Russell Reynolds Associates’ Inside the Mind of…series addresses the leadership and behavioral attributes of various groups of executives.
From access and relationships to influence and substance
As a primary representative of their industry, trade association chief executive officers (CEOs) are being called to wear more than just their “advocate” hat. Major changes in the social, economic and political ecospheres of their respective industry mean that successful trade association leaders need the skills of a corporate executive as much as those of an ambassador.
Created and funded by companies operating in a specific industry, trade associations work to shape the regulatory environment in ways most favorable to businesses operating in that particular space. They are uniquely positioned at the intersection of government and business, forcing leaders to balance the often competing interests of stakeholders in both spheres.
The arena in which trade associations operate has undergone a metamorphosis in recent years. Amidst economic recession, increased government regulation, a heightened emphasis on transparency and general political malaise, trade associations are grappling with many of the complexities that face the businesses of their members. In this paper, we set out to explore to what extent trade association CEOs have evolved to meet the changing demands of the political and corporate worlds in which they operate.
Historically, trade association CEOs were heavily focused on cultivating political relationships and access. However, changes in the social, economic and political landscape, as well as shifting member demographics and a growing demand for transparency, have prompted a new leadership profile to emerge. While trade association leaders must still possess public policy savvy and an ability to develop and maintain critical relationships in Washington, D.C., and beyond, they must also demonstrate traditional corporate executive competencies, such as sound business acumen, proven operational expertise and, in some instances, direct or aligned industry experience. Today, trade association CEOs serve as trusted representatives of their constituents—they understand the unique challenges facing their members and work to develop policy and advocacy campaigns that combat these challenges while also ensuring programmatic content that meets member needs.
To assess the profile of this new type of leader, Russell Reynolds Associates asked leading trade association CEOs to complete well-validated psychometric assessment tools that focus on behavioral characteristics relevant to leadership roles.1 The results were aggregated and compared with a group of best-in-class corporate CEOs from Russell Reynolds Associates’ proprietary database to determine on which of the 60 psychometric scales the trade association CEOs were statistically similar to and different from their corporate peers.2
Increasingly commercially oriented
When comparing trade association leaders with best-in-class corporate CEOs, we discovered striking results: Their profile is surprisingly similar to that of their corporate counterparts, with three distinct categories of leadership behavior emerging.
Common leadership attributes between trade association executives and best-in-class corporate CEOs
Long-term oriented and flexible: Both sets of leaders demonstrate a strong strategic and creative mindset, adopting a long-term approach to key challenges. Given the volatility and uncertainty of the political landscape, trade association executives must demonstrate an ability to quickly grasp emerging threats and creatively forge relationships with coalition partners, allied industry groups and policymakers that will protect the interests of the industry they represent. This requires flexible thinking and an ability to see around corners.
Committed to action and outcomes: Trade association CEOs are committed, results oriented and decisive—attributes more commonly associated with corporate CEOs than nonprofit leaders. Their sense of personal commitment and connectivity likely help them connect with members, and their goal-driven approach is reflective of the increasingly fast-paced environment in which they and their members operate. They must distill complex issues into clear, actionable steps to maintain progress amidst dynamic circumstances. Much like their peers in the consumer-centric business world, trade association chief executives are being forced to adapt to the changing expectations of their members.
Modest and humble: Trade association leaders and best-in-class corporate alike are unpretentious, focusing on the needs of members and the betterment of the organization rather than on personal gain or recognition. Humility enables trade association CEOs to ensure productive partnerships with policymakers, put members’ interests first and avoid discord among the membership, which is often segmented due to conflicting stakeholder interests.
A unique breed for a unique environment
While sharing many characteristics with best-in-class corporate CEOs, successful trade association leaders do not fully resemble them. A number of leadership attributes set them apart from their corporate counterparts. These attributes reflect the uniqueness of operating in a member-driven environment, which requires them to be able to navigate the interests of multiple stakeholders.
Distinct leadership attributes of trade association CEOs
Collaborative: Fitting with the membership basis of their organization, trade association CEOs display higher levels of collaboration than their corporate peers. Such diplomacy is both valued and necessary when faced with the conflicting demands of various constituencies and the imperative to build consensus and garner support from multiple stakeholder groups.
New ways of doing things: Trade association leaders are less traditional than best-in-class corporate CEOs. Adapting to the increasing complexities of the rapidly changing market environment, trade association CEOs are more inclined to challenge the status quo and explore new ways of doing things in order to meet their members’ needs.
Not restricted by rules or regulations: In the same vein, trade association CEOs must be willing to tackle bureaucracy and cut through red tape in order to address the changing needs of their membership. They are less restricted by an innate need to follow established processes and procedures than their corporate counterparts. To best serve their members’ interests, association leaders prioritize the end goal over following rules or standard procedures.
Self-directed: The often-competing interests of their membership call for trade association executives to be more self-directed. Given the delicate balancing of interests and stakeholders, trade association CEOs must be able to abstract themselves from “group think” and establish an independent point of view. While inclusive and democratic as mentioned above, they also must know when to apply their own thinking and problem solving skills to best address critical stakeholder needs in a timely fashion.
Calling on a new type of leader
As a result of the evolving political landscape in which trade associations operate, the expectations for successful leadership have also evolved, and a new breed of trade association officers is emerging. They possess both the business savvy and leadership traits of best-in-class corporate CEOs, as well as the unique interpersonal characteristics that allow them to be successful in a member-driven environment. Our research clearly reveals a shift in the trade association leader from the traditional “access and relationship” leadership profile toward an “influence and substance” executive profile. Trade association CEOs are being called upon to engage with members on a peer-to-peer level. Further, they must understand the specific challenges faced by member companies and work to develop policy, advocacy strategies and campaigns that will positively impact member businesses.
Assuming continued political gridlock and an increasingly complex external environment, the next generation of trade association leaders will be called upon to navigate the heated policy landscape, developing proactive solutions for the businesses they represent while also driving the development of new product and service offerings that address member needs. Top candidates for these multi-faceted roles will have to demonstrate strategic, industry-informed and results-oriented leadership traits, as well as political savvy and exceptional influencing skills.
STEPHANIE TOMASSO leads the firm’s Trade and Professional Association Practice. She is based in Washington, D.C.
STACEY SHAPIRO is a consultant for the Leadership & Succession Practice. She is based in Atlanta.
ERIN MARIE CONKLIN is a member of the firm’s Leadership & Succession Practice. She is based in Atlanta.
MAIKE VON HEYMANN is the firm’s Global Knowledge Manager for Nonprofit. She is based in London.
CLARA DESSAINT is a Knowledge Analyst in the New York office.
MOLLY FORGANG is a Knowledge Analyst in the firm’s Leadership & Succession Practice. She is based in the New York office.
Russell Reynolds Associates asked 14 CEOs of leading trade associations, recognized by The Hill for their advocacy performance, to take the 16 Personality Factor Questionnaire, the Occupational Personality Questionnaire and the Hogan Development Survey.
Best-in-class corporate CEOs were selected by applying both a qualitative screen of performance assessment by stakeholders and a quantitative hurdle
of 5% annual revenue growth rate during their tenure, which exceeds average gross domestic product growth.