Strategic Planning – 2nd in A Series

“Teamwork is the ability to work toward common vision: the ability to direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to attain uncommon results.” Andrew Carnegie

Building a sustainable economy for your community requires effective strategic planning. Unfortunately, many communities do not have a winning strategic plan to guide their investment choices. That leaves their economic future to chance. And, lack of an aligned strategic plan to guide major investment choices increases the risk program that funding will be revisited with each new elected official. Trying to create economic prosperity when major initiative priorities change with each Administration shift is extremely challenging (if not impossible).

If a winning strategic plan is so important, then why do so many communities lack one?

My observation is there two driving reasons for the lack of a winning strategy.

First, many Economic Development Organizations do not accept accountability for ensuring a quality process is in place for the design and deployment of a strategic plan for their community development. They may create a strategic plan to guide their own organizational choices, but do not see themselves accountable for ensuring their community has one. In my mind, this is a mistake.

To be clear, being accountable is not the same as leading the exercise. EDO accountability is to ensure a robust process is in place. A strong, respected steering team of stakeholders is actually best to lead the strategic planning exercise. But, if the community lacks a robust strategic plan it would be appropriate for community leadership and residents to hold the EDO accountable and expect them to put a process in place to deliver one.

Second, most Economic Development Organizations do not have personnel on staff skilled in facilitating a group of stakeholders to create and deploy a strategic plan for their community. From my vantage point, this is a real missed opportunity. Of all the players in the community, the EDO is the one best situated to facilitate this process and should be staffed appropriately to do so. It is impossible for an EDO to achieve its business mission without a network of key community stakeholders and a smooth flow of communication between them. One of the performance expectations for EDO Executive Directors should be to effectively facilitate strategic planning for the community.

The Five Critical Questions Your Community Must Answer

Strategic planning isn’t rocket science, but it is hard work. And facilitating a group of stakeholders with different missions and views on where a community should grow is a lot like herding cats. It requires strong influence leadership skills and answers to five questions.

What is your community’s wining aspiration?
Where will your community play?
How will your community win?
What capabilities must be in place?
What management systems are required?

Answer To The First Question: Your Winning Aspiration

This is an aspirational statement of what your community hopes to accomplish. In my opinion, too many EDOs focus on incremental job creation as their aspiration. The underlying assumption is that a consistent year-over-year increase in jobs will deliver economic prosperity for residents. But, the hypothesis is fundamentally flawed. Not every resident is looking for a job, and neither economic development professionals nor elected officials actually create jobs. The private sector creates jobs.

I believe strongly that every community should have an as its written aspiration to “Enable all residents to more fully achieve the American Dream.”

What is the American Dream?

“That dream of a land in which life should be better and richer and fuller for every man, with an opportunity for each according to his ability or achievement”. James Truslow Adams,The Epic of America

This aspiration can act like a rallying flag to enroll local decision makers. It will also stimulate a broad range of discussion in the areas of four economic considerations: 1) individual wellbeing, 2) societal considerations, 3) diversity friendliness and 4) the quality of the local environment. These four considerations need to be addressed strategically to enable residents to better achieve the American Dream.

When is the last time your community had a conversation about these areas and developed a set of prioritized strategies to improve them? I am guessing it has been awhile, if ever.

Historically, the aspiration of enabling residents to better achieve the American Dream would be challenging to measure performance against. But Xavier University has created and statistically validated tool called the American Dream Composite Index (ADCI) that quantifies each of the four consideration areas. The ADCI score can be used to both identify opportunities and to track progress.

This post entitled “Time To Change The Dialogue” will give you more information more about the ADCI measure.

Answer To The Second Question: Where will your community play?

This question requires stakeholders to define the core strengths of your community. It is these strengths that will be leveraged to define a playing field where your community can have a realistic expectation of winning.

Let’s think broadly for a moment. According to the book “Playing to Win” there are two possible ways to position your community. You can position it as the location with the lowest operational cost structure or you can position it as a location that is differentiated in a specific area.

Positioning your community as a location with the lowest operational cost structure is extremely challenging (but not impossible) for a community to achieve. According to Forbes magazine research, communities like Shreveport, LA or Fort Smith, AR could consider competing on this basis. But, in my experience, most communities will opt to try and compete as a differentiated location.

