Dean Barber

Archive for March, 2013|Monthly archive page

Guilt by Suspicion and the Big Hoax

In Uncategorized on March 31, 2013 at 8:00 am

I should not begrudge them. Certainly a bigger me, a better me, would not. But this other me often emerges, viewing the competition with a level of distrust and even contempt.

That is not a commendable attribute. I noticed my Conan the Rotarian tendencies when I was the business editor of The Birmingham News. In the same building, was the newsroom of the now defunct Birmingham Post-Herald. In those days, we had a joint operating agreement (JOA).

Essentially the Post -Herald leased space in our building and the use of our press, and there was some revenue split with the advertising dollars. JOAs were once common in a newspaper industry, which is now a shell of its former self. But there was never a sharing of news, no collaboration with the enemy across the hall.

I didn’t want to just beat the Post-Herald, I wanted to lay waste to all their efforts and aspirations. I was not their friend.

The Post-Herald eventually went belly up, and The News would be gutted (The once largest circulating daily newspaper in Alabama now publishes three days a week). Looking back, I recognize the Post-Herald reporters and editors were not the enemy, but that I created them to be so. I was one crazy dude.

You would think that I would have mellowed, and I have, but I still have these tendencies to create straw dogs to keep me going. The rational side of me (yes, I actually have one) recognizes that even consultants deserve respect and recognition for their good work … if they actually do it.

Guilt by Suspicion

Not long after moving to the Dallas-Fort Worth area, I attended a conference of the Texas Economic Development Council. I was talking to a local economic developer who I had reached out to on LinkedIn but she had not responded. I’ll always remember what she said: “I saw that you were a consultant. But now that I’ve talked with you, I will add you to my network.”

“Well, thanks,” I said.

She was telling me, in essence, that she viewed me with suspicion precisely because I was a consultant.  I understand where she is coming from.  I frequently hear a tone of resentment, if not outright complaints, from end users, especially economic developers, who have paid sometimes big bucks to consultants, only to get questionable products – fat studies and reports, laden with tables and graphs, that actually say very little, or say things that are off the mark. (More call centers, you say?) Too often what is said in 150 pages could have been said in 10 or 15 pages.

The Language of Consultant Speak

True story. When I was an economic developer, I was giving a site selection consultant a familiarization tour. During the course of our travels, he offered a “thematic mapping survey” that would tell me just about everything that I would ever need know about my region.

I remember how button-downed smart he sounded. The language that he used was not plain English, mind you, but it was impressive, if not a bit vague. I now refer to that language as “consultant speak,” designed to impress but not inform.  A few months later, a colleague of that same consultant apologized to me for the $200,000 number thrown my way.

“Well, I did think it was a bit high,” I said.

So I understand the trepidation. Truly I do. If there could be a single consultants’ motto, I think it should be the same as emblazoned on many police department patrol cars – “to protect and serve.”

Having said all that, I do believe in (some) consultants and will turn to them on occasion – people that I know and trust – to add their expertise in a collaborative effort to better serve a client. In a corporate site selection project, for example, I will serve the role as a general contractor and sub out certain functions to other consultants who have specialized knowledge that I do not have. (Anybody who says they know it all, watch out.)

So I will hire a GIS and thematic mapping expert, a logistics and transportation specialist and a tax analyst to better serve a corporate client during the site selection process. Most corporate clients will see and appreciate the logic behind this approach. I will also team up with other consultants on certain ED projects if doing so brings true value.

By turning to others, I am following the advice of a legendary business consultant Peter Drucker, “Do what you do best and outsource the rest.”

Get Off My Lawn

Last week, I got an email from a young economic developer (I am not making this up) with less than two years experience asking how he, too, could become a consultant. I told him that he needed to put some miles on the odometer before considering such a drastic if not stupid move. Then I told him to get off my lawn.

Of course, there are exceptions. Anatalio Ubalde, the CEO of GIS Planning Inc.; ZoomProspector.com; and SizeUp, started consulting in his late 20s. I like him even if he is young, successful and smart.  Now a wizened old man in his early 40s, Anatalio just came out with his second edition of “Economic Development Marketing.” But even he revealed his desperate side by including one of my blogs in his book.

My section in the book is entitled “Local Investment as Marketing and the Myth of Branding.” The original Barberbiz blog was called “Build Your Own Golden Triangle.”  Anatalio agrees with me that there’s a lot of bogus hocus pocus pitched by some consultants all in the name of brand. If you listen to them, they’ll give you a new do and all your dreams will come true just like the preacher said on TV if you just send that check.

