We Must Solve the Education Problem Once and for All

A report issued recently concludes that Colorado’s highly educated workforce and other economic benefits are offset by sluggish job growth and spending on education that ranks near the bottom.

The report, put together by the Metro Denver Economic Development Corp., said the state’s ‘‘competitive highlights’’ include the fourth most highly educated state in percentage of college graduates; the 10th most productive workforce; the fourth highest in terms of venture capital investments; and various health indicators, including low rates of obesity and deaths from heart disease and cancer.

The problems include poor support for primary and higher education, the report said. The researchers said Colorado ranks a dismal 48th in state and local support for higher education; 46th in higher education spending per capita; and 26th in per capita spending on K-12 education.

In my opinion, there remains more talk than action in most American communities about fixing education. It's everyone's fault, and it's high time we settle into an action mode where people work together to bring real solutions. This is about our kids' future!

Read more here.

You Must Have a Place to Put Them

Chandler, Mesa and Tempe remain in the running as sites for Google's new engineering plant and its 600 jobs, but Gilbert likely is knocked out of the competition.

Gilbert Mayor Steve Berman says the town lacks a large, vacant building that the company could move into right away.

Google, a popular Internet search engine, announced Wednesday it plans to locate in the Valley, and also is considering Phoenix and Scottsdale.

Read more here.

Delphi Blames Everyone Except Itself

Read this article in the Toledo Blade. More on how Delphi is pointing the finger at everyone and assuming responsibility for its own situation.

Will someone please remind Delphi that "it created its own reality?" By the way, we all do.

Delphi Puts the Pinch on the States

Michigan Gov. Jennifer Granholm told Delphi Chairman and CEO Robert “Steve” Miller during a half-hour, private meeting yesterday that her administration will work hard to keep Delphi jobs in Michigan.

My advice to Gov. Granholm and the governors of all states providing a "home" to Delphi facilities is: 1) to remind Delphi officials what their states have ALREADY given to the corporation and NOT gotten in return; 2) if you decide to give away more, draw up air tight agreements with the company that says they must pay back the money they are given no matter what.

Delphi has known its troubles were coming for a long time and they have taken the easy road out the whole way. This is a company that needs to be restructured to align with global competition. The cuts should start at the top and proceed downward.

Read more here.

Recipe for Economic Development Team-Building

Here are the steps I follow in building teams in economic development:

1. Create harmony & trust: Teamwork cannot happen without trust among team members. Remember: you must trust yourself! Trust in ED means people have to see beyond the "hunk of earth" they represent.

2. Define common purpose: Successful teams have a shared purpose, which creates the reason why people work together. Remember: there must be a clear goal and everyone must see a benefit. I find many ED organizations lack strategic focus, which causes them to stray into others' domains.

3. Build a strategy and track progress: Without a clear and agreed upon path to the goal, people will drift. Acccountability is essential as well. Track the team's progress. A bunch of meetings does not constitute a strategy. A documented way of doing things is needed. Be systematic in how you approach your ED work.

4. Define clear responsibilities and roles: Everybody plays a role in reaching the goal. Team members must be willing to do their part. A shared work plan is needed to ensure that everyone pulls their weight. Too often people just show up and say and do whatever comes to mind, rather than exercising the defined responsibilities they are assigned.

5. Delegate decision-making: Don't allow all decisions to flow to the top. That is not a team. Decisions should be made as close to the problem as possible. Too many ED boards let the Chair and the Executive Committee do everything.

6. Work on team member development: This is crucial. Every team member must adopt a continuous improvement mentality. We hide behind "being an expert" too often in ED. Don't be afraid to learn. Teach each other. Mentorship is leadership.

7. Meet, communicate, and decide: But don't spend your life in meetings. Meetings should have a purpose and when a team assembles, it should do something worthwhile. Too many unfocused meetings can be the death of a team.

8. Support the team: Every team needs resources, outside experts, information and knowledge, and other things to make things happen. In the absence of resources, teams fade into oblivion.

9. Create escalation points and backup strategies: Things change, fall apart, and the team must be able to move to another strategy to reach the goal. Don't switch teams; switch strategies when things don't work.

