It Does You Good
The flavour of the month may be data, especially in its ‘big’ form. But are we deluding ourselves into believing that big is always beautiful? Sure, big data identifies trends; helps to better understand and target customers; recognise and optimise business processes; and improve mechanical performance. It also has a role in public health, scientific research, and financial trading.
But, should we show caution when it extends unchallenged into security and law enforcement, or the ‘optimisation’ of cities and countries? It cannot be assumed that all data will ultimately be used for social good. Sometimes projects based on mass data increase inequality, and consequently harm those they were designed to help.
Bigger the Better
In 1907, Charles Darwin’s cousin Sir Francis Galton asked 787 villagers to guess the weight of an ox at a country fair. None of them got the right answer, but when Galton averaged their guesses, he arrived at a near perfect estimate. Beating not only most of the individual guesses but also those of alleged cattle experts. Thus the ‘wisdom of the crowds’ was born.
Groups of people pooling their abilities to demonstrate collective intelligence and average judgement converging on the right solution. It’s a pleasing theory and tempting to apply to all sorts of decision-making processes. Until, that is you realise that the crowd is far from infallible. Good crowd judgement only arises when people’s decisions are independent of one another. Influenced by other’s guesses, there’s more chance that they will drift towards a misplaced bias. In other words groups, when fed with information, tend towards a consensus to the detriment of accuracy. Witness the recent election polling predictions.
Analysing the Detail
Nothing in doing data analysis is neutral. How data is collected, cleaned, stored. What models are constructed, and what questions are asked. All tend towards discrimination.
As Dana Boyd, in her excellent article, ‘Toward Accountability’ asks, “How do we define discrimination? Most people think about unjust and prejudicial treatment based on protected categories. But discrimination as a concept has mathematical and economic roots that are core to data analysis. The practices of data cleaning, clustering data, running statistical correlations, etc. are practices of using information to discern between one set of information and another. They are a form of mathematical discrimination. The big question presented by data practices is: Who gets to choose what is acceptable discrimination? Who gets to choose what values and trade-offs are given priority?”
Even so, making data available to the public must be a good thing – it’s democratizing – right? But what if it’s not? For instance, what happens when big data is used in conjunction with a computer algorithm to predict crime? In theory analysing large amounts of crime data should spot patterns in the way criminals behave. Resources could then be deployed more effectively in the areas of predicted criminal activity. Result!
Or, what happens when parents are encouraged to select their children’s school places on the basis of an education data ‘dashboard’. Benchmarking every aspect of a school’s performance against the mean should tell you everything you need to know to make a rational decision about your child’s future. Simple!
Lastly, how good would it be if, when you applied for a job online, you were swiftly shortlisted for interview on the basis of your merits? Your CV having been analysed against the qualities of those who had previously succeeded in that role. Brilliant!
But wait! Critics of this kind of data analysis raise a number of ethical concerns. They claim predictive policing, for instance, leads to victimisation, and unnecessary stop and searches in areas with high crime rates; displacement of crime elsewhere; gathering of sensitive data, leading to invasions of privacy; and lastly, that it ignores the social, economic and cultural factors that cause crime. Advocates, on the other hand, argue that a variety of policing approaches are necessary; that research has found no evidence of victimisation; and that it makes police decision-making less biased.
Surely no one can argue that giving parents access to school data is a bad thing? But what data? What constitutes a good school? Is it test scores, student makeup, parent ratings, or facilities? Presented with the data, does every parent have the time, language skills, and ability to interrogate the statistics? And, if they do, is everyone equally able to act upon their findings by dint of wealth or mobility?
Oh yes, that job you applied for! Being filtered for interview on the basis your abilities is one thing. But what about your gender, ethnicity, or sickness record? You’ll never know, because you won’t get the chance to explain. Not that anyone would be so crass as to filter on that basis. But subtle clues, like blips in your career timeline or post-code may result in unwarranted inferences. Combine these factors with feed-back loops and machine learning and before you know it you may never work for a large company again.