I don’t know how many hours, days I have spent with corporate executives in search of better fit places. Our conversions centered around the conditions and assets (or the lack of) that we had either witnessed with our own eyes or have been provided with credible documentation and deemed true. Brand never entered into the discussion. Not once.

What Brand Will Never Do

Let’s face it, no promise of brand will bring down the homicide rate in Detroit or increase high school graduations rates in Nevada.  It is not your brand that is offering 3-D printing or a robotics programs at your local community college. Brand will not mean whether you have fully-served, shovel-ready industrial sites. Rather, it’s you getting off your duff and doing something about it.

“The idea that you can hire some consultant and be rebranded, that is a hoax,” said Ubalde. “That’s just someone wanting to make money off an economic development organization. There are a lot of snake oil salesmen out there.”

Shout it from the mountain, brother. Tell it like it is.

Here’s the deal: Now you can talk the talk or walk the walk. The truth is that your brand matters not to me or my client. We are looking for what is, not the promise or the claim of what is. We are looking for reality, assets on the ground that can be leveraged for purposes of establishing and sustaining profitable business operations for the long term.

Now many factors are involved in determining that optimal location, and they vary according to the specific needs of a company, but your brand surely is not one of them. As far as I am concerned, it’s just white noise.

Last week, a city in Canada, a place that I have been to several times and liked very much, “launched”  its new economic development brand.” The mayor said this, and I am not making this up. “The new marketing strategy rebrands and repositions xxxxx Economic Development brand as a forward-thinking, creative, dynamic catalyst for business success. The new brand identity will drive our business development tactics in the coming years.”

If you are going to put out a press release on your rebrand, what else are you supposed to say? By the language used, you have to wonder if this was a community of backward dullards before.  There will be a print campaign that will highlight this city’s “unique potential of raw human energy.” Sounds like a great location for mixed martial arts.

Look folks, you can spend your money on the packaged blah blah or you can spend your money on actually fixing things, investing in yourself and getting things done. By the way, do you mind driving me out to your tech school so that I learn more about your robotics program?

Here are two links where you can buy Anatalio’s book, which I would recommend:

http://www.amazon.com/Economic-Development-Marketing-Anatalio-Ubalde/dp/0692018778/

http://www.iedconline.org/book-store/economic-development-tools-and-trends/economic-development-marketing-2nd-edition

Have a Happy Easter and I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm in Plano, Texas — www.barberadvisors.com He can be reached at 972-767-9518 or at dbarber@barberadvisors.com

If you work for a company seeking site selection consulting or an economic development organization in need of counsel, ask for our separate brochures (pdfs) outlining how we can help. All requests for information will be considered confidential.

© Unauthorized use of this blog is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Dean Barber and Barberbiz with specific direction to the original content.

 

 

 

 

 

 

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Project Yum Yum Revealed the Not So Dumb Dumb

In Uncategorized on March 24, 2013 at 6:52 am

People continue to surprise me. I wasn’t sure how this thing would turn out. Privately, I had my doubts, but I put a brave face on it, because I figured, “What else can I do?” Besides, I was being paid. I had to buck up and make the best of it.

So I just got back from Tallahassee, Fla., where I spoke to Leadership Florida. As speaking engagements are a part of what I do as a consultant, I’ve learned over time to become more at ease with audiences. But I never tried the suggested mental exercise of imagining all members of my audience being naked. Nope, not gonna go there.

A substantial amount of work was done before arriving on the scene in preparation for what we were about to do. My assignment was to present a mock industrial project to a group, I would guess 50 or 60 business people, who were broken up into five teams representing five different regions of Florida.  Keep in mind that these were not professional economic developers.

The kicker was that someone from one region of the state would likely represent a different region. The Miami region or the Tampa region or the Jacksonville region or the Central Florida region could be assigned to be a member of the Northwest Florida team or vice versa.

Per the instructions from my good sponsor, Gulf Power Company, an operating subsidiary of the Atlanta-based Southern Company, which is THE electrical power company for 4.4 million customers in the Southeast and makes some of the finest voltage that money can buy, I explained what I did as a site selection consultant. My job is to help companies find optimal locations for future operations when they expand or consolidate. And I briefly detailed to my audience how that process worked.

Then We Lowered the Boom

Then we lowered the boom on them. We passed out a mock request for proposal (RFP) for Project Yum Yum, a $40 million food processing project, employing 110 people with an average production wage of $17 an hour. We went over the RFP with our audience and then opened it up for questions.

When I say “we”, I should tell you that Cliff Krut, a 20-year veteran of economic development and a representative of Gulf Power’s economic development team, was my co-conspirator in this exercise. Cliff was “Bob,” an anonymous senior executive with the anonymous company that I was representing. Bentina Terry, vice president of external affairs and corporate services for Gulf Power, served ably as the master of ceremonies and kept things moving along.

