Mid-Market CEOs Waken to Importance of More Involvement in Washington

The reason is that they are disproportionately under-represented in the affairs of the federal government, according to experts in business lobbying and in America’s middle-market businesses.

“Not too many people are speaking up specifically for companies in the middle, and it isn’t too widely recognized that they have unique opportunities and issues that politics and policy could address,”said Thomas Stewart, executive director of the National Center for the Middle Market, headquartered in Columbus.

But some seeds of change have been planted, as the country’s slow-growth recovery continues, especially in manufacturing, and more mid-market chiefs believe it behooves them and their companies to get more involved in the political process—and not just in donating to or voting for presidential candidates.

“We’re starting to put stakes in the ground in Washington around the concept that all mid-market companies are a community of interests,” said Gary LaBranche, CEO of ACG Global, part of the Association for Corporate Growth, “and that we have a role in working together to bring a focus to issues that cut across the board regardless of the vertical or sector interests companies have, such as taxation and the cost of capital and general labor policy.”

The Congressional Caucus for Middle Market Growth, for instance, is now two years old, formed for the purpose of addressing issues relevant to the critical segment that employs more than 44 million Americans.

“This bipartisan caucus will be an excellent way to educate members of Congress from across the country on the value and important role a vibrant middle market can have in our nation’s economy,” said U.S. Rep Steve Stivers (R-Ohio) when the organization emerged.

But while it’s a start, it’ll take more than a handful of congresspersons to make mid-market companies a force to be reckoned with in D.C. There are several legacy factors to overcome.

One of them is that the allies of large and small businesses in Washington, D.C., tend to overshadow the concerns of mid-market companies. Major corporations get their voices heard with big-bucks campaign contributions, armies of lobbyists and, typically, control of most trade associations, as well as the U.S. Chamber of Commerce, while small businesses are represented by groups such as the National Federation of Independent Businesses and even have a Small Business Administration to advocate for them.

Another factor that expands political significance for large companies vis a vis mid-market ones is that most of the latter operate in a single location, or perhaps two or three. Yet another handicap for mid-sized companies is that “big companies get credit for including small businesses in bids” to government agencies, “but not mid-size companies,” Stewart said.

Still another consideration is that many mid-market business leaders willingly sacrifice a profile in Washington because they want themselves and their companies generally to have a low profile if possible. Only 15% of them are publicly held.

“Also,” Stewart said, “they tend to be simpler businesses that may not have such complex issues with government as large companies and therefore may not feel that it’s worth their while” to delve into the political vortex.

However, given the unremitting record of the Obama administration in targeting businesses for greater regulation, and other factors, more mid-market owners are stirring politically. Their interest already has led, for example, in an expansion of membership of the mid-market congressional caucus to 17 members.

And in April, the National Center for the Middle Market as well as the Association for Corporate Growth (ACG), which represents mid-market executives and their support systems, was scheduled to brief congressional staffers on the concerns and interests of mid-market companies about cybersecurity issues.