The Seven Essentials For Success in Tough Economic Times

Operating budgets for economic development are getting even tighter as increased demand is placed on declining municipality and state tax revenues. As a consequence, economic development organizations are being asked to do even more with less. In light of concerns over the current slow rate of economic recovery, it doesn’t appear this situation is going to markedly improve any time soon.

So, if you can’t count on getting adequate resources for your current economic development plans, what can you do to help ensure success in these tough challenging economic times?

Here are Seven Essential things you could (and should) be doing to maximize your economic development performance.

  1. Know your community assets and the benefits they deliver for your capital attraction, expansion and retention target industries. Now is when you really need to invest time and energy into sharpening your unique selling proposition and sales story for your target industries. It is important you understand how capital investors objectively assess your community strengths and weaknesses. It is time to ensure the language you are using in your RFP responses are adequately answering the question – “What’s in it for me?” versus the classic construct of “Let me tell you how wonderful this community is.” Stop talking features, and start talking benefits. You need to generate insight into why an executive in a target industry might select your community and determine the most compelling bundle of assets you can authentically deliver. Now is the time to invest in candid introspection and community self-awareness. You rarely have time for this when your promotional budgets are strong and you are focused on project deadlines. Now is the time to do the assessment, when the project side of your operation has a temporary lull.
  2. Focus on a few industries and do the job exceptionally well. When your budget is cut, you need to redouble your efforts to understand the drivers of success in attracting capital from the industries you are targeting. You have minimal dollars to waste, so improving the effectiveness and efficiencies of what you are doing is paramount. Conduct a work out session in your shop to eliminate non-value added activities. Take a hard look at why companies have rejected your RFPs in the past and focus on strengthening the weak parts of your proposal package so you can increase the conversion rate for leads to investment. Seek to know what is really going on in a select few of your highest priority industries and try to meet their needs better than any other community.
  3. Resource your initiatives adequately.When your budget is cut, don’t try to maintain your promotional effort across a wide range of industries by cutting investment across the board. This is the easy, but often fatal, approach. Instead, make the hard choice about which industries you are going to prioritize and then make certain you can afford to invest at a level that ensures competitiveness. This approach will actually result in a higher probability for a return on investment. In addition to making the priority choices, you also need to reset expectations with your Management and contributing members. If you do not reset expectations, then you will be under constant pressure to expand your industry focus and your community leaders will be consistently disappointed in your performance no matter how remarkable it is under the circumstances. Recalibrate expectations. Get them aligned with your program’s ability to deliver results and then you will be in a position to win.
  4. Get even closer to your business community. You cannot afford expensive market research when budgets are tight. But, you cannot afford to fly blind either when it is so important to minimize the risk of making a wrong decision. How do you reconcile the dilemma? The key is to forge even closer, personal relationships with the business leadership in your community so you can learn about their industry directly from them. Often the insights you will get are informed by industry omnibus market research in addition to their own experience. It is unlikely company leaders will reach out to you and offer the knowledge. You will need to proactively reach out to them to explain your information needs and ask for their help and insights.
  5. Partner with other economic development organizations to cost share. We often view other communities as competitive. However, just because everybody’s budgets have gotten tighter doesn’t mean the cost of success has decreased. It just means you can’t afford to play the game the same way you used to. These are times when Regional collaborations really shine. They create opportunities for cost sharing that frees up your cash for redeployment to support mission critical activities only your organization can deliver. My general counsel to everybody who asks is to follow the OPM – OPR – OPK model (Other People’s Money, Other People’s Resources, Other People’s Knowledge). If you get the model working for you, then you are well on the way to a successful outcome.
  6. Enroll your business community as active advocates. It will take an increase in sweat equity from your team, but it won’t require a tremendous investment of promotional dollars to create a grassroots program to support your economic development efforts. Now is the time to reach out to the community and make them even more active partners in your work. To be clear, this is not as easy as it sounds. This is not as simple as creating a Facebook page or a community newsletter. You need to have a sound strategic and tactical plan to utilize the community’s voice in your selling efforts. You should think about this opportunity both systemically and on a project specific basis (e.g. using specific executives in your capital attraction program to accomplish specific goals).
  7. Create a team of trusted advisors and listen to them. Managing in tough times with a limited budget is hard and demanding work. But, it can be made easier if you tap into the collective wisdom of the business leaders in your community who have led their operations through ups and downs and have both personal experience and insight to share. Not only will you get great counsel, but you will also gain a lot of confidence from listening to people who have successfully maneuvered through similar rough seas as yours. Even if you simply learn what mistakes to avoid, you will be in a much better position to succeed.

