Dean Barber

Archive for March, 2016|Monthly archive page

Keeping Big Mo in the Big Easy

In Corporate Site Selection and Economic Development on March 27, 2016 at 12:05 pm

How an organization describes itself is often quite revealing and important.

This is how Greater New Orleans Inc. describes itself: “GNO Inc. is the regional economic development organization for Southeast Louisiana.  The GNO Inc. mission is to create jobs and wealth in the Greater New Orleans community.

“The GNO Inc. vision is for the Greater New Orleans region to fulfill its potential as one of the best places in the country to grow a company, and raise a family.”

There is a certain beauty and simplicity to this statement, one that I think every economic development organization in the country could learn from.

Think about it for a moment. The mission is to create jobs and wealth, a place to grow a company and raise a family. That is what economic development should be about. Period. End of statement.

Economic developers shouldn’t need special classes to figure that out.

Now getting to the Promised Land is much easier said than done, which is where the special classes can be of help. Getting there is typically a matter of policy and planning.

But sometimes things, big things, just happen, for better or for worse, creating a new playing field.

Before and After

Hurricane Katrina was the costliest natural disaster, as well as one of the five deadliest hurricanes, in the history of the United States. At least 1,245 people died and total property damage was estimated at $108 billion from the Aug. 29, 2005 storm.

There were numerous breaches to New Orleans’ levee system, and 80 percent of the city flooded, with the water lingering for weeks. All of the major studies have concluded that this was largely a  manmade disaster caused by the U.S. Army Corps of Engineers’  lack of planning and foresight.

(Don’t get me started on the Corps of Engineers, as I live not so far below a six-mile long earthen dam listed as one of the most dangerous in the country, and I believe the Corps is dragging its feet.)

In the annals of New Orleans, there will be before Katrina and after Katrina.

Before Katrina, you had a city on a downward spiral, marked by decay, a stagnant economy, horrible schools, corruption, and crime. And that’s the short list.

Along the way, there were a litany of missed opportunities. The city largely lost its international focus and hub status to Miami, which exploded. It lost the energy sector to Houston, which exploded.

Delta Airlines, first based in Monroe, La., picked its hub of operations at Atlanta, which exploded with Hartsfield International Airport. Walt Disney came knocking, was rebuked, and would later buy swamp land from a New Orleans family near Orlando, Fla., which, you got it, exploded.

The Old Louisiana

New Orleans was part of a bigger story of a dysfunctional Louisiana, which made its money largely through oil and gas.

“The old Louisiana, when it shot itself in the foot, it reloaded,” said Michael Hecht, president and CEO of GNO Inc.

“The old Louisiana suffered from the curse of riches. We were so blessed with the (Mississippi) river, and so blessed with oil, and so blessed with culture, all we had to do was just pull it out of the ground or pull it out of our people and sell it, without value adding, without having good institutions or good business practices, and we got rich. And that worked until it didn’t.”

New Lifeblood

The Mississippi River, oil and gas, and tourism still remain important to New Orleans’s economy and that of the state, but now there is a more value-added aspect on the scene, which gives a new lifeblood to the place.

Now the big story is a burgeoning industry in New Orleans that few could have predicted 10 years ago. From essentially a two-bit banana republic, New Orleans has become the nation’s hotspot for digital technology, software and digital media.

A turning point may have been GE Capital opening a tech center in April 2013. The center employs about 300 people in high-paying software development, engineering and project management jobs.

GE apparently looked at more than 50 U.S. locales but choose New Orleans because of low cost, high culture, a very attractive incentive plan, workforce training and a promise to develop a local pipeline of talent.

Other tech companies, particularly software gaming companies, have seen the same and have come. They include Gameloft, Turbosquid, High Voltage Software, Performance Software, 4th Source, inXile, and Smashing Boxes.

Low-Cost, High-Culture

The result: The fastest growing tech sector in the country, and the second fastest knowledge sector market in the country only behind Austin.

