Thoughts about business and economic development in rural areas.

 

November 2017
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Texas Attitudes

Modesty is a virtue….most of the time. When it comes to promoting your community, it can be a real drawback. Sometimes we are too close to our own community to appreciate what might be a real positive to a person who is new to the area or to a business that is considering locating here. Sometimes. Most of the time we are just too critical of what our area has and way too quick to point out what it lacks. Rural communities seem to do this more often expecially when they feel they are being compared with urban areas.

To counter that I suggest we develop a case of ‘Texas Attitudes.’ I’m talking about framing what we have in a positive way and not being afraid to boast a little bit. I call this ‘Texas Attitudes’ not just because of the Texas stereotype but because of a tourism commercial that the State of Texas aired on stations in Wisconsin several years back. In that commercial they were touting several reasons why we should vacation in Texas including a statement that Texas had over 500 lakes.

500 lakes! 500 LAKES! Now there’s a selling point sure to lure Wisconsinites…until you realize that plenty of Wisconsin COUNTIES have more lakes than that. In fact Wisconsin has over 15,000 lakes and if we want more we don’t have to travel to Texas, we can just go next door to Minnesota and visit some of the 11,000 they have over there. I checked several Texas tourism sites as I wrote this and found out that only ONE of their lakes is even natural. The rest are all manmade and I’ll bet that the ’500′ number included some large cattle watering troughs!

Not sure how many Wisconsin folks hopped on a plane to go visit one of those lakes but you’ve got to hand it to them for bravado. And frankly, we can all learn a little something from them. I’m not suggesting we should become braggarts and play footloose with the facts, but we shouldn’t sell ourselves short either.

A little dose of ‘Texas Attitudes’ can be a good thing.

Not Another Meeting! Part One

We’ve certainly learned to dread the word ‘meeting’ and not without good reason. But like it or not, meetings are here to stay so we might as well do everything we can to make them as productive as possible. As the Executive Director of three different community and county economic development groups during my career I’ve certainly attended my share.

Here’s what I’ve learned. When a meeting is well run people will attend and they will participate.

Sounds simple but it really isn’t. During my 12 year tenure with Grant County we usually held 11 monthly meetings each year. (We combined November & December into more of an ‘annual meeting/social.) We normally had about 17 people who were expected to attend as members of the board. Over that 12 year period we missed having a quorum only twice and during the last six of those years our average attendance was nearly 35 people. Twice the number that needed to be there. How did we do that? Here are some things that worked for us and the first things happen long before the actual meetings themselves.

Move the meeting site around. This was already in place before I came onboard. Grant County is a fairly large area, just a little bit bigger than the State of Rhode Island and the Grant County Economic Development had several community members. Each month a different community would host the meeting rather than holding all meetings in one central location like the county seat. There were a couple of benefits here. First it evened out the miles that everyone had to travel and if folks from one end of the county drove 60 miles to get to your corner of the county you felt a certain obligation to return the favor when they hosted.

The second benefit was we all got to learn firsthand about conditions throughout the county. Not just hear about them, but see them. When the folks in Cassville talked about the challenges of reaching their community we knew exactly what they were talking about after personally experiencing the 42 “driving opportunities” (my positive twist on the word ‘curves….sharp curves!’) on the last stretch of road leading into the community. We had a better appreciation for what they were doing to develop public spaces along the Mississippi River and we developed a real understanding of how important the employment provided by the two power plants was to them.

You can read it in a report and hear it at a meeting but ‘being there’ makes it real. Oh, and the size of the community doesn’t matter. If you were a member, you got to host a meeting. One little detail about scheduling the meetings. We had more members than we had months so we would do a drawing to determine who got to host which month. That way everyone had an equal chance at hosting a summer picnic or risking a snowstorm. We did let them trade with another community if they arranged it themselves but that was strictly up to them. It was a great arrangement that contributed more to building a sense of teamwork among our communities than you can possibly imagine.

You’ve heard of Management By Walking Around…..this was Teambuilding by Moving Meetings Around.

Land as an Incentive.

One topic that every community struggles with is how to price land in their industrial or business park. If there’s enough competition for space that you can charge market rates that cover your costs and provide a profit that’s great. In fact, if that’s the case your community probably should just step aside and let private developers handle land development. There’s no real need for you to be involved. But for most communities, especially in rural areas, that’s not the case. In fact, communities usually develop land for business use because no private developer is willing to take the risk.

