Bulletproofing your economic development organization

I have worked with over 60+ economic development organizations over the past decade and I would say the majority of them have faced serious questions about why they exist and if they are adding any value – if they are worth the tax dollars invested.  Many spend an inordinate amount of time justifying their value to funding partners, they always have the Sword of Damocles hanging over their heads.

And they ask me, directly or obtusely, what to do.

I don’t have a magic wand.  There will always be people that question the value of spending on economic development either on ideological grounds (although this is usually not well thought out) or on an inability to connect the dots between the spending and results.

I do have some advice, for what it’s worth, to proffer.

One, always remember you have shareholders and shareholders are normally not particularly concerned with what you do, they are concerned with outcomes.  If they invest $1 million and they get back $2 million they don’t care if you stood on your head and spit nickels.  The shareholder wants an ROI.  A lot of economic development organizations think because they have a board, with (ahem) business leaders on it, that they don’t have to worry about the ones writing the cheque.  They do.  They, in fact, are the ones that matter.  It is not much different if you work for Town Hall or the Government of Canada.  Always think about your shareholder and what they are looking for – and it is never (almost never) busyness or process.  They are focused on outcomes.

Two, defining outcomes is tricky but necessary.  There are normally many organizations involved directly and indirectly in successful economic development.  The best economic development organizations these days are integrators – ensuring the system is strong and pulling in the same direction.

You have heard about LIPs (Local Immigration Partnerships)?  They were set up because there ended up being many – in some cases dozens – of organization involved in immigrant attraction and retention and, in many communities they almost never talked to each other.  The LIPs were set up to ensure some coordination and alignment across the ecosystem and that is exactly how economic development becomes more effective.  If you have a great sales team and no product you won’t be successful.  If you have shiny new office buildings but no people to work in them you will fail.  If you have a very strong provincial economic development team but are weak in local communities, you will struggle.

The outcomes always relate to the economy.  You can throw all your processes and activities out the window.  You need to show tangible economic outcomes and, even more important, show your role in their achievement.

For the economic development agency, aligning and catalyzing various parts of the ecosystem just might be your #1 role.

We didn’t double the number of post-secondary students enrolled in programs needed for the local economy, but we shone a light and engaged our academic partners.

We didn’t triple the number of immigrants or address the lack of rental housing – but we engaged our partners.

We didn’t double public investment in R&D related to our growth sectors, but we made the case.

Again, I can’t stress enough, when it comes to economic development you are only as strong as your weakest link.  It’s not enough to plead that your part of the chain is strong.

Three, arrogance doesn’t work.  I’ve seen this many times.  When questioned, economic development agencies respond with arrogance.  How dare you question my organization?  I have dedicated and hard working staff.  We are committed.  Again, see point #1 above.  Usually, it’s not personal – up to the point you make it personal.  Then, good luck.

Four, economic development is still about the value proposition.  I am amazed at how many heads of econ. dev. organizations ignore or downplay this fundamental issue.  They will say “it’s not my business”, I’m in the job of selling what I have to convince businesses to invest.

This is fundamental.

You Are Not A Sales Agency.

You Are Not A Small Business Support Agency.

You Are Not A Marketing Shop.

You are an economic development organization.  If the top barrier to fostering economic development is a lack of real estate, you are in the real estate business.  If the top barrier is a lack of people, you are in the people business.  If the top barrier is taxation, regulation, policies, timeliness of decision making – you are in the good policy development business.  Again, see point #1 above.

Value proposition is fundamental.  If you see yourself as a sales organization – you are destined to either fail or underperform – unless you happen to be working for Guelph or some place that basically can’t lose.  Unfortunately, for most economic development agencies that I work with, they don’t have that luxury.

In fairness, however, the bottom line is that economic development agencies should not spend half their time justifying their existence.  The ‘shareholder’ should be involved in the development of the plan, help establish ongoing metrics and then give the agency a runway to achieve results.  Normally that should be at least 3 years.  Again, this doesn’t mean hands-off.  There may need to be course correction after six months but it does mean the threat of funding cuts or some other punitive measure should not always be the elephant in the room.

Finally, I can’t end without talking about the importance of strong relationships.  If there is one thing I have learned over the years it is that it almost always boils down to relationships.  Economic development organizations need to be constantly building and strengthening relationships – internal and external.  If they don’t like you – clients, partners or funders – it will be very hard to get the results you want.

If there is one common theme among successful economic development agencies it is that they tend to be well liked by mayors, premiers, local business leaders, partner organizations, etc.  For those that are struggling, usually the relationships are frayed.  I realize this is somewhat a “which came first, the chicken or the egg?” problem but it nevertheless matters a great deal.

I’m not saying that relationships are all that matters.  Taking the mayor out on your boat and plying her with lobster will not cover up for a weak organization. But a crackerjack organization with very weak relationships will still be unstable and will be hobbled in its efforts to achieve results.


1 thought on “Bulletproofing your economic development organization

  1. David, thank you for these well defined thoughts. Lessons for all in the article.

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