Strategy is about disciplined thinking. Deciding “Where to Play” is a question of which businesses your community can really support. You need to look at the question from a number of angles like geography, industry, and vertical stage within industry (e.g. R&D, supply chain, manufacturer etc.). The competitive set of communities must be a consideration as well. You need to objectively assess your community’s ability to effectively compete and win. Choosing a playing field identical to a formidable competitor could be the proverbial kiss of death.

Three Potential Pitfalls

When you look at your “Where to Play” options avoid these problems –

Refusing to make a real choice. Remember, the essence of great strategy is making clear, tough choices. You need to select which industries to pursue, and importantly which not to pursue. You dilute your focus and your community’s growth potential when you try to do too many things at a time or further away from your community’s core capabilities. If you define your target too broadly, your community efforts will become unfocused. Ultimately, you should be able to create a list of companies in your target and a corollary list of companies that are out of your target. For a community, a three-digit NAICS industry description is likely too broad. Chances are your community’s core strengths are really best suited for a specific sub-set of the industry. Get that specific.

Attempting to buy your way out of a poor choice. If your community is not competitive, then offering excessive incentives to offset location deficiencies is a losing tactic. Make a better choice or invest in making your community competitive.

Accepting a current choice as unchangeable. A bad choice is a bad choice. Time won’t make it a right choice. Explicitly choose “Where to Play” and where not to play. Get your community stakeholders aligned to those choices. If your community is not disciplined enough to stick with the choices made, your strategies will fail.

Don’t Forget

Your “Where to Play” and “How to Win” choices are interdependent. As such, they need to be thought about together. This post focuses on sharing thoughts about your “Where to Play” decisions. But, when you have made a “Where to Play” choice you need to understand the implications on your “How to Win” choices. If these are not reinforcing, then your action planning will not deliver your desired results. Future posts will share thoughts on “How to Win” choices.

“Where to Play” Choice Examples

This shares a short list of examples where a community has made a strategic “Where to Play” choice that has resulted in enabling residents to better achieve the American Dream. This is simply an illustrative list.

Branson, Missouri chose to play in the entertainment industry and has become a top location choice.

Las Vegas, Nevada chose to play in the gaming industry (a subset of the entertainment industry) and has been exceptionally successful.

Nashville, Tennessee chose to play in the music industry and has become a globally recognized location for country music (a subset of the music industry).

Plant City, Florida chose to play in the strawberry industry (a subset of the agriculture industry) and has built a reputation as the strawberry capital of the United States.

Norwich, New York recently chose to play in the yogurt industry (a subset of the dairy industry) and is now the headquarters location for Chobani.

Silicon Valley, California has been legendary for their focus on the high technology industry.

Triangle Park, North Carolina has been extremely successful by focusing on the health care industry.

Key to success has been the discipline to make a real choice and stick with it over time. Some of these examples started with a winning strategic plan, and some are turn around stories. Norwich, New York is a small community in upstate New York that was home to a health care R&D and manufacturing operation. When the company left, the community had to reinvent itself. The yogurt industry is helping to get this community back in a position where residents can legitimately have an opportunity to achieve the American Dream.

Spoiler Alert

My next post in the strategic planning series will explore the “Where To Play” choice a bit deeper. Future posts will deal with the balance of the questions.

Strategic Planning – 1st in A Series

Discussion

Does your community have a strategic plan in place to help enable residents to achieve the American Dream? Is the “Where To Play” choice transparent? Is your community attraction investment aligned with the “Where To Play” choice, or is the simply to be opportunistic? If you were to award your community a letter grade on the strength of its strategic plan, what would the grade be? Does your EDO believe it is accountable for ensuring a winning strategic plan for your community exists?

Caveat

This post deals with only one (Economic) of five ADCI subindices (Economic, Well-Being, Societal, Diversity, Environmental). I chose to focus on the Economic subindex because most EDOs are directly involved in business attraction, retention and expansion efforts, and I believe illustrating the principles of strategic planning using this subindex will be of greatest interest to the majority of visitors to the www.strengtheningbrandamerica.com website. However, it is important to note that in order to design an effective strategic plan for a community that will improve residents ability to achieve the American Dream, all five subindices need to be included in the exercise. In a future post, I will provide a strategic planning blueprint that will give guidance on how to manage the process across all five subindices.