10. Reward the desired team behavior and results: Rewards are essential to motivating teams, especially when the hard work arrives. Be creative in defining rewards. Sharing credit is important to everyone. Shared purpose + shared strategy = shared results + shared credit.

Contact Don Iannone at ED Futures to learn more about our economic development team-building services. Phone: 440.449.0753. Email: dtia@don-iannone.com

Two More on Leadership

"A new leader has to be able to change an organization that is dreamless, soulless and visionless ... someone's got to make a wake up call." --Warren Bennis

"I used to think that running an organization was equivalent to conducting a symphony orchestra. But I don't think that's quite it; it's more like jazz. There is more improvisation." --Warren Bennis

On Leadership

"All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership."

--John Kenneth Galbraith, U.S. Economist

Tips on Body Language

Here is a useful one for all of us. What does our body language say about us?

Killer #1- Avoiding eye contact: What it says about you: You lack confidence; you are nervous and unprepared.

Killer #2- Slouching: What it says about you: You are unauthoritative; you lack confidence.

Killer #3- Fidgeting, rocking or swaying: What it says about you: You are nervous, unsure or unprepared.

Killer #4- Standing in place: What it says about you: You are rigid, nervous, boring -- not engaging or dynamic.

Killer #5- Keeping hands in pocket: What it says about you: You are uninterested, uncommitted or nervous.

Killer #6- Using phony gestures: What it says about you: You are overcoached, unnatural or artificial.

Killer #7- Jingling coins, tapping toes & other annoying movements: What it says about you: You are nervous, unpolished or insufficiently concerned with details.

What should you do instead? Read the whole story here.

Globally Organized Labor

HBS Professor Jim Heskett raises these interesting questions about the future of labor in the global marketplace in the future: "Are we about to see the rise of labor organized on a global basis? If so, will such a movement be able to achieve the same purposes that have motivated large unions on a national basis? By what means will this be achieved? Or are these proposed efforts typical of those of a movement in its death throes? If it is the latter, how will labor extract its share of the gains of an expanding global economy in the future? What do you think?"

Read more here.

75 Reasons to be an Entrepreneur Now

Reason Number 47: Because in every decade you could differentiate and build a business by running an organization in strange new ways, unleashing yourself and your people by sharing equity or opening the books, or putting authority in the lowest hands, or experimenting with heroically unconventional environments, or leveraging teams, networks, and alternative workstyles, or by embracing any of a hundred other managerial strategies of unexpected provenance. And big-company managers, unlike you, still can't.

Read the other 74 here at Inc. Magazine.

Top 100 U.S. Retailers

2004 Total Sales: $1,308,457,454,000
Click on the source below and find out how various sectors and players contribute to this total.
Source: Retail Chain Age

Bring Back New Orleans

The newly created Bring New Orleans Back Commission, led by New Orleans Mayor Ray Nagin, has approved a proposal by the Urban Land Institute to support the commission's goal to develop a rebuilding vision during the first three months of the entity's tenure.

Now is the time to create an implementable vision for the new New Orleans," said ULI Chairman Marilyn J. Taylor. "ULI will bring its expertise in land use policy, sustainability and development to support the knowledge of the commission, local ULI members, community leaders, and citizens in creating a vision for rebuilding this great American city. New Orleans deserves to be redesigned and rebuilt with equity and sustainability."

ULI, an international research and education institute dedicated to responsible land use, will assist the commission with its master visioning efforts. The program of work will be carried out through four key activities: 1) the formation of an advisory panel of international and national experts on post-disaster redevelopment and urban regeneration; 2) the development of Ten Principles for Temporary Communities; 3) input from the breadth of ULI's membership; and 4) coordination with other groups who have dedicated valuable resources to the rebuilding effort.

Read more here.

Home-Building Market Overview

What is happening with the home-building market? That is a question that I am getting mroe and more in my travels about the country. Here are a few market insights. A better explanation for the intensive rise in home prices would be that many people transitioned their wealth from the stock market in the dot.com era to real estate. Many stock investors were flush with cash even after the stock market corrected in year 2000. We believe this was one of the main culprits for the wild run-up in real estate prices over the past four years. Indeed, low interest rates played a strong role in the run-up, but there were many market forces in play.

Single Family Homes

Single family unit dwellings have continued to remain strong through the first half of 2005. In May 2005, single family permits rose to 1.7 million and rising to 1.9 million in June 2005.

