I have been observing how choices regarding which site selection RFPs to invest in responding to are made. Given the overwhelming desire to create jobs in today’s challenging economy, it often reminds me of that famous scene in the British musical Oliver. The opening scene is set in a workhouse where orphan boys are fed gruel for dinner. Half-starved, Oliver creates chaos when he utters “Please, sir, I want some more.” Instead of “Food, Glorious Food”, in economic development the song might be titled “Jobs, Glorious Jobs.”
Rather than “Please, sir, I want some more”, the decision of which RFP to respond to should be a bit more strategic. And deciding to not respond should be an acceptable outcome if the potential capital investment is not a good fit for your community’s long-term economic portfolio plan.
One way to help create a more strategic approach is to use the Fit-Feasibility-Attractiveness tool to guide decisions. The tool is used successfully in R&D operations to make difficult portfolio choices on which projects to invest in moving forward. This adaptation of the tool evaluates an RFP opportunity in three key areas:
1. Fit – Does the capital investment make sense given the industries being targeted in your economic portfolio plan?
2. Feasibility – What is the probability of effectively competing for the capital investment?
3. Attractiveness – Is the financial return on investment a good deal for taxpayers?
If you are fortunate enough to have multiple RFP response opportunities for investing incentive dollars, the tool allows you to objectively evaluate different options competing for your community’s limited budget.
Fit Criteria (score 0 if low fit, 50 if neutral, 100 if good fit)
• Company will improve the attractiveness of the industry cluster in the community.
• Company will leverage assets unique to the community.
• The community brand promise is meaningful to the Company.
• Company culture is aligned with the community culture.
Feasibility Criteria (score 0 if low fit, 50 if neutral, 100 if good fit)
• Community can provide the Company a relevant supply chain or cost effective access to customers.
• Community can provide easy access to the skilled labor required by the Company.
• Cost of doing business in the community is competitive.
Attractiveness Criteria (score 0 if low fit, 50 if neutral, 100 if good fit)
• Projected winning deal will deliver a positive ROI for taxpayers within 5-years.
• Company is in a growing industry with expansion potential.
• Company adds a unique and desired business capability that strengthens community attractiveness within the industry.
• I believe this Company’s leadership will become active (versus passive) participants in helping shape the future business climate in the community.
You may have additional criteria to consider, and that is okay. The important thing is to use a version of the Fit-Feasibility-Attractiveness tool to help bring discipline to decisions regarding which RFPs are going to be addressed by your community. You should only invest in responding if the Company will 1) add sustaining value to your community and 2) will benefit uniquely from locating in your community. Winning a site selection opportunity with the wrong Company creates problems for effective economic portfolio management. A wrong fit will result in the Company leaving the community at a future date when the mismatch negatively impacts the P&L, or a better financial opportunity is presented by a competing location. A wrong fit also ties up incentive dollars and resources that could have been put to better use on a different capital investment opportunity.
What is Your Experience?
Do you use something like the Fit-Feasibility-Attractiveness tool to help you evaluate RFP options? What other criteria do you find helpful in making a strategic choice on which to invest in responding to Share your thoughts and experience by writing a comment. By sharing, you help others learn and be better prepared to ensure shale gas commercialization is a positive catalyzing experience for their community.
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