Tag Archives: economic development

Anatomy of a Failed Economic Development Project

(June 28, 2016)
This is the story of a failed economic development project. The names and locations have been changed to protect the guilty. It is a lesson for economic developers and community leaders seeking to recruit large projects to their areas.

A large retailer operating in a dozen states in the southeastern part of the United States was seeking to expand. Headquartered in a major metropolitan area, its sales were increasing and its market area was growing. Its analysts recommended opening a new distribution center to improved logistics and increase sales even more. They hired a site selector who recommended two sites in a certain area.

The company was family-owned, having been founded 30 years ago by a man and wife who began their business with a dress shop managed by her and a men’s clothing store managed by him. Their joint business expanded to household items and more. Their sons took over day-to-day management of the business with the goal of doubling in size in 10 years.

The area under consideration was located at the intersection of two large U.S. highways. It had a steady increase in population, and was projected to grow at even faster rate in the coming decade. Growth was occurring at a faster rate in the suburban area, which is located outside the city limits of the central city. Average income was higher than the state average and the unemployment rate was lower than the national average.

The central city had a well-established industrial park. There was only one vacant building, which was formerly used by a trucking company that went out of business. It met the needs of the company, with only slight modifications and could be ready in less than 90 days. A second option for the expanding company was to construct a new facility in the county. Although it would be slightly more efficient it would mean a construction period of at least nine months. The company decided that both options were equal. It sent its in-house real estate vice president to meet with local officials in the city and the county.

Recently, there had been increasing animosity between the chambers of commerce in the suburban areas and the one in the central city. A year ago, county leaders formed an economic development organization and hired its first economic developer, a 31-year-old male with previous experience as the assistant economic developer in a suburban county in the Atlanta area. His hiring was somewhat contentious from the beginning. A search committee put forth two candidates, one from the local area who was well-known and respected and one from outside the area. One faction of county leaders felt that a certain local candidate would be the best choice because the position required someone who knew the local “lay of the land.” Another group felt that the best choice would be someone from a growing suburban county from another state. Eventually, the board chose the economic developer from the other state.

On the appointed day, the real estate vice president met with the city economic developer in the morning and the county economic developer in the afternoon. As is now customary in the economic development world, there were discussions of incentives that would be offered to the company. Each economic development official was informed that two sites were under consideration and were asked why the company should choose their respective site. The central city economic developer pointed out the reasons that the city site met the needs of the company. The county economic developer did the same, but then chose to talk about the reasons that the city site was a bad choice. He pointed out that suburbia was where distribution companies were locating. He then handed the prospect a sheet that compared the city and county. The facts presented were about crime, schools, infrastructure, government officials and future growth. The county economic developer concluded his presentation by saying, in effect, “… choose that other site and it will get burglarized, your drivers will get mugged and it will be difficult to recruit employees who have children in school.”

The real estate vice president went back to headquarters and reported the details of his visit. It did not take long for the company management to choose the city site. The CEO of the company remarked if the county economic developer talked that way about his competition then he probably talks that way about other things. Today, the company is still in its distribution center in the city and the county economic developer was fired a long time ago.

The primary lesson in this story is that one should not disparage their competition, but should instead sell the benefits of their own assets. As this writer’s grandfather was fond of saying, “Never talk bad about someone else because when you do you’re really taking bad about yourself.”

A secondary lesson in this story is that sooner or later the city and county will be marketing itself as a region. Talking negatively about a neighbor will not be tolerated. When prospective clients see a divided region it raises the proverbial red flag. All one has to do is look at the most successful economic development projects in Mississippi to conclude that regions that work together get the best projects.

Friendly competition and pride in one’s community is a healthy thing. Attempting to sell a community by telling why a prospect should not move to a neighboring community is a disease that needs treatment.

The Benefits of Sharing a Meal

Collaboration among community leaders is one of the keys to success in moving an area forward. But what if leaders don’t seem to want to collaborate? What if they are more concerned with their own territory than the community as a whole? What can be done to get them together? One good place to begin is the dinner table.

One of the reasons that community leaders don’t work together is that they don’t respect each other. They may see each other as unequals or even adversaries. The reason they don’t respect each other is that they don’t understand each other. And one of the reasons that they don’t understand each other is that they don’t listen to each other. One of the best ways to begin to listen to each other is to have a meal together. And not the kind of meal that they usually attend together, i.e. the civic club luncheons, the public/private partnership meetings, the board meetings, etc. The meal should be one-on-one or better yet one-on-one in each other’s homes.

