The Board of a political party includes politicians, policy wonks, organizers and financial people. Small business advocacy groups on the other hand, have Boards made up of strategic people from within their membership. That is a weakness rather than a strength because advocacy groups influencing public policy and public opinion are more like political parties than businesses.
During the 1970s when CFIB was engaged in a fight against government policies that threatened small firms, the mood amongst the small business community was one of anger and fear. But it was a great time to sell memberships.
A similar situation existed in Finland before the fall of the Soviet Union, when the nation was preoccupied with the threat of a Soviet invasion. The mood was also one of fear and the sale of memberships by The Finnish Confederation of Private Entrepreneurs was more successful than membership sales in the other Scandinavian organizations.
Another unique aspect of an advocacy organization compared to a business is its history. In analyzing the value of a private company, you seldom worry about its history. The focus is on earnings and future cash flow. But the history of an advocacy organization is always relevant because policy and political issues go “round and round” in an endless circle.
The lessons of our early fight against proposed changes to the Income Tax Act and the Combines Investigation Act in the 70s are relevant anytime CFIB is dealing with complex public policy changes. What you learn is that few elected officials ever really read more than their briefing papers so there are always hidden agendas that only the bureaucrats understand. Usually, for example, only the Minister of Trade reads the full text of a trade agreement.
The reality of the leadership of CFIB dealing with issues that are both political and technical means that the qualities of a CFIB President are much more complex than that of a business leader. He or she has to possess a strong knowledge of public policy and then, at a moment's notice, be able to swing into the world of perception and emotion called politics. And on top of these qualities, he or she needs the skills of a Deputy Minister to administer a complex $40M business.
Another great bit of history demonstrating that advocacy organizations are more like political parties than businesses came from Holland when two advocacy membership organizations, one with 20,000 members and another with 15,000 members, decided to merge and did it at the Board level as if two businesses were merging. Both organizations had stopped growing. But they should have asked their members to vote on the decision just like two political parties would if they decided to merge. Well, the result of the merger was massive numbers of firms that would not join the combined group. The merger resulted in a massive cash shortfall of about $500K (US dollars) in 1980. The government stepped in and arranged for Ing Bank to provide a ten year loan and a seat on the Board.
The most important organizational development at CFIB has been the development of succession planning as a fundamental function of the Board of Governors. It is just impossible no matter what kind of executive search talent you use, to find the skill package you need to run a complex advocacy organization like CFIB. Succession must be developed internally, and this process requires a decade of critical training of potential candidates. Internal candidates also know that there is a political component in building membership, and that is something that outside candidates seldom understand.