Interview - Rob Fowler, President/CEO of Small Business Association of Michigan
Q1: "I would like to begin by talking briefly about the history of the SBAM. When was it founded? Is it part of a bigger nationwide organization? And finally, what was the primary objective for the organization?"
A1: "SBAM, as we are called was founded in 1969, so we just celebrated our 40th anniversary. It was actually founded in Kalamazoo, MI by a group of small business owners who had found themselves struggling with issues regarding health care - providing health insurance for their employees, and also tax and regulation. Those tended to be the three categories. They just felt that they would have more influence together than any of them would have separately. And really, the primary mission hasn't changed much over the years. We continue to believe that together, we are more likely to have a greater influence on, certainly the public policy process, than any of our members by themselves. As far as a national organization, we have somewhat of a loose affiliation, that is to say we are not a chapter of the National Small Business Association, but rather a member of the National Small Business Association. However, we have several members in our organization who sit on the board of the NSBA. I sit on the board, so we do have a really strong relationship but it is a loose confederation of small business associations.".
Q2: "Considering the current economic climate, have the primary goals and objectives of the organization changed or have they continued to remain somewhat the same? For instance, are there any new challenges or obstacles now that you have to account for that you did not in the past?"
A2: "Well, I think to some degree, the challenges always change, that is, what are the current topics? But I think there are some bigger trends that have changed from our founding, and you know, even from about 10 years ago. Certainly, the economy is a backdrop and the issues our members face change: Survival as opposed to growth. Not all that long ago, we were talking about the difficulties of finding available talent, but today we are at almost 15% unemployment rate so that is not always the most important issue. So issues change. But I think I would say to you that the fundamental goal of the organization was created to give a voice to small businesses, whatever the issues are, so that part hasn't changed. And I think our methods change and the size of our membership changes. There is almost a counterintuitive thing that is happening with us - we are growing right now as an organization. But we are growing mainly because of the fact that our members feel a sense of discontent about what is really going on in Lansing and in Washington and they feel like our message of a stronger voice together is more important now than maybe it was when the economy was good. "
Q3: "What are some of the strategies that you use to attract members to join your organization? What are some of the most common services that your organization provides to many of the Small Businesses in Michigan that do decide to join?"
A3: "Well, we could spend a lot of time on this but let me answer the second question first. Health Insurance has been one of the staples for us for many years, that is, we provide a group purchasing capacity in health insurance. We have an offer through Blue Cross - Blue Shield of Michigan, and while we can't necessarily offer a better price than they could get on the street, what we've done is put together a number of services around that Blue Cross plan. They are able to get a health savings account, other flexible spending accounts or Cobra Administration. These are all things that you really should have or must have if you are going to offer health insurance to your employees and so we help them save some money on that. So we really become sort of a health insurance plan of choice for small businesses in Michigan. A lot of our members join us for our health insurance plan but increasingly though, the message is less about ‘join for benefit' and more about ‘join for cause' and ‘join the fight for small business.' And what is resounding today, and again I think it is the backdrop of our economy, the growing sense that there is a lack of leadership in Lansing today, there is a growing sense that there is some danger in the public policy that is coming out of Washington and Lansing in regards to tax policy and health care and a lot of other things. The time is really right, I think, in the minds of many of our members to join and to become active in advocacy efforts, so in the big shift for us, lately it has been the case that membership is being attracted more for advocacy rather than for services."
Q4: "Can you go into more detail about the economic advantages that your members gain from joining your organization?"
A4: "Well, we were just talking about health insurance as one of the benefits of joining our organization, but I think the broader value proposition for us is that we take the buying power of our members and get them a deal that they could not get on their own. The basic economics behind it is group purchasing. In each case, we are getting a better price for higher volume. And if you think about it, large companies have that on their own. They can drive a better price, but small businesses can't get that on their own. They can only get that with being part of a bigger buying group. And you will see it in a variety of things from office products to payroll services to telecommunications. We have over the years, had a workers comp plan and a group buying plan for energy and natural gas. Some of those things have come and gone but the fundamental of it is that it is a group buying plan, a co-op if you will."
Q5: "Can you talk a little bit about the successes that your organization has had over the past decade in lobbying at Washington for Small Businesses across the country and also more specifically, for the Small Businesses in Michigan."
A5: "Yes, first of all, we mostly focus on state public policy and our time in Washington is spent either as part of our national organization or lobbying our own delegation: the Michigan Congressmen and Senators. So, while we do that some, on health insurance policy we have been heavily engaged in Washington. Most of our focus, historically at least, has been at the state policy level. And I think the success that we had most recently had would be the fact that we are growing in influence as an organization at both the state level and the national level. "
Q6: "What sort of tactics does your organization use in influencing state public policy?"
