Response to my first blog post on Golden Rules was overwhelmingly positive, so I thought I’d quickly follow-up with six more rules worth considering.
In the spirit of full disclosure, there were a few comments (shared directly with me) suggesting following rules leads to a lack of innovation and it is far better to write the rules. I think there is an important point to be considered in that feedback. Here are three additional references I’d recommend for important context and perspective on the role of knowledge (experience, rules) in innovation management.
- UNESCO paper on the importance of knowledge communities in stimulating innovation.
- Quicksilver authored by Dr. Michael O’Brien that argues for conscious decision making by leaders.
- Isaac Newton “If I have seen further, it is only by standing on the shoulders of giants.”
In my opinion, experience should be used to inform your decisions. As a leader, you still need to exercise judgment and make a conscious choice in selecting the best course of action. “This is the way it has always been done” is an excuse. It is not a reason for failure. Lack of effective leadership would be the underlying reason.
Six More Golden Rules
Here are six more Golden Rules I have found helpful to consider when trying to figure out how to be even more effective.
- Market share growth starts with gaining mind share. It is not only important for capital investors to think of your location positively, they need to see your community as a potential solution for their business challenge. You need as much top-of-mind awareness as possible, and the key to achieve it is through repetition of your place promise. This requires discipline and an appreciation for the importance of not having conflicting or confusing messages about your community. You may get bored with telling the same story about your community, but until you hear it consistently and correctly repeated back by capital investors you have not succeeded in establishing your message in their mind.
- Timing matters. Your message is easiest to communicate and best received when the capital investor is looking to make an investment. If you had an unlimited budget, then telling your story 24×7 through every possible communication channel you can think of might make sense. But, not only do we not have unlimited budgets in economic development, we typically are woefully under resourced. Therefore it is important your investment in telling your community story is timed to be as impactful as possible. When a company is actively seeking to make a capital investment, they are in an information-seeking mode and their minds are open to hearing your message. The challenge is to identify the communication channels that are the most effective at making your community story available at that critical moment. This is one reason why most economic development organizations concentrate on educating site selection consultants about their community assets. The site selection consultant is only contacted when a company is thinking about a capital investment. A 2008 best practices survey by DCI suggest your community website may actually be an even more important and better timed communication channel that will be referenced by capital investment decision makers during their site selection process.
- Effective branding takes time and costs money. If you don’t have the resources to support either marketing or branding effort, invest your budget in a highly targeted sales plan. For perspective, if you embark on developing a marketing or branding plan and do not do a good job, you risk creating ill will with thought leaders in your community. It will be unlikely you can again recreate the enthusiastic support required until time has past and the memory of failure fades. It would be smarter to invest limited funds in making progress competing for a specific company investment or in building awareness of your community among executives in a targeted industry. You might be interested in reading an earlier blog post on selecting the right level of planning for your community.
- Every important decision is based on emotion and rationalized with facts. The decision on location for a capital investment is no exception. Yet, most economic development attraction efforts focus on data and do not address the emotional considerations. How a capital investor feels about the desirability of your area to build and grow a business is key to making the short list of locations under consideration. How your current executives feel about your community is a great indicator. If they are strong advocates, you will win the emotional side of the decision. If they are not satisfied with their situation, then you can have all the rational reasons in the world and you will still likely lose the competition for capital investment. Here are a few more papers that give a good overview on the role of emotion in decision-making. They are worth reading.
- Your place promise is not right for everybody, and that is okay. In my experience, I have often seen people and teams get caught up in the competition to win. They lose sight of the bigger picture and begin to make poor business decisions. For example, whenever I heard the comment “Don’t worry, we’ll make up the margin on volume”, I always new objectivity was lost and winning at any cost was the operational objective. This is a sure recipe for disaster. Your objective should be a mutually beneficial partnership where both the company and community win long-term. It is okay to walk away from a potential capital investment opportunity if your community isn’t really right for the company. If you don’t, then the company will always be at risk of leaving your community in the future. It is my experience that you simply cannot make up margin through volume. Walking away from a potential investment may actually be a real win for your community. Play for the long-term, not the short-term. Don’t be afraid to walk away if a deal isn’t right for both parties.
- The more you know about your competition, the better prepared you are for success. Kevin Keller and Alice Tybout talk about the importance of understanding points of parity and points of difference between competitors. Points of parity are assets or benefits that several competitors offer. These have also been called “tickets to entry”. Points of difference are unique assets or benefits only one competitor offers. When your community has a point of difference, you have a competitive advantage. When another community has one, you have a competitive disadvantage. Knowing how your community compares with the communities you typically compete with will help you identify points of difference. It is important to note that the definition is through the eyes of the capital investors. I find many communities are proud of their assets and over state their relative value. It doesn’t matter what you think. It only matters whether the capital investor sees and values the differences as important. Capitalize on your positive points of difference, and neutralize your negative points of difference if they are important to the capital investment decision.
I hope you find this second six Golden Rules thought provoking. Use them (along with the first six) to help you think about your current challenges. Do not follow them blindly, but as Sir Isaac Newton suggested, stand on the shoulders of others and see further.
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