Built by Association

We've found the best little trade association in America. Why doesn't the one that serves your industry do this much for you?

Our first impulse in a story about trade associations is to look for ways to make you laugh. So we're leafing through the three-volume, six-inch-thick Encyclopedia of Associations. Our eyes light on the listing for, oh, the National Academy of Nannies. We smile, and we write it down. That's a good one, we're thinking. But we're just getting started.

What on earth do the dues-paying members of the National Coil Coaters Association talk about when they gather in convention? we ask you. Where were the marketing types when the founders of the National Association of Margarine Manufacturers chose a name for themselves? Which gang sounds like the most fun, the National Pecan Shellers Association, the National Ornamental Goldfish Growers Association, or the National Toothpick Holder Collectors Society? (All right, so NTHCS isn't a trade association, precisely, but so what? Neither are the National Association of Full Figured Women, the National Association of Lefthanded Golfers, and the National Coalition of Psychiatrists Against Motorcoach Therapy, but we managed to find room for them here.)

Why are we doing this? Our immediate goal is yawn prevention. We know there's something musty about the whole concept of trade associations, something that has vaguely to do with your father's generation. If you're young and ambitious and bearing down on business, what do you care about your trade association? You might wonder, Why pay dues to an organization that probably can't teach me anything? Why go to chapter meetings when I don't spend enough time with my family as it is? Why travel thousands of miles to attend a convention that I just know is going to blend into one big cocktail party populated by so many hale fellows well met I'd just as soon not meet, thanks?

"The entrepreneurs who have the very hot growth businesses want to be a part of knowing what's around them," concedes David Fiore, president of Reunion Time, a sizzling former Inc. 500 company. "But they're going to win no matter what the conditions are. And they're not going to depend on other people or an association to determine how fast they're going to grow." We're guessing that's what forms the basis of an opinion expressed by another Inc. 500 chief executive we polled, Kenneth Ryan of Airmax, an international-transport-service company. "Trade associations suck," he hollered into the phone. "Suck, suck, suck!"

But, listen, not everybody feels that way. When we asked Michael Tamasi how he justifies the dues he pays to the National Tooling and Machining Association (NTMA), he told us, "It's a no-brainer. There's no question that it's well worth it."

Tamasi, 32, is president of AccuRounds, a $3-million precision machine shop in Avon, Mass. Companies like Tamasi's grind parts destined for larger assemblies in complex products such as cars, armored tanks, medical devices, and flutes. It's an industry that has struggled lately in the face of worldwide recession and fierce competition from Europe and Japan, and it's invisible. "Very seldom do any of our companies make a product that you can hold up and sponsor 'Monday Night Football' with," says John Cox, NTMA's lobbyist.

Those themes -- anonymity and struggle -- come up again and again in conversation with Tamasi. He talks about "the beating we've taken," and how "it has made us pull together." How "we're trying to help each other out because we've got a pretty good bunch of down-to-earth people in our industry that nobody really knows about."

Tamasi, like many company owners in the industry, is second generation, the son of a journeyman machinist who one day got tired of working for somebody else and started his own business. Leonard Tamasi joined the association and paid his dues faithfully. Now that he's retired and living in Florida, he socializes with friends he made through NTMA. Mike, an engineer with an M.B.A., hip to JIT, TQM, and ISO 9000, is no less devoted to NTMA than his father was. For the lobbying it does on his behalf. For the benefits and services it provides. And for the community building it promotes through his local chapter, of which he's treasurer.

"It's meeting up with your peers and making friendships," says Tamasi. "Surviving as a group. Growing as a group. That camaraderie, that chance to make connections with people in the industry on a regular basis, is very important."

Frankly, we haven't found too many CEOs in other industries who speak the way Tamasi does about his trade association. "Trade associations don't look outward, they look inward," Ryan went on to say after his initial outburst. "They're rarely visionary, and they aren't taken seriously." Joseph Mansueto of Morningstar, a financial publisher, says of his involvement with the Information Industry Association: "As time went on, I got less out of it. If you're on the cutting edge, it usually doesn't happen in trade associations."

All the more reason, we humbly suggest, to take a closer look at NTMA and its special relationship with the industry it serves. If other trade associations can't compare, well, that's the point. Jennifer Bremer, director of the Kenan Institute, a Washington think tank, was "blown away" by the number and variety of trade associations she encountered in her research. She believes trade associations are an "underutilized resource" that can and should do more for American industry. "I think it's a gap in our system," she says. "The fact that they don't work as well as they could is a barrier to our competitiveness. And we ought to fix it."

Dues
"Dues are like taxes," says Phil Chisholm, executive vice-president of the Petroleum Marketers Association, "and nobody likes to pay taxes."

He's right, of course, and nobody likes to collect them, either. Which is why trade-association executives lie awake nights thinking about ways to reduce their dues dependence. When they do fall asleep, they dream about the National Auto Dealers Association, with its Blue Book, or the Association for Manufacturing Technology, with its hugely profitable biennial trade show in Chicago. Associations such as those are the envy of their peers because they have a single lucrative source of nondues income -- what Bob Dolibois of the American Association of Nurserymen calls a "silver bullet."

Peter Ruane, president of the American Road and Transportation Builders Association, doesn't have a silver bullet, so he has had to scramble. Over the past five years -- by selling advertising, lining up outside sponsorships, and aggressively marketing new fee-per-use services to members -- Ruane has managed to cut his organization's reliance on dues from 85% to less than 50%.

"We're very entrepreneurial," Ruane boasts. "Trade associations today, if they're not entrepreneurial and trying to diversify their revenue base, they're not going to survive."