It’s Simple, but It’s Not Easy. A Formula for BRE Program Success

I recently wrapped up some research on best practices in state-level business retention and expansion (BRE) programs. This isn’t an area that’s been researched extensively. Maybe ever. But never deterred, I set out to learn all I could about how states across the country are organizing people and resources to support existing businesses.

I started with a review of every state economic development plan or strategy I could get my hands on. That amounted to 46 plans after an exhaustive amount of internet research, personal calls for help, and serious reflection. I started the project here because I was looking for intent – a clear and stated strategy to grow state economies by supporting and nurturing firms where they sat. I was looking for clear, measurable goals, dedicated staff and an organization of resources that went one step further than the usual laundry list of small business resources.

That led me to interviews with staff in 20 states and eventually a short list of 13 states that I think are doing something special and different. These programs had some things in common. In fact, I found 8 really remarkable factors that set the best apart from the rest. The list and my commentary follows.

1) An integrated, statewide strategic plan for economic development. Ok, this sounds simple. Your state has a plan, right? I was amazed how strong the planning efforts were in the exemplary states. And BRE was front and center, on par with business attraction and situated right alongside workforce development. That gets me excited. So dust off that plan and tell me where it leads you.

2) Clear, measurable outcomes and program objectives. Economic developers all over are catching some heat for a lack of accountability, but the best BRE programs I reviewed charged in straight away with stated goals and very specific programs of work. Even better, they reported regularly with their results. And when they didn’t hit the mark, they weren’t afraid to change course and say why. I think outcomes say a lot about an organization. They shed a light on what an organization values and they should elicit some sort of emotional response. I could tell people were excited about what they were tasked to achieve when I talked to them. This creates momentum.

3) Dedicated leadership and outreach teams with appropriately matched resources. BRE is often the most understaffed area in economic development. Forced to do a lot with a little, most programs languish, never reaching their full potential. The best programs I found had staff and had them deployed in a way that made a big impact. That’s not to say every state had a huge stable of developers combing the countryside. They leveraged regional and local partners. Think matrix organization.

4) Strategic research and sophisticated firm targeting methods. Good news – no more random samples and mindless business surveys. The best programs I found are using business intelligence and predictive models to find and support high-impact, growth-oriented firms. This is probably one of the most underutilized approaches, despite the availability of both industry and firm-level data, but I am hopeful the places investing here will see big yields.

5) Coordinated outreach and business intelligence gathering. Ask any BRE program manager what their biggest constraint is, and they’ll likely tell you time. It’s the time needed to talk to firms and do that critical needs assessment PLUS respond PLUS ongoing monitoring. The most creative programs have figured out how to leverage partnerships to get more people in the field and use technology to monitor firm-level activity in a more real-time way. They have also figured out how to open up more continuous conversations and pull in business intel from disparate sources. And then they share it with the team so people can act on it. Yep, you read it here first.

6) A comprehensive, value-added service delivery system. This is where the magic happens. I was blown away by some of the tactics being used to link companies to resources in new and different ways. The siloed case management approach is falling by the wayside and new network models are emerging. Sometimes it’s simply combining existing assets in novel new ways. It requires a framework and common goals, but it can be done. It’s all about leadership. There’s also a fair amount of investment in industry-led consortia models where businesses organize their own service array. It’s ok. Buy the coffee and get out of the way.

7) Emphasis on capacity building and professional development for the economic development community. You know I’m a big fan of leveling up the profession and almost every manager I spoke with quickly and enthusiastically acknowledged the importance of professional development. National and state associations made the list, but training that supported this new way of doing business, developed specific industry knowledge, and supported the unique work of BRE program managers was also mentioned. Think everything from CEcD to PMP.

8) A supporting technology platform or CRM. Last but not least was the enthusiastic endorsement (and actually utilization) of a robust client relationship management system. The best ones let people put information IN but also lets you get in OUT in an organized fashion, not just to track activity, but also analyze trends and extract very specific data on firm characteristics. Again, the most progressive organization weren’t using their CRM to cover their collective asses, but were actually working to build a strategic project management and business intelligence system. (Sorry, I said asses.)

As exciting as this discovery process was, very few of the programs I reviewed hit all of these marks, but they are edging closer, innovating and shifting the notion of what economic development means in their state. An added bonus, I think all of these factors hold true for regional and local BRE program efforts as well, so we can all learn together.

You can read my white paper on this topic here – State Level BRE Programs and Best Practices. Would love to hear your thoughts. I’m sure I missed a few ingredients for success.

