Managing Economic Development Organizations, TN Basic Economic Development Course 2013


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Dr. Dave Kolzow
Team Kolzow, Inc.

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  • Why is it important to be viewed as “excellent?”Important to have a common understanding of what it means to be excellent.This presentation is directed at those who want to be the best at what they do. My intent is to trigger your thinking on how to be more effective in your organization and community.
  • Why are so many organizations mediocre or content with who they are, or not disturbed enough to do something about it.
  • It takes a lot of practice to be excellent, but you have to have a clear picture of what you’re trying to achieve.Example of hitting a golf ball.
  • Rate each of the components and summarize overall score for the core operation. This is one way to remove some of the subjectivity in the process. Outside input would provide additional insights.
  • Every org. has these same categories of capacity.
  • The Board has legal governing responsibility.The Board also has the power to “fire” the CEO.What about hiring/firing the staff?
  • Who has a Board manual? What are some of the things in it?Who has a formal Board orientation?
  • Which one of these two vision statements sounds more like a mission?
  • Each stage of this work flow can be improved. That is the mindset necessary.
  • Managing Economic Development Organizations, TN Basic Economic Development Course 2013

    2. 2. Team Kolzow 2MANAGING FOR EXCELLENCE INAN OUTCOME-BASEDENVIRONMENT• Who Are We?• Who Do We Want to Be?• How Do We Get There?• How Do We Know If We Got There?
    3. 3. Team Kolzow 3WHO ARE WE?
    4. 4. Team Kolzow 4TYPES OF DEVELOPMENTORGANIZATIONS• Public/private non-profits• Chambers of Commerce• Local governments• State governments• Port authorities• Local redevelopment corporations• Utility companies• Empowerment & enterprise zones• Certified development corporations• Universities & community colleges
    5. 5. Team Kolzow 5THE EXCELLENTORGANIZATION• Viewed as:• One of the best• First-Class• Highly professional• Working hard at doing mostthings well• Always striving to be betterQuality is not an act; it isa habit. Aristotle
    6. 6. Team Kolzow 6EXCELLENCE“Strive for perfection; be content withexcellence.”Mediocrity is what happens when you quitstriving for “excellence”
    7. 7. MEDIOCRITYTeam Kolzow 7
    8. 8. Team Kolzow 8EXCELLENCEAttitude is ultimately more important thanknowledge and ability in the quest forexcellence – true or false?
    9. 9. Team Kolzow 9MOVING TOWARDSEXCELLENCEAbility is what you’re capable of doing.Motivation determines what you do.Attitude determines how well you do it.Lou Holtz
    10. 10. Team Kolzow 10EXCELLENCEList those “things“ your organizationdoes that is superior to otherorganizations you are aware of:••••
    11. 11. Team Kolzow 11MANAGING FOR RESULTSBeing an “excellent” organization is morethan mastering certain managementtechniques
    12. 12. Team Kolzow 12MANAGING FOREXCELLENCE• Who in a organization is involved in itsmanagement?• How big does an organization have to beto have a concern for managementexcellence
    13. 13. Team Kolzow 13“Ninety percent ofwhat we call„management‟ consistsof making it difficult forpeople to get thingsdone.” – Peter Drucker
    14. 14. Team Kolzow 14THE NONPROFITORGANIZATION• The Board governs• The CEO manages• The staff performs• The stakeholders, constituents, andcustomers benefit
    15. 15. Team Kolzow 15WHO ARE WE?SWOT• Organizational Assessment• Strengths• Employees with valued skills• Organizational competencies & capabilities• Competitive advantages over other organizations• Unique resources• Weaknesses – inadequacies in any of the above• Opportunities – new paths to pursue with clear benefits• Threats – External situations that can negatively impactthe organization; they must be actively dealt with toprevent trouble (e.g., economic recession, loss offunding)
    16. 16. • Define org’s “core operations” and functions• E.g., working with prospects, marketing, BR&E• Measure your org’s current capability insuccessfully handling your core operations• Determine what gaps need addressing16WHAT IS OURCOMPETENCY?Team Kolzow
    17. 17. 17WHAT IS OURCOMPETENCY?Operation Core ComponentsMarketingprogramBoardsupportStrategies andperformancemeasuresAppropriatetargetsPromotionmaterialWebsite FundingCore OperationsScoring1unacceptable2weak3basic/average4sound / goodpractice5Excellent/outstandingTeam Kolzow
    18. 18. Organizational Capacity ComponentsStrategic leadership Leadership, strategic planning, innovative thinkingOrganizational structure Governance & operational structureHuman resources Planning, staffing, developing, appraising and rewarding,maintaining effective human relationsFinancial management Financial planning, financial accountability, financial statementsand systemsInfrastructure Facilities & technology managementProgram & services mgmt. Planning, implementing, and monitoring programs/projectsProcess mgmt. Problem-solving, decision-making, communications, monitoringand evaluationInter-org. linkages Planning, implementing, and monitoring networks andpartnerships188 AREAS OF ORGANIZATIONAL CAPACITYAND THEIR VARIOUS COMPONENTS
    19. 19. • Determine org’s “core competencies” that give it auniqueness and competitive advantage• Identify skills and capabilities needed to support corecompetencies• E.g., sales training, website development• Measure your org’s current capability• E.g., performance evaluations, input from customers• Determine what gaps need addressing19WHAT ARE OUR UNIQUE OR―CORE‖ COMPETENCIES?Team Kolzow
    20. 20. • Define org’s “core operations” and functions• E.g., working with prospects, marketing, BR&E• Determine org’s “core competencies” that give it auniqueness and competitive advantage• Identify skills and capabilities needed to supportcore competencies• E.g., sales training, website development• Measure your org’s current capability• E.g., performance evaluations• Determine what gaps need addressing20WHAT IS OURCOMPETENCY?