After 15 minutes of taking questions (very good questions by the way), the Florida Leadership teams, armed with the printed RFP, the answers to their questions, and links to websites of the regions that they were to be representing, went off to separate rooms to deliberate on Project Yum Yum. We gave them about 30 minutes to come up with a plan and then come back to give us their best shot – oral presentations on why their respective regions should remain in the hunt.

The teams were told that Project Yum Yum was also considering South Georgia and LA (Lower Alabama), and that Bob and I would only visit two finalist regions in Florida. Their goal then was to not be eliminated from the site selection process.

While the teams were off doing their thing, Cliff (“Bob”) suggested that we add a nasty if not realistic little twist. Let’s add the emotional element — Bob has an Aunt Millie who owns a condo in Destin (Northwest Florida). Because of this, Bob is privately pulling for Northwest Florida. As the site selection consultant, I had to be cognizant of my client’s bias.

The Iceman Cometh

So our pilgrims came back, eager and ready to present. Each team was given seven minutes, which was not fair to them, but our exercise was not designed to put them at ease. I was the cold and calculating consultant, the iceman cometh sort of guy. Bob was there to ask each presenting team as to how far their site was from Destin, which should have told them something.

Northwest Florida was the first team to present. Besides calling me “Dale” throughout their presentation, they did a most credible job. But the subsequent presentations only got better. Each team laid out in surprising detail the assets of their region, including workforce development and training, specifics on the greenfield site being offered, infrastructure, logistics, even financing and incentives. (We were offered free land in some locations.)

I was blown away by how good the presentations were from these laymen. I told our audience afterward that they could pass themselves off as experienced economic developers on TV. (That was a compliment.) But keep in mind that these were very astute and competitive business people. Some presentations actually rivaled what I have heard from certain economic developers, if you can imagine that.

When Bob and I announced our finalist locations that we would be visiting, it was no surprise that Northwest Florida remained in the uncut category. The Central Florida region would also be getting a visit. Bob finally fessed up to his family connection in Destin. No one threw fruit or dog cussed us as a result.

The Right Fit or Not?

Was this exercise realistic or fair? Well, yes and no. As a site selection consultant, I would have already known much of the information that was presented to me by my own research. I would have known that the $17-an-hour wage level would not qualify for incentives under Florida law in many communities because it was simply too low.

In short, we would not have opened it up to all five regions of the state, but concentrated on those rural places where $17-an-hour jobs would be above the median age. It would be in those places where incentives might come into play (although incentives should never be the dominant driving factor in location decisions.)

Cliff/Bob and I were hoping that at least one region might opt out. In other words say thanks but no thanks. But that didn’t happen. They all got their competitive dander up. They all wanted to win.

And therein might lie some truth for all of us, including experienced economic developers, to ponder. Not all projects will be a good fit for your community, so there are times to compete and there are times to gracefully bow out. Times to hold them and times to fold them.

Besides offering what would have been a lower wages for some areas, Project Yum Yum, as a food processing project, would have used a substantial amount of water and waste water. It would not have worked in some communities for that very fact, much less for the wage factor.

The point is that all communities, big and small, should know what they can do well and what they cannot. That might sound obvious, but as a consultant who also provides counsel to economic development organizations, I can tell you that some places have yet to figure that out.

Every community should know its strengths, weaknesses and opportunities, as well as possible threats that could arise. Then you try to move the dial.

There is No Nirvana

As I told my audience, there is no perfect place for all businesses. There is no nirvana. Rather, that are better places for certain businesses, where the risks are lessened and the chances for success are enhanced. As a site selection consultant representing a corporate interest, these are the places where we will want to hone in on based on a company’s specific needs.

In my other role as an economic development consultant, my job is to advise communities on how to better leverage strengths and address certain weaknesses when they can be addressed. (If your community is 50 miles from the nearest interstate highway, well, that’s just a fact. We cannot change that. But we can address those issues that we can change.)

If there is anything that comes out of our exercise with Leadership Florida, I hope it is this: I hope our participating business leaders, who seemed to have thoroughly enjoyed the exercise, go home with a greater appreciation for the work of their local economic development organizations. In some ways, it’s a thankless endeavor.

A community can do all the right things and still not win a recruitment project. I think our participants may now understand that. Project Yum Yum revealed a group that was far from being dumb dumb.

The Perils of the Job

During my trip to Florida, I heard stories of very experienced and talented economic developers coming and going, largely because they got caught in the crosshairs of a local politician or a business interest with whom they somehow irked. This happens everywhere as many economic developers lead the lives of itinerant coaches. Many will get the boot because of unrealistic expectations from their boards. Again, this happens everywhere.

