New Performance Measure

Ed Burghard

Destiny is not a matter of chance; but a matter of choice. It is not a thing to be waited for, It is a thing to be achieved.

William Jennings Bryan

I recently fielded a market research study among economic development professionals to help support a recommendation for a session at the 2014 IEDC Annual Conference to discuss the future of the economic development profession.

 

In the survey, I explored:

  • Who they felt accountable to.
  • What they felt their work impacted.
  • What role they envisioned playing in local strategic planning.
  • How they felt success should be measured.

I think the results are fascinating.  Obviously, this short survey should not be perceived as a comprehensive look at the above questions.  It wasn’t designed to be.  But, it should be viewed as validating that the question of – What should the future of economic development should be? – is worth an in-depth discussion.

SURVEY DEMOGRAPHICS

103 respondents were from of the United States.

66% of respondents were male, and 34% were female.

48.5% of respondents were 55 years old or older, 51.5% were younger.

44% of respondents were IEDC members, 56% were not.

WHO IS THE “BOSS”?

This question was intended to get some insight into who the profession feels accountable to.  The actual question was – “Who do you feel is the economic development profession’s real boss?”

32% EDO Board of Directors

34% Elected Officials

09% Executives of Businesses

12% Community Residents

13% Other (verbatim comments suggest combination of the above)

I also wanted to get a handle on whether the current situation reflected how the profession felt it should be.  So I asked the question – “Who do you feel should be the boss?”

31% EDO Board of Directors

08% Elected Officials

14% Executives of Businesses

29% Community Residents

18% Other (verbatim comments suggest combination of the above)

I wasn’t surprised by the answers, but I was disappointed.  My personal bias is that residents of the community should be considered the real “boss” of economic development professionals.  Ultimately, the work we do has a profound impact on the lives of the residents in the communities we serve.  I was pleased to see the percent recognizing the role of residents better than doubled (12% to 29%).  But, in my opinion it should have been 100%.

The reason this question was important to me is rooted in the transformation I witnessed at Procter & Gamble when Management redirected the Organization from focusing on the paradigm of “customer is boss” to “consumer is boss”.  The strategic choices made by the company when the real impact on the lives of consumers was considered made a dramatic difference.  Today, “consumer is boss” is part of the fabric of P&G’s culture and shareholders continue to benefit from that focus.  I think politics has become too prevalent in the economic development profession (34% of respondents feel they are currently accountable to elected officials).  And while I fully acknowledge the importance of enrolling both the Board of Directors and elected officials in the choices made by an economic development organization, I believe strongly that we need to hold ourselves accountable to the residents of our communities.  Positively impacting the lives of residents through our actions should be the #1 reason we wake up and want to go to work every day.  I have no doubt that if we adopt the paradigm of resident as boss we will see the same positive transformation of our profession as I saw at P&G.

Who Creates Jobs?

This is a question I was really interested in exploring.  In part, because of the language we use in the profession.  We constantly talk about job creation, retention and expansion.  But, companies create or destroy jobs based on market place conditions.  It makes no sense to me to talk about these outcomes if they are not really impacted by the work of the economic development profession.  I appreciate some people may feel it is a matter of semantics.  But, I believe language is important.  And, I believe continually talking about job creation, retention and expansion reinforces the use of job growth as a performance metric for the profession.

From a good news perspective, when asked the question – “Who creates jobs?”, 97% of respondents indicated it was employers.  So, it appears we all recognize that, as economic development professionals, we do not create jobs.  I don’t even know what to say about the remaining 3% who indicated it was economic development professionals (2%) or elected officials (1%).

If We Do Not Create Jobs, What Does Our Work Impact?

In order to figure out how to measure success, you need to know what the output of your work impacts.  So, I listed a few areas and asked for some perspective.

Plays an Above Average or Lead Role in Impacting the Outcome

61% Job Creation

17% Job Destruction

46% Resident’s Economic Well-Being

16% Resident’s Access to Quality Health Care

36% Resident’s Trust in Government and Businesses

29% Community’s Diversity Friendliness

42% Community’s Physical Environment

It’s pretty amazing that despite the fact that almost 100% of respondents believed employers create jobs, 61% felt the economic development profession plays an above average to lead role in job creation.  But, respondents were not eager to accept responsibility for job destruction.  To me this confusing response indicates we need to have a candid discussion on the real role of profession plays in job creation, retention and expansion.  My personal belief is that we way over estimate the importance our profession plays.  I do accept recognize the role of the profession in facilitating the process of site selection.  But, even this is becoming less frequent as many times local economic development professionals are not invited into the process until a short list of location options is already established.  The greatest impact our profession can make is to 1) help ensure an effective strategic plan to create the  conditions for success is in place and being actively worked, and 2) the benefits of working/living in our communities is understood.