“We are a low-cost, high-culture alternative to New York and San Francisco but increasingly Austin as well. In many ways, I look at New Orleans as Austin 20 years ago,” said Hecht.

The accounting firm KPMG has ranked New Orleans as the most cost-friendly city for businesses among 13 U.S. metropolitan areas with populations between 1 million and 2 million people.

On a related note, it sure doesn’t hurt that Louisiana offers credits up to 25 percent on qualified in-state payroll expenses and up to 18 percent on certain in-state production costs for digital media and software development.

In terms of culture, Austin prides itself as being eclectic. For a city that is increasingly becoming more corporate, this is a prevalent theme or movement to “Keep Austin Weird,” largely to attract millennial talent.

The truth is that New Orleans was weird before weird was cool. I know this from personal experience, but everyone knows or suspects that.

Said Hecht: “Having a keep New Orleans weird campaign would be like having a keep water wet campaign.”

Startups and Talent Development

The key is that people live where they want to live, and millennials, who make up a large portion of the talent base for tech companies, view New Orleans as a quirky, cool place to live.

New Orleans startups, formed at a per-capita rate 64 percent higher than the national average from 2011 to 2013, continue to be in a growth mode.

Training programs such as Tech Talent South and Operation Spark, offer weeks-long computer coding immersion workshops. Operation Spark offers boot camps for at-risk New Orleans youth in addition to adults.

With the startups and arrival of digital media companies and the type of employees they have imported or hired locally, there is huge residential growth in the central business district.

Nearly 1,000 new apartment or condo units have been completed, being built or in the works, and more than a dozen hotel projects, valued at nearly $1 billion, are proposed or under construction.

Now there is some disagreement on whether New Orleans public schools have improved vastly since Katrina. Hecht says his children are in public schools,  which he cites as the most improved in the nation. I think he makes a strong case.

What we do know is that a decade after Katrina, charter schools educate over 90 percent of the city’s public school students and that the percentage of New Orleans students passing the state’s standardized tests has nearly doubled, to 62 percent. The graduation rate has climbed to 73 percent – a renaissance aided by federal and philanthropic funding.

Not All Boats

Make no mistake, despite a growing economy, the Big Easy is still a city beset by poverty. The rising tide has not lifted all boats, which should be the ultimate goal of economic development.

A report by the New Orleans-based non-profit Data Center shows that 10 years after Katrina, black families continue to struggle while the gap between the rich and poor grows wider.

Annual median household income for black families in New Orleans was $27,812 in 2013, less than half the amount white families in the region brought home. Less than a third of metro New Orleans residents had at least a bachelor’s degree in 2013. That figure fell to 12 percent for black men.

The Data Center says poverty is increasing in the surrounding parishes “undermining social cohesion and resilience capacity across the region.”

The Big Question and Challenge

And I believe that scares GNO. I was in New Orleans last week with a group of other site selection consultants. I sensed a strong belief that while progress has been real, it also fragile. The challenge is how to go forward, how to make positive generational change, not for just 10 years, which has already happened, but for 30 years.

Now that much of the big federal and philanthropic spending has largely occurred, can the momentum, the progress, continue or could New Orleans lapse into its old ways?  That’s the big question and challenge ahead.

“We are at a critical juncture. We cannot take our economic progress over the past decade for granted, and we must continue to focus on creating the conditions for long-term job growth and wealth creation,” according a GNO Inc. email following the group’s annual meeting earlier this month.

Which takes us back to GNO Inc.’s vow to create jobs and wealth, and that should include all facets of society, and a great place to grow a company and raise a family.

If they continue to get that right, then the Big Mo in the Big Easy will continue.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. He can be reached at dbarber@barberadvisors.com or at 972-890-3733.

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Maybe It’s Time We Got Back to the Basics of Business

In Corporate Site Selection and Economic Development on March 20, 2016 at 10:24 pm

Some of you might remember this. There used to be this concept in business, really not so long ago, of actually serving the customer.

Don’t get me wrong, making money is essential to keeping the doors open in business. I get that. I just also happen to believe that this quaint if not radical idea of customer service/satisfaction is a better way to get there.

