How do Chartered Institutes and Trade Associations cope with Disruptive Innovation?

Chartered Institutes and Trade Associations cover thousands of sectors and trades. Here is an online directory of Professional Bodies and Trade Associations. The former serves people, primarily, the latter organisations, primarily; in both cases not exclusively. I put them together as “our representatives” for the purpose of my question. Can chartered institutes and trade associations cope with disruptive innovation? I say they can, and flourish, but like any market, there is good and bad. And it’s a gale blowing. CIM (marketing) is my professional body. UKBAA is our Trade Association, and both experience challenges and opportunities from disruptive sources such as artificial intelligence AI, internet competitors and DIY marketers. Innovation moves at breakneck speed these days, as I see first-hand at Dorset Business Angels, from the entrepreneurs and ideas we fund and review. Entrepreneurs and innovators question whether traditional organisations are fit for purpose. Can big companies survive? That’s for another discussion. My thoughts turn here to whether professional and trade bodies can cope. Issues such as GPDR – General Data Protection Regulations – are a real worry for business, and Institutes should be a place to turn to rather than just Google your problem. With innovation, moving at breakneck speed, have chartered bodies and trade associations had their day? I don’t think so, because disruptive innovation does not mean chaos, it means better problem-solving. How do our representative organisations work with disruption? What do the robots and AI have to say? Are we doomed? I’ve been a regional CIM Chair and a Trade Body Chair, plus an active, demanding customer of both. Here’re some ideas….

How we got here – charters

Charters were originally a record of land in Anglo-Saxon times. First drawn up in 670 AD granting land to the Church, subsequently to lay people. There were Congressional charters in the USA, municipal corporation charters and royal charters in Europe. The latter being the only way a company could be formed at one point. Nowadays trade bodies recognise the value of chartered status. They come under the authority of the Privy Council, who reserve charters for bodies it describes as: “eminent professional bodies or charities which have a solid record of achievement and are financially sound.” There are 900 Chartered bodies. They are the premier trade and professional organisations in the UK. Business people, Government, the public trust them to act as regulators and accreditors for their sectors. Professional people join them to stay up-to-date with the latest technical information for their industry. Members join and stay accredited by virtue of qualification and experience, and continuing professional development, CPD.

Trade Associations

There is no legislation governing trade associations and no requirement on them to be registered. Anyone can set one up. The result is a proliferation of bodies of variable quality. The Trade Association Forum estimates that there are currently as many as 3,500 trade associations in the UK. Extract from the Heseltine Report 31st October 2012, here is an extract: “The Trade Association Forum …(says) There have been various attempts to address the problems of business representation dating back to the Devlin Commission in 1972, but the issues of fragmentation and proliferation are still very much alive today. There has been little effective action to address these issues since that report.” My own experience in the equipment industry and now in the funding, finance and angel investment sectors is that you get out of trade associations, what you put in. There is a treasure trove of services to dip into, but you need to go shopping, and engage with your colleagues in the partner association. As ever, it’s all about people.

Modern Professional and Trade Associations

Effective organisations today, are lean, innovative and of limited size, or divided into smaller working units. Professional bodies and trade associations are not big organisations so can achieve the latter. In a fast changing world, they provide a vital service. At Dorset Business Angels we very much a rely upon UKBAA, UK Business Angels Association, for example to perform these key functions typical of a central trade association:

  • Speaking to Government on industry issues
  • Sharing industry best practice
  • Representing members
  • Providing networking, contact, lead and business development opportunities
  • Carrying our surveys and research
  • Acting as a catalyst and first point of contact for contact from the public and industry
  • Dealing with enquiries, complaints and ideas
  • Speaking and dealing with media
  • Running Conferences, Education and Informative events
  • Education and Training – online, classroom, centrally and regionally
  • Technical support
  • Agreeing and maintaining codes of conduct

Innovation – is renewal not destruction

Innovation, is a better solution to meet a new requirement. By definition it will shake things up, so I am never quite sure why we preface it with “disruptive”. A better engine, app, service, or product will mean another provider will suffer, go out of business, lose sales or be forced to get better. That’s what an effective market does. There was a great podcast interview recently with Marc Andreessen entrepreneur, investor, and co-founder of Netscape. His view is that the internet is only in its infancy, and we should embrace ai, robots and innovation; there are far more opportunities than problems with tech and innovation. I share this view.

Conclusion – the bad and the good are the innovative

The worst organisations demonstrate these attributes to a customer amongst others:

  • Poor service
  • Costly
  • Too many staff
  • Slow and unresponsive
  • Bureaucratic and rule bound
  • Inward focused
  • Old fashioned
  • No perceived value added
  • Backward looking

So, can chartered institutes and trade associations cope with disruptive innovation? The best chartered institutes and trade associations cope with disruptive innovation by embracing it as an opportunity and offering great, modern service to customers.  Disruptive innovation does not mean chaos, it means an opportunity for better problem solving.

Peter Eales BA Hons Chartered Marketer FCIM FIDM
Founder Director Dorset Business Angels
MD o i solutions limited

Posted in Blog.