The Book Club – Start With Why

I read a fantastic book called Start With Why – How Great Leaders Inspire Everyone to Take Action by Simon Sinek. I have run into so many people who have been inspired by this book and I feel compelled to share a bit more about it here. Simon is an interesting cat who rose to stardom after a particularly inspired TED talk. You can see that talk here and I encourage you to take a few minutes and watch it end to end. It’s been around for a while, but much like my must-watch list of Academy Award-winning films, I’m a bit behind. (I may be up to 2005, and that’s just for the films that won Best Picture.).

In the book, Simon builds on the idea of “The Golden Circle”, actually three concentric circles that include What, How, and Why. In economic development, we are all conditioned to talk about the first two. What do we do? We attract new companies into our markets. [or insert your own program emphasis here.] How do we do it? Well, we do marketing, lead generation, and prospect development. Then the tough one. Why do we do it? And I’m not giving you the easy response – “new job creation and new capital investment”. That’s a result. Why does your organization exist? Why do you get up in the morning? Why should people in your community care if you’re successful or not.

Maybe you have a good answer. Maybe you haven’t thought about it that way in a long time.

Simon believes that great leaders, causes, and organizations start with Why. The book has great examples of high performing organizations who have used this positioning to achieve extraordinary things. And I think it’s an incredibly relevant book for economic and workforce development organizations. My copy is all marked up and here’s an excerpt that hit me pretty hard where it counts.

“Instead of asking ‘WHAT should we do to compete?’ the question must be asked, ‘WHY did we start doing the WHAT we’re doing in the first place, and WHAT can we do to bring our cause to life considering all the technologies and market opportunities available today?'” (Sinek, p51.)

I especially love the end of this. It is just so full of possibilities. #levelup

BRE Programs and Teeth.

Today I got to interview Kathy Schaff with the Minnesota Chamber who manages a statewide business retention and expansion program called Grow Minnesota! She’s obviously crazy passionate about supporting businesses in the state and building capacity in communities to do the same. I learned she’s from a “dental family” and she shared, so perfectly, her perspective on existing businesses. “If you don’t take care of them, they’ll leave you.” WTG Kathy. Keep banging the drum.

Ask Me Anything

A new friend working in the workforce development space recently reached out via LinkedIn and asked me to help her answer a question. “Why is workforce development so important to economic development and how can we create better linkages between the two? ”

For what it’s worth, here’s my response (edited slightly for this post):

“Your question is a good one! Traditional economic development is really a pretty simple business – how to create new jobs and encourage new capital investment through three primary mechanisms – new business formation, the expansion of existing business, and the attraction of new firms. They tend to focus on “basic industries” – those firms that sell their goods and services outside the region. Why? They bring new money into a community. That’s why you rarely hear economic developers talk about industries like retail, hospitality, or healthcare. (I only mention this because these may be obvious omissions for you, but there is a rationale behind it.) 

Capital investment is important in that it grows the tax base and allows cities and counties to support all the services delivered by the public sector. Things like public schools, police protections, parks, and transportation.

The job creation piece is important in that it creates new economic opportunities for residents. These new jobs are envisioned to be a new pathway to prosperity and lead to a higher standard of living. (Here’s where the interests are most clearly aligned.) Of course, all those new wages get spent locally, spurring on even more business growth and more job creation and well, you get the picture.

Now, I would argue that a job “created” doesn’t manifest until it is filled by a qualified, job-ready candidate.That’s where the workforce system kicks in, providing training and support to help prepare people for these new opportunities. In some places, I would argue we don’t have a job creation problem, we have a job fulfillment problem. Again, the workforce system plays a vital role in helping economies (and businesses and people) reach their full potential.

But it’s even more important than that. I’ve just described how the system responds. I would say workforce is also a catalyst for economic development. In a recent survey of corporate executives, availability of skilled labor was the NUMBER ONE consideration when they were evaluating a place. More important than incentives, or highway access, or even labor cost. Lack of a quality workforce can be a significant barrier to business growth. So a highly skilled workforce actually becomes a powerful accelerant for new economic activity. It’s not the end of the process, it’s the beginning.

You are smart to look at data – simply understanding the high growth occupations and thinking about how resources are aligned to build talent pipelines in those areas is a great first step. The limitations with data is that it is based on trends and can’t consider deliberate efforts to grow certain sectors, single economic development announcements, emerging industries, disruptive technologies, etc.. So, the ongoing collaboration between the systems is important. And it should include lots of conversations with business and industry.

So – if your audience [for this response] is workforce folks, I would say a great first step is to figure out what the economic development strategy is and see how well your resources match up with that work. What unique capabilities does the workforce system have that were unknown to the economic development community that might accelerate or support new, unexplored economic development opportunities (unique research capabilities, best-in-class program, etc.)?

Opportunities to work together may come at the firm-level. Like when there is an announced economic development project and the ED-WF system reacts. But I would love to see something more proactive….”

So, what do you think? I’m sure she didn’t expect the brain dump. I would love your comments and insight on the topic.