Indeed, I see it as a basic blocking and tackling function of business. And yet, sometimes it’s hard, very hard, to get what seemingly would be proper customer support in day in age when digital technology has made communication virtually instantaneous.

Another Brick in the Wall

There is this disconnect for many companies and their customers. In the past week, I’ve been going around and around with LinkedIn, which I have used and appreciated over the years, in getting a technical problem solved. If only I could talk to a real person.

Geezerspeak: “Back in the day, we could talk to people and get things done. These kids today.”

I actually believe that customer service/satisfaction/support is just as important to millennials as it is to baby boomers. But some companies, particularly tech companies, have erected this wall. Maybe they think they are too busy to talk to their customers. Or maybe they are just afraid.

The Road Ahead

As a consultant to industry and economic development organizations, I have to talk and understand the needs of my customers. Focusing on their needs is our way forward.

And once a job is done, knowing that a client is pleased with our work, well, don’t you know that really rings our bell. The way I see it, if we do good work, the money and the business will largely take care of itself.

Now I know it’s more complicated than that. And I know some customers can be difficult or unrealistic. Still, you have to really work at serving  them well. Go the extra mile.

Before we write and submit any proposal to a potential client, we want have an in-depth conversation and ask questions. In short, we want to understand what they want and need. A second conversation/conference call may be order.

And if we win their business, we owe them good work. Our job is not to regurgitate what we think clients might want to hear. In fact, sometimes we tell them just the opposite. It’s what they need to hear. Call it tough love.

We’ve done that with communities that are struggling to find their way in terms of being competitive for business growth, and we’ve done that for corporate clients needing a location for future operations. This is how we see the road ahead.

(See blog “Why Companies Should Outsource Site Selection.”)

Panhandle One

A few weeks ago, Tim Feemster, principal of Foremost Quality Logistics, and I were driving back to Dallas from a community in the Texas Panhandle where we had presented our findings from a SWOT/target industry analysis. We had done the work in conjunction with Jason Hamman, with the Cleveland-based Hamman Consulting Group.

Our report was written in plain English, not some weird, vague consultant speak. And we were rather tough and blunt in our findings and recommendations.

We Tell It Like We See It

Think about it for a moment. If you are paying us to gather information, which we do from both on-the-ground visits and accessing data bases, analyze the data, and then report our findings and recommendations, then we owe it to you to tell it like we see it.

The economic developer and his board of directors in the Texas Panhandle community were appreciative of our report. I truly believe we steered them in the right direction to focus on changes that need to be made.

Riding back in Tim’s car to Dallas, we felt pretty good about our work, knowing that we met the needs of our client and that there was a good level of customer satisfaction.

It’s why we stopped and celebrated at a Dairy Queen. We would have something a little stronger once we got home in Dallas.

Panhandle Two

That same sort of afterglow feeling happened a few weeks later in Northwest Florida, also known as the Florida Panhandle. My firm had been engaged to evaluate the competitiveness of an aged industrial park that had its pluses and minuses. I brought in my pal Jason Hamman to help.

The good part about the industrial park is that it has some blue chip aerospace companies in it. The bad is that there are some blighted properties in the park, in which owners and tenants have done things that would never be allowed in any good industrial park. And the blue chippers, who we interviewed off the record, were certainly not pleased about that.

Our report was hard hitting to say the very least. We presented our findings and recommendations during a special session meeting of a city council.

Afterward, the local economic developer, the city manager, the mayor and council, thanked us for essentially telling them what some had already suspected but needed to hear. They vowed that our report would be the basis for change to come.

Jason and I had our celebratory time at the departing airport. Alcohol may have been involved but it was well within reason.

That Outside Voice

You know, it’s a funny thing. I have concluded that one of the most important roles of consultant is not only saying what needs to be said, but sometimes confirming what is suspected but is not being said.

Sometimes people within an organization have already voiced an opinion or strategy on how to fix or do something, and sometimes to their own job peril. And sometimes they choose to remain silent.

