SOCMA: Society of Chemical Manufacturers and Affiliates

CEO Update
May 18, 2012

Some might call it chemistry, the way Larry Sloan found his way to the top spot of an industry association.

Trained as a chemical engineer at the University of Pennsylvania, he started out in practice. When his first working group folded, he took the opportunity to add a Northwestern University degree. Then in Chicago, he met an alumnus who happened to head a chemical company.

“One thing led to another,” he said, and he started work there after business school in marketing and then sales, which took him to Florida. But straight sales (and the Southeast), “was just not my bailiwick.”

To get back to the Mid-Atlantic, he joined his father’s business for a time, but a conversation with an old Penn lab buddy changed the course of his future.

Robin Weiner, longtime president of the Institute of Scrap Recycling Industries, told Sloan he seemed to have the right background for a chemical trade group.

He soon made a career-changing move, in 2000 taking the job as director of membership at the Chemical Specialty Manufacturers’ Association (now Consumer Specialty Products Association).

Just eight months later, a recruiter called with an offer he couldn’t refuse. The Adhesive and Sealant Council was looking for a membership marketing director, but strongly indicated that its president would be retiring in five years and hinted that Sloan would be positioned to assume leadership.

He said he was feeling a little “constrained” at CSPA; he wasn’t a direct report to the president and “really wanted to try a lot more things in an association.

“So I jumped ship and, of course, CSPA was not happy with my move.”

At eight-staff ASC, he was involved in all facets of the organization, such as membership and marketing, but also database management, conference programming, advertising, educational outreach, even some GR.

“I basically covered a whole slew of functional areas in the five years,” he said.
And as he hoped, the president said Sloan would be positioned for succession. He began as president in 2005 and ran the group until 2010.

Now at the Society of Chemical Manufacturers and Affiliates, Sloan talked to CEO Update about how he moved to a larger group and the challenges he faces there.
CEO Update: Can you describe your move to SOCMA?

Larry Sloan: Joe Acker, the previous president of SOCMA, and I, we’d known each other for eight years. My former president and I came down to SOCMA back in 2003. We had a meeting with Joe because we felt there were synergies between ASC and SOCMA.

So when I became [ASC] president, I called Joe. He said, “This is fantastic. It’s important for us to network and brainstorm.” We started this pattern of having lunches once a quarter.

Years go by. He speaks at a couple of ASC conventions. We’re keeping in touch. We know each other as well through the [National Association of Manufacturers] NAM Council. In the beginning of 2009 we have lunch and he says, “I want to talk to you about a couple of things. I’ve announced to the board I’m going to retire from SOCMA at the end of this year. I’m retiring early because I’ve got pancreatic cancer.” (Acker died on Dec. 6, 2010.)

He hit me with all this information, and I said, “Oh my God, this is horrible.” And he said, “It is.” He said, “I’m dealing with it, but I really want to secure the leadership of SOCMA. My executive committee asked me if I knew anybody who was running a chemical association, and he said the only person I could think of suitable for this job would be you.”

I’d always had my eye on SOCMA because, I thought, it’s a nice step up for me. SOCMA has a broader array of programs and services, and there’s more to talk about. And I wanted to get into an association that had more of an advocacy component. My GR director would go to the Hill from time to time, but it wasn’t the concerted effort we have here at SOCMA.

And Joe and I had talked candidly before he told me the news about his health that, who knows, when he retires, maybe I would consider the opportunity. And it was kind of like yeah, yeah, nudge, nudge.

Historically SOCMA had hired—as he called it—old retired guys from the industry. He was such a jokester. I mean, just a delightful person. Wonderful personality. And not only a mentor to me, he was like an uncle.

He said they’re not used to interviewing younger people from the association community, but you’ve got that industry background, so you’re kind of a hybrid. You’ve got a good shot. So I was called in.

There’s a search committee in our boardroom—and it’s a very imposing room. It’s the racetrack table and you’ve got the light shining and all the psychological elements. The interview just went really well. It was a conversation, a discussion about my background, my skills.

I said, “If you’re looking for somebody who is a very, very well connected D.C. lobbyist, that’s not me. I’ve been to the Hill, I know some players, but my focus is on membership growth, program development, the business side of the association.” [They] said, “That’s what we want. We have a D.C. lobbyist. We need somebody to really grow the organization. Somebody’s who’s comfortable going out and visiting members, developing new programs, new services, who’s got a marketing bent.” I said “Well, that’s me. Let’s keep talking.”