I submit that if you are doing your job in economic development, you will on occasion ruffle some feathers. Telling the truth can get you in hot water. That is one reason why economic developers hire consultants, like me, to say what they cannot say. They typically will know their own communities far better than any outside consultant ever will. But they also have sense enough to know what they can say and what they cannot say.

If the word comes from them, the local economic developer, it may be viewed with suspicion and even derision. But if the word comes from me, the “enlightened one” with a briefcase from a far away land, ah, then somehow it is gospel. I don’t mean to be sacrilegious, truly I don’t. But Jesus spoke of the impossible task of being viewed as a prophet from your own village. There is so much truth to that.

I am certainly no prophet. But I do have a nice leather briefcase, which my wife gave me for Christmas. I took it with me to Tallahassee, where I hope that I made a difference.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm in Plano, Texas — www.barberadvisors.com  He can be reached at 972-767-9518 or at dbarber@barberadvisors.com

If you are company seeking site selection consulting or an economic development organization in need of counsel, ask for our separate brochures (pdfs) outlining how we can help. All requests for information will be considered confidential.

© Unauthorized use of this blog is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Dean Barber and Barberbiz with specific direction to the original content.

Breaking Some Rules Along the Way

In Uncategorized on March 17, 2013 at 9:03 am

When I left the newspaper business back in 1998, I don’t believe the word “blog” had yet been invented. Maybe it had, but I don’t think so. What I did then follows me today. With this Barberbiz thing of mine, I am essentially writing a business column, which was one of my many duties as the business editor of The Birmingham News.

In my newspaper columns, I took a somewhat irreverent tone, pointing out pomposity and the absurd in both government and corporate America. I was able to jab, poke and prod at the big boys with an eye toward keeping it real and funny for readers who wanted someone to just shoot straight with them.

I have certain ulterior motives in writing what I will now call a blog. It should be no great secret that as a contractor I hope to win contracts, both on the corporate side for site selection, and with economic development organizations. My observations might convince a prospective client that I am worthy.

My writings are having some impact. In the newly published second edition of “Economic Development Marketing” by Anatalio Ubalde and Eric Simundza, one of my blogs is included. “Local Investment as Marketing and the Myth of Branding” was my attempt to inject a little reality into the equation. Now if you love your country and your children, you will go out and buy this book.

Two Rules I Will Break

In my role as a consultant, I habitually violate what some would say are two cardinal rules of business: A) I will use humor to sometimes illustrate certain points and B) I don’t claim to know it all, which is almost blasphemy in some consultant circles.

Now there are those serious people in suits who will tell you that if you use humor, you risk coming off as being viewed as some sort of buffoon, certainly no one capable of providing serious solutions to serious problems. Therefore, humor should always be avoided. For best results, portray yourself as a Lutheran.

To that, I would say that life is too short and too weird not to find the humor in it all.

Look, if you have any walking-around sense whatsoever, you will soon recognize some of the absurdities of life that are thrown your way almost on a daily basis. Congress is a perfect example. If you cannot laugh at these things, and especially at yourself, well, then you need to go on a C-span marathon. Or better yet, go out and buy or rent DVDs of the Three Stooges.

If you do this, I submit that the meaning of life will dawn on you and you will either be laughing or crying as a result. Mind you, there is absolutely a time to be serious in business as people’s money and livelihoods are at stake. The Great Recession with $16 trillion of wealth vaporized and nobody going to jail for it? That was not especially funny. But I’m past that now. I’m just looking ahead for the next big joke.

Question: How can you look at Kim Jong Un, the 28-year-old leader of North Korea, and not think goober? Yes, he might prove to be a very dangerous goober by threatening nuclear war, but right now he’s the goober who met with Dennis Rodman. You cannot make this stuff up.

The Glue That Connects

I believe that we need humor to keep us sane. It certainly keeps us connected to each other and often a penetrating wisdom results. That sense of humor is often a glue of sorts at workplaces across America big and small. 

If you listen to combat veterans, they will tell you that humor was used as a survival tool when they found themselves in the presence of death and destruction. Sometimes it was a dark humor only understood and appreciated by them, but the joking served a purpose that they were in this together.

And to that sense, that is the very purpose of humor – we are in this thing together and we might as well make the best of it.  As a business tool, if nothing else, it serves as an assurance of good faith.

“Hey, I’m not here to rob you or take advantage of you. I just want to get the job done, like you, and then go home and eat Cheetos in my underwear and veg out in front of a zombie movie, OK?”

