Affiliations are key to future growth.

• Author: Farrell, Jr., Lawrence P.
• Position: President's Perspective

My report to NDIA members this month focuses on an important topic that has long-term implications for the health of our association: the acquisition of affiliated, defense-related, non-profit organizations. As many of you may already know, during the past several years, we have engaged other associations to figure our appropriate ways to work together and find common ground for corporate affiliation.

The purpose of these efforts is twofold. The first is to help grow the association in an environment where the defense industry--after a decade of nonstop mergers and acquisitions--has become much smaller. The defense sector only has a handful of major defense companies. Meanwhile, we see a growing number of small companies entering the market to fill specific service or product needs.

Secondly, we want to expand our coverage of the industry in areas where niche associations have grown to fill a need and a void. Both of these goals aim to better serve the industry by providing one association that covers most--if not all--of the issues and competencies of the defense industry.

Our approach could rake one of two directions: either create internal organizations, which we call "divisions," to address areas we don't currently cover, or to seek affiliation with other associations that focus on a particular area. We have selected affiliation as the more efficient path both for industry and the associations themselves.

Some of the turbulence in the industry is underscored in our membership statistics. For the past two years, NDIA experienced growth in total membership. For every two new member companies we add, we lose one through a merger or acquisition. Further, the wave of consolidation in the corporate world does not seem to end. Our big companies are getting bigger, while we see more and more small businesses being formed by people forced our of jobs as a result of mergers.

And as the industry reshapes itself, we are working hard to keep up with these developments to ensure that we provide the services our membership demands.

The ongoing efforts to expand NDIA by affiliating with other groups began in the mid-1990s, when one of our heritage associations, the American Defense Preparedness Association (ADPA), took on its first affiliate--the National Training Systems Association (NTSA). While it was a total acquisition, NTSA kept its own board, officers and staff--setting the pattern for the affiliations that followed and are underway as we speak.

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