Dining in each other’s homes is not as common as it used to be. Nowadays, friends and business acquaintances are more likely to go out to dine at a restaurant. That was not always the case. This writer recalls the time some 20-plus years ago when he was summoned to jury duty at the federal courthouse. At the beginning of the jury selection process, the judge asked prospective jurors if any of them were personal friends of any of the attorneys. One person raised his hand, saying he knew one of the attorneys. The judge then began probing into how well the juror was acquainted with the attorney. He asked the usual questions, and then he asked, “Have you ever had dinner in his home or has he ever had dinner in your home?” The prospective juror replied in the negative, whereupon the judge said that the man did not know the attorney well enough to be excused from jury duty.

Sharing a meal with someone else, and not having an agenda other than to get to know each other better can be the beginning of a joint effort to improve the community. Once upon a time, there was a community in Mississippi where there were three main influencers. One was the mayor, one was the president of the county board of supervisors and one was the chief executive of the largest employer in the area. The only time they dealt with each other was in public meetings where many other people were usually present. The community was not growing and no new businesses of significance were opening. An outside consultant evaluated the situation, recognized the dysfunction and recommended that the three leaders have a monthly meal together. Before long, they began to understand each other, respect each other and work together. Today, that community is on the move.

History is filled with leaders having meals together to get to know each other better, to resolve their issues and to plan the future. Let us begin with some noteworthy World War II meals. In 1942, Winston Churchill met Stalin for the first time. The purpose of their meeting was to generally discuss the end of the war and who would get what. They had dinner at the Kremlin. At the WW2History.com website History Professor David Williams gives his impression of the dinner and the meeting as Churchill would have perceived it:
“There’s a man here who I can deal with. Okay, so we had a bad day yesterday, but today is a good day, we’ve had dinner, we’ve had a booze, we’ve talked about families and things, this is human stuff. And given how remote Stalin was before, that’s progress. Churchill always hangs onto this, he always feels that if he could get round the table with Stalin things could be sorted out.”

There were many more dinner meetings in which Churchill, Stalin and others, including President Franklin D. Roosevelt would attend. There was the Tehran Conference in November 1943 and the Yalta Conference in February 1945.
In American history, there is probably no more famous meal than that which occurred in 1621 between the Pilgrims and the Wampanoag Indians. It is not known exactly what was consumed at this meal, but turkey was probably one of the dishes. Governor William Bradford wrote about the food situation of the autumn of 1621, saying that “there was great store of wild turkeys, of which they took many.” Although this meal was probably a harvest celebration, there is no doubt that the participants got to know each other better.

Leaders of all stripes use luncheons and dinners to meet with those who oppose them and those who support them to discuss issues. In February of this year, President Obama met with House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell in a private lunch session to discuss ways they could work together. Not really sure how that has worked out.

Without a doubt, the most famous meal would be that known as The Last Supper, in which Jesus Christ foretold coming events and instructed his disciples on what to do when he was gone.

As this writer observes current political events in Mississippi it is hoped that leaders from different sides of the issues would simply take the time to have a meal together and get to know each other on a more personal basis. Who knows what might happen?

AN ECONOMIC DEVELOPMENT PRIMER FOR SMALL TOWN MAYORS

November 12, 2015

My latest column as printed in the Mississippi Business Journal

AN ECONOMIC DEVELOPMENT PRIMER FOR SMALL TOWN MAYORS

They come in all sizes and shapes and from a wide variety of backgrounds. Almost all of them are serving in their posts in a part-time capacity. Many, if not most, have had little training in the fundamentals and nuances of economic development. They are the mayors of small towns in Mississippi and other states across America.

In spite of their lack of formal preparation for the duties of their offices there are quite a few opportunities and resources to them once they take their oaths. The Mississippi Municipal League offers a wide variety of training options and resource materials. Universities, community colleges, state agencies and nonprofit organizations are available for technical assistance and advice.

The following is a basic economic development primer for mayors of small towns. It is actually an outline. Each of these 26 topics are themselves worthy of full-blown seminars. The purpose here is to give the reader a taste of what its like to deal with some of the subjects that small town mayors encounter on a regular basis. Note that it is presented in second person.

A is for Asset-based economic development. Identify the assets in your community that you can capitalize on.

B is for Plan B. The best leaders are the ones who can manage Plan B. Although planning is important, things do not always go as planned.

C is for CDBG, the Community Development Block Grant program.

D is for Decisions, which tend to be data-driven or values-driven.

E is for Economy. What drives your town’s economy?

F is for Followers. You are the leader; who’s following you – and what do they want?