So how do you charge for the land and does it even matter if you intend to provide the land as part of an incentive package that encourages development? Some communities will set their land price at a level that covers all of their investment costs and not negotiate at all. They feel that the fact that the land is fully developed and ‘ready to go’ is incentive enough. Other communities will go to the other extreme and say the land is free to any ‘good’ employer that wants to build a business here. (I once asked a Mississippi utiltiy rep at a national conference what the going rate was for industrial land in his state and he just laughed and said, “I don’t really know, we’ve never charged anyone for land.”)

Both approaches have merit so what do you do? My answer lies somewhere in between the two. I suggest developing a “Land Price Formula” that discounts the cost to the business based on three factors: the number of jobs created, the quality of the jobs (pay & benefits) and the taxable investment being made by the business (the building and other improvements).

So how do you figure out the discounts? Well, first set your end points. What is a reasonable cost for the business park land. Look at your investment costs and look around at your competition, both nearby parks and the cost of green site development in other areas of your community. Pick a number in that range. Then determine what you consider to be a ‘great’ prospect. How many jobs would they have to create and at what quality level and how much of a building would they have to build to get us to say, “Omigosh, we really want to find a way to ‘give’ them five acres to make this project happen!”

Now do the math. What discounts do you have to give to get to ZERO for your ‘great’ client? Run several scenarios and the numbers will start to fall in place.

Once you have your “Land Price Formula” you can now say ‘yes’ to those warehouse distribution requests that eat up land but don’t create big job numbers or to those small businesses that need a couple of acres and only have one or two jobs. They end up paying a fair price for the land and receive a minimal discount while someone who creates more jobs and makes a bigger facility investment will receive a more substantial discount. The community provides more substantial incentives to projects that provide more substantial return while still being fair to other projects.

Everyone knows where they stand and you avoid listening to ‘the community bends over backwards for an outside company and doesn’t do anything for the ones who are already here’ complaint. The same rules apply whether it’s someone local or a business from outside your area. Fair to everyone involved and you can figure the price in 5 seconds using the formula that the community has agreed to in advance. No need for silly delays as you go back to the City Council or Economic Development Committee to discuss this part of the incentive package because it’s all cut and dried.

Plus the business knows the exact value of the incentive they are receiving. If community ‘A’ gives five acres to a prospect for free because they never charge for land, then that incentive has no real cash value. If community ‘B’ has a base price of $10,000/acre and provides five acres discounted to $1 then the cash value of that incentive is $49,999.

Two critical points. First: Always take your discounts against the total cost of the acreage involved and not against the per acre cost. Doing the latter just encourages the prospect to take more land than they need. Second: Always include a performance guarantee in your contract for the sale of the land. If the prospect does not meet the agreed upon levels of employment or investment in a set time period then the community should retain a legal right to a reimbursement for a portion of the incentive not earned. A ‘clawback’ provision is essential and any legitimate client will understand that this is just a good business practice on the part of the community.

And a final point about the amount of acres to provide for a project. Every business will want more land than they are likely to use. From their point it makes sense for them to plan for future expansion. But your community shouldn’t be tying up valuable developed land that may never be used by that business. You also don’t want to encourage any land speculators to take advantage of your community’s investment. What to do? Your proposal involving incentives should include just the land essential for the initial project and then include a ‘right of first refusal’ offer on any additional land that the client might have an interest in. It protects their future and doesn’t needlessly tie your hands when it comes to working with future development prospects.

Land can be free…..if the incentive is fair to all involved.

TRAINING AS PUNISHMENT?

Just did two customer service training sessions co-hosted by a chamber of commerce and a university. Great group of people in attendance and I really enjoyed working with them. Enjoyable day, no problems. Right?

Not quite. On the way home one item started to bother me more and more. During discussion in one of the sessions a participant indicated that she had been ‘sent’ to the session. It was obvious from her tone that she felt that this was a signal from her employer that her customer service skills were considered sub-par and she was being sent to this session to be ‘fixed’. To make matters worse, another of her co-workers in attendance said she felt the same way. It was obvious the two hadn’t talked about it as the second person seemed almost relieved that she wasn’t the only one who felt that way.

Unfortunately we didn’t have time at that point to pursue the matter but this really concerns me. As a participant I’ve always looked at training sessions and workshops as an opportunity. And with that attitude I’ve always felt that if I walk away with just one idea that I can use it’s been well worth my time. But folks who feel they are being punished or see training as an unpleasant task, what do they get out of it? This is scary. I took some consolation in that both participants seemed to be having a good time and after a little while had warmed up to the group and the information being discussed. We’d overcome the initial obstacle of attitude but how much time did we lose before getting there?

Could this have been avoided? I went back and looked at the promotional material that had been sent to businesses. It was well done and seemed very positive in nature. But could we have done a better job in helping managers ‘sell’ this to the people they were asking to attend?