Often what they need is outside confirmation or verification. They need that outside voice saying what essentially needs to be said that they cannot say or is being ignored.

Jesus is quoted as saying that a prophet isn’t accepted in his hometown, which probably holds true in every major religion. There really is something to that old saying that familiarity breeds contempt. It’s one reason why companies and economic development organizations turn to us, the outside experts, for help.

As consultants, we have a certain credence bestowed to us because we are both outsiders and have a body of knowledge and experience. And that gives us the advantage and freedom to objectively report what we see and to make recommendations.

It’s Their Call

Every client is different of course. No two projects are ever the same. There are always some twists and turns and surprises.

But what is certain is that at the end of the day, it is the client’s call on whether to act on the information that we give to them. It’s their call.

In site selection for corporate clients, we give a short list of finalist communities. where we can actually take the company and kick dirt if need be. But it’s not our decision on where to go. It’s always the company’s decision. Always.

For economic development organizations, they can put our report on the shelf and let it gather dust or they can act on it. It’s their call. Always.

Of course, we know there are roadblocks and pushback to making change happen. But maybe, just maybe, we give that economic development organization some political cover to do what needs to be done by virtue of our third-party findings and recommendations.

You see, we’ve been economic developers. We’ve been in their shoes. We know the pressures they face.

Let There Be Light

Our role, and you can say this for any good consultancy in virtually any industry, is to bring light to a situation, to provide information and recommend certain courses of action.

Doing what is right by the client truly is customer service. And it’s really not such an old-fashioned idea.

Next week, I’m going to tell you about how New Orleans is trying to keep the momentum going in making transformation change. It’s a pretty interesting story.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. He can be reached at dbarber@barberadvisors.com or at 972-890-3733.

Florida: It’s Not Just for Fun Anymore

In Corporate Site Selection and Economic Development on March 13, 2016 at 11:35 am

Back in 1969, Anita Bryant was the brand ambassador for the Florida Citrus Commission. Speaking on the all-important subject of orange juice, she said, “It’s not just for breakfast anymore.”

I mention this only because perception goes a long way in business, as it does in life.

While tourism continues to be a huge business in Florida (105 million tourists came to the state last year), economic developers there are continually fighting the perception that sun and fun is all that Florida has to offer.

Well, that’s just not so.

Still, I have to tell you that I only drink orange juice at breakfast, and I suspect I’m not alone at that.

A New Brand Campaign

Last month, Enterprise Florida Inc., the statewide economic development organization charged with recruiting and growing industry in the state, launched a new branding campaign: “Florida — The Future is Here.”

It debunks the notion that Florida is only a place for sun and play, but in fact is the home to some serious industry leaders in all sorts of highly advanced and technical sectors.

Personally, I would have gone with: “Florida – It’s not just for breakfast anymore.” Ok, that might need a little work.

The new, agreed-upon advertising campaign, funded to the tune of $10 million, is set to run in national and international print, online, television and radio outlets. No less key, the Legislature has approved $8.5 million in recurring annual funding to keep it going.

But what lawmakers giveth, they can also ignoreth. (That’s not a real word.)

No Fund for You

In the latest session, Florida Gov. Rick Scott went to the Legislature with two high-profile items: $1 billion in tax cuts and a $250 million incentives package. What he got was $129.1 million in tax cuts and his “Florida Enterprise Fund” zeroed out altogether.

Gov. Scott’s proposed enterprise fund was touted as a $250 million, three-year trust to incentivize the most competitive business deals, but lawmakers gave him nothing, nada, zilch.

Florida is not the first nor will it be the last state where state lawmakers have given the back of their hands to economic development incentive programs that they deem as “corporate welfare.”

Strange as it may seem, it’s where the hard left and the hard right in politics actually meet.

Wrote Rick Homans, president and CEO of the Tampa Bay Partnership:

“By failing to fund the Florida Enterprise Fund, we not only jeopardize all of the projects in our pipeline today, we send a message that we’re not prepared to compete for the highly coveted jobs of tomorrow.