The single family home permits is particularily strong in Sunbelt states where the climate is warm. This includes Florida, Texas, Arizona and Southern California. We believe building permit strength in this region is influenced by demographic changes. When baby boomers are retiring, they will increasing opt for geographical destinations where the weather is warm.

There are a number of notable reasons for the strength in single family home buying. First, the historically low interest rate environment has enabled first time buyers to qualify for a purchase. Second, an increase in the number of minority and foreign home buyers has kept the market relatively hot. Third, in recent years there's been an abundance of single woman that have entered the market who are buying new homes at record numbers. Fourth, a large part of the market is purchasing a second and third home for purely investment or speculative reasons.

Each of the factors has kept single family homes sales strong which can be directly linked to historically low interest rates.

Multi-family Homes

The multi-family housing market includes apartment units. In 2003, multifamily construction starts rose 0.8% and 0.7% in 2004. We believe overall growth levels will remain weak throughout the United States except for impacted markets where there's a lack of available land or areas where there's severe reduced affordability. The national vacancy rate was 10.4% in 2004 which remains at relatively high levels.

This sector could received increased activity due to the lack of home affordability in many regions of the United States. This has been particularly acute in coastal valley areas near the ocean. Apartment rental vacancies have a tendency to be weakest in markets where the home affordability index is above 90. Since homebuyers cannot qualify for a home in these markets, they opt to rent in the geographical regions. And this keeps apartment vacancy rates extremely low. This is particularly evident in areas such as San Diego, California and San Francisco, California.

We believe the multi-family unit market could experience an upturn due to the lack of affordability in many geographical markets and expectations of continued growth in housing prices. Thus, it may now be cheaper to rent a home than to buy a home due to the irrational exuberance of home price growth. In addition, higher interest rates will make homes less affordable which could increase demand for multi-family housing units.

Manufactured Homes

The manufactured housing market remains subdued. Shipments have plunged for four straight years from 2000 through 2004. In 2000, shipments declined to 250,550 units. In 2004, shipments were about 127,000 units. This represents a decline of 50 percent in four years. Shipment declines are largely the result of excessive inventories which caused the fall off in units shipped.

The manufactured home market experienced a spike in repossessions that impacted the market. lenders began tightening credit standards. This caused the industry to lose sales and reduce shipments. In addition, low interest rates encouraged many consumers to purchase site-built homes instead of manufactures homes.

Since the market is more inclined to attract sub-prime customers, there is likely to be an increased number of foreclosures in the manufactured home market. And this increases financing costs as compared to conventional mortgage loans. The market could return to more normal levels wih a spike in interest rates which could encourage more consumers to seek manufactured homes.

Want to know more? Give Don Iannone a call at: 440.449.0753, or send him an email at: dtia@don-iannone.com for a price estimate on a full Home-Building Market Profile Report.

Indy Lands International Logistics Project

A new Indianapolis logistics firm is developing ties to a Mexican port to try to steal business away from the clogged port of Long Beach, Calif., as well as from Chicago, the inland jumping-off point for much of the cargo.

Transpoint LLC, a startup that received $2.3 million in government incentives in August, was represented Monday as Mayor Bart Peterson hosted a delegation of Mexican businessmen and government officials from the port city of Lazaro Cardenas.

Several studies have shown the airport, railroads and interstate highways converging in Indianapolis make the area a good place for transportation, distribution and logistics activity.

Eventually the project will create 250 jobs in the Indy area.

Read more here.

Inner City Small Business Study by SBA

Here is a study from the SBA you should know about.

Inner city businesses are similar to businesses located in the rest of the metropolitan statistical area (MSA), exhibiting similar startup and bankruptcy rates. Small businesses are the greatest source of net new employment in inner cities – comprising more than 99 percent of establishments and 80 percent of total employment.

America’s inner cities are home to over 814,000 private employer establishments employing just less than 9 million people (8 percent of U.S. private employment), a figure that grew 1 percent between 1995 and 2002. This figure lagged behind the job growth rate for the rest of the MSA, which was 1.9 percent over the same time period.

