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BBA Economic Digest

The Problem with Strategic Plans

Frequently I will read requests for proposals from economic development organizations for strategic plans and think: "Bless their hearts. They don't know how to get there."

Maybe all that is wanted is a plan, so that everyone can feel good. But that in itself won't bring about effective change.

In memory of the late T. Boone Pickens, I will quote him to show how your "strategic plan" may fall short.

Mind you, I'm not against planning. Pickens' quote #1: “A fool with a plan beats a genius with no plan every time."

But here is the key, there must be a call for action. There must be actionable items with who does what when. Pickens' quote #2: "A plan without action is just a speech."

I have seen organizations get caught up in too much planning, to the degree that it has inhibited action. Pickens' Quote #3: “Don’t fall victim to what I call the ‘ready-aim-aim-aim-aim’ syndrome.' You must be willing to fire.”

We offer an alternative strategic plan. Our BBA Action Initiative includes a SWOT analysis, labor market analytics, identification of target industries and companies within those target industries. We're not giving you a speech.

The Ethics of Site Selection

It's not lost on many of you that I've been on a bit of a crusade of late -- writing about applying ethical standards and transparency to corporate site selection consulting. I think it's long overdue.

The encouragement and support that I have received from consultants and economic developers alike makes me believe that this is an issue that resonates with many.

When a consultant is paid for professional advice and counseling, he or she has a fiduciary duty to place the needs of the client first. That's business ethics 101.

But it is common practice by many site consultants to base their fees on incentives awarded and/or accessed from state and local governments. Such an arrangement clearly smacks of a conflict of interest, because it allows a consultant to steer a client company to a place where the consultant’s fee is inflated.

The client company may not realize this, but this model is not in its best long-term interest of finding the best site. Rather, it speaks to best interests of a consultant ignoring their fiduciary responsibility to the client.

Only a flat fee or a variation of prevents the possibility of abuse. Nothing short of that eliminates the conflict of interest inherent with incentive-based fees.

This is about putting the client first and putting an end to any hint of a pay-to-play scenario. Want to learn more? Check out: The Dinosaur Club; The Client Comes First; and Consultants Coming Clean.

Finding Success in Economic Development

What does success in economic development look like? How can an ED organization become more effective and bring about positive change in a community?

I may write a book on this one day, but in the meantime, consider these pointers:

Concentrate on continuous improvement. Create a team approach to proactively achieve regular, incremental improvements. Focus on becoming the best that you can be, knowing that there is always room for improvement.

Know your community's strengths and weaknesses. Leverage your strengths and work on your weaknesses. Do both. It may require a SWOT analysis from an outside perspective. We offer that via our BBA Community Review/Asset Mapping.

Put in the work. Commit yourself to business retention and expansion (where most of the jobs are created); at creating a better environment for entrepreneurs; and at business recruitment. It may sound simplistic, but do your job.

Have a vision. Don't just wish, but establish processes to "git 'er done." Be committed to seeing it through. Forget about things you cannot control. Focus on what you can control.

Know your allies. There are organizations in every community supporting economic development. Know them and what they do. Turn to them for ideas. Build your network.

The Website Whisperer

So there is this fellow that I wanted to contact via email. He is the president of a local chamber and also the CEO of the local economic development organization.

But when I went to the two separate websites, there were no staff email addresses to be found. Instead, my only option was to fill out a contact box. Really?

Do you know how many people will not do that besides me? Answer: A lot.

Postscript: I just had an online conversation with the person that I was referencing. He is a great guy, a seasoned pro who recently took the job in the community. He assures me that he will soon have a new and much improved website.

The good news is that he knows what needs to be done. The ones I feel most for are those who have no clue that their websites are seriously deficient. While I have no intentions of ever building economic development websites, I feel compelled to help. In that regard, I'm the "website whisperer."

John Buford Did His Job

There are many great business icons who warrant our attention. The late great T. Boone Pickens was one. When he talked, I listened.

But for inspiration, I look at a photograph near my desk of a man that most of you have never heard of. John Buford was a noted cavalry officer in the Union Army during the Civil War.

