No middle road.
"Either you get in and fight aggressively, or you're not going to be effective." Frank E. McCarthy, executive vice president of the National Automobile Dealers Association, McLean, Virginia, applies lessons learned on Capitol Hill to association management. He arrived at NADA in January 1968, loaded with legislative savvy and heavy with skepticism about associations.
"When I worked on Capitol Hill [as House Rules Committee minority counsel], associations could never make up their minds. At a hearing, if you asked a question outside their testimony, they'd say they had to go back to the board of directors. I thought, if they can't send somebody with authority to comment on 'what ifs,' they're totally ineffective. So I imagined working for an association would be boring." NADA proved him wrong, having kept McCarthy energetically engaged for 28 years. The association's recent take-action handling of proposed tariffs on Japanese autos and the resulting trade agreement exemplifies several McCarthy management rules of thumb.
Last year, U.S. Trade Representative Mickey Kantor surprised auto dealers by announcing sanctions affecting only Japanese cars, not any other products. When something will hurt 10 percent of your membership, "you don't have time to sit around and ponder what you should do," McCarthy advises. "You'd better have in line your mission statement and your position on how to protect your members, because the very next day there's a press conference at noon."
With a trade commission hearing scheduled for June 8th, President Clinton's decision expected June 28th, and no board meeting planned until mid-June, "there wasn't even time for a full executive committee meeting," says McCarthy. With his officers' approval, McCarthy was "fairly aggressive in protecting dealers" at the press conference and, with executive committee input, ready with a strong statement opposing sanctions for the Capitol Hill hearing.
An old Hill hand, McCarthy is at ease in that environment. Groups less familiar with it can develop a presence, he suggests. "All hearings are open - you can just walk in. Always show up [when the matter affects your members], provide credible information, and don't play games. Once you make a mistake, you're dead forever."
McCarthy advises association chief executives to attend themselves. "Some people think they're too important to be at a hearing, but the people on the committee think they're big shots, too. So say hello. That tells them their committee is important and you want to work with them." The credibility issue is elemental. "Provide 100 percent balanced information," McCarthy says. "Show the opposing argument and your response, and be straightforward. Never exaggerate, because once you do, you'll be discounted."
Reflecting on taking an action like testifying prior to full board approval, McCarthy remarks, "It's always a sensitive issue for an association. In our case, we knew our position was consistent with our mission statement, so we decided we could not wait. Further, if you don't act immediately you have no chance to have press coverage of your position, and hearings will come and go without your having had a chance to testify. To put it simply, the train doesn't wait for you; you either gear up and get aboard, or you stay on the platform."
Part of McCarthy's strategy in navigating the trade sanction morass with leaders, members, the press, and the administration was to keep the issue clearly framed. "Our basic purpose is to preserve the franchise system and the dealer's success. Any time a segment of the membership is [threatened], we should be involved," spells out McCarthy.
The trade negotiation reconfirmed a familiar axiom: Communicate. NADA kept officers and the executive committee "fully informed at all times about everything."
Communication and accessibility are also fundamental at the association staff level. In his early days as chief executive, McCarthy's members passed along two basic management lessons. One was to conduct senior staff meetings every week, not only as needed. The other was to work directly with several staffers. "I prefer 10 people reporting to me," McCarthy says. "If you have a number-two position, everything from other people is filtered through that one person."
Working directly with staff helps motivate them, he finds, and NADA's flattened but stable hierarchy with 10 group directors has proven effective. "If you give people more authority, they do a better job," McCarthy affirms, "and you can recruit better people and keep them longer."
How can CEOs with decades of service behind them keep their interest fresh? McCarthy avails himself of serendipitous projects that draw on unused skills. "I like numbers and figuring out finances," he offers as an example. He derives great satisfaction from working with NADA's retirement trust, which has grown from $75 million to $2.4 billion.
Another project to engage new interests might be establishing a for-profit service corporation. "Having a for-profit business is fun because you can measure your success. In associations, success is difficult to measure," McCarthy notes.
Measurement is a McCarthy leitmotif that may be familiar to most CEOs. From taking the high ground to protect all members rather than waffle along a middle road, to observing appropriate lines of board authority, McCarthy balances member needs carefully. And he plays sports. "In this job, it's really hard to score yourself. When you work on legislation, you don't hit home runs. You amend a bill, you do this or that, but you rarely have a clear-cut victory. When you play sports, you win or lose," he says triumphantly. "And I like to win."
Kristin Staroba is a freelance writer based in Takoma Park, Maryland.
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|Title Annotation:||interview with National Automobile Dealers Association Exec. Vice Pres. Frank E. McCarthy|
|Date:||Jun 1, 1996|
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