Business retention and expansion are priorities

Governor Haslam announced this week that the Department of Economic and Community Development will pour most of its energy and resources into retaining and expanding existing Tennessee businesses.  This is good news and a long ignored strategy.

The Governor is correct to recognize that many new jobs can come from building upon opportunities presented by those already doing business here.  As well, intervening long before someone considers pulling up stakes and jumping the boarder makes a great deal of sense.  The amount of effort and expense that goes into wooing the next big thing from another state often diminishes the importance of partnering with those already in our backyard.

This strategy is so often ignored because it is not sexy, it is hard and it demands follow through.

Elected officials like to cut ribbons in front of manufacturers that promise hundreds of jobs and make something really cool.  There is never much press for the box company expanding by 15 people.  The problem/opportunity is that there is probably a company or two in each of Tennessee’s nine economic development districts that would expand by 15 people this year if someone would drop by and just give them some warm & fuzzies.  There’s your first 150 new employees without trying.

But, I do admit, this is tedious work.  Businesses have to be targeted.  Visits have to be made.  A true understanding of the operation has to be developed.  And the economic developer has to endure being chewed out an awful lot.  When a government official walks in for a friendly visit, most business owners are not going to miss the chance to give them an earful.

This leads to the make or break part of the retention and expansion strategy.  When the business manager needs something, you better darn-well deliver.  If you do, that person will sing your praises and I guarantee you will get more business development than you planned for.  If you drop the ball, you will have done more harm than good… they are looking for the exit.

Here are a few tips for Governor Haslam as he dives into this endeavor.

Double your target list.  The Governor said that he and/or Commissioner Bill Hagerty will visit 100 of Tennessee’s top businesses.  That’s one per week for each guy.  I would bet that part of Mississippi Governor Haley Barbour’s daily morning routine goes something like this: Brush Teeth, call Washington, visit local business, call Tennessee business and ask when I can come visit them.  Someone has to live this strategy and it probably needs to be the top two guys.

Make sure your people answer the telephone.  This sounds stupid, doesn’t it?  This strategy is about building relationships that in turn build business.  When one of your team visits someone and attempts to build a relationship, it better not be lip service.  When someone calls, a live person better be on the line and ready to help.  Government employees are bad about saying, “I’ll have to get back to you”.  The best economic developers really do, with something valuable, and fast.

Don’t forget to say thank you.  If I have heard it once, I have heard it a thousand times…  “I have been doing business here for years and (insert Mayor/Councilman/Governor/Congressman/Block Club President) has never darkened my door to say they appreciate me”.  Ask your team to try this script:  “Good morning Mr. ABC Boxman.  Thanks for letting me come by.  First I just want you to know how much we appreciate you being here, me especially.  My granddad bought boxes here years ago.  Before we talk about what you need and what the state might be able to do for you, do you mind showing me around the factory so I can see how all of this really works?”  Don’t just say thank you.  Mean it and act like you mean it.

Don’t just ask about their business.  Ask them about their neighbor’s business.  Ask them about their suppliers.  Ask them about their customers.  When you visit someone, make them part of the team, not a name on a checklist.  Ask Mr. Boxman, “why isn’t your cardboard distributor closer to you?  Do you think there are any more businesses around here that could help him make a little more money?”

Finally, learn the codes.  For instance, a businessman that bothers to cuss you out and tell you that everything is wrong from his sidewalk to his taxes is pretty invested in the area.  If you can keep an open line of honest communication with him, he will become a great ally.  If you can fix a few of his problems, he will likely stay forever.  Look out for the guy who says thanks for coming but I couldn’t be happier, everything is great!  That guy is either going bankrupt or shopping his business to another state.

Bill Haslam is a salesman.  I suspect he knows how to do this.  But he needs to instill in his team a sense of importance and a sense of excitement about it.  Economic development is a lot like real estate leasing.  The only difference is that cold calls are easy.  Who will say no when you call and say you are from the Governor’s office and you’d like to drop by?

I applaud Governor Haslam for making retention and expansion priorities for his economic development program.  This should be good news for businesses that need a little help, good news for cities with established businesses and good news for the State of Tennessee.