilo Restrepo, a conservative candidate for President of Columbia, stated,

“Today the name of peace is employment….” In other words, business

associations must play a role in developing the overall economy and providing

jobs.

6. Becoming a broker of information. It has often been said that information is

power. However, it has become apparent that simple access to information does

not create power, but rather the use of this information in promoting economic

growth. Throughout the globe, successful organizations are serving as information

brokers to the business community by compiling, interpreting, distributing and

evaluating data. These organizations will come to understand that information is

not only power, it is also a source of revenue and prestige.

7. Embracing community trusteeship as a core value. Community trusteeship, in

its simplest form, is the safeguarding and/or enhancement of the community for

future generations. Community trusteeship has become a core value within strong

business associations, in that they realize their economic, social and educational

responsibility to future generations. Through trusteeship, these associations have

built grassroots support and credibility to enhance private sector development

through individual initiative.

8. Becoming a driving force in educational and workforce initiatives. According

to Luis Jorge Garay, “Poverty, inequalities of income, ownership and opportunity,

the exclusion of large segments of the population from the benefits of modern life,

amongst other things….The elimination of just some of these would be enough to

achieve true peace”.

This statement is becoming increasingly meaningful for

business organizations within transitional and post-conflict countries, but it is also

applicable to those in the developed world. Successful business associations are

heightening their involvement in education and workforce issues as a way to

address social unrest and societal fissures.

9. Celebrating diversity as a way to foster social and political change.

Associations such as the Afghanistan International Chamber of Commerce have set

a standard for diversity that is indicative of successful business associations. In

valuing diversity, business associations can expand their breadth of knowledge as

well as their baseline of support.

10. Using technology to build visibility and grassroots support. Technology or lack

thereof, continues to be a significant factor in business association development.

Garay, Luis Jorge. Para donde va Columbia? Bogota. February 1999.

While technology offers exponential opportunities, severe gaps in infrastructure in

transitional and post-conflict countries have made this medium inaccessible to

many business associations. Future success will depend on the ability to

communicate with members to gather input and garner support. This means that

technological gaps must be bridged through coordinated assistance from

governments, donors and the private sector. Associations must also harness the

power of technology by investing resources in hardware and software, as well as in

technical assistance for staff members and key volunteers. Currently, for all too

many business associations, the technology super highway is a dirt road.

11. Focusing on marketing strategies to reinforce organizational purpose and

message. It has often been said that “It doesn’t matter what you do if no one

knows you did it”. This is especially true of business associations, which depend

on marketing to increase membership, volunteer support and credibility. Even in

organizations with mandatory membership, marketing of programs and services is

critical to maintain connection with the business community. Future success will

depend on associations’ ability to create, market, and evaluate demand-driven

programs and services, as well as to build an organizational brand that denotes

excellence.

12. Adopting a team-oriented management style. Within the association arena, the

paradigm of management has changed significantly over the last twenty years.

Organizations that operated with a top down management style that limited

empowerment opportunities for staff members have been forced to reassess their

management strategies. A growing number of associations have adopted team

approaches to management, which focus on empowerment and individual

initiative. This paradigm is especially foreign to associations in former totalitarian

countries where hierarchical management was accepted as a cultural norm.

However, even associations with a background in top-down management are

beginning to accept the team approach, as they realize it provides them with

maximum ability to adapt to a changing business climate.

13. Employing and empowering professional staff members. The metamorphosis

of organizations in the West was initiated through a variety of factors, not the least

of which was the acceptance of organizational management as a profession.

Organizations are now harnessing the experience of paid professionals in order to

increase their power and influence. These organizations spend significant

resources on training in order to develop specialists in areas that are important to

their members. It is clear from trends within business associations around the

world that the days of volunteer management are coming to an end.

14. Involving the business community. Even in organizations that possess a highly

trained and profession staff, a significant amount of work is conducted through

volunteers that donate their time to assist in the organizations efforts.

Organizations around the world are beginning to recognize that the involvement of

the business community, first through payment of membership dues and then

through involvement in the organization’s programs, is critical to sustained growth.

Again, the concept of volunteerism is foreign to many cultures in that no historical

basis exists for its acceptance as a societal norm. However, in countries such as

Romania, Hungary, the Czech Republic, and Russia, volunteers are being

welcomed into associations and they are coming in droves. In fact, volunteerism

within associations is rapidly becoming the rule instead of the exception.

There is no doubt that successful associations are built on a foundation of

knowledge.

However, it is apparent in a changing world that knowledge is not enough to sustain

growth. Rather, it is the use of this knowledge in adapting to change that will create

powerful and sustainable business associations. The remainder of this guidebook will

focus on international best practices in business association management, using examples

from around the world. These examples, while important to an overall understanding of

core organizational management principles will impact associations only if they are used

in combination with strong leadership, vision, and strategy. By changing the way their

leaders think, the paradigm of association management will shift toward more sustainable

organizations and more invigorated business communities.

SECTION FOUR: CONSTRAINTS FACED BY BUSINESS ASSOCIATIONS IN

DEVELOPING/TRANSITIONAL COUNTRIES

Business association development in any part of the world is not easy, as

competition, changing economic structures, and challenging advocacy environments are

forcing even well-established organizations to change the way they conduct business. In

developing and transitioning economies, however, associations face additional constraints

that can be quantified into five basic categories.

The first, and arguably the most complex of these constraints is a lack of a business

association mentality. In many transitional economies, there is a lack of a business

association culture created by the ideology of former governmental regimes. This was the

case throughout most of Eastern Europe, Russia and Central Asia. While virtually every

country in these regions had a history of business associations, most were either controlled

or ended by repressive regimes. When coupled with the transition of most private

enterprises to the State, the years took a toll on the business association mentality and

eventually eroded their ability to be effective. The associations that did survive tended to

be tightly controlled by the State, with most serving as public relations conduits for the

government’s economic policies. Once these regimes changed, the countries were left

with a large number of state owned enterprises, a lack of understanding concerning the

market economy, and relatively little enthusiasm for the support of business associations.

The latter stemmed largely from the belief that associations either could not provide

demand-driven programs and services or that they were merely extensions of government

as had been the norm in many of these countries for over 40 years.

This lack of understanding of the need for business associations created a second

constraint, which was lack of trust. In many transitional countries, oppressive regimes had

eroded trust in institutions as a whole. Since many existing organizations, usually national

Chambers of Commerce, had been used by governments to promote specific economic and

social policies, the business community was slow to put their trust in them. This was

especially true since the leadership of a number of these organizations did not change.

With the same people in control and government in transition, little trust could be

developed between the existing associations and the private sector. This eventually led to

either the creation of new demand-driven business associations or the reform of the

existing institutions. The former was perceived to be the path of least resistance in many

countries, as the existing institutions were considered to have too much “baggage” to be

effective even with new leadership. Romania typified many transitional countries by

proliferating new business associations while at the same time undertaking reform of the

Chamber of Commerce and Industry of Romania and Bucharest (CCIRB). CCIRB is

today a growing and progressive organization that is meeting the needs of Romania’s

private sector.

The proliferation of new associations, combined with the restructuring of existing

ones led to a third constraint, which was lack of communication between organizations and

their members. The first hurdle for associations to clear was to create a need within the

private sector to become members. This was a daunting task that many organizations had

not mastered even ten years removed from the change in government. Of course, success

in this endeavor was based on an organization’s ability to develop demand driven

programs and services, while at the same time marketing the benefits of association

membership to the private sector. Associations that were able to develop an effective

communications strategy, such as the Brno Chamber of Commerce in the Czech Republic,

benefited through membership growth. Those that could not communicate effectively

either remained as small and low-capacity organizations or focused on a different method

of achieving sustainability, such as mandatory membership. The latter alleviated the need

for the associations to communicate effectively, while still providing them with a

consistent source of income.

Eventually, though a large number of associations created communications and

marketing strategies in order to reach their potential members. The most successful of

these strategies focused on the matching of customized benefits and services to the needs

of specific members. For instance, manufacturing companies have different needs than

retail trading firms, so the programs and services offered to them should also be different.

Many organizations also created communications products such as newsletters, magazines,

advocacy reports and websites. These products not only provided a variety of ways for

them to market their activities, but they also allowed the organizations to collect member

input and data.

In addition to dealing with external communication issues, a majority of the

associations also dealt with imperfect internal systems that caused chaos within the

management structure. Once internal communications broke down, the associations were

unable to establish a consistent message for the private sector. Over time a number of

these associations were able to improve their internal communications systems by

instituting weekly staff meetings, networking events, and modern management techniques.

Lack of effective internal communication led to an overall inability to adjust to a

management style that is conducive to peak organizational effectiveness. This fourth

constraint was exacerbated by the ideology and/or culture within the transitioning

countries. Many had been governed by oppressive regimes for decades, causing a

generation of managers to adopt a top-down management style. This higherarchical style

created bureaucracy and was not compatible with the ability of associations to meet market

demand. This being the case, association leaders had to change their own management

paradigms to adapt to new circumstances. This process moved painfully slow in many

developing nations, and even today the higherarchical management style is prevalent in a

number of transitional countries. Organizations such as the Dhaka, Bangladesh Chamber

of Commerce and Industry have instituted new participatory management systems, though,

which are becoming the more prevalent in transitional countries. DCCI not only

empowers its employees to perform at peak efficiency, but also keeps past volunteer

leaders involved in an advisory council to assist the president and board of directors in

addressing important private sector issues.

A fifth constraint faced by associations in transitional economies was either lack of

a legal infrastructure or the adherence to an archaic law(s) that governed organizational

development. Many countries in transition had laws on the books that specifically

acknowledged one or more business associations (usually a national Chamber of

Commerce or industrialists organization) as the government’s “official” representative on

economic issues. Few of these laws were repealed quickly, which left new business

associations in a kind of legal limbo, which led to a lack of legitimacy for most demand-

driven organizations. When coupled with the lack of a legal framework for doing

business, this led to the proliferation of scores of business associations that lacked

credibility with the government and had little legitimacy within the private sector.

Eventually, a majority of transitional countries repealed their archaic business association

and/or non-governmental organization laws, but some were replaced with new laws that

put different types of restrictions on the development of business associations. There is

still much debate within transitional countries as to the legal framework within which

organizations should operate.

In many transitional countries, non-existent or inconsistent legal frameworks led to

government’s lack of interest in acknowledging the right of associations to advocate on

behalf of their members. While some governments simply ignored the associations, others

actively pursued a “containment policy” whereby one association or group of associations

would be allowed access, while the others remained on the fringe of the policy debate.

After several years of focused attention from private sector organizations, governments in

many transitional countries are becoming more inclusive and supportive of a wide variety

of institutions.

Many of the constraints noted above are being favorably addressed by aggressive

and forward-looking business associations. The most successful organizations are

focusing on making a business case for membership and are ensuring participation from

businesses of all sizes. By tailoring programs and services to companies of different sizes

and types, associations in transitional countries have been able to create significant return

on investment for their members, which of course has led to increased member support.

While difficulties remain, these associations are examples for their counterparts around the

world.

CHAPTER ONE

THE BUILDING BLOCK METHODOLOGY: DEVELOPING HIGH CAPACITY

ORANIZATIONS

The key to building the capacity of business associations is an understanding of the

developmental model that allows for the creation of sustainable organizations.

BearingPoint has used the following model extensively to build the capacity of Chambers

of Commerce and business associations around the globe. The pyramid in Figure 1.1

outlines the model’s major components, which are:

 Governance: Organizational strength flows from the development of a fair and

transparent governance system. This is the foundation on which capacity is built.

 Programs and Services: Capacity is also built through the development and

implementation of demand-driven programs and services that meet the private

sector’s needs. Membership input is critical in order for these programs and

services to be truly demand-driven, which typically necessitates an ongoing series

of surveys, focus groups and communication in order to assess member attitudes.

 Visibility: Visibility is often confused with effectiveness. However, there are

multitudes of associations around the world that are visible but not effective. The

danger in transitional and post-conflict countries is that donor support will

artificially create visibility that cannot be sustained by the organization due to its

overall lack of capacity. True visibility, which leads to credibility and ultimately to

sustainability, is built on a foundation of good governance and progressive

programs/services that promote member involvement. Visible organizations are

ones that tell their story effectively, utilizing both media and word-of-mouth to

create awareness.

 Credibility: It may take a number of years for a business association to build

credibility with its members, the community and the government, as this only

happens through sustained focus on governance, programs/services and

communications.

 Sustainability: Credibility over a number of years establishes a sustainable

organization. Sustainability must not be considered only in economic terms, but

also including other factors that contribute to overall organizational health, such as

effective leadership. A sustainable organization is one that has power, both with its

members and with stakeholders in government and the private sector.

It should be noted that these levels are not mutually exclusive, meaning that one

has to accomplish one before moving on to the other. In fact, it is common for business

associations to work on governance, programs/services and visibility at the same time.

However, it is important that an association not “skip a level”. For instance, it would be

counter productive to focus on programs/services and visibility and ignore governance.

Figure 1.1 The Organizational Sustainability Pyramid

Movement up the sustainability pyramid requires customized intervention within

the following four activity areas. Each one of these areas should contain demand-driven

and practical objectives and activities that focus on building organizational capacity:

1. Foundational Resources: These are resources that assist business associations in

developing strong and transparent governance structures based on international

best practices. Some of these resources include effective bylaws, election

procedures, strategic planning processes and ethical guidelines. (Governance)

2. Informational Resources: These are resources that provide ongoing, customized

information to business association leaders in order to build their knowledge and

effectiveness. Some of these resources include technical assistance, publications

and networking. (Governance/Programs and Services)

3. Developmental Resources: These are resources that actually build capacity within

business associations by establishing programs and services and internal

management capacity. Some of these resources include staff development and

mentorship. (Programs and Services/Visibility)

4. Financial Resources: These are resources that business associations need to sustain

their operations as well as to manage growth. In transitional countries, this may

require short-term financial assistance through temporary external financing in

order to establish a firm financial foundation. (Credibility/Sustainability)

Credibility

Sustainability

Visibility

Programs

Services

Governance

Must be powerful

Must be believable

Must be noticed

Must be strategic and

demand-driven

Must be transparent

The

Sustainability

ramid

As an association moves toward sustainability, it is buoyed by increased

membership support, which leads to empowerment. The higher an organization moves up

the sustainability pyramid, the higher its members will move up the empowerment

pyramid shown below in Figure 1.2. Those members at the pinnacle of the pyramid, who

are considered to be committed and empowered, are virtual “customers for life”, meaning

that it would take an almost apocalyptical situation to erode their support for the

organization. This being the case, the higher the percentage of members that are in these

two categories, the more sustainable an association becomes. The empowerment pyramid

is shown below, and outlines the process required to turn an “uninformed” businessperson

into an “empowered” member. Graduation of members from “uninformed” to

“empowered” is directly proportional to the organization’s success in moving up the

sustainability pyramid described earlier. The more an association moves toward

sustainability, the more its members will be committed to its success.