“Data scientists”, said Mike Loukides, VP of O’Reilly Media, “are involved with gathering data, massaging it into a tractable form, making it tell its story, and presenting that story to others.” So, I remain conflicted on the benefits of big data. It has its uses. But, rather than thoughtlessly surrender ourselves to its machinations – in the belief that the outcome will always serve the interests of humanity – we should remain sceptical, questioning, and downright belligerent. Especially when told that it’s for ‘our own good’. I plan to keep in mind a quote from Ronald Coase, winner of the Nobel Prize in Economics, when he said, “Torture the data, and it will confess to anything.”
Sources / Further Reading:
Hang on a minute! What is all this stuff about ‘engagement’? Everywhere I look these days membership organisations are talking about engagement as though it was the be all and end all of their existence. But why? And what do they mean by the term? Look up ‘engage’ in any shorter dictionary and – apart from a ‘promise to marry’ – to engage somebody means to attract or hold their attention of sympathy, or to cause them to participate. But that isn’t what the tech wizards appear to mean when they come knocking at your door with a ‘solution’ to your dwindling membership. What they have in mind seems much more superficial. Just clicking in some cases!
Now, if I click an online petition, that no more makes me an activist, than liking a post or a tweet makes me engaged with the author or their organisation. The truth is, there is no definition! We may have been bandying the word around since the mid-2000s, but in reality you can make engagement mean anything you like. It could be defined as consumers’ behaviour online, or the strategies brands use to attract attention, or the things you can count. Context is everything!
If you’re a writer looking for blog readers, or you’re an ecommerce site looking for shares, it will alter the type of engagement you’re looking for. If you want people to purchase, then it’s all about the first meeting and activity leading up to the sale. But if you’re a blogger, then engagement may be a comment or a share by an influencer.
When it comes to associations, I contend that engagement is the result of a member investing time and money with them in exchange for value. That value may me financial, practical, emotional, or a sense of belonging. The more resources they invest, the more engaged they are. And that happy state can’t be brought about by clicks alone!
Engagement is also about value. The value for the person doing the engaging as well as the value of that engagement for the association. It’s not the ‘output’ of a programme, but the strategies and actions that go into establishing relationships. It’s a discipline not a goal.
So, I reckon that any system that offers to analyse your engagement by counting clicks is leading you into a fool’s paradise. Vacuous statistics are just vanity metrics. Handy for keeping critics off your back, but essentially worthless when it comes to predicting outcomes or measuring success!
The twin goals of most associations are member acquisition and retention. When it comes to acquisition, the numbers that view your website, blog, or twitter account; share content from your publications; or even read your press coverage, are superficial. They’re not a signal that you have held attention or triggered participation. And transactional interactions, like buying a product, or paying for a course, are unreliable as an indicator of likely member retention. Attention gained through financial incentive tends to be transient!
It’s only when you put issues of empathy into the mix that you can really start to measure engagement; when participants align with your ethos, and the significance of the relationship outweighs the financial cost of membership! Indicators of that state of mind are a willingness to write or speak on your behalf; volunteer for a committee or task force; serve in a leadership role; achieve status; invest in sponsorship or similar. Of course, not every member can achieve this, but at least they should have the feeling that they could!
Healthy associations create more engagement opportunities in areas that create value for both organisation and member. Strategically, it’s also worthwhile for associations to plot the members likely progress from pre to post engagement, and consider what the first steps on the commitment escalator might be. As an efficient flow from low to high value engagement will tend to be healthier from both revenue and mission fulfilment perspectives.
Edition 259, Association News, 9th June 2017
Artificial Intelligence (AI) – the capability of a machine to imitate intelligent human behaviour – has made great inroads into the automotive, aviation, and other highly technical manufacturing industries in the last few decades. However, those that rely on human dexterity, such as clothing manufacture have remained relatively unchanged; mostly because their response to price pressure has been squeezing labour costs. Investment in new machines and processes has taken second place to offshoring; moving manufacture to lower priced economies where human labour is cheap.
But now even that may be about to change with the advent of a sewing robot that it is claimed can assemble an entire garment from scratch. If it lives up to its inventor’s claims it could bolster the hope that domestic factories in the US and UK might be able to compete once again. But it won’t bring back jobs!
