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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