• Inner city residents hold only 22 percent of inner city jobs, while commuters hold 78 percent. This fact helps to explain why higher-wage inner city jobs do not correspond to higher median household income levels for many inner city residents. Wage growth between the inner city and the MSA has been competitive.

• About 5 percent of establishments with greater than $2.5 million in revenues are located in the inner city.

• Ten inner cities experienced faster small business job growth than their surrounding MSA’s from 1995 to 2002. These cities were: Jersey City, NJ; Tulsa, OK; Tampa, FL; Oakland, CA; St. Petersburg, FL; San Jose, CA; Mobile, AL; Portland, OR; Santa Ana, CA; and Augusta, GA. In addition, 51 inner cities gained small business jobs overall.

• Micro establishments in inner cities with under 20 employees showed an overall net job decrease of 75,000 jobs between 1995 and 2002. It is important to note that the SOICE project uses a static and not dynamic analysis of establishments; these micro establishments could have “graduated” beyond the 20 employee threshold.

• Service jobs dominated small business job growth in both inner cities and their surrounding regions.

• The most populous cities experienced more widespread employment growth than smaller cities. Job growth varied significantly by region, with larger growth in the West and the South outpacing smaller gains in the Northeast and Midwest.

Read more here.

Delphi Update: This is Nuts

Delphi, the bankrupt US car parts maker, is to ask General Motors (NYSE:GM) to guarantee $1bn of business a month in order to underpin its restructuring plan.

But the plan designed to allow Delphi to maintain its heavily underfunded pension fund looked questionable after GM said it was unlikely to promise fixed levels of business to its former subsidiary.

Steve Miller, Delphi chairman and chief executive, told the FT: "At this moment we are going to see if we can create a business plan that's robust enough to support recovery of our underfunded pension plan and therefore avoid termination [of the plan]."
"We need GM to assure us of a future revenue flow by not de-sourcing away from us."

Only one question: "Why didn't Delphi move to a sustainable business strategy five years ago when it had a chance?"

Read more here.

University of Wyoming Research Counts

University of Wyoming (UW) research programs contributed about $65 million to the state's economy and ranked as the fifth-largest single entity in the state service sector.

Bill Gern, UW vice president for research and economic development, said UW's research programs, funded by outside contracts and grants, make up 2.3 percent of Wyoming's service sector economy. Others in the top five of the service sector are the Wyoming Medical Center in Casper, United Medical Center in Cheyenne and the Laramie and Natrona county school districts.

The UW research enterprise employs some 1,200 people, including graduate and undergraduate students. (Note: student jobs are generally part-time jobs). In addition, satellite programs, such as the Research Products Center that serves as the university's technology transfer office and the Wyoming Small Business Innovative Research Initiative, have contributed to improving the state's business climate toward small, technology-related business.

In most states, 75 percent of research and development is done by private industry, with universities and other research foundations comprising the remaining 25 percent," Gern said. "In Wyoming, the university accounts for 73 percent of research and development. This is why UW must take a leadership role in developing a technology-business sector. We can help lead Wyoming across the technology divide."

Read more here.

Lean Thinking by James P. Womack and Daniel T. Jones

Lean manufacturing, and now lean office/service, have captured business thinking in recent years. A powerful 1996 book, Lean Thinking, by James P. Womack and Daniel T. Jones, set the stage for the lean revolution across America and worldwide. It's an important book for economic developers. Here is a summary of the five principles outlined in Lean Thinking.

Principle One: Specify Value--If you want to help your customers, think like them. What’s valuable to them? Their money, their time and the quality of the product or service that they receive. For them, value is not something on a chart. It’s not abstract. This can’t be stressed enough — for the customer, value is a concrete reality. Your job is to create this reality, every day, again and again.

Principle Two: Discover the Value Stream--You have a very important assignment. Think of yourself as a geographer in an unexplored rainforest. You’ve got to locate and identify the main source of water. You will meet many strange, wild and potentially dangerous creatures along the way. That’s right, you’re going to have to set foot in your own store. You’re going to have to observe your producers, your truck drivers, your low-level managers and even your customers. Be careful.

Principle Three: Create Flow--Okay, you have redefined what you mean by value, and you have figured out the geography of your value stream. Now call your own bluff. If you’re not really committed to lean thinking, this step will expose you. Why? Because it is difficult and it contradicts several traditional business methods, particularly the batch-and-queue method.