Figure 1.2 The Membership Empowerment Pyramid

These pyramids operate parallel to each other, meaning that as an organization

creates a transparent governance structure, institutes demand-driven programs, and

becomes more visible, the business community responds by increasing its monetary and

emotional support, until becoming “empowered”. Reaching the “empowerment” level

essentially means becoming a “customer for life”. At this level, members have so much of

themselves invested in the organization that they would not leave except under virtually

apocalyptic circumstances. While a majority of members in any organization, regardless

of where it is in the world, never reach the “empowered” level, a strong, sustainable

Committed

Empowered

Involved

Interested

Uninformed

Value representation and

sustain it.

Believe in representation and

are willing to support it.

Acknowledge representation

and become part of it.

Acknowledge representation

but don’t know how it works.

Want representation but

don’t know how to get it.

The

Empowerment

Pyramid

organization will strive to ensure that a large majority of its members are at least at the

“committed” level.

The relationship between these two pyramids is at the core of organizational

success, as they show the relationship between strategic governance, programming, and

communications to member involvement. It should be noted that increased funding is not

specifically mentioned in the sustainability pyramid, though it is assumed that a

sustainable organization will also be one that has a funding level that is appropriate to

conduct it operations, communications, and programming. The reason it is not a specific

part of the pyramid is that as members move up the pyramid, and especially when they get

to the “committed” and “empowered” tiers, they are willing to support the organization

with their finances as well as their time. This being the case, there is a corollary between

“empowered” members and a financially “sustainable” organization.

CHAPTER TWO

GOVERNANCE: THE FOUNDATION OF SUSTAINABILITY

“The problem with business association governance is that everyone wants to ride

the roller coaster, but few want to design or fix it”. There is a great deal of truth to this

statement in that it is exhilarating to ride a roller coaster….the ups and downs of the trip

are exciting and at the same time somewhat frightening. Yet, at the end of the ride, one

feels excited, even refreshed, by the experience. Those who design or repair roller

coasters enjoy none of the thrill of the ride, but are arguably the most important people in

the process as they keep the train from jumping the tracks. The establishment of good

governance within a business association does the same thing….it keeps the organization

from losing direction, getting off-course, and eventually “jumping the track” into chaos.

For business associations in a growing number of countries, governance has

become more than just a step in the organizational process. It has become one of the most

important aspects of building organizational capacity. In fact, according to the

sustainability pyramid discussed in the last chapter, governance is the foundation on which

the entire organization is built. It is virtually impossible to build a strong association on a

weak foundation, so focus on governance is of critical importance to business associations.

Definition of Governance

In order to discuss governance, it first must be defined. For purposes of this

guidebook, governance is defined as “the development of transparent and fair governing

structures that adhere to international best practices”. “Transparent” is defined as “a

governance structure that is supported by policies and procedures created with the

involvement of organizational members and that are communicated to these members in a

way that ensures understanding and accountability”. Transparency comes when everyone

within the organization has input into the governance structure, understands it, and is

accountable for it. In a transparent organization, everyone from the President down to the

smallest member firms understands the governance structure and is held accountable for

their actions regarding it.

Increasingly, business associations around the world are gravitating toward a

governance system based on international best practices. When evaluating some of the

world’s most successful organizations, one finds common elements within their

governance structures that provide a model for associations in transitional countries.

These structures can be consolidated into three primary categories: legal, organizational

and accountability.

Legal structures are those that are established by law and/or by internal governance

procedures. In many countries, Chambers of Commerce and business associations are

governed by one or more laws that outline the scope of their authority and activities. In

others, associations are governed primarily by market forces that determine their success

or failure. Typically, business associations fall into one of three broad models, two of

which establish organizations under public law. They are known as the State, Anglo-

Saxon and Continental models. The following text box contains a brief explanation of

each model:

Figure 2.1 Global Business Association Models

State Model (Public Law): The state model is one where the Chamber of Commerce is controlled either

directly or de-facto by the central government (public sector). Funding typically comes from mandatory

membership or a quasi-mandatory system that provides the Chamber of Commerce with guaranteed income.

While these organizations are typically well funded, most are ineffective representatives of the private sector.

In addition, most do not undertake advocacy activities as they are controlled in whole or in part by

government interests. Countries using the State Model include Libya, China, Vietnam, Iran, and Saudi

Arabia. Its strengths are that it provides stability, sufficient financial resources, little or no competition, and

legal protection from competition. Its weaknesses are that it provides little or no incentive to advocate for

private sector interests and miniscule motivation to provide services. Also, the organization may not be

viewed as professional but rather a government agency and be governed by individuals that may not

necessarily be advocates for the private sector but rather party officials put in place by government leaders.

Anglo-Saxon Model (Private Law): The Anglo-Saxon model is prevalent in the United States, Great Britain,

India and other constitutional democracies. Membership in these associations is voluntary and income is

generated both from membership dues and non-dues income in the form of events, publications, and

services. Many of these Chambers of Commerce have strong advocacy programs to support the interests of

the business community. Countries using the Anglo-Saxon Model include the United States, United

Kingdom, Australia, Argentina, South Africa, and Chile. The model’s strengths are that competition requires

these organizations to provide top-notch programs and services, voluntary membership ensures a focus on

private sector initiatives, they are usually led by professional staff members that are trained in organizational

management, they typically serve as strong advocates for the private sector, and are typically managed by a

board of directors consisting of private businessmen and women.

Continental Model (Public Law): The Continental model is prevalent in Western Europe and parts of

Central and Eastern Africa (in countries that were former colonies of Western European powers). These

Chambers of Commerce usually have mandatory membership and thus have little incentive to launch

sweeping advocacy initiatives. Most of the Chambers operate under the principle of “social responsibility”,

which essentially means their focus is more on employee’s rights than those of employers. Countries using

this model include Germany, France, United Arab Emirates, Portugal, Austria and Turkey. Major strengths

of this model include guaranteed funding through mandatory membership, negligible competition, and

legislative protection. The major weaknesses of this model are that organizations may have little or no

incentive to meet member needs, lack of focus on volunteerism and professional staff, and programs/services

that are not based on member demand. Also, they may be considered advocates for government policy

instead of private sector initiatives.

Those organizations that are established by law under either the State or

Continental models are usually empowered with a specific mission, scope of activities and

structure that is defined within sections of the law. There are instances where more than

one law governs the establishment and operation of business associations. This is an

anomaly, however, as most countries have no more than one law that governs the

establishment and operation of business associations, or at the most two….one for the

Chamber of Commerce system and another for other business organizations including

trade associations. An increasing number of countries are consolidating archaic business

association legislation into singular laws that provide the basis for activities by either

chambers of commerce or business associations. Pakistan’s business association law is

included in the appendix as an example of one that unifies all applicable legislation under

one representative law.

As in Pakistan’s legislation, several areas are typically addressed within laws that

govern business associations. Typically, these areas fall into the following broad

categories:

Figure 2.2 Major Functional Areas of Laws Governing Business Associations

Legal Framework: Business association laws typically outline the legal parameters under which an

association or group of associations can operate. This may include registration procedures as well as legal

authority to represent the private sector within and outside the country.

Scope of Responsibilities: Business association laws also typically outline the scope of responsibilities that

organizations have relative to the government and the international community. Some national chambers of

commerce, for instance, are authorized by law to “officially” represent a country’s private sector in

international economic forums, trade exhibitions and trade missions.

Membership: In most but not all cases, laws governing business associations establish mandatory or quasi-

mandatory membership. Mandatory membership requires that all registered businesses (in the case of a

chamber of commerce) or all those within a sector (in the case of a trade association) become members of the

organization. In some cases, this is enforced by providing the chamber of commerce or sectoral association

with the right to license, certify or oversee the standards of registered businesses. In other cases, the

organizations are not provided this right and therefore have no enforcement authority if companies do not

join as required by law.

Organizational Structure: Laws governing business associations usually establish a required structure under

which the organizations must operate. This is most common in cases where the law established a federation

model (such as in Pakistan). In some cases, the law acts almost in the capacity of organizational bylaws as it

outlines specific governance practices to which the organization(s) must adhere.

Programs and Activities: It is typical for laws governing business associations to establish at least a partial

list of programs and services that the organizations should or may provide. In many cases, the government

may even “outsource” services such as business licensing, issuance of certificates of origin, and export

certification to an organization(s) as a way to provide them with consistent revenue. In other cases, the law

provides only broad categories under which programs and services should be constructed.

Relationship to Government: It is also common for these laws to establish guidelines under which an

association(s) may interact with government. Some, especially those under the State Model, are restrictive

and provide few opportunities for business associations to advocate for the interests of the business

community. Others provide ample opportunities for public-private dialogue.

Dissolution: Over the last ten years, it has become popular for laws to address the dissolution of assets

should an organization(s) cease to operate. This is especially the case in countries where Chambers of

Commerce own property and other assets that would require liquidation should the organization cease to

function.

In recent years, there has been a clear trend away from the establishment of

business associations under public law, meaning that more and more organizations are

changing to a voluntary membership system that is driven by market forces versus legal

authority. Countries such as Poland, Hungary and Zambia terminated mandatory

membership in favor of a voluntary, market-oriented approach to development. It is clear,

however, that business associations can thrive under either the public law or private law

systems if they institute sound, transparent governance systems that allow for a focus on

private sector needs.

Organizational structures focus on how an association is organized internally.

This is usually identified on an organizational chart similar to the one contained in the

chart below, which outlines the organization of the Bethlehem Chamber of Commerce

(Palestine):

Figure 2.3 Bethlehem, Palestine Chamber of Commerce and Industry Organizational Chart

This chart establishes the members (General Assembly) as the organization’s focal

point and provides it the authority to elect a board of directors in the number and

qualifications established in the bylaws. It also provides the board of directors with

authority to elect a chairman of the board (chief non-paid executive) as well as to hire a

managing director (chief paid executive) that reports to the Chairman and ultimately to the

board as a whole. The managing director is responsible for overseeing the implementation

of the organization’s programs and services through the departments established beneath

his/her authority. In other words, the managing director is a paid, professional

organizational executive that is responsible for the association’s day-to-day operation

including personnel, materials, financial reporting and membership services. He/she is

empowered, according to this organizational chart, to employ professional staff members

to manage each department under his/her authority. The managing director employs an

executive secretary that reports directly to him/her but has no oversight authority relative

to the rest of the staff.

It is not uncommon for business associations to have counselors that provide input

into their strategy and activities. For instance, the Jerusalem Chamber of Commerce has a

legal counselor as well as an economic advisor to provide input into issues that may be

outside the expertise of the organization’s board of directors and staff. In addition, many

business associations have affiliate or federated organizations with which they either

interact or are obligated to acknowledge. The Jerusalem Chamber of Commerce is aligned

with a group of four or more organizations that have no oversight authority but do

represent partners with which the Chamber collaborates.

For associations that are organized under a federation, the following model from

the Palestinian Chamber of Commerce provides an overview of an organizational structure

that contains many elements of international best practices:

Figure 2.4 Overview of Federation Organizational Structure

General Assembly:

The general assembly compromises all elected directors of the constituent chambers. It comprises 109

businessmen freely elected by their respective business communities representing collectively all economic

activities of the Palestinian business community. The elected boards of each chamber internally elect a

chairman who automatically becomes a member of the federation council.

Federation Council:

The elected chairmen of the constituent chambers form the Federation Council, which internally elects the

Federation’s president and three vice presidents, one from Gaza and two from the West Bank. The Chairman

of the Jerusalem Chamber of Commerce was elected by consensus as President of the Federation Council.

The following officers were also elected: Chairman of the Gaza Chamber as a first vice president, Chairman

of the Hebron Chamber as a vice president, Chairman of the Nablus Chamber as a vice president, Chairman

of the Ramallah Chamber as treasurer and chairman of the Bethlehem Chamber as a vice treasurer. The rest

of the elected Chamber chairmen are members of the Federation Council.

The Federation Council’s main task is to create harmony and synergy between the constituent Chambers, to

unify the business community behind issues of economic importance, and to provide ongoing capacity

building support for its members. The Council has a regular rotating monthly meeting at the constituent

chambers. The president of the Federation may call for emergency sessions upon his or any member’s

request in order to address any urgent issues that may arise.

Secretariat General:

General Assembly

(

Member Association’s Boards

)

Federation Council

(

Elected b

Federation Members

)

Secretariat

(

Chief Paid Executive/Mana

ement Staff

)

Administrative (Operational) Directorate

Directorate of Economic Affairs

The Federation President nominates a Secretary General, but the appointment has to be approved by the

Council. This also applies to the Secretary General’s assistant. The Secretary General is responsible for the

Federation’s day-to-day operation. He is also responsible for implementing the Council’s policies.

Operational Directorates:

The Federation’s structure in terms of operational staff is not completed. Currently, only ten staff members

are working for the Federation. This includes the Secretary General and his assistant along with two

secretaries, a chief economist, a senior researcher, two junior researchers and two information technology

specialists.

Directorate of Economic Affairs

The Directorate of Economic Affairs serves as the Federation’s backbone and has a staff of five headed by a

senior researcher. In the future, the plan is to strengthen this directorate to have two main departments;

private sector strategies/policies department and department of services & technical assistance. The private

sector strategies/polices department will consist of three subordinate units; research & studies, foreign trade

and credit & investment. These units will be vertically integrated into the department of strategies and

policies to advocate for better involvement of the private sector in legislation, trade agreements and

economic development initiatives. Additionally, it will be horizontally integrated into the business advisory

& consultation services in order to promote capacity building, marketing & trade promotion and access to

credit and the provision of business development services.