So, automation, having eliminated many manufacturing and assembly jobs over the last couple of decades, will soon remove another tier of human employment. But this time they won’t be so called ‘blue collar’ production jobs. Commentators and futurologists predict that artificial intelligence (AI) is set to take over the service sector – then the professions!
As Dhaval Joshi, economist at BCA Research, has noted, it is not going to be the low-paid jobs in the service sector such as cleaning, gardening, carers, bar staff or cooks, whose jobs are most at risk. That’s because machines find it hard to replicate the movements of humans in everyday tasks.
“The hard problems that are easy for AI are those that require the application of complex algorithms and pattern recognition to large quantities of data – such as beating a grandmaster at chess”, says Joshi. “Or a job such as calculating a credit score or insurance premium, translating a report from English to Mandarin Chinese, or managing a stock portfolio.”
Seen in this light, the looming threat is obvious. The first army of machines wiped out well-paid jobs in manufacturing; the second army is about to wipe out well-paid jobs in the service sector. In many cases, the people who will be surplus to requirements will have spent many years in school and university building up their skill (1).
Could it go further? We know that machines have beaten humans in chess, draughts, and most recently in the ancient game of Go. But, more significantly, a machine has just beaten four professional poker players at their own game. The importance of this development lies in the fact that poker is an imperfect information game — similar to the real world where not all problems are laid out. The difficulty in figuring out human behaviour is one of the main reasons why poker was considered immune to machines.
The machine, developed by Carnegie Mellon University (CMU), and called Libratus, employs a problem solving algorithm that can be used in any situation where information is incomplete, including business negotiation, military strategy, cyber security and medical treatment. But, what next, if a machine can learn the ability to reason and bluff?
Over the last half-dozen years, deep learning, a branch of artificial intelligence inspired by the structure of the human brain, has made enormous strides in giving machines the ability to intuit the physical world. Three years ago, Microsoft’s chief research officer impressed attendees at a lecture in China with a demonstration of deep learning speech software that translated his spoken English into Chinese, then instantly delivered the translation using a simulation of his voice speaking Mandarin—with an error rate of just 7%.
So, how will these developments affect the membership sector? Can trade associations acclimatise to the new reality, and – assuming we still have them – how can we help members adapt?
©2017 M J Hoare
As recent events – such as allegations of Russian electoral hacking – have proved, the merest hint of uncertainty over the conduct or legality of a selection process can seriously damage the credibility of a ballot in the minds of the voters. Even a whiff of mismanagement will leave a bitter taste of dissent lingering amongst the electorate. Remember George W Bush and his hanging chads!?
Cock-up or conspiracy all become one in the minds of those who have begun to question the validity of the process and therefore the result. History has shown us that governments adopted on the basis of a dubious selection process almost always fail to maintain the trust of the people. Except, of course, for dictatorships, and they just don’t care!
So, electing governments is one thing, what about day-to-day decision making? How many times have you, as a trade association manager, been asked your membership’s view on a particular issue, policy, or piece of legislation, only to realise that you are completely in the dark? And, in all honesty, how many times have you responded to such an enquiry – possibly from the press – with your own best guess; hoping that the majority would tow the party line?
We’ve all done it, and because we’re all seasoned campaigners – with our ears to the ground – we generally get away with it. But what if your judgement call goes awry? Second-guessing the mood of your constituency is a risky business, and careers can be seriously dented by getting it wrong. So, why not limit the risk by asking your members what they really think? Most often, the answer to that question is that to do so would be costly, time consuming, and possibly wasteful. But what if it was none of these? Enter digital democracy!?
Under modern government the people elect representatives rather than decide matters directly. The resulting administration may be viewed as more or less democratic depending on how well it represents the will of the people. So, in these terms, digital democracy – where all adult citizens are presumed eligible to participate equally – might be considered an improvement on the democratic process. Or as a remedy to the insular nature, concentrated power, and lack of post-election accountability in a process organized mostly around political parties. And, because the Internet is a primary source of information for many people, it enables citizens to get and post information about politicians, and it in turn allows them to get advice from the electorate in larger numbers. Thus collective judgement and problem solving gives more theoretical power to the citizens and speeds up decision making.