Principle Four: Use Your Pull--As your organization begins to master the technique of flow, an interesting opportunity will arise. When you cut the crap out of your processes, you’ll be producing products more quickly than you could have imagined. This gives you the chance to make the customer a fundamental part of the process. If you’re focusing on one product at a time, you can tailor the process along the way. If your customer wants an orange bike instead of a blue one, all you’ve got to do is slightly modify the flow of that order. If your employees are capably adapting to flow techniques, they’ll have no problem with the concept of customer pull.

Principle Five: Approach Perfection--Once you get all these principles rolling, you’re no longer competing with other organizations, you’re competing with yourself. How fast can you move your products? How many diverse customers can you serve? How lean can you be? Lean thinking allows you to court that unrivalled beauty, perfection, because it is a perpetually self-improving system. As you become better at listening to your customers, they become better at talking. In turn, the pull on your organization becomes stronger. This calls for a swifter flow, a stronger value stream. What looked like it was working one day will be revealed as muda the next. There’s no telling how tight this whole process can become.

Want to read the book, buy it here at Amazon.com.

Is Feng Shui Relevant to Economic Development?

Feng Shui anyone? Could the Chinese field of Feng Shui have anything to do with the location of businesses or how economic activity should be organized in a geographic area?

This is definitely an "out there" subject for economic development, but I think it's worth thinking about...at least a little bit. I believe it is important to stretch our minds and belief systems in different directions. It makes us stronger.

Some time ago, I read Move Your Stuff, Change Your Life: How to Use Feng Shui to Get Love, Money, Respect, and Happiness by Karen Rauch Carter (Published 2000, Simon & Schuster, Inc., NY.) I relocated the book on my bookshelf after it was buried behind Michael Porter's book Competitive Strategy. (Now that says something about feng shui. Doesn't it?)

Don't get too excited. The book is not about using feng shui in economic development, but if you read my short summary below, it might raise some questions about how feng shui could relate to the location of economic activities in geographic areas. At a minimum, it may suggest some ways that you can better organize your ED office.

Carter explains the ins and outs of the ch’i, gaus and bagaus that can completely transform your job, your bank account, your relationships and your happiness, according to the feng shui doctrine. The book is written in a casual, unpretentious style that helps to offset some of the grand notions of the concept.

Feng shui experts say there are certain forces revolving around us at all times. That’s right, at this very moment, unbeknownst to you, the room or office you are in is having an impact on every aspect of your day-to-day life. The plant near the window, the picture of your wife on your desk, the old pair of sneakers that you chucked in the corner three months ago: these things shape your future as much if not more than your daily transactions and conversations. Sounds spooky, doesn’t it? It doesn’t have to be. According to Carter, we can learn to control these invisible forces. You can learn to make them work for you through the application of feng shui.

The doctrine of feng shui (pronounced fung shway, Chinese in origin) states that you can arrange the environments you live and work in so as to modify the existing conditions of your life. Surely you remember the first time one of your science teachers told you that nothing, not your books, not your desk, not your hands, is truly solid — that all matter is built of atoms that revolve around one another and create the appearance of solidity. Feng shui is based on the same principle. Everything affects everything else. As a result, moving things with the right intentions can produce positive results.

Ch’i, or energy, spurs these results. When you move your couch, you push ch’i out in all directions. Who knows how much you’re losing when you move your couch without being aware of the forces you are displacing. And who knows how you’re affecting your life.

Every environment that you spend time in, whether it’s your one-bedroom apartment, your three-story house, or your office, is split into nine invisible guas, or spaces. Each of these guas matches up with a significant aspect of your life. The guas fall into a natural order called a bagua. When you walk in the (true) front door of your house or office, you are in the career gua.

Directly to the left is the skills and knowledge gua. To the right is the helpful people and travel gua. In the middle of the living or working space is the health gua, which is bordered on the left by the family gua and on the right by the creativity and children gua. Moving from the far left hand corner of the living or working space to the right hand corner you will find the prosperity gua, the fame and reputation gua, and the relationships and love gua. Each gua calls for different cures. When you apply a cure to a gua, you move things around in it or add things to it in order to have an effect on that aspect of your life.

There's more, but I will stop here. The seed of an idea has been planted.