Not with a Straight Face

The second cardinal rule that I violate with some regularity is that I do not hold myself as an all-knowing guru/problem solver with encyclopedic knowledge at my finger tips. I simply couldn’t pull it off with a straight face. Lately, I have had several readers of this column ask me questions that would have taken me hours if not days of research to answer with any sort of certainty.

The questions were posed by economic developers who probably hoped that I would give them short and sweet (and free) answers, to which I simply could not because I did not have the answers. Now I have met some business people, consultants in particular, who have answers for everything under the sun. They are the be-all and end-all source, which means you should grab your wallet.

Popeye the Sailor said: “I am what I am and that’s all that I am.” Similarly, I will suggest that I know what I know, but I keep on trying to learn more. And that is especially true if you are paying me in a consulting capacity.

Educating a Client

When I am talking to a prospective corporate client about my services as a site selection consultant, I think it is important that I tell them about my philosophy in assembling information that they can ultimately use for their benefit. The way I see it, this company will know its own business. That will be their primary expertise, their bread and butter. Conversely, I know how the site selection process works or should work, and that is probably something they will not know much about. So I have to do a little educating along the way.

I will explain my plans and will seek their buy in. If they are spending their money on me, they deserve as much.  So in this exercise in transparency, I will tell them that I’m going to bring in some specialists with expert knowledge in certain fields that I have some cursory knowledge about but that I do not consider myself the expert in. I will bring in these experts to ensure that site selection search process works better than if I tried to wing it alone. 

So I will find my GIS person. I will hire my logistics-transportation guru, and I will contract out with my expert tax accountant. In short, I will serve as the general contractor and hire qualified subcontractors to get the job done and get it done right. For me to attempt to do it all myself, well, I don’t think I would be serving my client to the best of my ability.

As the outlaw Josey Wales said, “A man’s got to know his own limitations.”

And therein lies the beauty. I do not have to know it all. I just have to know who knows what. If I get that part right, which means assembling an All Star team on any given project, and then manage the overall site selection process competently, then we will bring true value to that company and determine the best place for them expand or consolidate operations.

Yes, I might be breaking some rules along the way, but there is a method to my madness. First, if I recognize that humor is called for to calm some frayed nerves, then I just might whip up a batch. “Look, the worst that can happen is that we all get fired and find ourselves living under a bridge.” Ok, maybe that is not such a good example.

Second, I hope that I am offering a realistic approach by acknowledging that I am not an expert in all fields but will actually depend on the expertise of others to get things done.

Bigger Means Better?

Also, I have no desire to blow smoke at you. I read a 50-page report this past week about a piece of property and how it should be used. I truly believe I could have done that same report in two, maybe three pages. But maybe that’s not what that economic development organization wanted. Maybe they wanted that 50-page heft to it. I mean, if there are more pages to it, there has to be more thoughtful analysis, more truth, right?

Also this past week, I got my rewritten, re-designed economic development brochure back from the printer. I think I like it, because it spells in rather succinct, no-nonsense terms the things that I can do for an economic development organization. If you want a pdf version, just let me know and I will email it to you. I think of it as being short and sweet.

After I get back from Florida working a mock project as a teaching aide to business stakeholders this coming week, I will resume my work on a redesigned corporate site selection brochure, which I think will prove to be very useful and instrumental to companies who could use my services in finding best locations for future operations.

Like me, companies need to know what they don’t know, which is exactly why they should hire me. They may be an industry leader in manufacturing widgets, but they don’t know how the intricacies of a site selection process works any more than I know how to play the xylophone.  

For the record, I do not anticipate the need to ever subcontract with a xylophone player. But I have learned that you never say never. That would be very funny.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm in Plano, Texas — www.barberadvisors.com He can be reached at 972-767-9518 or at dbarber@barberadvisors.com

If you are company seeking site selection consulting or an economic development organization in need of counsel, ask for our separate brochures (pdfs) outlining how we can help. All requests for information will be considered confidential.

© Unauthorized use of this blog is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Dean Barber and Barberbiz with specific direction to the original content.

Waiting for a Renaissance (and My Smiling Robot)

In Uncategorized on March 10, 2013 at 6:36 am

Do you see the world as it is or how you want it to be?

Talk about a loaded question. If it makes you feel any better, we all see the world through very personal and sometimes even fractured lens. At any given time, each of us can be an optimist, a pessimist and occasionally, very occasionally, a realist.

Now I will admit that I get rankled with what I perceive as cheerleading talk about a wave of re-shoring that will spark a “manufacturing renaissance” in this country. As most of us are prone to do, the proponents of this notion cherry pick information (anecdotal evidence) to buttress their argument that this mega-trend is actually taking place.

