“Never interrupt your enemy when he is making a mistake.”
― Napoleon Bonaparte
Building a compelling image for your community is challenging on a good day. But there are a few mistakes that will make success impossible. In my experience, I see these mistakes made too often in economic development. How many of these mistakes do you believe your economic development Organization is guilty of?
DEADLY MISTAKES – Don’t ever:
- Be trite. Your community deserves better. What is trite? Describing your community as “Open For Business” is a good example of a trite way to characterize your community. Every community is open for business or there wouldn’t be any real reason for economic development. As an aside, if you do discover (or have discovered) a community with an active economic development effort that is “Closed For Business” please let me know. Other real world examples include “We Mean Business”, “The Premier Location For Your Business”, “Ideal Location”, “Business is Booming” and “Where Business Grows”. In my opinion, these types of statements about your community are throw away claims. They squarely position your community in the middle of the great majority of “vanilla” choices. Trite claims suggest you really have nothing worth saying about your community. And, if you have nothing worth saying, why should a capital investor spend money to conduct a due diligence exercise of your community? The probability of finding something of value that you haven’t discovered is nil. Your community deserves better because trite positioning is a complete waste of money. Money that could have been invested in other programs capable of delivering a positive ROI.
- Talk to yourself rather than your customer. It is so easy to describe the features of your community, to talk about the assets and infrastructure. But what really matters is the business benefits a capital investor will realize from your community. To really understand the benefits, you must first understand the capital investor’s business needs. It is easy to tell the difference between a feature and a benefit. Features describe WHAT is available while benefits describe WHY features matter. Another clever way I have heard it described is features tell while benefits sell. If at all possible, use the language of business in your communication with capital investors. If you were in a foreign country, it would be obvious to you that speaking the local language would make your attempt at communication easier to understand. It is equally valuable to speak the language of business to executives and not the language of economic development.
- Over promise and under deliver. Pride is a tricky thing. Pride in your community can translate into a “liberal” description of what it is like to live and work there. Your community’s promise needs to be relevant, competitive and authentic. In the world of product advertising, nothing kills a bad product faster than trial. That is because when the product fails to live up to expectations, it quickly gets a poor reputation. You don’t want your community to suffer the same fate. If you over promise, chances well executed due diligence process will make the risk of under delivering visible and your community will be eliminated from further consideration. If you win the deal, but over promised and fall short on the follow-through, you will create dissatisfaction and mistrust among the leadership team of that Company. The relationship will quickly move from partnership to adversarial. Bottom-line? Don’t over promise. Instead, over deliver.
- Care more about winning the investment than ensuring a great fit. If you cannot legitimately create a win:win proposition, then you will lose the Company in the long run and create a negative impact on the lives of families counting on employment with that Company. Contrary to the current rhetoric, in my opinion it isn’t all about attracting jobs. It is all about attracting sustainable jobs. If your community is not a good choice for a Company, and conversely, if the Company is not a good choice for your community, have the foresight and courage to take your community off the list for investment consideration. Your citizens will be better served by you passing and working hard to find a Company that is a good long-term fit and by using your limited resources to win that opportunity instead of incurring the opportunity cost of bringing a wrong fit Company into your community. One of my mentors, Bob McDonald former CEO of Procter & Gamble, advised me it is always better to “choose the hard right, than the easy wrong”. If you genuinely care about a Company’s long-term success, you will make the “hard right” choice of voluntarily passing on a bad fit.
- Fail to work hard at winning the repeat investment. Many communities treat their current companies like tenants. That is unfortunate since according to a study by Donald Walls most (71%) of the new jobs in your community will either be created or destroyed by those very same companies. As an economic development professional, you should adopt the paradigm that with every sunrise CEOs of companies in your community wake with the option of a) staying and growing in their current location, or b) relocating their business and jobs to another location. The question then becomes – How easy are you making it for those CEOs to elect to stay? You can’t answer the question if you don’t talk with the CEOs in your community on a regular basis and constantly seek opportunities to help them be even more successful. Based on Donald’s research findings, winning the repeat investment is the key to sustained and significant job creation in your community. My counsel is to scrap your capital retention efforts and start funding an accelerated capital growth effort where you partner with Companies in your community to remove the barriers to their success. If Companies succeed and feel your community was a true partner in that success, they will elect to expand in your community. You will win the repeat investment with every sunrise.
- Lose your objectivity. It is easy to overlook or under prioritize the shortcomings of your community. It is your home. You are comfortable and happy there. But, no place is perfect and no place can provide everything a capital investor is seeking. In today’s world of transparency and easy fact checking, authenticity is critical to success. If you exaggerate about what it is like to live and work in your community, the capital investor will independently find out and your personal credibility will be diminished. There is a great article by Peter Wink about the critical importance of trust in deal making. If you lose your objectivity and over sell your community, you will erode trust and winning the capital investment deal becomes virtually impossible.
What Are Your Observations?
Do you see the mistakes discussed above being made by your EDO? Have you found a way to avoid making the deadly mistakes? Leave a comment and share your thoughts. By sharing your learning we collectively become better at our jobs. Contribute to the “rising tide”.
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