Entering Gettysburg, Pennsylvania, on June 30, 1863, Brig. Gen. Buford recognized that holding the high ground would be key if a battle was to be fought there. And it came to be.

Attacked the next morning by overwhelming Confederate forces, his outnumbered men fought a two and half hour holding action which allowed for federal infantry to arrive on the field.

Buford picked his goal -- holding the high ground until help arrived. He designed a process for achieving it -- posting his dismounted troopers behind stone walls on the low ridges. And he was totally committed.

Goal, process, commitment. Buford did his job. He put the Union army in the position from which it would win the Battle of Gettysburg and turn the tide of the war.

Six months later, Buford, known in the Army as "Old Steadfast," died of typhoid fever at the age of 37. He was promoted to major general on his deathbed by President Abraham Lincoln.

The Promise of Opportunity Zones

Will Opportunity Zones attract a meaningful amount of corporate investment into what have been marginalized areas? Will they have a big impact on economic development? The best I can say is stay tuned, that we will eventually know.

There are 8,700 such districts nationwide, which allow investors to defer their capital gains taxes if they invest in real estate, infrastructure and businesses in these designated low-income zones.

The good news is that OZs are broad in scope, offer limited oversight, and are more flexible in terms of who and how assets are managed.

But, but, but: In the 1980s, Republicans in more than 40 states created “enterprise zones” offering tax relief and job training. Democrats followed suit with “empowerment zones” during the Clinton era. Both were mostly real estate investment plays of limited benefit to communities.

Will OZs be different this time around? Many consultants say so, but keep in mind it may be simply a revenue stream for them. And while there have been some early success stories, it's anecdotal evidence at best. If there is to be a sizable wave of investment in opportunity zones, a real developing mega trend, I want to see it before proclaiming success.

Twern't Me

A Dallas man was recently arrested in New York after damaging Wall Street's famous "Charging Bull" statue by striking it with ... get this, a banjo.

“All he was calling it was ‘the devil,’ and he was talking a whole bunch of holy stuff,” said Shandu Marks of Queens, who caught the incident on his cell phone.. “At first I was going to try to stop him, but I thought differently because of that banjo.”

As a banjoist, I take my responsibilities to society quite seriously. While a banjo can be used as a weapon in the wrong hands, used properly it a musical instrument, albeit one that some may find disturbing. (Mark Twain said a gentleman is one who can play a banjo but chooses not to.)

Rest assured that I would never strike a person or a thing with a banjo. I am a peace loving man and a capitalist to boot.

What We're Reading

Jane Goodall Keeps Going, With A Lot of Hope (and a Bit of Whiskey)

New York Times

What Makes Silicon Valley Different? CityLab

The Capital of Kindness The Washington Post Magazine

We Could Have Had Electric Cars from the Very Beginning Longreads

The One Skill That Doesn't Deteriorate with Age Quartz

The Most Absurd Foods You Can Eat at the Minnesota State Fair

National Geographic

Parting Thoughts

We leave you with "Boone-isms" -- quotes from the late T. Boone Pickens, who died this past week at his home in Dallas.

“The older I get, the more I see a straight path where I want to go. If you’re going to hunt elephants, don’t get off the trail for a rabbit.”

"Work eight hours and sleep eight hours and make sure that they are not the same hours."

“My I.Q. is the gas price. At $3 I’m a genius. At $1.50 I’m a moron. Don’t talk to me too fast; it’s at $1.53 today.”

“Keep things informal. Talking is the natural way to do business. Writing is great for keeping records and putting down details, but talk generates ideas. Great things come from our luncheon meetings, which consist of a sandwich, a cup of soup, and a good idea or two. No martinis.”

"Don’t rush the monkey, and you’ll see a better show."

"My dad said to me, 'Son, your problem is you don't have a plan. You've never had a plan. A fool with a plan can beat a genius with no plan. Your mother and I are concerned that our son is a fool with no plan.' I stood there with my mouth open. 'Son, I love you. Get a plan.' "

"A big deal takes as much time as a little deal."

"Don’t be foolish with the money you’ve made. No big cars. Second, remember who you are. Stay humble and be generous. It’s the right thing to do, and it feels good."