This confirmation bias, also known as “my side bias,” is a tendency of people to favor information that confirms their beliefs. People display this bias when they gather or remember information selectively, or when they interpret it in a biased way. They also tend to interpret ambiguous evidence to support their existing position.

Now we are all guilty of this because we are human, but there are times when you really have to guard against it. For example, I would not be serving a corporate client very well on a site selection project if I allowed my personal biases to skew or interfere with my interpretation of data.

Strive to be Fair

Sure, there will be subjective decisions made during the process, but I should strive to be fair and balanced in my approach to essentially eliminate building/sites/communities from contention. After all, site selection has to be a winnowing process.

When I was a newspaper reporter, the creed within the profession of journalism was that I should be “objective” and not let any personal views creep into my reporting. As I am a bit of a traditionalist, I still believe in that approach, although it is impossible to be completely objective.

But by virtue of the fact that I would return to the newsroom with a notepad full of notes after covering, let’s say a trial, I had to pick and choose on what facts to report. I couldn’t just regurgitate all my notes.  Rather, I had to make subjective decisions on what to report and how to organize my story.

Later, as an editor, I would stress to my staff that they should strive to be accurate, fair and balanced and, of course, tough.  If we did those things, I figured, we would be doing our jobs.

As the business editor, I was frequently approached by business owners and corporate flacks to do “puff pieces,” that is favorable, cheerleading stories about their businesses. In essence, they were seeking free advertising in the guise of journalism. When we asked why we should do the story, more often than not the answer was that they were nice and had a swell business.

Beyond the Cheerleading

That in itself didn’t cut it. There had to be more. There had to be a compelling reason or news peg to do the story. We were always willing to listen and be convinced, but the cheerleading by itself was not enough.  Our credibility would surely have suffered had we cranked out puff pieces essentially promoting businesses.

To me, cheerleaders are pretty much just that, cheerleaders. They are proponents of something, often a feel-good notion that would make us feel better if it were only true. But too often reality sets in. Them durn facts get in the way.

If there is a re-shoring tidal wave to come with huge inroads in manufacturing job growth, please know that I am all for it but am just waiting for it to happen. I am willing to be convinced.

Since the 2007-09 recession ended, the economy has struggled to grow above a 2 percent annual pace. In the fourth quarter, output barely expanded.  The economy is forecast to yet again grow a modest 2 percent this year. Growth will likely be held back by uncertainty about the federal budget, higher Social Security taxes and across-the-board government spending cuts that kicked in March 1.

And unemployment remains high nearly four years after the end of the Great Recession. Roughly 12 million people remain out of work.

But I recognize progress when I see it. The breaking news on Friday that the unemployment rate had dropped to 7.7 percent, the lowest in four years, is certainly welcomed. But put it in context.

We Are Trudging Along

Of the 236,000 jobs created in February, 14,000 were in manufacturing, following the 12,000 factory jobs created in January. If we create 200,000 manufacturing jobs in 2013, I will be pleasantly surprised.

Industrial production is expected to rise by just 2.3 percent in 2013, even slower than 2012’s 3.8 percent growth rate, according to John Lonski, chief economist at Moody’s Capital Markets. The truth is we are trudging along.

A new Michigan State study said 40 percent of manufacturing firms surveyed believe there is increased movement of production back to the U.S. Conversely, that would mean 60 percent do not foresee that happening.

About 220 to 250 companies have brought some manufacturing operations back to the U.S., with the heaviest migration from China, according to Harry Moser, president of the Kildeer, Ill.,-based Reshoring Initiative. This represents about 50,000 jobs or 10 percent of job growth in manufacturing since January 2010.

And while that is all very good, it’s a gnat on a log when you consider the 5.5 million manufacturing jobs lost in the first decade of the new century.

So there you have it, I am trying my best to be a realist. I see positive signs but I am still waiting for a renaissance in terms of a job explosion in the order of a half  million manufacturing jobs. Let’s just say that I remain skeptical.

What Will the History Books Say?

Lord knows we live in a strange time. This past week, stocks surpassed the nominal record set in 2007, while the last recorded real median US household income was 8 percent lower than its 2007 peak. Is it just me or is something wrong with that picture? I only wish I could read the history books 100 years from now.

The last time the Dow hit a record, unemployment was 4.7 percent, George W. Bush was president, and Apple had just sold its first iPhone. From its peak in October 2007 to its bottom in March 2009, the Dow fell 54 percent.

That was far less than the nearly 90 percent drop in the Great Depression but still resulted in some $16 trillion in American household wealth being vaporized. There had been 11 previous bear markets since World War II and none had reached 50 percent.

Ascending stocks usually bode well for consumer spending, as there is the well-documented “wealth effect” that helps people feel better about spending. But the stock market, while a boon to Wall Street, cannot repair all the damage done to Main Street.