“Companies look for consistency and dependability. A decision to eliminate one of the state’s cornerstone incentive programs delivers the opposite message.”

But at least the new advertising campaign will be funded, a first in many years. It will focus on industries on which Florida especially wants to base its economy in coming years.

Aerospace Out the Wazoo

Aerospace is one of those target industries and where there has been success. There are nearly 500 aerospace companies in Florida, manufacturing and assembling parts, focusing on intelligence, surveillance, reconnaissance, and missiles.

Boeing, Embraer, General Dynamics, Lockheed Martin, Northrop Grumman, Pratt & Whitney, and Sikorsky are there to name a few. Virtually every major defense contractor from the U.S. has a presence in Florida.

The state has more than 50,700 active duty military and a significant number of veterans, as well as rocket scientists, machinists, pilots, and engineers are part of Florida’s flexible, “badgeable” talent pool.

Life Sciences Rule

Then there’s the life sciences. Florida, yes. Florida, is home to some of the nation’s most highly regarded research centers; over 1,100 biotech, pharmaceutical and medical devices companies.

Breaking it down further, there are more than 260 biotech companies and world renowned R&D institutes specializing in therapeutics, diagnostics, industrial/ag biotech.

And get this, Florida is ranked 2nd among states for FDA registered medical device manufacturing facilities. Nearly 19,000 Floridians work in this industry.

Finally, Florida has more than 220 pharmaceutical manufacturing companies developing and manufacturing generics, nutraceuticals prescription and over the counter drugs. That industry employs some 4,500 people in Florida.

There are other target industries. They include defense and homeland security, information technology, financial and professional services, among others.

Last week, I was in Florida at the invitation of Enterprise Florida Inc. Like many site consultants, I will go on an occasional familiarization tour to learn about a place, especially if that place would be of interest to a corporate client.

Brilliant Kids

At dinners where economic developers and site selection consultants come together, EFI does something a little different which I really like. It brings in local college students who illustrate the level of talent that resides in Florida.

Let’s face it, smart companies need smart people, so this is an altogether fitting move.

At one of these dinners last week, I listened to a local economic developer speak about her county, which was most appropriate. Then real estate developer told us about his mixed-used project coming on-line, which was interesting.

But it was those brilliant kids who really impressed me. Tania Rodriguez, a pre-med honors student from the Florida Atlantic University, sat at my table and answered all my question about the science of sleep and fruit flies.

Monique Tromp sat another table, but prior to the dinner, I learned that she a scholar for the Max Planck Florida Institute for Neuroscience Scholars Program. There she conducts research on morphological changes of inhibitory neurons, which sounds very important.

Billed as the nation’s newest hub for the life sciences, a total of $74.5 million in federal funding is fueling the cutting-edge research among Scripps Florida, Max Planck Florida  and FAU’s Jupiter Life Science Initiative in Jupiter, Fla.

As J.D. “Jed” Clampett would say, “Welllllll, doggies!”

Now here comes the confession part, I actually had some fun in the sun. You see, there is this now rather famous thing called the Florida Grapefruit League, which is spring training for Major League Baseball.

And if you don’t like baseball, well, I just feel sorry for you. Bless your heart.

Barber Takes the Mound

In their wisdom, Enterprise Florida invited site selection consultants to come to spring training, watch some games, and talk business.

I was enjoying myself thoroughly until I learned on Day 2 that I was chosen to throw out the first pitch at a New York Mets-St. Louis Cardinals game in Port St. Lucie. I learned this about two hours before the game.

There would be about 10,000 fans in the stands, and I was supposed to throw a baseball, which I haven’t touched in years, over the plate without humiliating myself.

Somehow, some way, it actually happened. I delivered a high arching pitch without the catcher having to move, which was a tremendous relief to me. The crowd even cheered.

The scene was captured on a cell phone video, which I posted on Facebook. A longtime friend, upon seeing it, said: “You throw like an old fat man. But then again.”

He’s got a point. I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. He can be reached at dbarber@barberadvisors.com or at 972-890-3733.