Delivery of these services will be done by the Federation at the constituent chamber level. The main task of

these Federation units is to coordinate activities among the chambers, initiate the process of learning from

success stories, and institutionalize international best practices within constituent organizations.

While there are certainly other organizational models that are appropriate, the two

noted above are common (with variations) for use by local and national business

associations as well as federations. Regardless of the ultimate design, the important

elements of an organizational structure are:

1. The establishment of members as the ultimate governing authority. In both of

these examples, the organizations’ membership elected the governing boards and

thus had input into the overall structure.

2. The establishment of a pro-active governing board. The board of director’s size is

not as important as the criterion established to elect organizational leaders, but

international best practices dictate that boards function at a higher level when

containing no more than 21 members. Board members should be visionary leaders

that are committed to the organization’s success and are willing to act in a

constructive, transparent, and collective manner.

3. The establishment of transparency as organizational culture. The organizational

structure must be supported by transparent bylaws and other regulations that

establish election procedures, ethical behavior, and constructive member input.

4. The employment and empowerment of paid staff: In both of these examples, paid

staff form the critical nexus between the governing board, which is responsible for

strategy, and the members, which expect effective, demand-driven services.

Regardless of their location on the organizational chart, the employment of

professional, highly-motivated staff members is critical to organizational success.

An association’s organizational structure is critical in its overall development, as

structural difficulties in the area of governance are often the cause of problems in other

areas such as membership, programming and communications. For this reason,

organizations should take full advantage of international best practices models such as

those outlined above.

Accountability structures focus on the establishment of internal regulations that

promote accountable behavior on behalf of members, staff, directors and other leaders.

This structure includes but is not limited to the following:

Figure 2.5 Accountability Structures Utilized by Progressive Business Associations

Bylaws: Bylaws establish the framework under which an organization exists. It outlines the structure,

operational procedures, and other governance principles under which the organization operates. Bylaws are

considered by most highly-functioning organizations to be their most important governance document. Two

sample bylaws are included in the appendix and provide an overview of the types of information contained

therein.

Codes of Ethics: As an increasing number of business associations focus on transparency, codes of ethics

have become widely used in order to ensure accountability among members, directors and staff. Codes of

ethics usually contain language that addresses conflict of interest, director and staff ethics, gifts, and

guidelines for interaction with public officials among others. A sample code of ethics from the Afghanistan

International Chamber of Commerce is included in the appendix. In AICC’s case, every staff member and

elected director (from the Chairman on down) signed the code of ethics and was bound by its accountability

structure.

Personnel, Policy and Procedures Manual: As organizations grow, operational guidelines become

increasingly important, which is why a number of organizations have created personnel, policy and

procedures manuals to provide a framework under which organizational staff may operate. Typically, such a

manual will include an explanation of office procedures, staff authority, ethics guidelines, employment

practices, dress requirements, annual review processes, and grievance procedures.

Job Descriptions: In order for association staff members to function at a high level, they must have a

specific set of goals, activities and outcomes that are pre-established. In addition, they must understand their

role(s) within the organization. This being the case, most highly-functioning associations have written job

descriptions and/or employment contracts that outline the scope, function, duration and desired outcome for

each staff position. The job descriptions, and the goals that are established in conjunction with them, provide

the basis for annual employee evaluations.

Experience indicates that accountability structures are especially needed in

transitional countries, where rule of law is often lacking. While these structures typically

do not initially have the force of law, they have been found to be constructive mechanisms

for the promotion of transparency and ethical behavior.

All things considered, governance provides the foundation on which successful

business associations are built. While a focus on governance provides little in the way of

excitement, it lays the foundational stones necessary to construct sustainable programs and

services.

CHAPTER THREE

STRATEGIC PLANNING AND ITS ROLE IN ORGANIZATIONAL

DEVELOPMENT

SECTION ONE: OVERVIEW OF STRATEGIC PLANNING

“The illiterate of the 21

Century will not be those who cannot read and write but

those who cannot learn and re-learn”

Salima Ahmad, President of the Bangladesh Women’s Chamber of Commerce and

Industry, understood the daunting task ahead of her when she founded the organization in

2000. Because of the country’s poverty, political unrest, and conservative views on

women’s participation in business, it appeared that her efforts might be doomed from the

start. Nearly nine years later, however, BWCCI is now a dynamic, growing association

that is empowering hundreds of Bangladesh businesswomen. Mrs. Ahmad contributes this

success largely to two factors. First, she focused on the establishment of an effective and

transparent organizational governance process and secondly she took the time to develop a

strategic plan for the organization’s development. “I began with the end in mind”, she

stated during a recent speech. “Strategic planning provided the vision we needed to

establish membership support and credibility. It is the primary reason behind BWCCI’s

success”.

Mrs. Ahmad’s story is reiterated by business association executives around the

world that have discovered the “power of planning”. Thousands of organizations fail

every year and none of them plan to fail. Many of them, however, fail to plan, thus

contributing to their demise. In order to succeed in today’s ever-changing environment,

business associations embrace a new management paradigm that includes appropriate

emphasis on strategy. Strategic planning is defined as the process whereby an

organization determines where it is going and the most direct path to getting there.

Essentially, the process involves the institutionalization of a process that begins with a

definition of where the organization wants to “go” or what it wants to achieve in the

future. Once this is determined, the remainder of the strategic planning process is devoted

to developing a process to move the organization toward the achievement of its vision.

SECTION TWO: KEY ELEMENTS OF STRATEGIC PLANNING

A strategic plan is important for four main reasons. First, it makes an organization

proactive versus reactive. Planning allows an organization to “see the future” and take

advantage of opportunities instead of dealing with day-to-day problems. Secondly, it

allows an organization to adapt to a fluid environment. In transitional countries, changes

are rapid and profound. Organizations can use strategic planning as a way to be on the

leading edge of change instead of being in a constant state of chaos. Thirdly, strategic

planning helps organizations adapt to crisis situations. In 1993, in the aftermath of the

terrorist bombing of the Alfred E. Murrah Federal Building in Oklahoma City, Oklahoma,

the local chamber of commerce played a critical role in helping businesses re-open and

assisting the press in gaining access to the facts of the situation. It was able to do this

because of its strategic plan. Finally, and most importantly, strategic planning provides a

mechanism through which organizations can invigorate the membership to support its

vision. Members support with their finances what they support with their ideas and

strategic planning provides a way to gain their involvement in the organization’s

programs.

There are six elements of strategic planning (vision, mission, objectives, activities,

resources and outcomes) that are divided into two functional areas (product and process).

The following is a brief explanation of each functional area and the elements incorporated

in each:

Product: Product incorporates vision, mission and outcomes and is the lynchpin of

the strategic planning process. Successful strategic planners “begin with the end in mind”

and work backward to design a process-oriented approach to achieving the desired

outcomes.

Process: Process incorporates objectives, activities and resources. It is the system

designed to move an organization from its current position to its desired vision. It is

usually based on a system that includes organizational structure, controls and evaluation.

3.1 Essential Elements of a Strategic Plan

Vision=Where does the organization want to go? An organization must agree on a vision

before it can develop a capacity building process. The vision is typically developed with

membership input and fine-tuned by the board of directors at an annual retreat or

conference. It establishes where an organization wants to be within a specific timeframe.

Mission=Why does the organization do what it does? The mission statement, which is

typically outlined in no more than fifty words, outlines why an organization conducts

specific activities at the present time.

Objectives=What process will the organization put in place to achieve its vision?

Objectives are essential elements of the process designed to help an organization progress

from where it is today to its desired vision for the future. They establish what an

organization will do in order to achieve its vision and therefore must be quantifiable,

measurable and achievable.

Activities=How will the organization achieve its goals/objectives? Activities are specific

initiatives designed to achieve objectives. They may range from comprehensive programs

to specific tasks that are necessary to reach benchmarks in the strategic planning process.

Resources=When will the organization achieve its goals/objectives as well as its vision?

Resources include the time, financial resources and materials to initiate the activities

necessary to achieve objectives and ultimately make the organization’s vision a reality. It

establishes a timeline in which an organizational strategy will be implemented.

Vision

Of these six elements, vision is the one most often overlooked, as it is sometimes

confused with mission. Vision is typically an end-state the organization wants to achieve

in the long-term. The period of time necessary to achieve the vision is dependent on a

variety of factors such as current organizational capacity, commitment on the part of the

organization’s volunteer leadership and staff, overall member support, and the business

environment in which the association operates. The last factor is of paramount importance

since in a transitional country it may take an organization five years to accomplish what an

organization in a stable political and economic environment could achieve in a fraction of

the time.

Vision differs from mission in three primary ways. First, vision focuses on the

long-term, while mission simply provides a reflection of why the organizations operates

the way it does today. This being the case, the second difference is that vision requires

foresight while mission requires only sight. It is not complicated for an organization to

state its purpose for existence, but it is sometimes very difficult for it to craft a vision.

This is especially true in transitional countries where vision has not been a management

paradigm used in the past. Finally, vision focuses on product while mission focuses on

purpose. In other words, vision outlines what is to be achieved while mission outlines why

it is achieved.

In most cases, vision is incorporated into a short phrase that reminds the

organization’s leaders where they are headed. While it need not be long, the vision

statement should be comprehensive and incorporate member input. Also, it should

establish a timeframe for accomplishment. The following are some examples of effective

vision statements:

Figure 3.2 Sample Vision Statements

“The Chamber will inspire and influence business vitality” Auckland, New Zealand

Chamber of Commerce

“As the premiere advocacy organization in the state, the Chamber will serve as the unified

voice for promoting an economy of increased productivity and per capita income to

achieve global competitiveness”. South Carolina (USA) Chamber of Commerce

“In ten years the Dubai Business Council will be an organization that facilitates trade,

promotes economic opportunities and creates business matches between Afghan

companies in the UAE and those of countries around the world”. Afghan Business

Council, Dubai, United Arab Emirates

Mission

A mission statement is a statement of purpose that defines why an organization

exists. It is typically stated in 50 words or less. An organization’s mission sets the

foundation for its strategy as well as builds its identity. The mission statement should be

widely understood by the organization’s members and should create a clear image in the

minds of stakeholders. The following are some examples of effective mission statements:

Figure 3.3 Sample Mission Statements

“The mission of the National Association of Manufacturers is to enhance the

competitiveness of manufacturers, to improve American living standards by shaping a

legislative and regulatory environment conducive to US economic growth, and to increase

understanding among policymakers, the media and the general public about the importance

of manufacturing to America’s economic strength.”

“The mission of the Kenya National Chamber of Commerce is to play a central and

catalytic role in facilitating the growth of Kenya’s economy through entrepreneurial

development that is geared to result in creation of wealth and employment.”

Objectives

Objectives are an organization’s goals over the long term and identify what the

organization wants to accomplish. They are typically action-oriented and provide

direction to the organization’s leaders. In addition, they should be realistic, yet

challenging and measurable. For instance, a strong goal would be “increasing membership

income by $50,000 over the next year” versus “increasing membership income”. The

latter provides no measurable goal and no timeline, both of which are necessary in

developing strong objectives.

Many organizations develop their objectives around the “SMARTER” model

outlined below, as it provides a measurable way to track progress toward implementation

of the overall strategic plan:

Figure 3.4 Measuring Objectives

Specific: As mentioned above, objectives should be specific so that there is broad

understanding of what is to be accomplished.

Measurable: Objectives should also be measurable, setting specific targets to be achieved.

Acceptable: Objectives should be acceptable to the membership and developed with input

from the membership.

Resource-sufficient: It is important that objectives be realistic from a resource standpoint.

Resources are the manpower, time, materials and finances needed to accomplish the

objective.

Time-sensitive: Objectives should be tied to a specific timeline so that there is no question

as to when they are to be accomplished.

Extending: Objectives should be aggressive but realistic. They should stretch an

organization’s parameters, but not be unattainable.

Rewarding: Objectives should provide return on investment, as well as measurable

progress toward an organization’s vision.

Activities

Activities are specific initiatives that are implemented by an organization in order

to achieve its objectives. The following is an example:

Figure 3.5: Objectives and Activities

Objective: The organization will increase membership income by $50,000 over the

next year.

Activities: a) The organization will conduct a membership campaign from June 1-30 to

recruit 50 new members.

b) The organization will establish monthly networking events to identify and

involve potential members.

c) The organization will run monthly advertisements in the newspaper and

on selected radio stations that discuss chamber events and activities.

As is shown in this example, activities focus on specific actions that will elicit a

planned result. All the activities listed support the overall objective of increasing new

membership income. Therefore, the objective outlines “what” is to be done and the

activities focus on “how” the objective will be achieved.

Resources

Many associations view resources as simply the financial capacity needed to

implement its strategic plan. While finances are certainly one element of the resource

picture, there are other factors to consider, such as time and materials. In many cases,

strategic plans fail not because of lack of vision or even a flawed process, but rather an

underestimation of the resources necessary to make the vision a reality. The involvement

of well-trained paid staff members, committed volunteers, and outside stakeholders are

critical elements of the resource picture. The resources necessary to achieve the

organization’s overall vision should be agreed upon in advance, and changes should be

expected. After all, prices rise, key staff members depart the organization, and assets

depreciate. For these reasons, it is important to revisit the resource plan often.

Once there is an understanding of the elements contained within a strategic plan, an

organization must focus on the process of its development. It is essential that this process

be both participative and strategic, as the organization must generate broad-based support

for the plan’s implementation. The following chart provides an excellent structural

example of a participative strategic planning process. This strategic planning process

begins with the identification of issues and options, which is essential to the establishment

of a strategy. Regardless of an organization’s vision, it must thoroughly understand the

issues that affect its achievement of this vision, as well as the options available to address

these issues. This model also incorporates the use of a strategic planning task force in

order to ensure that plan is indicative of the overall organization. In some organizations,

this task force is the board of directors while in others a task force is appointed and asked

to develop the draft plan for review by the board. Regardless of the system, member input

is the key to a strong strategic plan.