I didn’t have anything to lose in the interview, so it was very relaxing. I got a call about two or three weeks later saying, “OK, you made the cut. Now we’re going to bring you back and you’re going to have dinner with the outgoing chair, the incoming chair, and Joe. “They wanted to make sure that I could eat and talk at the same time. And you know, they’re saying OK, well we haven’t made our decision yet, and we’re still evaluating options.

So I’m walking out of the restaurant. Joe’s right next to me and he goes, “Yeah, you’ve got it.” He ends up calling me the next day and says, “That was fantastic, don’t worry. You’re basically it.”

CU: You were succeeding Joe Acker, who was a kind of legend, and they weren’t used to younger guys with association backgrounds. How did you deal with those issues?

LS: Well, I have an older brother and a younger brother. And I followed my older brother in school, and my parents instilled in me, from an early age, never, ever compare yourself to your older brother. Your older brother has got his own skills, and you have your own unique skills.

I thought, I can’t compete with a legend. This guy is universally loved, and I loved him. I thought I need to build upon that. SOCMA is a 90-year-old, storied association. It’s got a loyal membership. The SOCMA organization is a reflection of our members—basically small, medium size enterprises.

I thought to myself, I’ve got to figure out how I’m going to carve out my identity without compromising the richness of our history. The way that I did that is I started going out and I visited members, which we had not done before my arrival too much. Twenty, 30 a year. That was my way of connecting and defining my persona vis-à-vis the membership.

My first two years I went to absolutely every single SOCMA event. This is year three. I can let other people go to these things. People know me now. But I got out there and made myself as public as possible to say, “Look, you all know and love Joe. Let me tell you a little bit about myself.” It was my way of connecting with the membership to explain who I was, and that I wasn’t going to just change everything for the sake of change.

I have only heard [positive] comments from members and other industry stakeholders since I’ve taken over. I haven’t heard anything like What do you know? You’re so young. You know, I’m not as young as I look. I’m 48. But I do look young, so I think that people think, oh, you know, he’s just a kid. But everybody’s been very supportive. I mean, everybody has been very, very collegial, wanting to help us define what our next step is as an organization.

CU: What did you do to build up confidence in your leadership with your staff?
LS: Virtually everybody who is a director reports to me. I need to really understand what the issues are with all of my direct reports. What keeps them up at night? What did they like under Joe’s leadership? What didn’t they like? How can we work collaboratively?

So it was a lot of walking around, and I still do that. Sometimes maybe I’m a little bit of a nag, but that’s my way of checking in. I have more structured meetings with all of my direct reports. I often sit in on department meetings if I’m needed. Every once in a while I’ll sit in on the GR team meeting.

I really haven’t done any major tweaking to the organizational chart, but I’ve changed the leadership. We used to have an overarching leadership council, anybody who was basically a manager of a department. That group was a little unwieldy, so I broke it apart. I created a strategic leadership team, which was everybody who was outward-facing. Membership, marketing, government relations and association management services. All departments serving companies, customers.

Then I had the administrative leadership team, basically HR, IT and accounting. By carving out those two leadership groups, we can really hone in on the issues those people need to address. And every once in a while I’ll bring the two groups together if it’s a macro issue. But I feel by carving them apart, we can operate in a leadership mode more efficiently.

CU: Have you been looking to expand the group’s advocacy?

LS: We’re very much an advocacy-driven organization. And there’s a myriad of industry issues that we deal with on a regular basis. We just formed a GR steering committee. And the steering committee’s focus is on macro issues, some of which are being addressed by NAM, but issues that are of a concern to our membership. Historically SOCMA has been focused on chemical regulations and chemical-related legislation. We’re not going to drill into details and get into to an issue on, say, styrene, but we’re going to focus on issues affecting the specialty chemical sector.

Through the steering committee we want to broaden ourselves a little bit, start focusing on perhaps some fiscal issues. Perhaps tax reform. So we’re just getting this group started.

You know, the R&D tax credit is a significant issue for the entire manufacturing sector, not just for the chemical industry. Over the past many years, it’s been renewed on an annual basis, so it’s very difficult for companies to plan because they don’t know whether this piece of legislation is going to be reauthorized. We started analyzing what is really a concern to our members. As we were going out visiting members, we started realizing there are some macro business issues they want SOCMA to address.

