The Attributes of Successful Business Attraction

August 2008
By Jim Colson, COO & President of Site Selection Angelou Economics

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.

Through Angelou Economics' experience in developing programs for more than 130
communities worldwide, the firm has identified varying attributes of communities with
successful business recruitment programs. Over the last decade, AE has observed
multiple shared attributes of truly successful communities:

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.