I think in terms like, “Reward your best staff with…..” or “Give this gift to….” etc.

If training is viewed as a punishment we all lose.

Rural Boundaries

With the proliferation of rural subdivisions and the seemingly neverending growth of urban centers it has become much more difficult to define what constitutes a true rural area. Most definitions rely on political distinctions (is it incorporated or is it a city vs being a village?) and some try to use numbers like population density.

Here’s another one for your consideration. Walk out of your house on a cloudless night. If your eyes are irresistably drawn up by a blanket of stars then your location is definitely ‘rural’. If you remain focussed on buildings and areas lighted by artificial light then you are ‘urban’. For those of you who don’t know there is something above the horizon and not just beyond it, my sympathies.

To learn more about keeping our night-time skys ‘rural’ check out the International Dark-Sky Association. To do your part, put a switch on your outside lighting and then set it in the “off” position. It’s a green idea that is beautiful in many ways and truly ‘rural’ in its simplicity.

And then get out there and enjoy those rural star-filled nights while you can.

Rediscovering Community

Visited a good friend, Alan Anderson, last night and listened to his story about a person who moved from the city into a rural area. I was expecting a tale of how he tried to ‘ejakate’ the locals. Well this story was just the opposite. This guy got involved all right but he did it in what I consider to be the ‘smart way’. He took time to really learn the area and to become a part of the existing community. He didn’t immediately try to change things. But over time, he certainly added to what was there and helped the area evolve in ways that were acceptable, significant and sustainable. He was wise enough to understand that he needed to have an understanding of the existing ‘community’ if he was going to be able to contribute something meaningful.

As I listened to Al, two thoughts came to the fore. The first was the reminder of how powerful a well crafted story is to making a point. Al is an absolute master of this. I’m always amazed by those who have honed that skill.

Second, the words “Rediscovering Community” evolved in my head. I’ve been doing a presentation I call, “Skating to Where the Puck Will Be”. It’s intended for rural audiences. My objective is to encourage rural leaders to open up to different perspectives on what the future of their area can be and to let them know that they are actually in charge of their destiny and not just victims of it. While I am comfortable with the constantly evolving content of the presentation, I’ve struggled with the title. I’ve found that most people have heard Gretzky’s quote but I’m not sure everyone can closely relate to a hockey analogy. Put me on skates and I would have a tough time standing up and gliding to where the puck will be is a fantasy at best. (Besides, sports references are done to death.)

So based on what I learned last night I’ve renamed my presentation, “Rediscovering Community: A Vision for Rural America“.

Now that feels right. Thanks, Al.

Leading by Driving Around

Managing by Walking Around (MBWA) is certainly not a new idea and at its core it is pretty basic. But it never ceases to amaze me how few people do this well and how complicated some people try to make this. I once saw a 26 page instuction manual for managers of a certain business……complete with cute little graphics on how the flow of information was supposed to happen. (I am not making this up.)

Well, an effective leader would boil that manual down to one sentence, “Get the hell out of your office every day and listen to somebody.”

And this is absolutely essential for people in the rural world. It’s way too easy for anyone to get caught in the office ‘trap’. Believe me I know. I’ve always struggled with this and I don’t think I’m alone. That pile of paperwork on the upper left hand corner of the desk is screaming for attention and we try to make ourselves feel better by saying that making a couple of phone calls will be a practical substitute for actually visiting with someone face-to-face.

This can be even more daunting to folks in rural areas. After all, we’re not talking about a five minute trip down the hall or a quick visit to the shop floor. We’re talking about getting in the car and travelling somewhere. We’re talking time. But in a rural area this investment of time may be the most important investment you can make.

Couple of thoughts on how the make this investment pay off.

1.) Make it a habit….Put it on the schedule or it won’t happen on a regular basis. And once a month doesn’t cut it. Once a week should be your minimum.

2.) Talk to someone…..don’t just do a drive by of the business park or downtown. Park the car and talk with someone. If the person you decide to see is too busy to talk with you, respect that and go on to someone else.

3.) Introduce yourself to someone new…..Don’t just visit with your regular contacts. Yes, you need to visit the mayor or village president but don’t forget about that new council or board member. Or how about the owner of that new business that opened up since you last were in town. Every one of those folks has a unique and likely ‘fresh’ perspective on what is happening and what needs to happen in that community.

You’re going to learn a lot and it will all be current information. Beats the heck out of the statistics you will get from the state 18 months from now.

Hey, a better title for this post might have been, “LEARNING by driving around.”

Nothing Ever Changes Here.