CU: In the last recession, the manufacturing sector lost jobs. What can the U.S. government do to try to grease the wheels with job creation?

LS: Well, I’m speaking from the NAM playbook here, but one of the first things that they can do is analyze the myriad, complex regulations, many of which almost conflict with one another. And simplify the regulatory framework that our manufacturers, and specifically the chemical industry, have to deal with. That is creating an incredible regulatory burden. Our members are drowning, which is why they come to us, because they don’t have the staff to interpret all these complex regulations.

Regulatory reform is needed. We’ve got to figure out a way to eliminate the non-pragmatic regulations. All regulations being approved have to have a cost-benefit analysis. We don’t believe that a lot of these regulations pushed through the system lately have done the robust cost-benefit analysis that they can.

The second thing is tax reform. We’ve got to figure out a way to make the manufacturing sector as economically competitive in the global community as possible. Most of our members —not all, but most—just like with the NAM, are family businesses, S corporations. They’re paying the personal tax rate, not the corporate tax rate. So even if there’s corporate tax reform, there has to be the personal tax reform as well, because otherwise it’s not going to benefit a large majority of our members. Maybe there needs to be some carved-out classification for S corporations that are not publicly traded. The R&D tax credit needs to be renewed in a multiple-year interval, not this annual piecemeal basis. You can’t plan that way.

The other thing that needs to be done is skills development. We need to educate and train 20 percent of the workforce. There are jobs available, but a lot of the people that lost jobs in the last recession don’t have the skills to go back into the workforce.

I think the tide is turning, but until we get a handle on the regulatory burden, the tax issue and the whole skills training issue, we’re going to lose ground. We still have a chance to get back on track, and I think we’ve come back on track a little bit, but there’s a lot more that we have to do.

CU: What changes have you seen at SOCMA during your tenure?

LS: Revenues had increased a little bit over the last couple of years. We’ve increased sponsorships. We’ve increased our meeting registration income. And we’re very proud of the fact that we’re bringing more people to our meetings. We brought on a couple new affiliate groups under our association management services umbrella, some new non-dues revenue there.

We are now focusing on membership. We’ve been relatively stable in number of members. We’ve lost some; we’ve gained some. We’re now embarking on a brand identity campaign, and one of the things that we’re going to be analyzing is what we need to appeal to a lot of these nonmembers. There’s hundreds of chemical companies, small, medium-sized chemical companies, very ripe for SOCMA membership. What is it that our current members love about us; what will appeal to these companies to consider them to join?

One of the things I did when I was brought on board is a compensation study, because I was concerned we were not paying our people competitively. In the past SOCMA had somewhat of a turnover issue. What do we need to do to make sure we pay our people fairly? So we hired Quatt Associates. As it turns out, we were very competitive on our benefits, pretty competitive on our salaries, but there were some people on staff we needed to adjust.

We’re very flexible in terms of our benefits, flexible vacation, flexible working from home. We’re looking at some other benefit programs for staff that might make it a little more enticing.

CU: You are one of the younger CEOs we’ve interviewed. Will you stay in associations?

LS: I love SOCMA and want to stay here for a while. I’ve got a great team here. I feel like we’ve got all the basic building blocks to take this association to the next level.
I’m not the kind of person who likes to jump ship as you can tell from my career, except for that one example, unfortunately, at CSPA. I want to see the fruits of my labor. I want to see the membership significantly increase and get us back up close to 300 like we were before the recession. We can do it again.

I want to see our association management practice blossom. I just see all these pieces coming together within the next several years, and I want to see it happen.
Ultimately I would like to run a larger organization. I would like to stay in nonprofit. I’ve been in this sector now for 12 years. Could I go back [to] for-profit? I suppose I could. Part of me has toyed with the idea down the road of going into consulting, because I feel I’ve got a lot of experience and a good story to tell. And I feel like I could segue my experience in the nonprofit sector, I could be a marketing or business development consultant.

I sometimes think maybe I would be a sole proprietor someday, maybe when I’m kind of getting ready to retire. But between now and then I still see myself running associations.

After this, I’d like to run a larger organization, maybe with a budget between, say, $10 million and $20 million, with a staff size of, say, 50 to 100. That would be a good next step. Couldn’t tell you where that place is. Couldn’t tell you when it’s going to happen.