A6: " Well, we talked about how internally, each organization has a formula to influence the policy process. We are not the state Chamber of Commerce, which has a lot of larger companies and a large pack as a result of that - we do have a pack. Part of our tactics is to help friends of SBAM get elected into the legislature and to help support those who are friendly to us. But it is not a big part of our overall formula. We talked about grassroots involvement, that is, have our members engage with their legislature. We encourage them to invite their legislature into their business, to get to know them and their businesses better and really try to explain to them what sorts of challenges they face. Building this sort of relationship is effective, so grassroots is definitely a part of it, probably a bigger part of our formula than others. Part of it is the public policy knowledge on our issues, that is, really being the smartest group in the room on issues that affect small businesses. So we testify, we meet one on one with legislatures, we make our arguments and provide public policy research on the issues that affect us. That is a very big part of our formula. We have a staff, in fact the vice president of our government affairs is a former member of the legislature who knows the process very well; you can be the smartest kid on the block, you can have the biggest pack and have an active grassroots but misunderstand the process and end up not having much influence. So we know the process and we know the people as a result of having someone who has spent a lot of time on the inside, who has spent a lot of time on building relationships. We know the administration, that is the governor and the lieutenant governor, and we work hard in trying to have a good relationship with them because it is important. However, we don't have a very good relationship with them right now because we call them like we see them. When we don't like something, we say it and we say it very publicly. And finally, I think I would say that our formula is media relations. That is we hold our policy makers accountable through the media, by telling our members what is going on. If they are mad about it, so be it and if they are happy about it, so be it. We tell the truth about what is going on in Lansing as it relates to their business. "
Q7: "What are some of the difficulties or challenges that you feel exist in dealing directly with the state government and also who might be some of your typical opponents? "
A7: "That's a really great question! I think one of the biggest challenges we face today, and I'm going to talk specifically as a Small Business advocate is that I have never met a policymaker or elected official that said that ‘I am anti-small business.' In other interest group areas, you have people that say ‘I am anti-‘ pick any topic but people don't come out directly and say that I am anti-small business. In fact, people usually say that I am ‘pro-small business' and they can give the speech as to how important small businesses are to the economy and they will use terms like the ‘backbone' or the ‘engine' and they all do it. However, there is a large number of legislators today that vote with us less than 25% of the time. So, ‘I'm for small business' but ‘I don't vote for you.' The difference is that we get to define what is good for small business and they don't because we represent small business. In our definition of what is good for small business, some of them just don't cut the mustard and there is this dichotomy between them thinking or at least saying or wanting to be perceived as pro-small business and their real voting record. So that is one of the biggest challenges that we have. Now, we don't have any natural opponents but there is business and labor. We don't tend to be in the middle of those classic business vs. labor issues. We are not the natural opponent of organized labor because very few of our members are organized, but sometimes at a public policy level, we are an opponent. On some issues, the trial lawyers would be an opponent, where we tend to hope for liability laws that aren't willy-nilly. When you have done everything that you can as a business to protect your customers and employees from hurting themselves, and you lose, or you spend thousands trying to defend yourself, that's kind of a crazy system. On the business tax side, often it is the spenders, so everybody from school to state government employees to anybody who is an interest group of a department of state who depends on public dollars. We are about fiscal responsibility and reasonable taxes from a business standpoint because our view at the end of the day is that businesses don't really pay taxes; they pass it along to their customers. It comes back in lower salaries, lower benefits, lower profits. So from an economic standpoint, that is really hiding the cost of government or spreading it differently. A more honest way of taxation would be not through the business community. So that's a natural fight and spenders tend to be the opponent there. "
Q8: "Have your political views or opinion on policy issues changed since you have become increasingly involved with the government? If so, can you give some examples?"
A8: "Well, I can give you a great example of a view that I have changed personally, having been involved. But before I say that, you know that it's interesting that my very first job out of college, I worked for the Republican Party so my political views were cast probably before my policy views played out. I would tell you today that I am less of a pure Republican than I was early on. I'm certainly not a Democrat but I am comfortable saying that I am a conservative and in representing small business, that's a good place to be in terms of economic issues. Most of our members would call themselves fiscal conservatives. So from that end, I guess my political views have been focused more on the fiscal conservative issues and I think that has been honed over the years as I have become more involved in the organization. That being said, I think that I also have a more holistic view of government because there is a very legitimate purpose and need for government and funding and all those sorts of things. Now I know some people who consider themselves fiscal conservatives would say that we should just ‘starve the beast' and there should be no taxation and I wouldn't consider myself in that category. Now the example that I would use as having changed my views is that I believed at one point that in theory, term limits were a very good thing to have, that we should limit the amount of time any given elected official should spend in office; we would have a more citizen-government by putting more fresh faces in office. You wouldn't have people that just stayed around and lost touch with the voters. I have seen term limits in action now, and I can tell you that what happened in terms of term limits is that the wisdom has left the legislature. The institutional memory is gone, collegiality is gone because people get to the legislative process by a rough and tumble political process and then they come together and they must very quickly work together with the very people that they just fought against so vigorously. And it just doesn't happen. Working together across the aisle, whether it's the other house or the other party, takes some relationship building and Michigan's short terms, especially for the house with the 6 years overall does not really give someone the time to develop that trusting relationship. A third of the house is changing every 2 years. And I think what we are seeing today in Michigan, the inability of our legislature has its roots in term limits."