And while the US economy appears to be healing, workers’ pay has been a progressively shrinking piece of total GDP. Labor’s share of the economy is now at a 50-year low.  This is not just a U.S. phenomenon. The share of income going to workers is crashing worldwide.

Are the Machines Plotting Against Us?

I am wondering if the machines are not to blame. If there is a renaissance, a flourishing of knowledge, it would seem the case in the area of robotics and automation. Certainly, our machines make us more efficient and more productive at our jobs.

But it is also appears that there might be a sinister side to all this technological advancement at the workplace. How should I say this delicately? It would appear that the machines are making many of us, gulp, obsolete.

Recent technological advances have resulted in robots performing some higher cognitive tasks, which is both cool and scary. While it might initially be attractive to have a cyborg write this blog, I would soon tire of lying on a Mexican beach sipping from a glass with one of those little umbrellas.

Actually, the demise of mass labor is a sobering concept to say the least. I think it will be something the world will struggle with for decades to come and will only increase the inequities of wealth within societies. And I say that as true believer in capitalism.

Economists are increasingly pondering this trend “capital-biased technological change” — of machines essentially killing the need for people.  If the economists are offering solutions, I not sure I am hearing them. Maybe we should all be trained on how to program our own personal robots. 

If I could program mine with certain cognitive skills, certain human traits and attitudes, I think I would want it to be happy and optimistic. My smiling robot. I would want it to be my personal cheerleader, saying such things as, “Go Dean Go,” or “You can do it, Dean,” or “You the man, Dean.” Then again, I might hit the off switch after awhile.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm in Plano, Texas — www.barberadvisors.com He can be reached at 972-767-9518 or at dbarber@barberadvisors.com

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Blessed Are the Peacemakers

In Uncategorized on March 3, 2013 at 6:00 am

I have decided not to subject you to any more blather on our latest manufactured crisis from Washington called sequester. If you are like me, you’ve had your fill, so I am going to spare you.

Leave it to say, the business community is not pleased with the current political climate, which certainly inhibits future investment. The private sector yearns for at least a modicum of stability for purposes of planning, but the politicians are too caught up in a blame game on why they cannot or will not govern. I am so tired of them.

It appears that the ability to get things done now resides on the state level, where partisan politics will often take more of a back seat. That’s not always true. There have been some bruising political fights in Wisconsin, Indiana, and Michigan, where governors there have taken on organized labor and largely won.

As a site selection consultant, I have had corporate clients who have insisted that the search area for new operations be limited to right-to-work states. Typically, those are states in the Southeast, the Southwest and parts of the West.  States in the industrial Midwest and the Northeast, where a legacy of organized labor exists, have rejected the right-to-work mantle. At least until recently.

The Big Difference

Unions can form and do exist in right-to-work states. The same federal laws pertain as to the legality of forming a union, with a process overseen by the National Labor Relations Board. The big difference is that in a right-to-work state, workers are not required to join a union (and pay dues) even if their workplace becomes unionized.

And while right-to-work status may weaken the union movement, it doesn’t put it  out of business. I can tell you from firsthand experience that the United Mine Workers of America and the United Steelworkers of America had political if not actual muscle in Alabama, a right to work state, during the 1980s when I was a business reporter for The Birmingham News.

When I would cover meetings at USW Local 1013 union hall in Fairfield, Ala., a short distance from a U.S. Steel mill, I made sure to park my Toyota blocks away, as I have always preferred to drive with a windshield and inflated tires. The steel workers didn’t play around. Nor did the Mineworkers, who I found to be even more prone to, let’s just say, excitement. Anybody who works underground and then gets upset above ground, well, I will give them wide berth.

But I did get some valuable insight covering those industrial unions.  And I understood the union/lunchbucket mentality to some degree, as I had previously worked in several grey-iron foundries before I decided that I needed to become a college boy.

Witnessing Courageous Leadership

While they may have donned this masculine “don’t mess with us” attitude, I realized over time that there were certain enlightened union leaders who sensed that the world beneath their feet was shifting and that they (and their membership) had to essentially adapt or die.

I actually came to respect certain union leaders as I watched them move their membership to accept things that would have been unacceptable just a short time prior. In essence, they showed courage and leadership. And I can also tell you from firsthand knowledge that senior management with some companies respected them for it.

Jobs were saved as a result, as the howling hotheads were kept in check. There is no doubt in my mind that some of these union leaders who I watched work to save their membership from themselves would have made excellent CEOs.

The U.S. Bureau of Labor Statistics reported last month that union membership fell in 2012 to its lowest level since 1916. And last year Michigan, yes Michigan of all places, became the 24th right-to-work state in the country. It did so by following Indiana, another bastion of Midwest manufacturing, earlier in the year.

