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Associations, Uncategorized
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
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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.

Disruptive Diamonds V2

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?

Bavaria 1

Michael Hoare FIAM

Reviewing your strategy, communications, or public profile? Can I help? info@michael-hoare.co.uk    
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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?

Adapting to the Uber WorldAssociations 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?

Reviewing your strategy and communications? Can I help? Over twenty years’ association management experience.

Bavaria 1

Michael Hoare

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Getting a buzz from jewellery drones

The jewellery trade press are reporting that a business owner in the U S has completed what is thought to be the first ever drone-delivery undertaken by a jeweller. According to Jewellery Focus:

‘Distinctive Gold Jewelry, of Frankfort in Illinois, delivered a women’s watch to a couple celebrating their anniversary. The business owners say that they have being “dying to do” such a delivery since they first heard of the concept of drones. Drones have become a talking point in retail and consumer circles ever since online shopping giant Amazon said it was trialling the technology….It is not clear whether Distinctive Gold Jewelry intends to roll it out as a standard part of their service offering, but it has nonetheless garnered some attention stateside, with US trade magazine National Jeweler breaking the story.’

So, a PR coupe for Distinctive Gold Jewelry, but what if this neat – even amusing – stunt were to become an everyday occurrence?  The crowded streets of our major cities are a far cry from the comfortable little town of Frankfort with its 17,000 inhabitants.

Scale up the delivery of one watch to the kind of volumes that might attract Amazon, and you have a whole different scenario. Imagine the skies of London or Birmingham buzzing with delivery drones? Or worse still, the peaceful horizons of our market towns? Is that really what we want?  How much fun will it be when our Sunday afternoons – and maybe nights – are shattered by the infernal buzz of drones passing overhead? How much of a laugh will it be when you’re poleaxed by a parcel falling from the sky, or get a swipe across the head from a twenty kilo projectile, as it bounces off the roof, and breaks a few tiles on the way down? And who will pay for the damage?

So, leaving aside the obvious security concerns, the threats to privacy and safety are just two of the reasons we should think very hard before surrendering to this seductive new technology. But if that time ever does come, I think I’ll be investing in a tin hat and a catapult!
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