So, online voting could be an effective way to reduce an association’s printing costs; provide wider communication choice for members; be more environmentally friendly; and represent members’ views more accurately. However, not everybody is comfortable with computers and it is vital in a democracy to ensure that no voter is disenfranchised; the right mix of communication methods need to be employed. Maximising communications and using social media within an election context is a powerful way to raise its profile and foster engaging discussion with the electorate. But unfettered it can also backfire badly leading to the dissemination of half-truths, falsehoods, and even character assassination.
But in a world where interest groups already exert influence via platforms like 38 Degrees, Mumsnet, and Global Citizen, digital democracy has to be about much more than just responding to trends on social media. And there are barriers to voting online, including lack of trust in the security of the process; technophobia; and voter fatigue or cynicism. However, as more commercial transactions take place digitally, and security improves, members may become increasingly comfortable with online voting. And if the effective capture and use of data allows for targeted communications it may also increase the ‘buy-in’ to online polling and elections.
So, where does that leave association and membership management skills? Will there be any further need for judgement and experience once all options can be tested – Swiss style – by referendum and all decisions can be digitally ‘crowd sourced’? But, can we really trust the wisdom of crowds to get us through? Are rapid decisions always wise ones? Or, is a wily CEO with his / her ear to the ground still the best barometer of member opinion?
Whatever the answers, membership organisations can’t afford to ignore digital democracy. Having long-since sacrificed their role as information gatekeepers, how long will it be before their ability to represent members and influence policy is also side-stepped on the web?
Michael Hoare 2017
According to recent reports in The Guardian the Association of Model Agencies (AMA) has about three months to submit their responses to allegations by the Competition and Markets Authority that it is involved in price fixing with some of its members.
Agencies allegedly used the trade association as a vehicle for price coordination when their representatives controlled the AMA’s managing council. Like most associations, the AMA claims its Council meets to discuss industry matters and promote the interests of its members, but it is also alleged, by the CMA, to have circulated regular “AMA alerts” that encouraged agencies to reject fees offered by customers and negotiate higher payments.
I wonder how many trade association councils haven’t at one time or another thought it might be a good idea to give members a ‘heads-up’ on sensitive commercial information; suggest ways of capitalising on their dominant position in the market; or have an ‘informal’ discussion of tenders? Or more likely perhaps, agree a price to avoid competing with each other.
In September 2005, fifty prominent independent schools were found guilty of operating a fee-fixing cartel by the Office of Fair Trading. The OFT found that the schools had exchanged details of their planned fee increases over three academic years between 2001-02 and 2003-04, in breach of the Competition Act 1998. For their part Bursars freely admitted that they used to meet regularly and talk about fees, but maintained that the swapping of information did not amount to a concerted plot to push up fees.
It’s a familiar dilemma for association CEOs. A general discussion at a council meeting can all too soon result in some bright spark suggesting a monthly alert to all members with a guide price for some service or functions. And it’s often down to the CEO to nip it in the bud before what seemed like a helpful suggestion turns in anti-competitive behaviour, generally to the accompaniment of harrumphing about what exactly are the ‘benefits’ of membership!
Thirteen years as CEO of the now defunct National Association of Goldsmiths (NAG) and I was beginning to experience a sense of frustration that the debate on transparency and trace-ability in the jewelley supply chain was going around in circles! After more than a decade of work – heroic efforts by Greg Valerio and Fairtrade Gold, and a bucket load of green-wash from other quarters – I was starting to feel that the pool of committed people was almost saturated and that we were now just having a circular debate within a group of devotees to the cause. But the recent FLUX: REDEFINING LUXURY conference has restored my faith!
Now, after three years watching from the side-lines, I’m immensely encouraged to find that the message is again reaching a wider, grass-roots, audience of designer makers. Why is this? Well, persistence is one reason, recognition another! The award of Greg’s MBE contributed new impetus and pushed ethical gold several notches up the awareness ladder. Ethical fashion has helped too.
In 2000 – when I first became involved with retail jewellers – many didn’t really get the connection between themselves and the fashion industry. But brands and diverse materials have broadened their horizons, and cemented the bonds between jewellery and fashion. Interestingly fashion and jewellery have been running on parallel tracks when it comes to ethical supply chain issues too.