SECTION THREE: THE STRATEGIC PLANNING PROCESS FLOW CHART

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As noted in the chart above, an organization’s members should be involved in the

early phases of the planning process (issue identification and options), the middle of the

planning process (public hearing or general membership meeting) and the end of the

process (joint public hearing). This will create strong support among the membership base

for the strategy’s implementation.

This mechanism is just one of many that is used by progressive associations to

develop a strategic plan. Another, called the Logic Model, is extensively explained in

Chapter Nine. While they incorporate many of the steps necessary to ensure success, these

planning methodologies should be adapted for use in organizations where the political,

educational, and/or cultural environment requires a different approach. The time frame

necessary to complete each step will depend on a variety of factors but will certainly be

elongated in countries where the communication infrastructure is poor. Because of this, it

is important that an organization’s leadership is totally committed to the strategic planning

process and understands its importance in developing sustainability.

In conclusion, organizations should do everything possible to construct a participative and

transparent strategic planning process. If the process is structured incorrectly, there are a

number of pitfalls that could come into play. First, the organization could try to be all

things to all people, which is not possible. This will drain resources while at the same time

creating frustration among staff and volunteers. Secondly, a flawed strategic planning

process can lead an organization’s total focus to raising funds, which undermines the

reason why associations exist in the first place. Since members are at the core of any

organization, activities only make sense, regardless of their financial impact, if they

benefit the members. Finally, a flawed process can lead to the development of a

bureaucracy that damages the organization and renders it ineffective in providing

programs and services. International best practices indicate that business associations

operate with higher efficiency when staff and volunteers are empowered to utilize their

expertise in a non-bureaucratic, team-oriented way. By avoiding these pitfalls,

organizations can ensure the development of a strategic plan that culminates in turning

vision into reality.

CHAPTER FOUR

THE MEMBERSHIP SYSTEM

Regardless of a business association’s structure, membership development plays a

key role in its overall success. Most organizational executives will acknowledge this, but

in many cases the process of recruiting and retaining members is confounding to even

mature associations. There are several reasons for this. First and foremost, many

organizations, especially those in transitional and post-conflict countries, do not have a

background in membership recruitment. Where no paradigm exists, organizations tend to

adopt the easiest approach to membership recruitment, which is advocating for the

government to pass a law establishing mandatory membership. In a large majority of

cases this approach does not produce the desired results, as businesses that are forced to

join an association will not support it with more than the revenue they are obligated to

provide. Over time, a number of association executives realized that from a resource

standpoint, financial and otherwise, it was best to adopt a system that focuses on the

development of “loyal members” versus “loyal subjects”. Because of this, several high

profile organizations that formerly enjoyed mandatory membership eventually pressured

the government to rescind the law, thus allowing them to institute a voluntary system. In

every case, revenues increased, as did overall support for the organizations as a whole.

Even organizations that retained mandatory membership began movement toward

member-oriented programs as a way to create commitment instead of resentment.

Since membership development is one of the most important aspects in association

capacity building, it is the subject of much debate within organizational management

circles. While the last twenty years have produced a number of “unique” membership

programs, the most effective model continues to be what is known as the “membership

system”. This system, called the Chamber and Association Membership Program (CAMP)

was developed especially for use in transitional and post-conflict countries as it

institutionalizes a membership mentality within organizations while at the same time

positively impacting their resource streams.

The CAMP strategy’s foundation is a process-oriented approach meant to initiate

sustainability within business associations. The focus of the program is on the three

essential components of membership development, which are recruitment, retention and

non-dues income.

The CAMP model’s implementation requires the creation of the following strategic

processes within the three component areas:

Step One: Creation of Membership Team

The construction of a membership recruitment team is critical to the success of

membership development. The team must have strong and committed leadership (usually

provided by a member of the organization’s board of directors), as well as trained

members that have marketing/sales skills and are willing to “sell” the organization’s

importance to the business community. Before the team begins work, its members should

undergo teambuilding and training in order to ensure that the membership recruitment

effort’s methodology and activities are sound.

It is important that the chief paid executive assign a staff person (usually the

membership director) to provide technical support for the committee’s activities as well as

to coordinate training, networking and membership-outreach events. The staff person not

only provides critical technical assistance to the committee, but also serves as a liaison

between the committee and the organization’s management. This communication link

ensures that everyone including the chief paid executive understands and concurs with the

direction in which the membership recruitment effort is headed. In some organizations,

the recruitment team consists entirely of staff members, but experience indicates that those

with board member and volunteer representation are the most effective since they can

speak to prospective members as businesspeople that have made a conscious decision to

invest their own time and financial resources in the organization.

Whether staff or volunteer oriented, the team’s composition is important in that a

broad range of expertise should be included. Expertise should include marketing,

communications, and sales among others. By utilizing a broad range of skills, the team

can address any situations that arise during strategy development. It is helpful to involve a

board member on the team as he/she can provide a direct link to the organization’s

leadership. In many cases, the board member will chair the membership team, thereby

giving it instant credibility within the organizational structure. Membership teams range

in size, but most are between 9 and 13 members, as this represents a manageable size.

Meetings are set at intervals agreed to by the team, but during strategy development this

may require several meetings a month.

Once the team is created, its members should receive intensive training in order to

ensure a thorough understanding of the organization’s vision, mission, programs, and

activities. Training should be tailored to the members’ expertise. The following is a

sample training outline for an organization’s membership team:

Figure 4.1 Sample Membership Team Training Outline

Module One: Membership Recruitment

Understanding Membership

WHO are your potential members?

WHAT are their expectations?

WHY should they join your association?

WHEN should they be approached for membership?

HOW should the association solicit membership and involvement?

The Laws of Membership Growth

Members and potential members must have realistic expectations.

The association must understand and exceed member expectations.

Relationships sell memberships.

Selling a membership is the BEGINNING of a process, not the ENDING of one.

Members expect a fair price for the services provided.

Associations must continually communicate their message to stakeholders.

The more an association knows about its members the more success it will have.

Membership development is considered to be the recruitment of new customers and the

retention of existing customers.

Membership Development

Development of a membership strategy.

Establishment of goals and objectives.

Development of a fair pricing structure.

Development and implementation of a membership recruitment campaign.

Membership Strategy

Should be based on input from the members.

Should be quantitative and measurable.

Should be constructed according to a timeline.

Should identify responsible parties.

Pricing Structure

Know what it costs to provide service.

Minimum dues should be at least equal to the cost of providing service.

Dues can be based on a variety of factors.

Different levels of membership can be established.

Membership Campaigns

Conduct as part of the overall membership strategy.

Set goals and objectives that are quantifiable and attainable.

Recruit a leadership team.

Recruit volunteers.

Develop materials.

Develop sales strategy.

Conduct training for volunteers and staff.

Promote membership in the association by partnering with media.

Conduct campaign.

Celebrate results.

Module Two: Membership Retention

“Membership campaigns are important, but the best way to create membership growth

still is, and always will be, through building relationships and focusing on exceeding

customer expectations.”

Membership Retention

It costs 65% more to recruit a new member than it does to retain an existing one.

The first two years of member involvement are critical to retention efforts.

Outstanding service and attention to detail increases retention.

The Formula for Success

Understanding customer expectations + Exhibiting a willingness to exceed them=

Membership Growth.

How to Make Members Love You Forever

Ask them what they need and exceed their expectations.

Say “thank you” without asking for anything.

Tend to the details.

Module Three: Generating Non-Dues Income

Other Sources of Income

Publications: Membership Directors, Catalogues, Brochures

Events: Trade Exhibitions, Forums, Investment Luncheons

Technology: Website Advertising, Development of Web Pages

Information: Research Materials, Statistics

International Best Practices

On-going membership effort.

Higher than 85% annual membership retention.

No more than 60% of association income from membership and no less than 30%.

Increasing amount of budget from non-dues income, but not more than 50%.

Final Thoughts on Membership

Dues: Members will pay for what they get. Great services=more income.

Service: Associations should offer the BEST service to its members.

Staff: Typically, a smaller number of people will accomplish more.

Bureaucracy: Is like a stake in the heart of associations.

Step Two: Stakeholder Input

As in the development of an overall organizational strategy, the creation of a

strategic plan for membership development requires input from stakeholders. A variety of

techniques may be used to solicit this input, but the most common are focus groups

(usually consisting of members, former members, and prospective members), surveys and

company site visits. The following is an explanation of each technique:

Focus Groups

Purpose: The purpose of focus groups is to gain information from members, non-

members and former members that can be used to develop a membership recruitment,

retention and non-dues income strategy. Focus groups are widely considered to be an

excellent source of information because they provide instant input within a structured

setting.

Design of Focus Groups: Focus groups typically contain 8-12 participants and are

professionally facilitated in order to achieve maximum results. In the case of a

membership recruitment strategy, it is best to empanel two groups each of members, non-

members and former members. An agenda and list of questions for each group is attached.

Groups should include both men and women of various ages and backgrounds. It is

important to have an adequate demographic representation in the group. The facilitator

should be an experienced but neutral party that has no ties to the organization. No staff

member or volunteer leader of the association should attend the focus group sessions as

this typically hampers discussion and erodes the ability of the facilitator to elicit honest

responses. To form the focus groups, the President or Executive Director of the

organization should send letters to the members, non members and former members

identified by the staff. The letter should stress that all comments made during the sessions

are confidential and that none of the organization’s staff will be present. A sample letter

of invitation is attached. The organization, at its discretion, may offer incentives to those

individuals that participate. This may vary from providing a lunch to giving away prizes.

Typically, the sessions are held over a two or three-day period, with the facilitator holding

both morning and afternoon sessions. While the sessions may be held at the offices of the

organization, most likely they will be held off-site at a conference facility, restaurant or

hotel.

Focus Group Process: Typically, focus group sessions are between 1 hour and 1 ½ hours

in length. Each session is scripted with an agenda and specific questions that are asked by

the facilitator. Responses to the questions are noted on a flip chart either by the facilitator

or a designated recorder. The facilitator must attempt to elicit input from all the

participants, while at the same time ensuring accurate and honest responses. After all

questions have been asked and responses recorded, the facilitator thanks the group and

distributes any incentives that are offered.

Report: Within ten days after the focus groups, the facilitator prepares a report that

provides an overview of all responses, as well as suggests recommendations for future

actions within the organization. Typically, the facilitator will meet with the organization’s

senior staff and volunteers to present the report.

Membership Development Surveys

Purpose: Conducting surveys is a traditional way of generating input from stakeholders,

which may include members, non-members, international donors, government officials,

and other individuals/organizations with which a business association has contact. A

survey’s purpose, of course, is to provide structured feedback that can be analyzed and

utilized in the development of an organizational strategy, or at least an element of the

strategy such as membership development.

Survey Design: A survey’s design is critical in its ability to generate useful information.

Surveys that are designed to achieve pre-determined results are not useful inputs to a

strategic plan, nor are unscientific samplings that do not include a broad sampling pool. It

is recommended that for purposes of developing a membership development strategy that

organizations survey a wide-variety of stakeholders in order to gauge overall support for

its activities across diverse groups. The survey should contain both quantifiable and

subjective questions to elicit both structured and un-structured input. Quantifiable

questions allow the organization access to specific data that can be used to analyze the

organization’s perceived effectiveness among a variety of stakeholders, while subjective

responses may provide insight into specific situations and/or attitudes of importance to

individual stakeholders. A survey sample is included in the appendix.

Survey Process: The process used to conduct the survey impacts its results. First and

foremost, a scientific sampling pool must be developed that includes all of the targeted

stakeholders. It is assumed that no more than 15% of respondents will complete a mailed

survey, so in order to achieve an accurate sampling, the survey pool must be large enough

to ensure the proper return. The distribution pool may be smaller for survey projects that

include personal visits and/or follow up. Many organizations outsource survey projects in

order to ensure a scientific sampling as well as impartiality in the question-development,

survey implementation and results analysis processes. In the case of outsourcing, an

organization typically works closely with a professional polling/research company to

develop a sample list, survey methodology, survey instrument, and analysis process. Once

the data is evaluated, it becomes part of the input stream along with focus group results

and the responses from company visits.

Report: Organizations typically report survey findings at a public stakeholders meeting,

but many also publish an executive summary for distribution.

Membership Development Company Visits

Purpose: Conducting company visits can also be an effective way of generating input

although it is time consuming and lacks the scientific nature of either a written survey or a

focus group. Because of this, many organizations utilize company site visits as part of

their survey process. The strength of this technique is it provides the best way to obtain

honest, uncensored information on the business association’s performance. Its weakness is

that it takes significant staff and/or volunteer resources to plan, conduct and follow up on

the visits.

Company Visit Design: Companies selected for visits should be approach by mail with

personal follow up from a membership team representative. Once appointments are set, an

appropriate number of visits should be assigned to each team member and selected

association staff. The visit should be no more than one hour in length and should focus on

the completion of a survey form.

Survey Process: Once introductions are made, the membership team representative

should provide a brief overview of the reason for the visit, after which he/she will ask a

few questions in a conversational style. The questions should correspond with a pre-set

survey instrument. Once the survey is completed, the team member may want to tour the

company if asked to do so by the owner.

Report: Organizations typically report survey findings at a public stakeholders meeting,

but many also publish an executive summary for distribution. This can be done in

conjunction with written (mail) survey findings as discussed above.

Gathering input is a critical step in the planning process, but evaluation and follow

up should not be overlooked. Associations sometimes waste their resources by failing to

utilize input correctly, or through being negligent in follow up. Each individual that

participated in the survey as well as every member should receive a copy of the results and

be invited to provide additional input on an ongoing basis. If used properly, the results

will provide the membership team with an indication of what issues should be addressed in

the membership strategy. While some association leaders feel that input should only be

obtained from members, experience indicates that this needlessly narrows the sample pool,

while at the same time creating an information gap.

Step Three: Strategy Development

Utilizing the input received from stakeholders, the membership team should

construct a strategy that focuses on prioritized goals. Using the elements of strategy

development discussed in the previous chapter, team members can construct a customized

and prioritized membership process that will lead to the desired results.

