A Clean Slate At The NRA

Bob Krummert

It’s been smooth sailing for nearly three decades at the NRA, thanks to able leadership from, first, Bill Fisher and, more recently, Steve Anderson. The organization has been extremely effective in looking after the needs of its restaurant-owner members, with its lobbying clout, educational efforts and research skills all earning high marks. In particular, Steve Anderson’s campaign to position restaurants via the “Cornerstone Initiative” has gone a long way toward elevating the public perception of this industry.

So being in charge of finding someone to replace Anderson must have been a daunting task. No wonder current NRA board chairman Dick Rivera was turning cartwheels when Sweeney’s name came up.

“Sweeney is an extraordinary executive with a record of success leading business and trade associations,” he says. “She has the leadership, business and marketing skills that will enable her to build on the National Restaurant Association’s success as we seek to grow. Her breadth of experience will be critical as we move forward.”

Indeed. Before her time at AARP, Sweeney worked at the National Rural Electric Cooperative Association (NRECA). Writing as someone who receives an electric bill each month from both a rural electric co-op and a publicly held utility, we can’t help but be impressed with the strikingly low rates NRECA helps its affiliated electricity suppliers wheedle out of the government. We hope Sweeney uses every lobbying skill she learned from this association job in her new one at NRA.

Combine this background with her work at AARP and you have someone with a dream resume for the NRA job. No wonder Rivera was so happy she applied.

Except Sweeney didn’t exactly work at AARP. Here’s how the NRA press release on her hiring describes her role there:
“Sweeney has been president and CEO of AARP Services Inc. for the past five years. In that role, she was responsible for generating more than $700 million in annual revenue for AARP’s for-profit entity. AARP Services develops market-changing products and services for millions of older Americans. Under Sweeney’s leadership, the organization recorded double-digit sales and revenue growth each of the past for years.”

Seven hundred million bucks a year in revenue? Four straight years of double-digit growth for the top and bottom lines? Just the credentials you want if you’re hiring someone to run the show at a big corporation. But how these skills will come into play for the NRA’s leadership post isn’t yet clear. Right now, the NRA has no large-scale for-profit ventures we know of, other than its annual show in Chicago. Rivera says the association wants to grow and move forward, which is good. But will for-profit ventures capable of producing double-digit sales and revenue growth be required to fund that growth? Is this what restaurant owner-members expect out of the NRA?

It will be if they the NRA comes out with programs that help operators cut costs, boost business or both. We look forward to finding out if, or when, such initiatives will hit the marketplace. But we hope they will be structured a bit differently than the “market changing products and services” AARP Services developed for millions of older Americans. A number of AARP members aren’t too happy with how some of those worked out.

There have been a couple of policy snafus in recent AARP history, and we want to point out that we aren’t laying them at the feet of Sweeney. But at least she’s had a close-up view of how tricky an association’s for-profit initiatives can become if they are not 100 percent aligned, or perceived to be not 100 percent aligned, with the interests of its members.

One such instance occurred in late 2003 as new Medicare legislation worked its way through Congress. Through partnerships, AARP is a large medical insurance provider and much of its revenue comes from these partnership arrangements. Its position on this bill was perceived by some as a conflict of interest, favoring AARP’s commercial interests and those of its partners over those of its dues-paying members. AARP claimed that its prior research and focus group testing had shown that its members supported its position—big news to the association members who burned their cards. One subsequent poll found that only 18 percent of members actually supported the official AARP position. In all, an estimated 70,000 members quit AARP.

What really ticked members off was that AARP seemed to think that the way out of the dilemma was to mount a PR campaign to convince members that the proposed legislation wasn’t harmful, as opposed to trying to amend the legislation to reflect the concerns of its members. Said U.S. Rep. Robert Wexler (D-FL) at the time, “AARP has sold out America’s seniors. It is more concerned about the bottom line of their insurance business than looking out for the interests of American’s seniors.”

A second flap arose in 2005 when President George Bush proposed restructuring Social Security via individual investment accounts financed by Social Security payroll taxes, a move AARP opposed. There was no backlash from members on this issue, but AARP still had to defend itself against charges of conflict of interest. The problem: The group makes millions from the mutual funds peddled by its partners, who could potentially be harmed by the move to private accounts.

At the time, Sweeney told Business Week magazine that AARP’s marketing “does not in any way influence AARP’s public policy positions.” She added that all money raised by the for-profit side of AARP is plowed back into benefits for members. Good. Let’s make sure that’s how it works at NRA.

A third issue relates to the quality and/or rate schedule of AARP’s offerings in health insurance, life insurance, home insurance, car insurance and mutual funds. Some programs are viewed as godsends, others as too costly, and still others as poor performers, causing some observes to wonder if, other than being lucrative for AARP, these were the best deals that could be gotten for members in every instance.

In Sweeney, it’s clear the NRA has chosen a leader who knows how to wield the collective power of its membership to advance the interests of the organization. She takes over in October. We welcome her to the restaurant industry, and we look forward to seeing how her approach, whatever it turns out to be, helps the NRA and its individual members prosper and grow.