Both are concerned with provenance, the elimination of destructive environmental practices, human rights violations, and exploitation of local workers. But their gestation periods have been different. Environmental and exploitation anxieties about gold, precious metals, and diamonds matured over decades, reaching their tipping point with the No Dirty Gold and ‘blood diamond’ revelations early this century.
Similarly, the extraction, and consumption of water during cotton cultivation and subsequent pollution in the processing of fabric has long been an environmental concern for the fashion industry. The universality, accessibility, and relentless rapidity of fashion trends – ‘fast fashion’ – has accelerated that destruction but also propelled the possibility of change in the garment industry. The durability, value, and complexity of jewellery, has driven change more slowly.
Fashion Revolution was born, in the wake of the Rana Plaza collapse in Dhaka, Bangladesh, that killed 1,134 and injuring 2,500 others. Its belief that ‘fashion can be made in a safe, clean and beautiful way, where creativity, quality, environment and people are valued equally’ seems to me to be the fundamental linkage between jewellery and fashion! Thanks to Greg, Fairtrade Gold, Lina Villa from ARM, and Orsola de Castro of Fashion Revolution for bringing that fact vividly to life!
The jewellery industry has been angst-ridden for most of the current century over the moral, ethical, and environmental damage done by the exploitation of gold and diamonds. Child labour, the blighted lives of miners, the spoil left by extraction, the financing of civil wars, and the buttressing of repressive regimes have each left their own stain on the industry. The Kimberley Process, the Dodd Frank act, OECD Due Diligence, and subsequent legislation, attempted to deal with these concerns, and bring forth order out of chaos. However, the plethora of initiatives in the supply chain remains perplexing for retailers, and those that want to trade ethically.
As CEO of the now defunct National Association of Goldsmiths (NAG) and a founding Director of the Responsible Jewellery Council (RJC), I worked with NGOs and others for over a decade to influence the practices and policies of miners, refineries, processors, wholesalers, retailers, and banks in their efforts to regulate and monitor the movement and provenance of gold and diamonds within the supply chain.
Today, rigorous policies – both imposed and self-policed – are impacting on the tracking of both commodities back to responsible origins. But the work still isn’t complete, and the industry still needs to shore up its claims to social and ethical sourcing with transparency, trace-ability, and communication across the entire supply chain, before retailers can trade with complete confidence in the attribution of their stock. Platinum group metals have also been added to the scope of the RJC, but one of the unsolved problems remains the provenance of coloured gemstones!
Therefore the announcement of the launch of a technical feasibility study to include coloured gemstones into the scope of the RJC should be music to jewellers’ ears. But, past experience of working alongside the Gemmological Association of Great Britain (Gem-A), whose work is the study and identification of gemstones, I am acutely aware how complex a task it is likely to be. Not just because of the range of stones, but because of the fractured supply chain.
Artisanal and small-scale mining (ASM) – labour intensive and often in remote and inaccessible areas – still accounts for the majority of the worldwide supply, raising obstacles to transparency and trace-ability at even the production stage. Compared to diamonds, the supply chain of coloured gemstones is highly complex, making it nearly impossible to trace their trajectory from mine to end-user.
Mined in roughly fifty countries – located mostly in the global south – gemstones pass through numerous hands before being polished, transformed into jewellery and sold in the international retail market. And – unlike diamonds – the coloured gemstone supply chain doesn’t have a history of being governed by a centralised cartel, so opportunities for human rights abuses, environmental damage, and illicit activity, are legion.
So, while the RJC’s intentions are entirely laudable, their desire to plug the remaining gaps admirable, I think we should all recognise that the road ahead will be strewn with moral and ethical boulders, and some will be very difficult to work around!
Contact me on email@example.com for strategy, communications, and public relations consultancy.
For most of the twenty-first century the jewellery industry has agonised over the moral, ethical, and environmental damage done by the exploitation of diamonds. Be that in terms of child labour, the blighted lives of miners, the spoil left by the extraction process, the financing of civil wars, or the propping up of repressive regimes. The Kimberley Process, and subsequent legislation, attempted to bring forth order out of chaos. But in 2006, the Hollywood blockbuster movie ‘Blood Diamond’, starring Leonardo Di Caprio, pricked the conscience of the industry and brought the subject back into public focus. The actor’s name has been linked with low-level anti diamond activism to this day.