In 2002, the Satu Mare Chamber of Commerce and Industry in Romania developed

a membership development strategy that is included in the appendix. This strategy

allowed the organization to increase membership by more than 30% while at the same time

cutting its attrition rate from 44% to 19% over twelve months. This strategy was

successful because a) it was created utilizing input from key stakeholders, b) it was

designed utilizing a systems-based approach that provided a scientific approach to

development, c) it was created utilizing the techniques described in the previous chapter,

and d) it was customized to fit the organization.

When analyzing the results of its information collection efforts, the leaders of the

Satu Mare Chamber identified five primary issues. First, as a whole, members were

uninformed and/or dissatisfied with the organization’s efforts. Secondly, both members

and non-members saw the Chamber as basically a revenue collection agency for the

government instead of an advocate for the private sector. Thirdly, a majority of all

stakeholders that provided input (members, non-members and former members)

considered the Chamber’s leadership to be unconcerned about their problems. Fourthly, a

majority of total respondents said they would retain their membership or (in the case of

non-members or former members) become members of the association only if they saw

real progress in the areas of advocacy and program development. Finally, a large majority

of respondents believed that the Satu Mare Chamber could be a catalyst for private sector

development should it change its mentality. Armed with this information, the Chamber

developed a strategy that focused on retention of existing members first, then the

recruitment of new members and finally the creation of non-dues income. More

importantly, the plan established membership as the Chamber’s single most important

priority.

When analyzing the types of membership strategies within progressive

associations, most contain at least some of the following elements:

Membership Recruitment: This is the process of recruiting new members or bringing

former members back onto the membership roles. Members are defined as those

companies and/or individuals that pay annual dues to an organization. If dues are not paid,

the company and/or individual cannot be considered a member. International best

practices in membership recruitment often include the following activities:

Membership Campaign: A membership campaign is a recruitment tool that is widely used

by voluntary membership organizations around the world. It is an event conducted over a

specific time frame that has the goal of adding new members to the business association.

Campaigns are usually held once a year, but some organizations hold them as often as

quarterly. Their duration ranges from a few days to more than a month during which

organization staff and volunteers (comprising a membership team) attempt to recruit as

many new members as possible. While this technique is still widely used, it is not

considered by membership development experts to be the most effective way of recruiting

new members. Its strengths are that it allows for the recruitment of a volume of new

members at one time and therefore the organization receives a bulk infusion of revenue.

This technique also has some inherent weaknesses, the most significant of which is that it

reduces membership to a one time a year phenomenon. Membership development should

be a daily focus for business associations, not just an annual exercise that brings in

increased revenue during a short period. In addition, campaigns tend to focus on recruiting

new members instead of retaining them. Once an individual or company decides to pay

dues to an organization, this is the beginning of a process not the end of one. Retention

should be the organization’s focus from the first day after a new member joins.

Campaigns tend to skew the focus toward recruitment.

Networking Events: Networking events are ongoing programs that are usually informal,

allowing members, non-members and other stakeholders to get to know each other better.

Typically, these events feature a reception (that is often sponsored by a member company

or group of companies) and a short program that focuses on a topic of interest. The

event’s purpose is to create business-to-business linkages among the association’s

members as well as to distribute information on the organization and its programs. An

increasing number of business associations are using networking events as a way to

develop interest within non-members. The American Chamber of Commerce in

Kyrgyzstan sponsors monthly networking events that raise its visibility and allow it to

communicate with a broad range of stakeholders. These events are one of the techniques it

uses to gain new members. The Afghanistan International Chamber of Commerce also

sponsors monthly networking events that promote business linkages as well as facilitate

information flow. AICC has signed up new members at virtually every one of these events

over the last twelve months. Membership experts agree that networking events can be an

important part of an organization’s ongoing membership development strategy.

Ongoing Membership Effort: An ongoing membership effort is one that happens on a

daily basis. It may or may not include an annual recruitment campaign to provide short-

term focus on membership, but it does not depend on such an effort to be the foundation of

its recruitment strategy. Rather, it establishes membership development as a whole as one

of the organization’s most significant goals. Organizations that focus on membership

development as an ongoing exercise usually provide intense training for staff members and

volunteer leaders on the specific elements of the membership system. Staff members and

leaders constantly look for opportunities to recruit new members or retain existing ones.

In other words, membership is a “mentality”. It permeates the entire organization and is

valued by staff and volunteer leaders alike.

Membership Retention: This is the process of retaining dues-paying members from year

to year. Research conducted by the National Association of Membership Directors (U.S.)

reveals that retaining members costs 65% less than recruiting new members. In addition,

NAMD asserts that members retained for at least five consecutive years have an 85%

chance of retaining their membership for at least ten years more. In other words, creating

loyal members is of paramount importance to business associations. International best

practices in membership retention often include the following activities:

Thank You Campaign: This is a campaign that focuses on ensuring that every member

within an organization receives at least one “unsolicited” visit every year from a staff

member, volunteer leader or their representative. This visit allows the organization to

have a “face” with each of its members, as well as providing an opportunity to express

gratitude for the member’s support. Some organizations structure such a campaign over a

series of days or weeks and they segment their membership lists among dozens of

volunteers and staff members that personally visit each and every member. The campaign

also provides the organization a way to update its membership records by recording

address changes, business closures, new ownership, etc. As effective as “thank you”

campaigns are for some organizations, they are impractical for others. In countries where

security is a concern or where infrastructure does not allow for easy access, this technique

may not be feasible. In addition, it is resource-dependent (from the standpoint of staff and

volunteer effort) as well as time consuming.

Involvement on Committees: Committees are an integral part of an organization’s

structure. They provide not only a mechanism through which goals are accomplished but

also a way to involve members in the organization’s programs. Membership experts agree

that involvement is critical to membership retention. In fact, a study conducted by the

National Association of Membership Directors (U.S.), found that members who are

involved in committees and other organizational activities are 77% more likely to renew

their financial support than those who are not involved. Encouraging member

participation costs very little, but the rewards can be extremely high. In some

organizations, committees meet monthly to plan programs or discuss issues. In others,

short-term task forces are responsible for implementing core programs. Regardless of the

system, member involvement is paramount. Through committees and task forces,

members not only gain more knowledge about the organization and its practices but they

also provide a great service to staff and volunteers by segmenting the work load. One

noted membership expert says, “Members support with their money what they believe in

with their hearts”. Involvement is a way to create a bond between an organization and its

members that leads to ongoing support.

Customized Programs and Services: It is obvious that the development of a sustainable

business association is dependent on the quality of programs and services it provides. The

problem in many organizations, however, is not that they do not provide services, but

rather the kind of services they provide. Programs and services that do not meet the needs

of members waste both an organization’s time and resources. For this reason, the practice

of “customizing” programs and services is becoming increasingly important.

“Customization” assumes that members in different sectors, sub-sectors and industry

groupings may have different needs. For instance, a manufacturing company most likely

will be interested in different services than will a retail business. In addition, some

business owners have different ideas as to what programs and services are important to

them personally. For instance, a member may want to receive his/her newsletter on line

instead of in hard-copy form because he/she has too much paper piling up on the desk. If

an organization does not know this, or ignores it, the member may become dissatisfied and

cease to renew his/her membership. Business associations that offer the same services to

every member therefore ignore the fact that people and companies represent a broad cross-

section of society. “Customizing” programs and services provides a way to meet both

individual and corporate needs. To do this, an organization’s staff and leadership must be

keenly aware of the difference within its membership base, have the willingness to find out

what interests members, and develop a fee-based dues schedule that provides members a

way to pay for the programs and services they desire. Customization requires a thorough

knowledge of what members want, which can be accomplished through personal visits,

surveys, and other input-gathering exercises. However, it can also be accomplished

through a thorough understanding of the industries represented within an organization.

For instance, a retail travel agency’s primary goal is most likely to gain access to more

tourists. This being the case, the owner of a travel agency may want to participate in an

organization’s tourism committee so that he/she can have access to information on laws

that govern the industry as well as promotion opportunities. He/she may also be interested

in having access to international trade missions, on-line promotion opportunities, and

advertisement in publications, as all of these initiatives provide access to potential

customers. The owner of a printing company, on the other hand, may be interested in

bidding on the printing for the association’s newsletter and/or magazine, as well as

attending networking events at which he/she can meet potential local customers. If an

organization understands these needs and responds to them, it can create loyal members

that will support it into perpetuity. A noted membership expert defines the importance of

customized programs and services by saying, “If you want pie and someone gives you

cake, you may eat the cake for awhile, but eventually you will go to a place where you can

get pie. It is human nature”.

Fee-Based Membership Dues Structure: A fee-based membership structure is one in

which a member pays for the programs and services that he/she receives. Some

organizations provide a comprehensive list of services that are individually priced

allowing members to choose whatever they want and pay accordingly. Others provide

“tiered” membership services under which the higher a member’s dues, the more services

he/she receives. Either scenario offers members the option to spend as much as they want

thereby overcoming a major objection to joining and retaining membership in associations,

which is “The dues are too high. I cannot afford to be a member”. Fee-based structures

directly countermand the former dues system where fees are based on a company’s size,

turnover, or number of employees. An increasing number of organizations have come to

realize that this system is both archaic and unfair, since it assumes that all members

regardless of size will benefit from all available programs and services. The Afghanistan

International Chamber of Commerce increased its paid membership by more than 30% and

its retention by more than 44% after instituting the “tiered” membership structure that is

included in the appendix.

Non-Dues Income: Non-dues income is considered any revenue that is generated from

sources other than membership dues. In a growing number of organizations, non-dues

income actually constitutes a higher percentage of overall revenue than does dues.

Because competition for revenue is acute, organizations have developed increasingly

creative ways of earning income. Progressive organizations will, however, only embrace

non-dues income sources that fit within their mission and are supported by their investors.

International best practices in non-dues income generation often include the following

activities:

Publications: Publications have long been a source of non-dues revenue. Typically,

revenue is generated through advertising sales, which both pay for the publication’s

printing and distribution as well as generate profit. A number of associations provide

publications free of charge or at a nominal fee to members but sell them to non-members

at a higher price. Generating revenue through publications will be successful only if the

publication is of high quality, contains pertinent information and is widely distributed.

Databases: Information is not only power, it can also be a source of revenue.

Organizations that possess data such as economic statistics, member information, and

promotional materials can generate profit by providing them at a fee to individuals and

companies that need this information. Again, some organizations provide this information

free or at a nominal charge to members and at a much higher fee to non-members. To be a

consistent source of non-dues revenue, databases and statistical abstracts must contain

current information and be in a format that can be easily used by customers.

Events: Event sponsorships are another significant source of non-dues revenue.

Companies are likely to sponsor events that provide them visibility and access to potential

customers. These sponsorships can be combined with charging an event entrance fee to

produce significant profit for an organization.

It should be noted that the examples provided above are consistent with the mission

and values of most business associations. Profit-making activities that are counter to an

organization’s mission and/or goals should be examined very carefully before being

implemented, as they can damage its reputation and actually impede future efforts to

generate non-dues revenue. A comprehensive list of “100 Great Funding Ideas for

Business Associations” is contained in the appendix. This list includes actual non-dues

income programs that are successfully being implemented by business associations around

the world.

Step Four: Strategy Implementation

Once the membership development strategy is created, the membership team

should immediately focus on implementation. Depending on the strategy, this may include

a larger focus on membership recruitment, membership retention, or the creation of non-

dues income sources. This will depend on the organization’s priorities based on the input

received from stakeholders.

Regardless of the priorities in which they are addressed, most organizations will

include all three elements in their strategy. This being the case, at least some of the

techniques discussed above will be put into practice. Each element has specific focal areas

that must be addressed by the membership team as they are implemented. For instance, in

membership recruitment, the most significant challenge is overcoming objections from

non-members that do not want to support the organization. Because of this, most

organizations conduct sales training as part of their overall team development plan.

Central to being able to overcome objections is the understanding that “no” does not really

mean “no”. In many cases, it simply means “I am not convinced”. Using this as a

guideline, the following are some ways for the membership team to address some common

objections from non-members:

Figure 4.2 Possible Responses to Objections from Non-Members

Objection

Possible Response

"I do not have time to participate"

"I thought the same thing when I was first asked to join. However

I quickly found out that the organization has a number of ways for

me to be involved. Most of them take very little time but produce

outstanding results for the organization as a whole and my business

in specific. If we could find an activity that would fit your time schedule

and

have a positive effect on your business, would you agree to participate"?

"I receive no benefits from

"I can understand your concerns. However, just so I will know, what

kind

the organization".

of benefits do you expect? There is a good chance our organization

provides them but for some reason has not communicated this

effectively".

"I do not agree with the

In all candor, there are some policies that I do not agree with as well.

organization's policies".

However, our policies are developed by gaining input from our

membership

as a whole, so if you are a member, you will have the chance to effect

these

policies. Just so I will know, what are the specific policies with which

you

do not agree? Maybe I can ease your concerns.

"The organization does not do

"It is possible that we have not communicated what we do effectively. If

you

anything"?

have a few moments, could I outline for you just a few of our

organization's

accomplishments over the past year? Then, if you still feel we have not

accomplished anything, I will not take any more of your time".

"My business is too small

I can understand your concern. My business was very small when I

became

to get any benefit".

involved and I had the same concerns. Fortunately, our organization has

number of programs such as (list a few) that directly impact small and

medium sized enterprises. Would you agree to go to our next small

business

networking event with me so that you can see first hand how small

companies

can benefit"?

"The membership dues are too high;

"I realize that our membership dues may seem expensive. Believe me, I

felt the

I cannot afford to join".

same way when I was asked to join. However, I soon realized that the

benefits

I receive from the organization are much more than the amount I pay in

dues.

For instance, (share an example). If I can prove to you that the benefits

justify

the expense, will you agree to become a member"?

"I want to think about it"

"No problem. I am not asking you to make a decision today. However,

I hope you will give this serious consideration over the next few days as

I would

hate for you to miss the business-to-business mixer we are going to have

Friday. It is only for members and will provide you the opportunity to

meet

potential customers. If I picked you up and introduced you to some of

our

other members, would you join me for this event"?

"I am a professional person. The

"You may not know that our organization has a number of professionals

that are

organization is for businessmen".

members. We have doctors, lawyers, real estate agents, teachers and

many

more. In fact, in your profession alone we have more than (number) of

members.

