The Attributes of Successful Business Attraction

August 2008

By Jim Colson, COO & President of Site Selection

AngelouEconomics

Economic development, specifically business attraction, is a highly competitive discipline. Recent estimates place the number of economic development agencies in the U.S. at nearly 13,000 though the number of agencies operating worldwide is substantially higher. A great number of these agencies are committed to the same thing: recruiting economic base jobs to the communities they represent.

The large number of competitive agencies and the practical challenges associated with the business attraction process itself combine to create a very challenging environment for success. However, economic development agencies that achieve continuing and demonstrable success in the business recruiting arena often share certain attributes.

•  A commitment by leadership to a shared vision of success is vital to a strategic business recruitment program. Shared vision brings together the intellectual capacity of a group of people determined to work together toward a specific outcome. It is a willingness to agree to a specific goal and cooperatively apply the required energy to achieve the same. A critical element of the shared vision is the ability to harness positive energy, but also restrict the negative energy that often leads to loss of focus and splintered activities.

•  A clear understanding of competitive strengths and weakness ensures that a community is able to focus on realistic outcomes . A community will benefit from an approach that promotes competitive advantages and strategically addresses weaknesses. Not every project is for every community; and not every community is for every project. However, by clearly understanding its relative strengths and weaknesses, a community can begin to more effectively identify a list of desirable targeted industries and companies that are a good match.

•  All business attraction projects are seeking to satisfy a number of location criteria requirements. Depending on the industry and the company, these criteria are prioritized and weighted differently, but generally there are thirteen site selection factors : labor, real estate, utilities, transportation, supply chain impacts, educational system, operating costs, governmental taxation and regulatory issues, environmental considerations, business interruption risks, political stability, quality of life and incentives. The successful business developer understands each of the factors and knows how they impact--positively or negatively--each of the targeted industries.

•  A willingness to conduct benchmarking exercises drawing comparisons to other select communities ensures that the proposed business attraction program has been fully qualified. For the exercise to have value, the benchmarked communities must share some type of critical attribute that makes a comparison relevant and meaningful, such as size, demographic base, economic profile, or unique distinguishing feature. An assessment of best practices is a good way to gain further insight into how to strategically improve organizational structure, procedures, product deliverables and programming.

•  A definitive assessment of realistic targeted industries and a description of company parameters and predictive indicators promote highly effective results. In addition to understanding relative strengths and weaknesses, successful business recruiters understand what location criteria are required by the targeted industries and, based on an in-depth understanding of the targeted industry, the most successful communities are able to more effectively model indicators that indicate an impending decision to relocate, expand or consolidate operations. Further, insight regarding the typical decision making process within the industry provides an important assist in working with company officials and increases confidence in the decision for both industry executives and business recruiters. There are two important factors when constructing a target industry list. First, the company has to represent a desirable target for the community. Second, the community has to optimally satisfy the location criteria requirements for the industry. If community leaders understand this process, they are more likely to recruit their target industries.

•  The development and implementation of an effective business outreach plan is an obvious important unifying characteristic of successful business developers. The best plans are thorough, innovative, anticipate challenges, reflect specific industry knowledge, and have established performance metrics. The three subsections of a successful outreach plan focus on the message, the delivery model and follow up.

•   The message is based on a thorough understanding of the targeted industry. It indicates an understanding of the industry's specific requirements and current challenges, and proposes a viable solution. The message is concise, relevant and timely.

 

•   The successful delivery model is in a format that is acceptable and effective within the particular industry. It bypasses the “noise pollution” that exists and is able to get in front of the appropriate decision maker. This often reflects an understanding of both the industry and the decision making process.

 

•   Consistently applied discipline in the follow-up phase is the largest single differentiator between successful and unsuccessful business development professionals. A well-reasoned and executed follow-up program will uncover opportunities and create conversations that will not otherwise occur. It is a highly competitive environment and success demands that opportunities are fully vetted. The challenge is to know the difference between being persistent and being a pest.

It is not uncommon for communities approaching our organization to be surprised to find that they are missing one or more of the essential ingredients for successful business recruitment. Many communities think they have all of their proverbial “ducks in a row,” only to discover gaps in their business recruitment program, such as an inconsistent message, unrealistic expectations, or unwarranted target industries.

To the everyday practitioner, these guidelines ultimately go back to the very first ingredient: a shared vision. Newly founded, and even the most historic economic development organizations can take away from this article the requirement to look inward and follow through for the benefit of the community. While the other elements for success may take time and money to put into place, with commitment, first and foremost, every community can stand out from the 13,000-member pack.

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