Too weird for you? That's ok. You can read continue reading Site Selection Magazine or Expansion Magazine to figure our where and how businesses are locating their facilities.

Want to learn more, you can buy Carter's book here at Amazon.com.

John Adair on Leadership

Decision-making ability, leadership and integrity are the top three characteristics of a successful chief executive, but all leaders must be able to inspire team members.

To be a leader, first define the job at hand. Be very clear and specific about what needs to be done and when. Set realistic but challenging expectations. Make sure that all the steps and goals you outline can be measured and monitored. Then, plan, prepare and motivate, using these ideas:

• Be prepared. For good performance, plan and prepare properly.
• Call in experts for advice when you need it.
• Brief your people to keep them informed and motivated.
• Steer with loose reins. Give your people enough autonomy to work but keep enough control to make sure they don’t pull in contradictory directions.
• Focus on the consequences of actions so that you can evaluate performance, offer
training to people who need it and make judgments about employees’ abilities.
• You can’t give what you don’t have. To motivate others, first motivate yourself.
• One of the best motivators is success. Recognize and reward it.
• Organize yourself so that you can organize others.
• Lead by example. Don’t be afraid to get your hands dirty.
• Treat your people as you’d like them to treat each other.
• Admit it when you make a mistake and be generous in your praise of others.
• Do you have what it takes to lead? Examine your leadership conscience. Identify any shortcomings and make a plan to overcome or remedy them.

Buy the book here.

Doing the Best at What You Do Best

Marsha Sinetar, in her book, Find the Work You Love, and the Money Will Follow, introduces a principle called Right Livelihood, which suggests that we should concentrate on doing our best at what we do best in our work.

The concept of Right Livelihood seems a relevant point of discussion for economic developers for two important reasons: 1) every economic developer must discover what he or she truly does best and align with that strength; and 2) economic developers help give shape to local labor markets, the types of jobs available to people in places, and the rules that employers and workers follow in the workplace. Perhaps you didn't know that you had that much influence, but you do!

Finding the work that you do best isn't easy, even with the help of trained professionals, tests, and other tools. Our work interests and performance are shaped by a myriad of factors that fall under the headings of interests and abilities. There are also many factors outside us as individuals that influence our ability to discover what we do best. These include family, community, business, industry, labor market and many other external variables.

Doing our best at what we do best is complex as well. Our personal interests and skills may align within us, but no opportunity exists with our current employer or within the local labor market to satisfy our wish to do our best at what we do best.

Often, it forces a critical decision about moving yourself and your family from one part of the country to another. There is always some price to pay for any relocation.

Also, some people work for managers, executives, and boards that hold them back and block efforts by the individual to work at what they love. Obviously, if these situations cannot be resolved, it's time to move on, which again isn't easy.

Doing your best at what you do best is a worthwhile principle for economic developers to bear in mind, but it is important that anyone mounting this path be fully prepared to deal with the many obstacles that present themselves along the way. And at times, they must be willing to tackle the exceedingly difficult decisions that involve critical work-life balance issues. It's important for all of us to realize that we are more than the work we do.

Spiritually Meaningful Work

Here are some clips from a recent speech I gave on the subject of Spiritually Meaningful Work. This is a new topic for economic developers, but one I believe we need to attend to in the future.

Please send me an email if you would like to receive a copy of the complete speech. Don Iannone.

"Our real work in life is to discover who we are in a spiritual sense, how to align with what we discover, and then allow what we discover shape who and how we are in our work and the rest of our lives. By all standards, this is far more a journey and than a job.

The journey begins when we open to the possibility that we are spiritual beings, and that a transcendent quality exists in all of us that goes beyond the physical and mental aspects of our being. Our willingness to entertain this idea opens many other doors that we didn’t even know existed before this willingness existed.

Spirit is the mystery and magic in our lives. It transcends personality, and all other aspects of who we think we are.

Meaningful work engages our spirit. It is work that is performed in recognition of the sacredness of all life. It is work that allows us to create, grow, touch other human spirits, and treat the Earth and all it holds in reverence and appreciation. Meaningful work is a state of being in the workplace that allows us to couple body, mind, and spirit in a meaningful way."

May your work as an economic developer be blessed with meaning.