Would it be all right if I had (name of member from target profession)

contact you

and let you know how our organization has made a positive impact on

his/her

business"?

"I am not interested"

No problem. Not everyone is and that is okay. I would like you to

know, however,

that our organization has broad-based support throughout the (country,

community,

profession). It would be helpful for you to let me know why you are not

interested so

that I can report back to our leadership. Why are you not interested in

becoming a

member"?

"Please send me some information"

"As a matter of fact, I have an information packet with me right now. If

you have ten

minutes or so, I can briefly explain what is inside. We have a business-

to-business

mixer coming up in a few days and it would be great if you could attend.

It is for

members only and will provide you a way to meet dozens of potential

customers.

One of the publications in this informational packet is our four-color

membership

directory. Member companies can choose under which categories they

are listed.

How would you like your company listed"?

"I will join if you will guarantee that

"Unfortunately, no organization can guarantee that you will get more

customers.

I will get more customers".

However, we can guarantee that you will get ACCESS to more

customers and that

we can provide the TOOLS you need to increase your business. For

instance, we

offer workshops on customer service, marketing, sales/promotion, and

communications, as well as monthly business-to-business networking

events where

you can build relationships with potential customers. How do these

services sound

to you"?

The time frame for implementing the membership strategy will, of course, depend

on its focus. For instance, the timeline for an ongoing membership strategy will be infinite

but will include benchmarks to be achieved at various intervals. A campaign-oriented

strategy may have a finite start and end date. In addition, the implementation timeline for

a retention-oriented strategy may be longer than that of a recruitment-oriented one. For

longer-term strategies, it is important that the entire organization is focused on

implementation in order to provide oversight and follow through.

Step Five: Evaluation

Depending on the type of membership strategy (e.g. campaign-oriented versus

ongoing) evaluation may occur after a specific event or at the end of a specific time period.

In the case of an ongoing strategy, evaluation should occur at least quarterly so that course

corrections can be made if unforeseen opportunities or challenges arise.

Evaluation should focus on actual outcomes versus the goals articulated within the

strategic plan. Once all data has been analyzed, the membership team should prepare a

report for distribution to the board of directors and membership as a whole. Some

organizations release the results in a public forum, as well as in press release form. The

following is the executive summary of the membership campaign evaluation report

submitted by the Greater Colorado Springs, Colorado (USA) Chamber of Commerce after

its membership recruitment effort in 1998:

Figure 4.3 Evaluation of Membership Effort

EXECUTIVE SUMMARY

“PARTY AT THE PEAK” MEMBERSHIP CAMPAIGN

EVALUATION REPORT

Result: The membership campaign achieved both its monetary and numerical goals,

raising $124,418 in new member revenue. Sixty volunteers representing ten local

companies participated in the campaign.

Budget: The attached budget reflects the income and expenditures for the campaign. In

total, the Chamber received net income of $119,162.

Recommendations: The following are recommendations from the Membership

Recruitment Team that should be considered for next year’s campaign:

1. Prospect List: Prepare a more extensive prospect list and ensure the accuracy of the

contact information.

2. Training: Utilize the same training materials but conduct the training for volunteers

earlier. This should be completed at least two weeks prior to the campaign.

3. Recognition: Provide more recognition to the corporate sponsors for the launch and

celebration events. Present plaques and acknowledge their contributions.

4. Materials: Re-design recruitment materials and membership application. Utilize a “less

is more” approach, meaning that materials should be professional but concise.

5. Dues Schedule: Revise the membership dues schedule to provide for payments of fees-

for-services versus the current focus on number of employees. Each dues category should

be assessed and modified if necessary to create a fair baseline for membership.

6. Database: The Chamber’s membership staff should input the entire prospect list into its

database so it does not have to be recreated next year. Interns should be hired to update

the information and add new prospects.

7. Promotion: The Vice President of Membership Development should coordinate the

media and publicity on the campaign instead of the Vice President of Public Relations.

This report outlines a successful membership campaign, but also provides specific

recommendations for improvement. Two years later, the Colorado Springs Chamber of

Commerce totally revised its membership strategy, moving away from a campaign-

oriented effort to instead focus on ongoing membership development.

Step Six: Revision

As in the case of the Greater Colorado Springs Chamber of Commerce, there are

times when a strategy must be revised in order to meet changing paradigms within the

community, industry or organization. For this reason, evaluation is imperative at least

quarterly in order to provide the ability to respond to changing circumstances. Even the

best membership strategies become stale over time, as new ideas and techniques become

prevalent. It is therefore dangerous for an organization to assume that a strategy that has

worked well for the last ten years will produce the same results over the next ten unless

modifications are made along the way.

Creating Customers for Life

In their book entitled, “1:1 Marketing”, Dr. Martha Rogers and Don Pepper outline

ways that companies and organizations can create “customers for life”. This phrase is

defined as members that are so empowered and have such a vested interest in an

organization’s success that they will never leave. The Empowerment Pyramid discussed

in chapter one outlines the process of creating empowered, loyal members. This process

starts immediately after they pay their membership dues for the first time. Constant follow

up is necessary in order to prove to a new member that his/her investment was a sound

one. As stated earlier, involvement is the key. As noted on the pyramid, members must

make the transition from “uninformed” to “involved” in order for them to be committed

and ultimately empowered. This transformation requires everyone in the

organization…from the chief paid executive to the receptionist….to focus on membership

development.

CHAPTER FIVE

THE ROLE OF BUSINESS ORGANIZATIONS IN PUBLIC POLICY ADVOCACY

SECTION ONE: OVERVIEW OF ORGANIZATIONAL ADVOCACY

Global experience highlights that economic reform is only truly effective when

business associations make their voice known through advocacy. Business groups

represent an important segment of society -- one that stimulates economic growth through

the creation of goods and services and the jobs that accompany them. Hence, their voice

needs to be heard in the policymaking process. Many think of business associations as

providers of education and entrepreneurial training. These efforts will be in vain if the

overall business environment is not conducive to entrepreneurship. Effective business

associations combine educational goals with an advocacy program for policy reform in

areas that affect their members. In today’s world of global competition where business

men and women are looking for associations that will help their bottom line, no

association can afford to overlook advocacy. In fact, in the long run, advocacy is the key to

an association’s success and survival.

What is Advocacy?

In simple terms, advocacy is the act of transparently influencing or supporting a

person or ideal. Public policy advocacy refers to the influencing of laws and/or

regulations. In the case of business associations, this usually means those policies that

affect their members.

In other words, public policy advocacy involves speaking out in favor of and

garnering support for particular positions concerning political platforms, laws, regulations

and other public actions. The position might be to approve, repeal, reject or amend a

policy. Advocacy, especially public policy advocacy, can be challenging because it may

involve opposing a government’s stand on specific issues. Because of this, even the most

effective public policy advocacy organizations are not always successful. As a matter of

fact, advocacy professionals agree that success in this arena involves risk, patience and

“the willingness to lose…a lot…and keep on trying”. One advocacy professional put it

this way, “Losing is a bi-product of advocacy, but organizations that learn from their

losses will gain an ever increasing number of policy wins”.

Because many public policies directly affect business activity, the private sector

needs to make its voice heard so that it can improve certain public policies. In many cases,

these include tax policies, laws/regulations governing transportation, and tax issues to

name a few.

Because the development of a business-friendly legal framework is crucial to

private sector growth, many businesspersons, through their business associations, regularly

make their positions on specific issues known by engaging in public policy advocacy at all

levels of government. For business associations, this entails educating their members about

government policies and gathering their often disparate views into one voice that

articulates the costs and benefits of particular policies. Organizing in this way increases the

likelihood that the government will adopt specific reform measures. Overall, these efforts

focus on the establishment and maintenance of a favorable business environment. The type

of advocacy in which an association can be involved depends on whether the organization

is defined under public law and has mandatory membership requirements, or whether it is

a completely voluntary association.

What Public Policy Advocacy is Not

It is important not only to understand what public policy advocacy is, but also

realize what it is not. From the perspective of business associations, public policy

advocacy is geared towards creating a hospitable business climate for all its members. It is

not designed to:

 Obtain preferential treatment for one business or sector

 Solve problems concerning members’ day-to-day business activities. (If, however,

daily obstacles are indicative of a larger problem plaguing the business community

at large, then public policy advocacy is warranted. In such cases, special attention

needs to be given to attack the real cause as opposed to the symptom.)

 Provide members with daily problem-solving services related to conducting routine

business transactions or settling disputes between members and the government.

To resolve such matters, members should obtain the services of lawyers,

consultants and so forth.

Business associations with mandatory membership, that are government-funded, may

have restrictions on their scope of activities or may jeopardize their funding if they engage

in certain types of advocacy. Most still conduct some aspects of public policy advocacy.

This guidebook is designed to assist business associations in fully participating in the

public policy advocacy process regardless of their structure.

Why is Public Policy Advocacy by Business Associations Important?

To make the voice of business heard

Effective advocacy makes crucial, policy-relevant information widely available to

several key audiences that influence public policy. These audiences include:

 The media who benefit greatly from business association and think tank

commentary and criticism. Journalists gather a great deal of their information from

official government sources, but they are better able to analyze this information

once they have listened to the alternative voice of business associations and think

tanks.

 Lawmakers who need sound information because they make policy decisions that

affect their citizens’ lives. These citizens, in many cases, will decide on whether or

not to re-elect the same legislators. Sound policies foster a favorable business

environment, advance market-oriented reforms and benefit society as a whole. A

hospitable business climate attracts investment and stimulates entrepreneurship

which, in turn, generates economic growth and well-paid quality jobs. All citizens

can take advantage of these new opportunities.

 Regulators, bureaucrats and administrators who, when provided with solid

information about the underlying objectives of specific policies and regulations, are

able to do a better job implementing and enforcing them.

 The general public including business association members who influence

policymaking decisions. Having access to key information about policies under

consideration educates business association members and the public on policies

that affect them and helps them know what elected officials are doing -- or failing

to do -- on its behalf. Citizens and business associations can then hold these

representatives accountable.

To strengthen business associations

Advocacy is also vital to a business association’s survival and growth. Business

associations aim to serve members. To this end, they offer many services such as business

education and training. Yet these efforts may be in vain if laws and regulations make it

very difficult to be a successful entrepreneur. In these circumstances, advocacy is needed

in order to eliminate these barriers so that association members’ businesses can survive

and prosper.

Business associations that advocate effectively are known to:

 Articulate members’ concerns as a unified voice thereby quickly attracting

policymakers’ attention

 Meet regularly with decision-makers to discuss key policy issues and to provide

well researched publications

 Establish regular channels of communication and close working relationships

with government officials: Set up regular times to meet with government

officials.

 Use these channels to promote members’ interests by influencing the pace and

direction of specific laws and policy proposals. Moreover, through these activities,

policymakers may begin to consider business associations as key participants in the

policymaking process and as providers of sound policy-relevant information. In

some countries policymakers automatically turned to business associations for

policy advice.

 Engage in both pro-active and reactive advocacy to their members’ benefit. By

communicating regularly with policymakers, business association representatives

can help to set the policy agenda by voicing concerns and proposing specific

policies they endorse as opposed to only reacting to others’ proposals. Moreover,

frequent contact also helps business associations to keep

abreast of imminent and current policy proposals so that they can thoroughly

examine the issue and prepare a sound policy response

 Help prevent frequent changes to the business-related legal and regulatory

framework that frighten investors and hinder entrepreneurship.

 Monitor the administration of policies to ensure that enacted provisions of

interest to their members are administered fairly, consistently and swiftly thereby

strengthening the rule of law.

By actively engaging in advocacy, a business association becomes a serious actor

in the policymaking arena and strengthens itself. Successful advocacy raises an

organization’s profile amid policymakers and enhances its reputation within the business

community as a useful membership service provider. This increases contributions from

existing members and attracts new members. With more funding, business associations

can devote more resources to advocacy and thereby enhance advocacy strategies and

tactics. A larger membership means more voting constituents and thus more clout amid

elected policymakers. In short, advocacy equips business association members with the

necessary information, motivation and tools with which to protect and improve the private

sector.

SECTION TWO: PUBLIC POLICY ADVOCACY COALITIONS

At the outset of any discussion of advocacy coalitions, there must be an

understanding of the importance of these organizations to the development of effective

public policy. Among the multitude of reasons why advocacy coalitions must be part of a

process-oriented approach to policy development, four emerge as the most significant.

First and foremost, public policy advocacy coalitions raise the level of debate on

issues that affect private sector development. Because coalitions of business associations

bring significant resources to bear on important issues, the profile of these issues typically

rises. While the concerns of one association may be a low priority for the media and

public officials, those of a coalition of business associations may increase the importance

of issues because of the unified approach. This phenomenon, commonly called the “one

voice” principle, reinforces a common sense approach to advocacy, which is that the

media and public officials respond better to issues that are made significant through

promotion and discussion. According to Edward Priola, and expert in field of public

policy advocacy, “an issue has to become visible”. Because of the constant barrage of

messages through the media, along with the sophistication of direct advocacy efforts by

individuals and organizations, there is no shortage of issues for consideration by public

officials. By using the “one voice” principle, advocacy coalitions can increase the priority

of their issues and ensure full debate and consideration of their proposals.

Secondly, advocacy coalitions provide opportunities to build relationships between

organizations, public officials, and the media. The importance of relationships to success

in advocacy cannot be understated, and its synergetic relationship to the overall goal of

legislative efforts is outlined in the following formula:

Figure 5.1 The Advocacy Formula

Relationships + Information= Access

Access + Process= Results

Results + Follow Up + Promotion= Credibility

Credibility x Time= Power

If the end result of coalition advocacy efforts is power, the beginning of these

efforts must be the ability to develop relationships that create unity and access. Unity is

essential within the framework of the coalition itself, but the trust relationship built

between coalition members, the media and public officials is integral in ensuring success.

Because coalitions involve a number of different individuals that represent various

organizations, the pool of potential contacts within the media and government is widened.

Members of the coalition can thus take responsibility for building relationships in a

strategic and process-oriented manner rather than working in the microscopic realm in

which most singular associations operate.

