Advice Pool - Business

Here’s the Scenario for Economic Development Strategy
After a six-month national search, your firm has developed a short list of three highly competitive sites for your client’s new manufacturing facility. You’ve had helicopter tours of Greenfield sites and met with local government and economic development officials. You’ve gathered information on available workforce, historic weather patterns and school systems. You’ve been placed on the ‘rubber chicken’ circuit, treated to local cuisine as part of each community’s efforts to wine, dine and attract your client.

Each site meets the basic criteria for your client, a major multi-national food products company. While incentives for each vary, the differences are offset by the unique attrib

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

utes that each community offers, making the situation basically a toss-up. So, which location do you recommend?

Before you answer, here’s one more question.

Have you considered how the community works for its business retention? If you’re wondering about the relevance of this question to an attraction project, here’s the same question expressed differently. Are you going to entrust your client to a community that places a long term value on its business base – or one that’s constantly looking for the next big win? After all, a site consultant’s reputation rests on how well the recommended community works for the client in the long run, not how good it looks on paper when the location is announced.

Business Development Strategy - Playing

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

at Home
Sports teams know the importance of the home field advantage, especially at playoff times. Playing in familiar confines in front of a friendly, supportive crowd can be the difference between a win and a loss – and even a championship season.

The home field advantage is not limited to sports. It is relevant to the site selection process, especially in a competitive global economy where every advantage, large or small, is important. How a community treats the businesses already located there could be a harbinger of things to come for your client. When a location is finally selected and the decision announced local government and economic development leaders will be your client’s best friend during these exciting early days of the rel

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

tionship. Their eager-to-please attitude reflects your client’s status as the new kid in town.

Now, let’s fast forward three years. What happens when the excitement dies down? When there’s a bigger, newer kid in town? Or when global conditions present unforeseen challenges for your client? Will local government and economic development leaders be as supportive as they once were? Or, have they focused their energies on attraction prospects, virtually ignoring the companies already in town?

These are questions relevant to the site selection process. These are questions that impact the long-term satisfaction of your client with the location that you ultimately recommend.

Rodney Dangerfield and Economic Development
If you, as a site select

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

or or corporate real estate professional, haven’t considered the ‘retention factor,’ don’t be surprised. The quiet, behind-the-scenes work to retain and grow an existing company seldom generates the headlines or top story status that an attraction prospect does. It’s nitty-gritty, in-the-trenches economic development work, usually not very visible, appreciated or valued – but entirely necessary.

For just these reasons, Randy Welker, the business retention manager for the Greater Cincinnati Chamber of Commerce, characterizes business retention as the ‘Rodney Dangerfield’ of economic development when compared to other economic development activities.

While colorful, the description has more than the ring of truth to it. In fact, when compared to busi

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ess attraction and incubation efforts, retention is often overlooked in many communities. According to research conducted by the International Economic Development Council (IEDC), economic development professionals claim to focus primarily on business retention in their daily activities. Yet, other studies of private sector firms reveal that local companies perceive recruitment – not retention – as the primary function of local economic development groups.

Business Retention and Business Development in the Eyes of Expert
As Phil Phillips, Manager of Business Retention and Expansion for the Greater Omaha Chamber of Commerce puts it “Retention is priority #1 in any economic development organization’s mission statement, but often slips to #

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

2 in their work plan and virtually disappears in day to day agency activities. This is a classic case of the ‘urgent’ forcing out the ‘important’. We have all had site selectors demand reams of information from us on nearly impossible timetables. What economic developer has ever had an existing business call to demand the developer come out to do an existing business survey IMMEDIATELY?”

Given disconnect between local development groups and their customers, it’s not surprising that some site selectors may shortchange the retention factor. Like Dangerfield’s signature complaint, retention doesn’t get any respect – and it may be undervalued as a competitive factor in the site selection process.

The Signs of Business Retention Supportive Community<

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

/b>
So, how can you determine if a community is serious about the business of business retention? One indicator is the status of the retention program. Retention should not be viewed as a short-term, one-time, feel-good blitz. It should be a formal, ongoing program that is an integral part of the overall economic development strategy. It should be aggressively marketed and have a recognizable brand name such as The Team Pennsylvania Business Calling Program in the Keystone State; DC Connects in Washington D.C. and Business First! in Dayton and Montgomery County OH.

Another indicator is the type of outreach with the customer – i.e., the CEO or business owner in the community’s key industry clusters. While outreach often takes the form of phone,

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ail or fax surveys, programs that emphasize face-to-face dialogue with business owners take retention to a higher level. These meetings provide an opportunity for relationship building that a phone, fax or mail survey cannot provide. It permits an in-depth discussion of the challenges and opportunities facing the firm, especially if the owner is interested in available programs and resources.

Causes of Failure of Business Retention Plan
Outreach is virtually meaningless unless the community has assembled a cohesive team of service providers who are ready to respond to requests for assistance. One of the biggest failures of existing retention programs is the inability of local economic development groups to work together on behalf of the

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

customer – whether it’s retention or recruitment. One site selector notes that he can determine the level of cooperation among local government and economic development groups within 10 minutes of arriving in a community.

The common theme of the nation’s best retention programs is that existing customers are the foundation of economic growth. This is consistent with studies that indicate up to 80% of local job growth is generated by the companies already located in the community. The best retention programs rely on human interaction to build relationships with valued customers – as demonstrated by those programs focusing on face-to-face meetings with business owners and committed, enthusiastic local development groups who work together to benefit th

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

business community.