None of the seven tips are “rocket science”. But, we often forget to pay attention to the basics or we are afraid to make difficult prioritization choices when economic times are difficult. Legacy systems, unchanging expectations, over burdensome bureaucracy, all conspire to create a “deer in the headlight response” and we tend to operate the same way we did as when we had budget to invest. This Organizational behavior leads to poor performance and dissatisfaction among your key stakeholders. Instead of business as usual, as a leader in your economic development organization, you need to rethink priorities, retool delivery systems and reset expectations for what success looks like. Do this, and even in tough economic times you will make progress in moving your community toward economic prosperity.

If you have an eighth essential to add to the list, or a thought to consider, please add a comment to this blog post.

P.S.  Your support of the Place BrandAid project is important. Help the economic development professionals in states affected by the BP oil spill by sharing your thoughts on how you might tackle their challenge to rebuild their community image. The contribution of your thinking matters and will make a difference. Thank you!

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3 Comments so far

  1. Sara Dunnigan

    July 20, 2010

    These are great practical tips that will produce dividends way beyond our current economic crisis and many should be standard operating practices in EDOs.

  2. Sarika

    July 20, 2010

    I’d like to add an obvious one. Encourage experimentation and thinking out of the Box. While small companies with little or no budgets are used to doing this in the hope of getting at least one of the experiments right; larger companies typically depend on larger budget established ways of doing business. But when budgets are down or out, it is the most perfect time to experiment by trying newer, smarter, not so established ways of doing business. It helps in more ways that one:

    1) Keeps employee morale up in tough times
    2) Gets employees to take ownership of problems.
    3) Gets the frontline that actually interacts with customers to put their direct learning to work.
    4) Helps experimentation with little or no expenses and once the situation improves, the company can put more money behind winning formulas and get far superior returns on promotional budgets.

  3. Pavitra Saxena

    July 20, 2010

    Yes you are right ! Now in tough times, Brand Managers, Marketing Managers are at least asked to measure the effectiveness of their activities and spend.

    Optimizing the costs on Promotions might have two aspects.

    1) Communication Effectiveness :

    Though it is still difficult to directly measure the effectiveness of few traditional activities (like signboards), however activities on web channels can be optimized through better targeting of content. This is being achieved through “Audience Measurement” and tens of the companies are already working, innovating new ways to achieve better ‘targetedness’. To name a few are Audience Science, Com Score, Quant Cast, Tumri, Kommli and many others.
    However there is another big scope of cost optimization which is “Execution Effectiveness” and the “Creating The Right Content!” which becomes the second aspect.

    2) Execution Effectiveness & Creating The Right Content:

    Before the introduction of Wooqer, there were no (scientific and statistics driven) ways to rightly answer the questions like

    Whether should I go for 50 % discount or Buy One get One Free?

    Whether should I go for 30% discount or give a Gift Free which is having MRP equivalent to 30% of my product. What would be the tradeoffs between saving in reward costs (higher perceived value to consumers in case of gift than actual spend by brand) v/s higher execution costs , if I go for gift.

    Whether the promotion which I am designing, goes well with the OBJECTIVE which I have in mind?

    Whether this promotion be liked by end consumers for a particular geography?

    List can keep on going.

    And Wooqer has build it’s suite of products exactly to answer these questions and thus helping Brand Managers saving a lot by creating the “RIGHT CONTENT” which is asked by end consumers of a given geography and a given time.

    At one place Wooqer collects millions of data pointers through its property (www.wooqer.com) and through various other online and offline partners , at the same some it mines the patterns from those data sets to calculate the effectiveness of various promotion types for a given input from Brand Manager.

    So to summarize, you have Wooqer to add to your strategy to get more of your limited promotions budgets

    Visit http://www.wooqer.com and refer ‘About us’ to more about this and offerings to Brand Managers. Respective channel for Brand Managers is http://aida.wooqer.com

    Regards
    Pavitra

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