A third aspect in the importance of advocacy coalitions is the unified voice that is

developed through the collaboration of organizations and private sector institutions. The

“one voice” principle aside, coalitions afford the opportunity for organizations to expand

their vision and expertise through cooperation with similar associations. Some coalitions

manage to achieve a unified approach to a group of issues, which are typically published in

the form of a legislative agenda, but in other cases associations may agree on only one

issue. An example of this is the creation of a coalition between business and labor in

Oklahoma in the early 1990’s. The Oklahoma State Chamber of Commerce and a variety

of local labor organizations cooperated to address the state’s abysmal workers

compensation system. The initial meeting between the unlikely coalition partners laid the

foundation for the entire effort by acknowledging that the groups would agree on nothing

else except on a strategy for the workers compensation issue. A strategy was developed

and success achieved, after which the organizations went back to their own “corners” and

focused on separate issues. The unified voice created through this coalition not only had a

favorable impact on the issue, but also developed a level of trust between individuals and

organizations that had not been present in the past. Each of the participating organizations

learned from the process, and the expertise gained through the exercise created additional

collaborative opportunities in the future.

A final measure of the importance of advocacy coalitions is the ability of these

entities to amass grassroots support behind an issue or group of issues. It is reasonable

that the media and public officials would respond better to recommendations promulgated

by a group of organizations representing thousands of members than to a singular

organization representing hundreds. If an effective grassroots effort is initiated, the

combined membership of the coalition organizations can be used to raise the level of

debate on an issue or issues. As the advocacy formula indicates, power is the holy grail of

advocacy. Organizations that achieve power will enjoy great success in public policy

development. An effective grassroots program, using the combined membership resources

of coalition members, can create power, or at least the illusion of power.

Types of Coalitions

The type of advocacy coalition depends on the issues to be addressed, the number

of organizations interested in the issues, and the mission of the participating organizations.

The following are the most common types of coalitions:

Sector-Specific: These coalitions consist of organizations that support a specific industry

or sector. They may include employers associations, non-governmental organizations

(NGOs), and even employee or labor organizations. Multi-sector organizations, such as

Chambers of Commerce, may also be involved in these coalitions if they have members

within the particular sector. Sector-specific coalitions typically deal with fewer issues

than other coalitions, but thoroughly cover each issue and make recommendations based

on the combined experience of industry professionals.

Multi-Sector: These coalitions are comprised of a variety of business associations that

come together in support of an overall business environment. It is typically this type of

coalition that produces a National Business Agenda, and other macro-strategies to promote

business development. A multi-sector coalition may consider a large number of issues on

a variety of topics, which makes prioritization a key element of success. These coalitions

are sometimes anchored by a Chamber or other associations but may include organizations

from a variety of industries.

Structure of Coalitions

One of the most important decisions that must be made by business associations

that wish to form a coalition is the structure the coalition will take. Advocacy coalitions

typically have one of the following structures:

Figure 5.2 Types of Advocacy Coalitions

Formal: The coalition is a structured body with elected leadership and specific rules as to

its operation and procedures.

Informal: The coalition has a flexible structure where leadership is shared and/or

assigned depending on the issue and where the operating rules and procedures

are structured according to a specific advocacy scenario.

Federation: The coalition’s formal structure is codified into a legal federation that

continues into perpetuity.

Each advocacy coalition structure has strengths and weaknesses that must be

addressed from the outset. Participating organizations should reach agreement on the

structure early in the process in order to alleviate debates in the future. The following

table outlines the strengths and weaknesses of each organizational structure:

Figure 5.3 Analysis of Advocacy Coalition Structures

Process-Oriented Advocacy

The Public Policy Advocacy System

As stated earlier, the strength of coalitions is directly proportional to their

integration into a systems based model. Using the expertise of direct advocacy

professionals, as well as research conducted by experts in the field, the following thirteen-

step coalition advocacy process was developed to build organizational capacity to

influence public policy:

Structure Strengths Weaknesses

Formal a) Structured approach a) Relatively inflexible approach to issues

b) Team roles defined in b) Potential for the development of

advance hierarchy and bureaucracy

c) Leadership identified c) Potential for conflict over leadership

in advance

d) Specific rules and d) Potential for one or a small group of

procedural guidelines organizations to take control of the

process

Informal a) Flexible approach to a) Lack of structure may lead to confusion

issues and emerging over roles and responsibilities

situations

b) Team roles based on b) Communications lapses could result in

issues and expertise mixed messages or conflict within the

coalition

c) Leadership shared

depending on issues access

and other factors

Federation a) Codified structure ensures a) Organizations give up some autonomy

longevity of the coalition

b) Leadership is elected and b) Larger organizations may have more

provides consistency in influence

terms of vision and mission

c) Funding is an issue as the federation

may have staff and overhead costs

Table 5.4 The Public Policy Advocacy System

Step One: Creation of the Advocacy Coalition Team: The team should consist of

at least one representative of each of the participating organizations. The representative

should be a senior member of the staff or board of directors who can make decisions on

behalf of the organization. He or she should bring specific expertise to the coalition in

terms of legislative experience, contacts, access to public officials, media expertise, or the

knowledge of issues. Once developed, the coalition should make decisions based on

majority vote, with the agreement that once a decision is made all the participating

organizations will publicly support it.

Step Two: Training of the Advocacy Coalition Team: Even when the coalition

consists of senior organizational representatives, training should be conducted in order to

ensure a complete understanding of the systems-based process and the issues that will be

discussed. Outside resources should be harnessed to ensure that the training is conducted

in a complete and unbiased manner. A training manual should be provided to each team

member in order to initiate continuity.

Step Three: Identification of Issues: Issue identification is one of the earliest and

most important tasks of the coalition team. Identification can be conducted in a variety of

ways, but it must include input from a variety of stakeholders including members of each

of the organizations, technical experts, and data. Once input is gathered and analyzed, the

coalition team has the ability to make informed decisions on the pallet of issues to be

considered. Armed with the data necessary to ensure adequate issue identification, many

coalitions use the simple strengths, weaknesses, opportunities, and threats (SWOT)

analysis to facilitate the activity. Another popular approach is the “nomination” of issues

by each member of the coalition team, and the discussion and prioritization of each issue.

Issue identification is less complicated in a sector-specific coalition because of a higher

definition of the policy needed to support the industry. Multi-sector coalitions create a

bigger challenge in issue identification, as the field of issues is broader and less focused.

1. Creation of advocacy coalition team

2. Training of advocacy coalition team and

representatives

3. Identification of issues

4. Prioritization of issues

5. Development of policy recommendations

6. Creation of timeline

7. Compilation of legislative agenda

8. Public launch of legislative agenda

9. Development of issue papers

10. Coordination of grassroots support

11. Creation of a National Business Agenda

12. Direct advocacy

13. Evaluation of advocacy effort

Step Four: Prioritization of Issues: After identifying the salient issues to be

included in the coalition’s agenda, the team must prioritize them in order to develop an

effective advocacy approach. Prioritization is most easily achieved by having each

member of the team rank the issues from most to least important then to develop a priority

structure based on how many votes the issue receives. During prioritization, the team

should consider the importance of the issue, the timing, and the political reality of

addressing it. Some coalitions assign the highest priority to the most important issues

without considering how long it will take to achieve success or the political realities that

are in play. This can be both frustrating and confusing for the team, and can retard the

development of the coalition.

Step Five: Development of Policy Recommendations: Once issues are identified

and prioritized, the coalition team must develop recommendations for each. In order to do

this, team members must have a thorough knowledge of the issue as well as access to

information on the opinions of key stakeholders. Recommendations should incorporate

specific and practical ideas that support the coalition’s point of view. The

recommendations should be technically sound, but also compliant with available resources

and political realities.

Step Six: Development of a Timeline: Based on the approved recommendations,

the available resources and the current political climate, the team should develop a

timeline to address each issue. The timeline should coincide with the legislative session

(Parliamentary schedule, committee meeting or hearing docket, etc.) and should clearly

define the length of time it will take to address the issue. Some coalition teams structure

develop a strategy to ensure some quick victories, even if these come on lower priority

issues, in order to build credibility to address the higher priority, longer term initiatives.

Step Seven: Compilation of the Legislative Agenda: A legislative agenda is

simply a collection of the coalition’s policy statements. It should include all the

coalition’s approved issues and the recommendations on each. These are referred to as

policy statements because they inform the public official as to the coalition’s opinion on

the issue as well as its recommendations. Information in the legislative agenda may

include the following:

 Cover Letter: A letter either on coalition stationary signed by the elected

leader (in the case of a formal coalition) or a series of support letters from

the participating organizations (in the case of an informal association).

 Issue Statements: Usually one per page. The statements should include a

brief overview of the issue, the supporting view (coalition’s opinion), the

opposing view, and the policy recommendation.

 Organizational Overviews: These overviews provide the media and public

officials with information on the size, structure and influence of the

coalition members.

The legislative agenda should be produced both in printed and electronic forms,

and should be designed in an aesthetically appealing manner. The expense of producing

the publication is less important than how professional it looks and the quality of

information it contains. Coalitions typically choose to distribute the agendas at a media

launch event, as well as through personal visits to public officials.

Step Eight: Public Launch of Legislative Agenda: The legislative agenda will not

achieve the desired results unless it is promoted strategically and publicly. Many

coalitions choose to distribute the agenda to public officials in person and follow this

action with a public event for the media and other stakeholders. This strategy works well

when the coalition has a cadre of public officials that will talk to the press. If this is not

the case, the process may be inverted, with the launch event being held first.

The launch event should include members of the coalition, member companies

from each of the participating organizations, public officials, and the media. Typically, a

coalition spokesperson(s) will provide a brief presentation on the group’s history and

structure before focusing on the agenda itself. Experience indicates that the launch event

should be more of a networking event than a conference format. With this in mind, it may

include an opening or closing reception. Copies of the legislative agenda should be

available for each person in attendance. Media representatives should also receive press

kits that include a press release and coalition overview.

Step Nine: Development of Issue Papers: An issue paper should reinforce each

item in the legislative agenda. An issue paper is simply a document that reinforces the

coalition’s recommendation on how to address an issue. It may include data, technical

information, and research reports. In some cases, the issue paper may include an actual

draft of a proposed law. Each issue paper will be different depending on the technical

aspects of the issue addressed. Coalition team members should be assigned the task of

writing, or overseeing the drafting, of issue papers.

Step Ten: Coordination of Grassroots Support: Once the legislative agenda and

issue papers are prepared, the coalition should coordinate its grassroots network in support

of its policy positions. A grassroots network is quite simply a database containing the

names and contact information of individuals that support the coalition’s efforts on one or

more issues. A strategy should be developed that provides a mechanism to inform the

grassroots network of action that is required on each issue. The identified action should be

specific and timely. Usually, this includes making a telephone call, sending a fax or e-

mail, or attending an event. It is important that the information supplied to the members of

the grassroots network be concise, complete, and correct. Complete contact information

for any targeted officials should be provided. A member or members of the coalition team

should be assigned to initiate and follow up on contacts generated by the grassroots

network.

Step Eleven: Creation of a National Business Agenda: One input has been

obtained from members and other stakeholders, a National Business Agenda should be

created to provide background information and recommendations on important issues.

The National Business Agenda should serve as the business association’s strategy for its

public policy advocacy effort and should be distributed widely to government, the private

sectors and other stakeholders.

Step Twelve: Direct Advocacy: Direct advocacy (formerly referred to as

lobbying) is probably the most recognized step in the systems-based processed, but it is

also the most misunderstood. Many coalitions and individual organizations mistakenly

believe that direct advocacy is a process when it is actually a component of a process.

Direct advocacy, of course, is the direct contact made by a coalition representative or

representatives with an elected official or bureaucrat. This essential advocacy function can

be conducted either by volunteers or by paid professionals (legislative consultants).

Step Thirteen: Evaluation of Advocacy Efforts: At the end of the legislative

session or the timeline of issues covered in the legislative agenda, the coalition should

evaluate its effort based on the number of its recommendations that were adopted. Also,

the members of the coalition should take into account the increased visibility it received

and whether or not it improved its image as an advocacy organization. An overall

evaluation should be conducted, as well as one on an issue-by-issue basis. The two critical

elements that should be evaluated are “wins” on the issues as well as in credibility. The

goal of the coalition should be not only to win on the issue (meaning its position is

supported by the government) but also to increase its credibility.

Figure 5.5 Advocacy Outcome Scenarios

Advocacy coalitions are essential elements in the successful creation and

implementation of a National Business Agenda. The institutionalization of the advocacy

Issue Credibility Result Coalition/

Association

Effectiveness

Win Win Best possible scenario Increases

in that the coalition

not only is successful

in convincing the

government of its

position, but also does

this in such a way

that it gains

credibility for the

future.

Win Lose In this scenario, the Decreases

coalition wins on the

issue, but loses

credibility due to a

faulty process, non-

transparent behavior,

or win-at-all costs

mentality.

Lose Win This scenario can be Increases

very advantageous for

a coalition in that even

process and the creation of sector-specific coalitions will ensure that the business

community’s voice is heard on policy issues.

Case Studies

In the context of transitional economies, four case studies provide excellent

examples of the advocacy coalition process in action. These examples outline diverse

approaches and issues, but reinforce the importance of the systems-based process.

The Open Doors Campaign

Romania

http://www.opendoorscampaign.org

Contact: Radu Nicosevici (Advocacy Academy Association)

[email protected]

The Open Doors Campaign was launched in 2001 by a consortium of business

associations in the tourism, information technology, and manufacturing sectors, along with

non-governmental organizations and other private sector organizations. The campaign’s

goals were threefold. First, the business associations wanted to convince the Government

of Romania to establish transparent processes for citizen participation in the advocacy

process. Realizing the importance of this participation to economic growth, the

associations hoped to increase the understanding of the governmental process in order to

create a partnership between the public and private sectors. Secondly, the associations

wanted to mobilize the business community behind a series of private sector reforms.

These reforms ranged from changes in the fiscal code to the creation of incentives that

would increase foreign direct investment. The Open Doors Campaign’s third goal was to

develop grassroots support for private sector initiatives. This support was needed in order

to establish the private sector as a key dialogue partner with government. As all of these

goals centered on the development of sustainable dialogue with government officials, it

was designed to “open doors” within the government, which would create access for both

citizens and public officials to communicate their desires in an open and transparent way.