“The people who moved in after the couple that owned the place that bought it from the Morleys don’t live there anymore.” Sound familiar? It should. Years ago we knew the folks who bought the ‘old Morley place’. They probably bought the property 30 years earlier but all the locals still refer to it by the former owner’s name. Seems to be an unwritten rule in rural areas that the unofficial ‘name’ for a property only changes long after actual ownership changes hands. I know about the ‘old Morley place because my folks bought that farm in 1943. They didn’t buy it from the Morleys, they bought it from Walter Meyer. Our family owned it until 1970 and there have been three owners since then. It’s probably the ‘old Schneider place’ about now., we’ve been gone long enough.

But this isn’t about local naming conventions. It’s about the constant change in the makeup of our ‘communities’. Families seem to be much more mobile today and a look at U.S. Census data proves it. One of the questions asked determines if a household has moved within the previous five years. If so, the next question determines if the mover came from a neighboring county or neighboring state. The bottom line is that nearly 15% of the people living in a typical rural community moved there within the past five years and they moved from far enough away that they don’t know the pronounciations of local names. The test around here is pronouncing ‘Muscoda’. (It’s “musk-oh-day”….bet you didn’t come up with that?)

So what does it mean to us? It means that there are a whole lot of new people who don’t know squat about our community and it means we have a whole bunch of new neighbors that we have probably never met. And we used to say that only happened in ‘the big city’. To make my point I always issue a friendly challenge to mayors and village presidents. I’ll offer to bet them that if I took them to the five houses on either side of where they currently live I will be able to introduce them to at least one family they have never formally met. I don’t get too many takers. They might know there are new people over at ‘the Old Morley place’ and they might see them drive by on their way to somewhere, but they haven’t been introduced.

So we’re all trying to run community governments and civic organizations based on who used to live here while we wonder who those new folks are.

And all the while we nod our heads knowingly and say, “Nothing ever changes here”.

The customer’s viewpoint.

One of the best stories I ever ran across on how to drive the customer’s perception on the service they received was something I read years ago in Readers Digest. It detailed the story of two clerks at a local dime store. At that time most dime stores had candy in bulk and you ordered a certain amount by weight. At this particular dime store there were two clerks who regularly handled the sales of bulk candy. The manager noticed that one clerk regularly outsold the other. In fact, kids would wait until she got near the candy and would then quickly go up to the counter to place their order with her.

Upon closer observation the manager noticed the key difference that was already obvious to the savvy young customers. One clerk would place a generous scoop of candy on the scale and then remove enough to get to the desired weight. The second clerk would start with a smaller amount of candy and would add candy until she got to the desired weight. Both clerks gave out exactly the correct weight as ordered by the customer but you’ve already figured out which one had the higher sales.

Now if we want to increase sales should we focus on the facts or on the cusomer’s perception of those facts? Your choice.

It’s a matter of time…

Just participated in the 40th Annual Wo-Zha-Wa Run in Wisconsin Dells. The festival held in this tourism destination point on the 2nd weekend after Labor Day is wildly successful. Thousands of people invade the community over the weekend and every homeowner that chooses to do so can park their lawn full of cars at $5 a pop. The town is that full.

But that wasn’t always the case. I know, because I’ve run in 37 of those 40 events. In the early years, Wo-Zha-Wa (which is a Ho-Chunk term for “fun times or to have fun” was just a local end-of-season clearance sale for tourist related businesses as they closed for the season. Local service clubs ran brat & beer stands to make a few bucks which they hadn’t been able to do during the Summer because all their members were working 7 days a week to take advantage of the short tourist season which was the community’s only industry. And it was a chance for the locals to relax and celebrate the end of another hectic, anc hopefully successful, season. If several hundred people showed up that was a big deal. In fact, after three years there was a discussion about cancelling the event because of its small draw. ‘No one was going to come to the Dells after Labor Day’ was the oft repeated local mantra.

The most powerful tourism center in the entire state couldn’t create a successful event after three years of trying so what hope do any of us have when it comes to changing customer habits. Right? Well something obviously changed. But what was it? Over the next few entries I’ll share my view on what happened and why.

The first lesson learned is that everyting takes time. Just because something is a good idea or has potential doesn’t mean it will be instantly successful. Word of mouth is the key. The hot term today is ‘viral marketing’ but it’s really the same thing. But word of mouth takes time…..more time today than we might think given our belief that everything is ‘instant’ in our electronic world. Now go back to 1968 when this festival started and consider how much time it would take for word-of-mouth to work its magic, especially when you have a festival name that noone can pronounce.

By the way….Wo-Zha-Wa is pronounced…….Ah, you’ll get it. It’s just a matter of time.