The best retention programs don’t wait for the phones to ring. Instead, these programs put local development officials on the street, systematically meeting with businesses on a regular basis. They strive to build relationships with CEOs, understand their challenges, seek their opinions about the business climate and link them to resources. In a nutshell, communities that value their businesses take a proactive, formal and systematic approach to business retention. These communities are ideal candidate for your clients who are looking for a competitive location today that will remain a competitive and supportive location tomorrow.

A Competitive Edge in Omaha
While many local development groups ‘talk’ retention, some

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

communities practice it religiously. Omaha NE is one community that recognizes the distinct connection between their retention and recruitment activities.

A systematic retention program has been an integral part of the ‘Target Omaha’ economic development strategy since 1994. Each year, over 300 firms in strategic industry clusters are visited including:
• Large firms that have the most employees and set the pace for the economy.
• Basic wealth generating companies that bring dollars into the community such as
• manufacturing, distribution, and business and professional services including
• teleservices and insurance, two important local clusters.
• Fast growing firms.
• Technology-based firms.

These firms are visited

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

by Target Omaha ‘Ambassadors” who link business owners to available resources when needed. They also take the pulse of the business climate by asking CEOs for their views and opinions on a variety of factors impacting their businesses. This gives Omaha development officials a clear understanding of the strengths and weaknesses of the local business climate and the challenges facing local firms. Officials can also measure the impact of efforts to address these issues by tracking changes in ratings over time.

The Target Omaha retention effort is led by a site selector turned economic development guru. Formerly a Vice President for The Fantus Company in Chicago, Phil Phillips has been the Manager of Business Retention and Expansion for the Greater Omah

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

Chamber of Commerce since 1995.

The relationship between Business Retention and Business Attraction
Phillips describes the relationship between business retention and attraction as ‘service after the sale.’ From a site selector’s perspective, the level of service provided by a community can impact a client’s long-term satisfaction with the recommended location. This is especially important, says Phillips, because competitive factors change rapidly – what was once an advantage in Year One may no longer be relevant in Year Ten. A proactive retention program maintains lines of communications between the business community and local development officials. It creates a better understanding of the changing needs and pressures that local busin

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

esses face.

There is a further connection between business attraction and retention at the local level. Effective retention programs can play a big role in a community’s efforts to attract new firms. According to research by New York City-based Development Counselors International (DCI), CEOs routinely consult with local business leaders when evaluating a community for potential investment. It poses an interesting question for economic development officials: are local CEOs cheerleaders for the community or do they feel disconnected and ignored?

Omaha’s Phillips understands this connection because it’s a routine part of his office. He recounts a recent situation in which three site selectors called the Chamber on the same day to schedule visits. All

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

of the visits would be during the same two day period and the lead time to arrange the visits was less than three days. Moreover, all of the site selectors wanted to focus their visit on meetings with human resource managers of leading local companies in specific industries. Because of working relationships from the retention and expansion program, the Chamber was able within just a few hours to arrange a total of 12 visits with companies that met the site selector’s needs.

Phillips notes that local business leaders played key roles in landing several major projects in Omaha recently including Union Pacific’s headquarters and a reservations center for Greyhound Bus Lines.

More Value for Your Clients
Another site consultant who now focus

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

es on community development is Kenny McDonald, Vice President of the Charlotte Regional Partnership. Formerly with Fluor Global Location Strategies, McDonald sees a community’s retention activities as a value-added proposition.

According to McDonald, communities in touch with their businesses add value to the site selection process because they have a better understanding of the needs, issues and concerns of the business community. This understanding is not generated by casual conversations at local events but by spending quality time with CEOs in their facilities on a regular basis, building relationships and offering assistance when it is needed.

The value added concept extends to the way in which various local economic development organizations

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

cooperate and deliver their services. McDonald notes that a systematic retention program typically fosters a high degree of integration among development organizations, minimizing the usual turf wars between local groups. As a result, these communities are adept at focusing on the customer and delivering economic development services quickly and efficiently.

The importance of a cohesive community for a recruitment prospect cannot be ignored. As McDonald notes, every project has problems and the bigger the project, the bigger the problems. Communities “That have worked on projects together before tend to have the attitude that they can solve anything and are determined to work together so the client is not impacted in a negative way,” says McDonald.

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

It’s Game Day
In sports, the home field advantage can mean the difference between a win and a loss especially for the big games. In site selection, the difference can be just as dramatic. The home field advantage adds another dimension to the site selection analysis especially when the communities on a project’s short list appear to be roughly comparable. Can you further differentiate these locations by examining each community’s business retention system? Is there one community on the list with a stellar record of working to retain and grow its businesses? What’s your perception of the level of cooperation and collaboration among local economic development players? Have you talked with local CEOs for their opinions about the community an

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

d level of support?

The answers to these questions underscore the importance of the retention factor in the site selection process. Communities with a strong record of keeping and growing their businesses are doing more than just seeking the next big project. They are practicing customer satisfaction day-in and day-out through a sustained, ongoing retention effort that links firms to the economic development system and gives local officials a better understanding of the challenges and opportunities facing businesses.

A community that values its businesses could be an ideal candidate for your client’s new project. These communities offer a home field advantage that can pay ongoing dividends to your client long after the site selection ‘game’ is over

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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