Get Unstuck.

If you’ve ever been involved in solving a really messy community problem, you’ve probably gotten stuck. The best data supporting the strongest planning process can fail when people can’t find a way to move forward together. It’s probably been my biggest frustration. How do we move these complex networks forward in a way that recognizes the unique assets of the network and links them together in a way that gets stuff done? Why do we get stuck?

As communities, we’re moving from a hierarchical, top-down system where select few set the course and the minions at the bottom figure out how to execute. The problem is that resources (including networks, money, and ideas) are highly distributed and often hidden from us. To address the problem, we’ve edged into thinking about problems together and even integrated stakeholder engagement into our planning processes. But doing things together? That’s a strange and dangerous space.

Fortunately, there is an emerging new discipline that I think can help. I’m in Indiana learning more about Strategic Doing. It was developed by Ed Morrison and refined here by a team at Purdue. It’s an agile, iterative planning process that moves people quickly to action. Regular check-ins ensure the work is getting done and creates ample opportunity for the team to pivot if needed. And we need to pivot. In my experience, even the best plans take on water quickly and that’s ok. That’s how we learn. Strategic Doing holds promise to give some discipline to our collaborations and keep us moving forward together.

ON TREND – Niche (Nude) Retirement Communities

Ok, that headline was a bit of clickbait. Guilty as charged. But stick with me. I am a huge proponent of asset-based economic development. That means understanding your super powers and wrapping around strategies that focus on your strengths, not your weaknesses. If Superman spent every day trying to figure out how to make himself impervious to the effects of Kryptonite, think about all the time he wouldn’t have to save the plant from nefarious villains.

Matching your assets to opportunities in the marketplace takes it to another level altogether. Which brings me to the rise of niche retirement communities. I stumbled into this trend while brainstorming ideas for a rural community, rich in natural beauty and a workforce strong in skills in the personal service industry. Currently those folks are employed in tourism. How does a community like this level up, increase wages, and encourage some new capital development?

Well demography leads the way. CNN reports that baby boomers represent the largest generation of Americans born in US history and now represent more than 24% of the US population. Boomers will be aging out into retirement for a long time, with the youngest set to reach retirement age in 2029. The US Census Bureau reports that 10,000 baby boomers retire every day.

So, what opportunity does this present for communities? I’m keen on understanding how this growing group of seniors will affect the health care, assisted living, and housing markets and super interested in niche retirement communities. These are communities that cater to seniors who have shared interests, professions or lifestyles. Golf communities have been around for a long time, but I’m not a golfer. How about interests like lifelong learning, music, fitness, and the arts? There are some great examples out there.

Aegis Living owns a number of retirement communities that appeal to Asian-Americans.Oakmont Senior Living recently opened the luxury Fountaingrove Lodge in Santa Clara, CA which markets to lesbians, gays, bisexuals, and transgendered seniors. Also included in this trend are UBRC’s or university-based retirement communities popular with retired professors where those with a passion for lifelong learning can live with people of shared interest. Developer MetaHousing opened its first senior arts colony in 2013 in North Hollywood, which includes a professional on-site theatre and access to art studios. The NoHO Senior Arts Colony is a 126 unit apartment community and a local not-for-profit is proving arts and wellness classes at no charge to residents. PandaBEAR, a not-for-profit based in Florida, is contemplating a retirement living community for nudists. (Gasp.) Nalcrest is a retirement community for the exclusive use of retired postal workers. (No dogs allowed.)

If these type of developments seems like an opportunity for your place, think about how your assets (including simple things like natural beauty and an outdoor lifestyle) might support this growing opportunity in affinity retirement living. How could you link other sector initiatives or university supported research into the plan? I’ll admit it’s not advanced manufacturing, but it might be a good fit for you.

Scale Up vs Start Up

I was doing my weekly, dorky content curation on Flipboard and decided to take a dip back into the Harvard Business Review blogosphere. Rich, rich content and I recommend you add it to your winter reading list.  Anyway, my curiosity was especially piqued when I saw an article claiming that the number of startups in your community may not be the positive metric you think it is.

Where to start? Well, traditional economic development theorists would claim that to have a demonstrated entrepreneurial ecosystem, you have to have velocity – a certain number of new businesses being formed relative to your business base and a good number of business failures. These failures are commonly referred to as exits and I don’t know why. It is unlikely that they will ENTER again, but I think it feels better than business DEATHS which is another term used to describe businesses that fail.  Again, words matter.

Anyway, this churn rate is supposed to be good for us, weeding out the weak and leaving the strong new entrants to thrive and grow. The theories also suggest that only young companies innovate and a that the recent decline in business dynamism suggests that entrepreneurship is dying in the US. Authors Isenburg and Fabre event take a couple of low shots on the Brookings Institute’s recent research on this topic.