Industry insiders don’t need reminding of all the arguments that have ricocheted to and fro ever since. Initiative has piled upon initiative in an attempt to improve the situation – or create a thicker smoke screen – depending on your point of view, and the depth of your cynicism. At the same time the hunt has been on for verification systems that could guarantee the provenance of natural diamonds, or for diamond substitutes that provided glitz without guilt. Cubic Zirconium was a passable diamond simulant, but lacked the cache of the real thing and, whilst man-made synthetic diamonds were theoretically possible, it wasn’t until the barriers came down across Russia that the technology to manufacture them became readily available.
So, imagine the kudos attaching to a company that not only claims to be able to manufacture quantities of large synthetic diamonds relatively quickly and economically, but also secures an investment and an endorsement from Di Caprio! Not only will his money come in handy, his publicity value is enormous! But Diamond Foundry isn’t actually too short of money, having secured the financial backing of six billionaires in making products that they claim are “ethically and morally pure”, and selling them – already set in jewellery – direct to consumers.
Naturally enough, there has been a backlash, with an open letter to Di Caprio, from Bob Bates of JCK Online, questioning the basis of the company’s environmental claims, highlighting the social and economic impact on mining communities in Botswana, South Africa, Namibia, and Sierra Leone and raising fears about the effect of commodification on prices. So, the argument over who benefits most from diamonds – the miners the middle-men or the financiers – and who will suffer most from the proliferation of synthetics rumbles on.
However, regardless of the arguments or judgements about who is morally or ethically right, the underlying theme of this debate is one that we will return to regularly over the next decade. For here is a classic example of a disruptive innovation. One that has the potential to create a new market and value network – disrupt existing ones – and displace established market leaders and alliances. Think Alibaba, Amazon, and Uber!
As we plunge into Industrial Revolution 4.0 it becomes easier to make money than even twenty-five years ago. Setting up and running a mine is expensive and requires a lot of manual workers. A company that makes its money out of a smart app needs less capital, doesn’t incur the same infrastructure costs, and virtually no extra outlay as the number of users rise. In other words, the marginal costs per unit of output tend towards zero. That’s why tech entrepreneurs get very rich very young!
Oxfam recently highlighted that the sixty-two richest billionaires own as much wealth as the poorer half of the world’s population put together. The world is becoming polarised between the ‘haves’ and ‘have-nots’. Against this backdrop, regardless of ethical, or environmental concerns, the initial losers will be those at the bottom of the heap.
What if the ‘direct-to-consumer’ model proliferates – undermining established practice and traditions, atomising existing supply chains, shedding jobs, and vaporising careers? As wealth passes from old style mine owning corporations to billionaire technology pioneers and venture capitalists – concentrating it in fewer hands – who will be the winners and losers? Regardless of the short-term disruption, where are innovations like these taking us, and what will be the effect on society in years to come?
Michael Hoare FIAM
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Technology that upsets the status-quo isn’t new. It’s been around since before the industrial revolution. Jethro Tull’s horse drawn seed drills and hoes put the cat amongst the eighteenth century’s agricultural pigeons. While in the nineteenth, spinning frames and power looms inadvertently gave us ‘Luddites’, the derogatory term for opponents of labour-economising technologies.
But things have moved on apace with the advent of digital technology, and it’s surprising quite how many of our transactional relationships have been affected by new digital platforms: the so-called disruptive technologies. A disruptive innovation is one that creates a new market and value network and eventually disrupts existing ones, displacing established market leaders and alliances. But the interesting thing about the current crop is that they achieve this without being subject to any of the traditional infrastructure costs.
So, Uber is the world’s largest taxi company but owns no cabs. One of the largest accommodation providers – Airbnb – doesn’t have a hotel room to call its own. Whilst SKYPE and WECHAT have no wires or exchanges, and ALIBABA, the world’s most valuable retailer, has no inventory. The list goes on! In fact, they have become so disruptive that the House of Lords launched an inquiry into online platforms in the EU Digital Single Market: asking why are collaborative economy platforms growing so quickly; what are their implications for employment law and health and safety regulation; and how does consumer protection law apply? Who is regulating them? Is it the EU, the Member State or even the local authority?
