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.