The Open Doors Campaign consisted of three business association coalitions, each

of which developed its own legislative agenda. The Tourism for Today and Tomorrow (T-

3) Coalition was launched in early 2001 and was comprised of eighteen tourism

associations. The Tech 21 Coalition was comprised of the eight national information

technology and communications associations. It was officially launched in spring of 2001.

In early 2002, thirteen business associations created the Pro Globe Coalition in the

manufacturing sector. With guidance from international experts, the coalitions used the

systems-based advocacy process to gain input from stakeholders, to identify important

issues, to develop a legislative agenda, and to initiate grassroots support for their policy

positions. In order to promote their activities, each of the associations held a launch event

that was attended by the press, business owners, international organizations and public

officials. In addition, the coalitions designed a National Advocacy Tour, which took the

Open Doors Campaign message to ten major cities in Romania. Because of this tour, the

Open Doors Campaign gained massive media attention, and the coalitions added hundreds

of grassroots supporters to their databases.

After developing their legislative agendas, the coalitions created policy position

papers on each issue and began to promote these initiatives to applicable government

officials. In April 2002, the coalitions hosted Advocacy Days, which was the first

grassroots advocacy event held in Romania. During this event, hundreds of business

association members converged on the offices of elected officials to support the coalitions’

initiatives. The event further raised the Open Doors Campaign’s profile.

In early 2003, the Open Doors Campaign moved to its next stage of development

with the creation of the Advocacy Academy Association. Six business associations in the

Banat Region of western Romania formed the Academy with support from the United

States Agency for International Development (USAID). The Academy’s purpose was the

following:

 Train advocacy professionals to support the advocacy efforts of business

associations.

 Conduct voter demographic studies and other research to compile information on

voter attitudes and trends.

 Plan and conduct public events aimed at providing a form for constructive dialogue

between the public and private sectors.

The Advocacy Academy Association’s success was both swift and dramatic. Only

three months after its formation, it conducted the first public hearing in the recent history

of Romania. The hearing provided private sector input into the proposed law to govern

direct advocacy activities. Forty-three private sector representatives testified at the

hearing, which was attended by high-level politicians including the President of the

Romanian Senate, Members of Parliament, and even the Crown Prince of Romania, His

Excellency Radu Horhensolen. The Academy held four other public hearings in 2003, all

of which had a significant impact on public policy. In addition, it graduated its first class

of twelve advocacy professionals who worked with nearly a dozen business associations to

initiate advocacy campaigns.

Because of the relationships built through initiation of the Open Doors Campaign,

23 pro-business initiatives were passed, the advocacy system became the foundation for

private sector dialogue with government, and the business associations gained credibility

and increased membership. Many government officials, including former Minister of

Small and Medium Sized Enterprises Silvia Ciornei, called the Open Doors Campaign

“one of the best programs for initiating dialogue and achieving results”. The Open Doors

Campaign continues to be at the forefront of public policy in Romania, and with the

support of the Advocacy Academy Association, it will remain relevant for years to come.

The Bulldozer Initiative

Bosnia-Herzegovina

http://www.obr.int/obr-dept/econ/bulldozer-initiative/index.asp

Contact: Benjamin Herzberg

[email protected]

With the support of the United Nations High Representative, Business associations

in Bosnia-Herzegovina participated in the Bulldozer Initiative to break down

administrative and bureaucratic barriers that plagued private sector development. Because

of its history of conflict, Bosnia-Herzegovina represented a formidable challenge to the

growth of private sector institutions. With over 40% of its economy in the gray sector, the

country badly needed to embrace reforms.

The Bulldozer Initiatives goals were first to break down barriers to development

and secondly to create private sector support. The organizers of the initiative consulted

with hundreds of businesses to identify barriers to growth. “Roadblock Submission

Forms” were provided to businesses throughout the country, and dozens were returned to

the organizing committee. The campaign’s goals were achieved through the initiation of a

strategic and focused advocacy initiative. With support from a number of international

NGOs and donor organizations, the Bulldozer Initiative succeeded in passing nearly 50

reform measures, while at the same time breaking down ethnic divisions. While the

Open Doors Campaign initiative in Romania was a grassroots or “bottom up” effort, the

Bulldozer Initiative worked at both the governmental and grassroots levels.

Advocacy Partnership Program

Tanzania

http://www.tccia.com

Contact: [email protected]

Because of Tanzania’s socialistic history, public policy advocacy was an unknown

commodity. Business associations felt powerless to affect change, and bureaucracy, non-

transparency and corruption continually arrested the development of the private sector. In

2002, USAID sought to facilitate the development of advocacy coalitions in several of

Tanzania’s regions.

Through this initiative, regions such as Mbeya, Morogoro, Ruvuma, Rukwa,

Tonga, and Iringa were able to harness grassroots support for local and regional legislative

initiatives. Business association-led advocacy coalitions were created in each region, and

the systems-based advocacy process was used to build the foundation for the development

of policy statements. The goal of the coalitions was to raise the level of debate on policy

issues, as well as to establish a “voice” for the business communities within the region.

The strategy in this initiative was to build the capacity of the participating

organizations to serve as advocates for the business community. With assistance from

international experts, the business associations created dialogue forums is six regions and

thirty-three districts. One region even took the advocacy process to the ward level, in

order to affect local public policy. Public policy advocacy coalitions in all thirty-three

districts developed advocacy agendas that were promoted through well-organized

campaigns. Through these campaigns, and the dialogue events that supported them, the

coalitions gained both visibility and credibility. The coalitions continue to work in pursuit

of these goals, but already they have earned the respect of local and regional governmental

officials, who see them as resources and not adversaries.

Montenegro Business Alliance

Montenegro

http://www.visit-mba.org

Contact: Ralph Marlatt

[email protected]

Petar Ivanovic

[email protected]

In order to build Montenegro’s private sector, the Center for Entrepreneurship and

Enterprise Development (CEED) provided technical assistance to business associations in

the creation of the Montenegro Business Alliance (MBA). The purpose of the alliance is

to identify and overcome barriers to private sector growth by adopting a strategic approach

to advocacy. In order to gain input from businesses relative to the issues facing private

sector development, the MBA distributed hundreds of surveys, the results of which were

compiled and used to create a National Business Agenda. In addition, the MBA held a

series of round table discussions between business and governmental leaders, which

initiated open and honest dialogue. In 2001 and 2002, the MBA focused on two primary

pieces of legislation, the Enterprise Law and the Accounting Law. As a direct result of the

MBA’s participation, an Enterprise Law was passed that simplified the business

registration process. A company can now be registered in four days for just 1 Euro. The

Accounting Law initiated international accounting standards throughout Montenegro and

created a public/private institute to develop regulations, provide training for auditors, and

deal with daily accounting issues. The MBA was the only private sector organization

named to the Institute’s board of directors.

In 2003, the MBA’s success continued as it forged alliances between fierce

competitors to address a variety of tax and regulatory issues. In addition, it hosted six

business-to-business forums that attracted over 1,000 participants from Slovenia, Croatia,

Bosnia-Herzegovina, Serbia, Macedonia, Kosovo and Albania. As a result of these

forums, over 4 million Euros in contracts were initiated.

Summary and Conclusions

Public policy advocacy coalitions will continue to be important components of a

process-oriented strategy. Their proliferation in transitional economies will increase as

will their effectiveness in influencing legislation. The key issue for coalitions will not be

whether they continue to exist, but rather how quickly they will adopt cutting-edge

techniques to increase their effectiveness. Many coalitions continue to underutilize their

grassroots network, while focusing mainly on direct advocacy by influential members.

Along the same lines, there is still no clear delineation between influence peddling and

advocacy. Influence peddling is a non-transparent practice that provides advantages to

officials based not on merit but on relationships. It sometimes involves the payment of

bribes or the use of family alliances to initiate action. Influence is maintained as long as

the government officials or bureaucrats that benefit from this arrangement are in power.

Advocacy, on the other hand, is a necessary and transparent process by which

organizations and individuals express their points of view in an effort to affect change.

Influence peddling is an affront to democracy, while advocacy reinforces it.

When assessing the impact of coalitions on the advocacy process, it is evident that

there is strength in numbers. Coalitions provide a way for associations to pool resources

and experience to strengthen the business environment. As part of an overall advocacy

process, public policy coalitions are both useful and effective.

SECTION THREE: DEVELOPING A BUSINESS AGENDA

What is a Business Agenda?

As stated in Chapter One, a business agenda is a publication that highlights issues

that are important to an organization’s membership and provides recommendations as to

how to address them. Development of a business agenda is a crucial step in the

establishment of a successful public policy advocacy effort. Even though important, it is

challenging for many organizations as it involves the establishment of a specific process

through which an association(s) can identify, prioritize, and develop policy positions on

issues related to business. This requires the gathering of input from key stakeholders

including members, collaborating organizations, international organizations, and research

organizations.

A business agenda provides a way for an organization or advocacy coalition to

encapsulate its recommendations into one document that is easily distributed to key

stakeholders such as government officials, representatives of international organizations,

and members of the press. The agenda frames issues in an easy-to-follow format that

makes it easy to focus on individual issues within the document. In many cases,

organizations or advocacy coalitions augment the business agenda with policy papers that

provide specific data to support its recommendations.

The development process for a business agenda is encapsulated in steps 3 through

8 of the systems-based advocacy model that is discussed in Chapter One. In order to

implement these steps, an organization must be committed to the implementation of the

following approach, which consists of five developmental phases:

Figure 5.6 Phases in the Development of a Business Agenda

Phase 1: Gathering Input

Phase 2: Compiling and Analyzing Data

Phase 3: Conducting Independent Research

Phase 4: Developing Specific Policy Positions

Phase 5: Developing a Utilization Plan for the Agenda

Phases in the Development of a Business Agenda

Gathering Input

As in the development of an overall organizational strategy, the creation of a

business agenda requires input from stakeholders. A variety of techniques may be used to

solicit this input, but the most common are focus groups (usually consisting of members,

international stakeholders, and public officials), surveys, and public meetings. The

following is an explanation of each technique:

Focus Groups

Purpose: The purpose of focus groups is to gain information from members,

representatives from coalition partner organizations, international stakeholders and

government officials that can be used to identify key policy issues. Focus groups are

widely considered to be an excellent source of information because they provide instant

input within a structured setting.

Design of Focus Groups: Focus groups typically contain 8-12 participants and are

professionally facilitated in order to achieve maximum results. In the case of gaining input

for a business agenda, it is best to empanel a number of mixed groups of members

(including representatives from coalition partners if applicable), international stakeholders

and public officials. Groups should include both men and women of various ages and

backgrounds. It is important to have an adequate demographic representation in the group.

The facilitator should be an experienced but neutral party that has no ties to the

organization. An association staff member may facilitate the focus group session or an

outside facilitator may be used. To form the focus groups, the President or Executive

Director of the organization should send letters to stakeholders that have been identified by

the staff. The letter should stress that the session’s purpose is to identify policy issues that

affect business in general or, depending on the mission of the sponsoring organization(s),

an industry as a whole. The organization, at its discretion, may offer incentives to those

individuals that participate. This may vary from providing a lunch to giving away prizes.

Often, the sessions are held over a two or three-day period, with the facilitator holding

both morning and afternoon sessions. While the sessions may be held at the offices of the

organization, most likely they will be held off-site at a conference facility, restaurant or

hotel.

Focus Group Process: Typically, focus group sessions are between 1 hour and 1 ½ hours

in length. Each session is scripted with an agenda and specific questions that are asked by

the facilitator. Responses to the questions are noted on a flip chart either by the facilitator

or a designated recorder. The facilitator must attempt to elicit input from all the

participants, while at the same time ensuring accurate and honest responses. After all

questions have been asked and responses recorded, the facilitator thanks the group and

distributes any incentives that are offered. Because the session’s purpose is to elicit

specific input on policy issues, the questions should be designed to focus on challenges

faced by the business community as a whole or an industry in specific. Some facilitators

utilize an analysis of strengths, weaknesses, opportunities and threats (SWOT) to frame the

discussion rather than a pre-planned set of questions. Regardless of the technique used,

the focus group’s goal should be the identification and prioritization of specific policy

issues to be addressed within the business agenda.

Report: Within ten days after the focus groups, the facilitator prepares a report that

identifies the issues that were identified as well as the group’s suggested prioritization.

Prioritization is important because it provides a mechanism to cross-reference responses

from each focus group to determine which issues are considered important by all the

groups. This provides the organization or advocacy coalition with a practical way to

assess which issues should be included in the business agenda and which should be left

out. It also provides a way to determine which of the prioritized issues should be

addressed in the near-term versus taking a longer-term approach. Typically, the facilitator

will meet with the organization’s senior staff and volunteers to present the report.

Public Policy Advocacy Surveys

Purpose: Conducting surveys is a traditional way of generating input from stakeholders.

For purposes of gaining input from a business agenda, it is not as important as focus

groups and public meetings. Surveys, especially those dealing with policy issues, have

become passé in many areas, thus reducing the number of responses, eroding the accuracy

of the responses provided, and generally limiting their effectiveness as an input-gathering

tool. Advocacy experts contend that surveys are most effective when they a) focus on one

particular issue, b) are done in conjunction with or as part of a public meeting, and/or c)

are constructed scientifically to ensure participation by the appropriate stakeholders. In an

advocacy context, surveys are most usually linked to polls, which are a scientific

amalgamation of stakeholder opinions on a candidate or issue.

Survey Design: A survey’s design is critical in its ability to generate useful information.

Surveys that are designed to achieve pre-determined results are not useful inputs to a

business agenda, nor are unscientific samplings that do not include a broad sampling pool.

It is recommended that for purposes of developing a membership development strategy

organizations survey a wide-variety of stakeholders in order to gauge overall support for

its activities across diverse groups. The survey should contain both quantifiable and

subjective questions that allow for both structured and un-structured input. Quantifiable

questions allow the organization access to specific data that can be used to analyze the

importance stakeholders place on a specific issue or issues, while subjective responses

may provide insight into situations and/or attitudes of importance to individual

stakeholders.