Watching Michigan

I have been thinking a lot about Michigan lately. A group of Michigan economic developers recently visited with me in Dallas. This is not an uncommon occurrence. I frequently meet with gaggles of economic developers from different parts of the country. They come to Dallas to call on gaggles of site selection consultants.

The message is always similar, no matter from where they come. It goes something like this:  “Hey, things are looking up here in (insert state, city or region). We got this, this and this. Please consider us if and when the time is right for a project.”

I have yet to hear this: “You know, there are probably better places than ours for capital investment.” Then again, I haven’t met many economic developers from California. I’m sorry, that was a low blow. Really uncalled for. Well, kinda. (Gov. Perry, let’s do lunch.)

I actually find these meetings with economic developers quite useful, as it gives me not only a face or faces of people whom I may work with in the future, but it also gives me a sense of what is important to them and what assets they may have on the ground. I focus on the real and tangible – what do you actually have existing that might make a difference – rather than on some ethereal notion of your brand.

“Accordion music capital of North America? No kidding. Well, that’s nice. Now tell me about that new robotics program that was started last year at your community college. And what’s the status of that interstate bypass on the north side of town? ”

Now I know what you are thinking and you are right — I get too caught up in provincial matters, when I should be thinking polka, polka, polka.

One Tough Nerd

But like I said, I’ve been thinking a lot about Michigan lately, where the Cedar Polka Fest will be held July 4-7 for all those so inclined. More importantly, I have been thinking about Gov. Rick Snyder, who I just might lump into that courageous leadership category. (It matters not to me if you are liberal or conservative to win my respect. I take notice of those who act and make a positive difference.)

Gov. Snyder currently does not enjoy particularly high approval ratings in his state.  About half of those polled in a recent survey said his push to make Michigan a right-to-work state was a bad move. Kurt Weiss, a spokesman for the governor, said Snyder is focused on fixing Michigan, not poll results. “He campaigned as ‘one tough nerd,'” Weiss said. “It wasn’t political. He wanted to put Michigan’s house in order and create an environment for job growth.”

Even if Snyder’s actions result in him becoming a one-term governor, I think he will leave a lasting legacy. Not only has he transformed this once union bastion into a right-to-work state, but he has also eliminated the widely despised and wildly complex Michigan Business Tax. It  was replaced with a simpler 6 percent corporate income tax that exempts most small businesses. As a result, the Tax Foundation now ranks Michigan 7th lowest or best on corporate income taxes, compared to the previous ranking of 49th.

Detroit Can’t Wait

On Friday, Snyder took on the proverbial weak link in the chain, that something in the punch bowl – Detroit. Standing beneath a banner at Wayne State University that read “Detroit Can’t Wait,” Snyder announced the state would be taking control of the city’s finances. My visiting economic developer friends from Michigan said this would likely happen. And it did.

Now I could write an entire blog on the good things that are happening in Detroit and there are good things happening there. The automotive industry is rebounding and showing growth. A young, creative class is moving in. Conversely, I could probably write several blogs on why Detroit can be viewed as a miserable, broken and dangerous place.

If you are secretly drawn to watching races to see the wrecks, then you might be a candidate for “ruin porn.” Believe it or not, there are tourists who actually come to Detroit to gape at and photograph once magnificent buildings and structures that are now essentially fallen timbers. Little do they know that 16 percent of all homicide victims are visitors.

Detroit, facing $14 billion in long-term debt, has struggled to maintain its tax base and services as its population has plunged. Since 1970, the Motor City’s population has been halved, from 1.5 million to less than 700,000 in 2012, and more than one-in-five lots in the 139-square-mile city is vacant. Michigan was the only state to lose population between 2000 and 2010, when the nation gained population by 10 percent.

Solve These Problems

“A lot of the things we’re talking about today could’ve been done in the last decade or even two or three decades in some cases,” Snyder told The Daily Beast. “Now, it’s to the point where an emergency manager is really what’s needed. We do need to solve these problems.”

No doubt the governor’s latest actions will not endear himself to a majority of voters in Detroit, as a racial gulf exists between the city, with more than 80 percent of  its residents black, and what could be viewed as a heavy white (Republican) hand emanating from Lansing. I understand those concerns.

The most important thing that the governor can do now is to choose the right person for the job as the emergency manager. Whoever he chooses, that person must be a tough, effective and yet a reasonable diplomat, willing to listen and build bridges. Blessed are the peacemakers.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm in Plano, Texas — www.barberadvisors.com He can be reached at 972-767-9518 or at dbarber@barberadvisors.com