G is for Goals, the mileposts along the highway to achieving the vision. Goals are SMART: Specific, Measurable, Attainable, Realistic and Time-bound.

H is for Heroes. Who is going to step forward when you need it the most?

I is for Incentives. Economic development prospects are driven by location, workforce and incentives.

J is for Jobs. Economic development is the process of increasing the wealth in your town through creation, recruitment and retention of jobs.

K is for Keystone, the central, topmost stone of an arch (an essential part).

L is for Legacy. A lifetime of achievement is often reduced to one incident or program. What will be your legacy?

M is for Meetings, especially productive meetings – with your board, with citizens, with developers and with prospects. The importance of the agenda.

N is for Numbers, or measurements, that will quantify your town’s progress. Data should be determined early in your administration and tracked on a regular basis.

O is for Observation. Stop looking for the answers you expect to find. As Yogi Berra said, “You can learn a lot by watching.”

P is for People, or demographics. Know and understand your people.

Q is for Quality. If anything is worth doing, it is worth doing well.

R is for Responsibility. Most strategic plans fail because there is no accountability or responsibility. Hold people accountable.

S is for Story. What is your town’s story, and how can you capitalize on it?

T is for Taxes, especially tax incentives.

U is for Unique. What makes your town unique?

V is for Vision – your vision and your town’s vision.

W is for World View. How does globalization affect your town?

X is for X-Ray. Have some outside expert look “into” you town.

Y is for Youth, the future of your town. What do they think about the future? Do you have a Mayor’s Youth Council?

Z is for Zeal, the synonym for passion. One big difference in towns that succeed and those that do not is passionate leadership.

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Phil Hardwick is a regular Mississippi Business Journal columnist and owner of Hardwick & Associates, LLC, which provides strategic planning facilitation and leadership training services. His email is phil@philhardwick. com and he’s on the web at http://www.philhardwick.com.

Education is the key to economic development

ARTICLE – MSU’s Stennis Institute Assists Schools (2-27-2013)

Education is the key to economic development. Industries need problem-solvers: educated, trainable workers who can go above and beyond classroom instruction.

Strategic planner Phil Hardwick has seen it time and again in his work as a project manager with Mississippi State University’s John C. Stennis Institute of Government and Community Development. Over the past three years, he’s worked with 13 Northeast Mississippi schools to increase the numbers of students admitted to college.  More…

States most likely to grow will have these policy approaches.

ENTERPRISING STATES:  Policies that produce is a just-released report from the U.S. Chamber of Commerce.  It is an interesting and recommended read for anyone in the field of community and economic development.

One section caught my eye, and it should be included in any state’s discussion of its strategy for economic growth.  It says that the states most likely to grow in the next decade will be defined by the following broad policy approaches:

• Parlaying their natural resources and historically competitive industry sectors into 1st century job creating opportunities.

• Paying attention to and addressing their competitive weaknesses.

• Supporting their companies’ business development efforts to reach an expanding global marketplace.

• Creating fertile environment and workforce for a technology-based and innovation-driven economy.

• Getting government, academia, and the private sector to collaborate effectively to make sure that more new ideas developed by companies and in research labs scale up into industries.

• Taking steps to make existing firms more productive and innovative, creating an environment in which new firms can emerge and thrive.

• Maintaining an affordable cost of living for middle-skilled and middle-class employees.

• Promoting education, workforce development and entrepreneurial mentoring.

• Fostering an enterprise-friendly business environment by cleaning up the DURT (delays, uncertainty, regulations, and taxes), modernizing government, and fixing deficiencies in the market that inhibit private sector investment and entrepreneurial activity.

Want to know about recruiting industry? Read this.

If you want to know about how the industrial recruiting business really works, then this article will be of great interest.  Insite Consulting, a South Carolina company that provides real estate, economic development and site selection told a group of local leaders in Mississippi how the process of site selection works.

Click here to read the Columbus (MS) Dispatch article.

Create your own economic development success story

One of the best things that local economic developers, community leaders and public officials can do is visit another city that has a similar demographic and economic profile and learn about how the other city became successful.  One of the worst things these same people can do is attempt to replicate what the other city did to become successful.  Why?  Because even though cities may be alike, they are not identical.  Generally speaking, a city must find its own unique path to economic development success.  In other words, learn from others, but chart your own course based on your particular situation.

Having issued those words of caution, I now urge you to read the special Economic Development section of today’s Wall Street Journal in today’s (Monday, July 28, 2008) Wall Street Journal It features seven cities that “…took different approaches to economic development – and came out ahead.”