Those are all good questions for associations to ponder too! But don’t let’s be fooled into thinking that disruptive technology is only about market dominance via digital platforms. Genomics, 3D printing, advanced materials, advanced oil and gas exploration and recovery, and renewable electricity are also on the top twelve list of developments poised to dislocate us.
So what, if the world’s most popular media owner – Facebook – not only creates no content, but also brings special interest groups together in a way associations previously regarded as their forte? That LinkedIn has already knocked the dynamics of recruitment off kilter, and Amazon has dealt an almost mortal blow to traditional booksellers? Clearly there is no going back, and hankering after the past is no help.
Industry sectors atomized by disruptive technologies will adapt, but they will require a very different set of benefits from their associations. And they in turn will require different skills, finance, and governance to match their members’ needs. Are associations up to the task? Or even thinking that far ahead?
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Over twenty years’ association management experience.
Michael Hoare FIAM
What does the brave new world of disruptive technology have in store for trade associations? Will they have a future purpose, and how will they justify their subscription?
Associations have always adapted to change. Time was when they encouraged actors in a particular trade or industry to gather together under a shared identity, partly to validate their supposed expertise, and partly to exclude those deemed less worthy. So, if we’re honest, protectionism and elitism played no small part in achieving credentials, and arcane rules re-enforced by mystifying etiquette were fashioned, which rendered those inside the tent unassailable, and those outside beyond the pale!
This kind of `gentlemen`s club’ mentality – where simply belonging was in itself enough to justify the fee – survived in various forms until the end of the last (twentieth) century. Some associations also managed to build a quasi-official carapace around themselves, and further strengthened their position by assuming the mantle of gate-keepers: granting access to industry data and information to the privileged few.
Members were also encouraged to believe that their status granted them the ear of government. Indeed, in 1996 the Department of Trade and Industry (DTI) appeared to confirm that view with the publication of its best practice guide for The Model Trade Association. The DTI is long gone but that document remains the bedrock of many associations, cementing the notions of best practice, bench-marking, and competitiveness in their psyche.
The turn of the century saw companies` growing more concerned about trust issues and the protection of their reputation. Collectively, reputation management became a function of trade associations, achieved by furthering members’ interests with stakeholders like regulators, industry analysts, employees, suppliers, and the media. And, in response to common reputational problems brought about by industry-wide crises – like pollution, slave labour, or blood diamonds – competing firms tried to stave off aggressive government legislation through the development and enforcement of self-regulation.
Commercially, associations also attempted to influence any regulatory or trading conditions that adversely affected their members, by providing a platform for collective representation and lobbying. In reality, the so called ‘level playing field’ involved seeking favourable rules like tax breaks, subsidised research and development, or relaxed employment practices. Promote and protect was, and still is, the stated or implied motto of many associations.
However, over the last decade, the big story has been the rise of digital and the evolution of organisations to meet their members’ changing expectations. Data is now freely available to all; associations aren’t the only conduit for communication between stakeholders; and businesses are increasingly reluctant to pay to simply to `belong`. Faced by shrinking membership fees, and keeping up with members’ demands for instant access to resources and training, some associations turned to sponsorship, exhibitions, group buying, financial benefits packages, and other monetised relationships to fill the financial gap. The most successful ones have managed to continue updating and innovating – make the transition to e-learning, develop digital products – and make all their services accessible online! But how much longer can they keep ahead of the curve?
Emerging, or disruptive, technologies have the capacity to alter our lifestyle, what is understood by work, business and the global economy. Whilst disruptive innovations create new markets and value networks and eventually disrupt the existing ones, while simultaneously displacing established market leaders and alliances. The interesting thing about the current crop – like Airbnb – is that they achieve this without being subject to any of the traditional infrastructure costs and limitations.
So, as social media has already undermined the logic behind at least one of their key functions – communication – how long will it be before someone applies the `Uber’ model to trade association procedures: undermining established practice; regulation; and tradition? And how will associations represent the interests of members who find themselves displaced by, or in competition with, others driven by disruptive technology?
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Over twenty years’ association management experience.