Interview with Jim McGraw, Jr. – Economic Development Expert
Jim McGraw, Jr. is the President and Chief Executive Officer of KMK Consulting and a member of its Board of Directors. Jim is also a Corporate Partner of Keating, Muething & Klekamp, P.L.L., the parent of KMK Consulting. His background is centered in business development, public utilities, insurance and not-for-profit organizations. Jim’s clients include national and international firms in the areas of real estate, manufacturing, energy, transportation and technology. He has been actively involved in business and related client consulting for 30 years.
Jim is a nationally recognized consultant in the area of economic development. He has worked in over 80 cities and regions across the U.S., helping community and business leaders design and build some of the country’s leading economic development organizations. He has been instrumental in the growth of these organizations in such markets as Baton Rouge, Baltimore, Buffalo, Charlotte, Charleston, Cincinnati, Honolulu, Ft. Lauderdale, Ft. Worth, Irvine (CA), Jacksonville, Kansas City, Los Angeles, Memphis, Omaha, Orlando, Phoenix, Rochester, San Francisco, Scottsdale, St. Louis, Tampa, Tucson and Washington, D.C. Jim is an active member of the International Economic Development Council and related regional associations.
I recently took a moment to talk with Jim about his thoughts on place branding.
- Question: Based on your experience, what are the top two or three reasons place branding efforts tend to fail?
I think the top three reasons are:
1. Insufficient differentiation versus other markets. Communities have a hard time understanding and focusing on the key things that make them unique. Sometimes it is because the points of difference don’t feel glamorous enough, and sometimes it is because contracted Advertising Agencies recommend aspirational positionings that are neither relevant nor authentic.
2. Insufficient resourcing to get the branding work out and sustained in the marketplace. Many times, communities only raise enough funding to contract for the strategic planning phase of the branding process. They develop a strong strategy, but do not have the resources for deployment. This is the worst of all worlds because the plans get put on the shelf and never have an opportunity to positively impact the local economy.
3. Insufficient commitment to use the new brand. I have seen many community branding exercises undermined by false commitment. Either the final brand position is so compromised to reach consensus that it is not compelling, or the position is polarizing and never implemented with enthusiasm. Place branding is an exercise that requires strong and inspirational leadership that is inclusive, but does not drive a compromised outcome. Passionate and sustained deployment of the new brand is critical to success.
- Question: Incentives continue to play a role in capital attraction. Why do you think that is the case, and for communities that are cash strapped what are viable alternatives if they want to be competitive?
Until outlawed, for example the current sales tax litigation in Arizona, incentives will always be used in economic development. Perhaps in today’s economy, more than ever. Usually though, they are used as a deal sweetener or tiebreaker, but rarely the dealmaker. The fundamental assets for long-term success need to be present in a location if it is to be given serious consideration.
Without cash, viable alternatives could be personal and in-kind incentives. Smother the client with attention, love and family support. For example, provide a mentor family for each new family moving into the community. Retaining key employees and getting them productive quickly in a new location is always an important consideration for any capital investment location decision.
- Question: Looking forward, what are the opportunities you see to dramatically change the site selection process for the better and what will it take to make it happen?
Information on communities is quite good today thanks to the Internet. Companies still face lots of frustration dealing with government and economic development staffs. Many are still not expert salesman or provide the level of support they claim to have in house. We must raise the bar on education of the government sectors as well as private sector organizations involved in the site selection process, both at the leadership and at the staff levels. What is cutting edge or best practice is always a moving target and the best in the business are always pushing that benchmark higher.
One of the biggest opportunities to improve the site selection process is to educate CEOs as to why it is incumbent upon them as part of their CEO role in their own hometown community to be personally active in the sales and marketing process. CEO to CEO sales is the way of the future in site selection. The communities that are best aligned at the CEO level, with this kind of focus to grow their markets with quality, high value companies in which they personally participate in the recruitment process is the dramatic move which will distinguish the best communities from the rest.
- Question: What role do you see foreign direct investment playing in creating jobs and economic wealth? How can communities do a better job attracting FDI inflow?
FDI inflow is big and getting bigger. This is a matter of more branding and more sales in a more targeted fashion. Those markets that are most targeted in their FDI attraction efforts are the winners for the most part. Brand awareness and brand differentiation are critical. And for many FDI prospects, incentives must be precise and aggressive, as they can make or break a deal for these companies.
Communities will be looking for better ways to attract attention to their own markets. Akron, Ohio is a great example where they invest in an Israeli incubator. This is an extremely creative strategy. It means that when those companies graduate and look for locations in the United States they immediately will start, and hopefully end with, Akron as their location choice.