What does this have to do with life as an economic developer? Well, first, if your community is not the hotspot of hipster entrepreneurship, don’t be afraid. Even older, larger companies can be innovative and create tons of value. The HBR post cites “dinosaurs” like eBay, Google, Starbucks, and even Apple as companies who may be long in the tooth by traditional measures but still wildly innovative and growing. These companies have resources to scale innovations, not just create them, and that’s a big deal.

Second, an increase in entrepreneurism may not be the positive signal you think it is. This piece concludes that the relationship between business startups and per capita income is inverse – meaning “the more new businesses countries have, the lower their GDP’s are.” If your aspirations are to create more wealth, startups may not be the best path to success.

Think about the companies in your market like a portfolio. Your work as an economic developer should be balanced for risk and reward. So, just don’t put all your eggs in the high-risk start-up basket. Look for high-growth and high-growth potential startups with the right resources (attitude, people, and money). Balance that with a strong foundation of high impact firms with scale-up potential (older, more mature companies who have consistently performed). And work your business attraction angle in a strategic way to compliment your existing business base and round out the portfolio.

Business “Visitation” and Other Poor Word Choices in #econdev

I am an evangelist for smart business retention and expansion efforts. More than just goodwill calls where cheerful community ambassadors deliver coffee cups. (Not that these aren’t important, just get back to your mission and goals. If you see the connection between this activity and the outcomes you’re charged to generate, go for it.) I am a fan of smart, strategic industry advancement initiatives, especially those focused on high-impact, growth-oriented businesses.

So, I cringe a bit when I hear folks talk about their visitation programs. “Visitation” is a word my grandmother used when she went to the hospital to visit sick family. Funeral homes refer to it as the time when friends can come and pay their respects to the families of the recently deceased. Let’s commit today to stop using the word visitation in our economic development efforts. I’m thinking about words like “outreach” and “engagement”. Words matter.

 

SnagAJob’s New App is Like a Tiny Recruiter in Your Pocket

Maybe we don’t have a job creation problem. Maybe we have a job fulfillment problem. And I wonder if some of this talk about a skills gap is really about an information gap. And maybe it could be bridged for employers and the hourly, “lightly-skilled” workers using technology. And maybe a company called SnagAJob launched a mobile solution back in July. (Spoiler alert. They did!)

Allow me to digress and talk a little about frictional unemployment. It’s a pesky problem, and one that often manifests when employers and job seekers lack a way to connect. Employers can’t find the right qualified candidates. Job seekers can’t find employers who need the skills they can deliver. Like two ships passing in the night. You would think it would be easy, but information is imperfect and the pathways to deliver and obtain information about available employment opportunities can be incredibly inefficient.

I’ve been pining for a solution that pulls that all together and provides geo-coded job information so candidates can look for work in neighborhoods close to them. Back in 1999, SnagAJob stepped up to fill an important niche by developing the number one employment network for hourly jobs in the country. Now, the super cool thing is all this new magic happens on a mobile device and it offers a full feature set for job seekers and employers. Job seekers who download the app now have a little career coach in their pocket, letting them know through an opt-in daily job alert when jobs matching their profile come into the system. Job seekers can upload a video clip that lets them share what sets them apart from the rest. (Think 30-second elevator speech.) And employers can invite matched registered users to apply for their positions and then evaluate candidates instantly. Check out this fun video clip of the app in action.

I got the opportunity to learn more at the Virginia Workforce Professional Academy this week when I shared the stage with Slav Lakov, their extraordinary Director of Product Marketing. (He’s hiring BTW, so if you know a Sr. Web Designer or Mobile App Designer, please direct them to SnagAJob’s website.)

#LevelUp – More Professional Development Opportunities for Economic Developers

I am always banging the drum for more, better professional development in the field of economic development. There are some great offerings out there through the industry associations – state and national. Consider for a moment, a break from that tradition. Now, I hope you have all been watching the rise of the MOOC (Massive Open Online Courses) and eLearning communities like the Khan Academy, Coursera, Udemy, and more. I set out to see what courses they might offer a curious economic developer like me. There is some good content out there. I mean really, really good. For example:

• Learn new stuff about new stuff. Coursera is offering a self-paced intro course on Sustainable Development.
• Don’t suffer silently in ignorance. Through Edx I found this cool course on Innovation and Commercialization taught by a MIT and Cornell University professor.
• Support your clients better. ClassCentral, an aggregator of MOOCs info, led me to this course called Foundations of Business Strategy taught by profs at the University of Virginia.

I believe you can learn almost anything on the internet. I learned how to fix my dishwasher on YouTube. As the days get shorter and you’re looking for something to fill your dark, chilly evenings – consider some professional development from the comfort of your couch.