The other areas I asked about are sub-indexes reported in Xavier University’s American Dream Composite Index.  I felt good that respondents believe their work can impact these areas, but I also believe they under estimate the impact their work has.  I personally think the profession is way too focused on job creation, despite the fact that employers, not economic development professionals create jobs.  At best, our impact is indirect.  This obvious inconsistency tends to make us schizophrenic and prevents us from focusing on the areas where we really make a more direct impact.

What Role Do We Play in Strategic Planning?

This is an area I believe the economic development profession should play a big role.  My bias is we should be facilitating the design and deployment of long-term strategic plans for our communities.  Helping local leaders think through how to make communities more attractive to companies and top talent is something our profession should embrace as a core part of our work.  I wanted to see if my belief was shared or considered radical.

I asked – “How large a role does your EDO currently play in community strategic plan design and deployment?”.

Only 33% of respondents felt their EDO currently facilitates the process.  Most (52%) felt the extent of their EDO involvement was limited to participating in meetings or making recommendations.

I then asked – “How strongly do you feel the economic development profession should be facilitating your community’s strategic planning and deployment process?”

86% of respondents indicated they felt strongly to definitely.

This tells me I am not alone in thinking the economic development profession should be accountable for facilitating strategy design and deployment in their communities.  To be clear, facilitating does not mean creating the strategic plan.  Local leaders still need to be involved in plan creation.  It means being responsible for ensuring a robust process is in place, the right people are involved and aligned, and the agreed-to plan is implemented successfully.  For fans of Total Quality, this includes oversight of the PDCA process.

I think the role of the economic development profession is community strategic planning should be an important discussion at the 2014 IEDC Annual Conference.  And, I think there should be more professional training available on the skills necessary to do this work.

How Should We Be Measured?

This is a key question.  In my mind it is crazy our profession is measured on year-over-year job growth when we all agree employers, not economic development professionals, create jobs.  Those of you who regularly read my blog know I feel a much better measure is the degree to which residents feel they are achieving their American Dream.  Now that Xavier University has figured out a way to quantify the American Dream and their research can help inform local community strategic planning, I think having a real conversation about how to operationalize this measure makes sense.

I asked – “Is year-over-year job growth a good measure?”

27% of respondents indicated YES.

33% of respondents indicated NO.

I asked – Assuming the American Dream can be reliably measured on an annual basis, do you believe a valid objective of an EDO could be to better enable residents to achieve their American Dream?”

55% of respondents indicated YES.

18% of respondents indicated NO.

These data suggest Xavier University’s American Dream Composite Index offers a new performance metric to the economic development profession.  One the majority of economic development professionals feel represents a good objective for their EDO.  A measure that has significantly fewer detractors than annual job growth does.

DISCUSSION

I believe this survey supports the importance of having a discussion on the future of the economic development profession.  I don’t believe we have sorted out the role we play in job creation, retention and expansion.  And, lack of clarity is likely limiting the profession from focusing on the areas where it can have the greatest impact.  I fully recognize the importance of meeting Board and elected official expectations, but still maintain that the true “boss” of our profession should be residents of our communities.  I’d be curious to hear your thoughts on how adopting this “resident is boss” paradigm would impact our profession.

Leave a comment with your thoughts.

What You Need To Know About The American Dream

Media Coverage

Fox Business

Wall Street Journal

FoxNews

American Dream Case Study Series

Cincinnati versus Ohio and Nation

Indiana versus Michigan

Florida versus North Carolina

New York versus New Jersey

California versus Texas

Pennsylvania versus New York

North Carolina versus Texas

Ohio versus Michigan

How Easy Is It To Achieve The American Dream In Your State?

To view the complete set of State rankings based on the ADCI and five explanatory sub-indexes, download the complimentary 2012 American Dream State Ranking Report.

Download American Dream Report

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4 Comments so far

  1. […]   […]

  2. Michael Ammann

    December 3, 2013

    My customer is the employer, investor or third party who represent them. The resident or the person that may commute or move to our community is the benefactor from our efforts as a public/private partnership.

    If you have made an investment in our community (own a business, manage a business/public organization or own a home) then you need to insure that the investment will provide a return from growing the economy. Therefore, you need to be a member of the local economic development partnership. Most residents could care less about the outcomes of our efforts and will not become members of local economic development organizations.

  3. […] “The Burghard Group | Strengthening Brand America: discussing EcDev metrics http://t.co/7OStX0DyeI”;  […]

  4. […] Burghard recently fielded a market research study among economic development peers in order to explore to whom they feel accountable, the impact of the work, the role in strategic […]

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