    21. 21. Team Kolzow 21ORGANIZATIONALASSESSMENTSources of assessment:• Staff (least objective)• Board or other stakeholders• Clients/constituents/members• Third-party (most objective)
    22. 22. Team Kolzow 22WHO ARE YOURSTAKEHOLDERS?• Stakeholder Identification• Identify existing and potential stakeholders• What is their interest or stake in the organization?• What will it take to get them more effectively involved?• What do they need from the organization?
    23. 23. Team Kolzow 23WHO ARE WE?THE MISSION STATEMENT• Brief description of thebasic purpose of theorganization, includingthe nature of the work tobe carried out• It guides basic decision-making for theorganization, keepingdecisions and policiesfocused on its corepurpose
    24. 24. MISSION STATEMENT24• Who associated with the organization hasthe primary responsibility for determining itsmission?• How does the mission statement improveaccountability?Team Kolzow
    25. 25. Team Kolzow 25MISSION STATEMENT√ Basic needs to be filled?√ Desired outcomes and achievements?√ Clients and customers?√ Core values?√ Organization’s uniqueness?√ Reason for existence?How does your organization’smission statement measure up tothese preceding questions?
    26. 26. Team Kolzow 26MISSION STATEMENT EXAMPLEThe mission of the Kansas Rural Development Councilis to provide a framework within which public andprivate sector resources can be used to promote ruraleconomic development. The Council will serve as aforum for effective collaboration between variousentities to meet the needs and identify issues affectingrural Kansas. The Council will provide leadership inmaking strategic use of available resources to achieveshort- and long-term rural economic development. Inaddition, the Council will serve as a focal point foridentifying and addressing interdepartmental barriersto implementing a long-term economic developmentstrategy.
    27. 27. MISSION STATEMENTEXAMPLETo attract business investment by generating new business leadsand building regional capacity through product developmentand effective regional engagement.What does this mean?We are an investor-based organization that supports the region’seconomic development throughout our member counties. Theefforts of the Partnership will:LeadsEstablish the identity and promote the brand of our region as oneof the most business-friendly, innovative, and attractiveregions in the Midwest;Etc.27Team Kolzow
    28. 28. Team Kolzow 28BOARD INVOLVEMENT
    29. 29. Team Kolzow 29BOARD GOVERNING ROLESThe most important governing role of aBoard of Directors is setting policy – trueor false?
    30. 30. Team Kolzow 30KEY POLICY AREAS• Reporting procedures of management to Board• Process for monitoring & approving expenditures• Basic employee policies• Appropriate volunteer involvement in staff ororganization activities• Process for evaluating performance of program &chief executive• How Board meetings are to be conducted• Who speaks on behalf of organization• Avoiding conflicts of interest or asking for specialfavors
    31. 31. Team Kolzow 31BOARD GOVERNING ROLES• Establish policy (rules & procedures)• Determine the direction of theorganization• Clarify the mission of the organization• Evaluate performance• Hire the chief executive• Establish the organization’s priorities• Monitor expenditures• Raise the funds
    32. 32. Team Kolzow 32FACILITATION ROLES OFBOARD• Establishing contacts that benefit theorganization• Promoting the organization in the community• Providing key advice• Serving as a bridge between the organization andthe community
    33. 33. Team Kolzow 33BOARD OPTIONSWhat is the likelyresponse of Boardmembers whenthey aren’t clear ontheir role?
    34. 34. 34BOARD ORIENTATION Discussion of history of organization Meeting staff Touring the office Reviewing the Board manual
    35. 35. Team Kolzow 35WHO DO WE WANT TO BE?
    36. 36. Team Kolzow 36VISION“There is no more powerful engine driving anorganization toward excellence and long-rangesuccess than an attractive, worthwhile, andachievable vision of the future, widely shared.”(Burt Nanus, Visionary Leadership)
    37. 37. Team Kolzow 37VISION• An ideal & unique view of what theorganization will be about in thefuture• What will the futurerequire of ourorganization?
    38. 38. WHAT IS YOUR ORGANIZATION’SVISION?Think about your desires for your organization’s future,or its vision:◦ What would you like to see your organization doingin five years that it isn’t doing now?◦ What changes would you like to see in how yourorganization does business?◦ What future do you see for the funding of yourorganization?◦ What impact is an economic downturn likely to haveon the future of your organization?38 Team Kolzow
    39. 39. Team Kolzow 39VISIONWhat/who should be the primary source ofan organization’s vision?
    40. 40. Team Kolzow 40VISION• Should be widely shared• Requires strong commitment fromthe leadership
    42. 42. EXAMPLES: EDORGANIZATION VISIONS• SEDA will be considered by its peers as the best businesssolicitation and facility location organization for cities ofcomparable size in the country. It will be the guardian ofSavannah’s diverse economy. SEDA understands that theeconomy is dynamic and economic developmentorganizations must adjust to changes in order to remainsuccessful. SEDA will always be the first to change.• Create a diversified, sustainable economy generatingwealth, quality jobs and improving quality of life.(Owensboro KY)• Comment: the majority of ED orgs. don’t have a visionstatementTeam Kolzow 42
    43. 43. EXAMPLE: ORGANIZATIONALVISIONThe Partnership is one of the top performingregional economic development organizations inthe nation.What does this mean?NEIRP is recognized as one of the top performingregional economic development organizations inthe nation. It is known for its innovative practices,its collaborative approach, its customer service,and its professional excellence. The Partnershipis successfully leading the Northeast Indianaregion to increased economic prosperity andbusiness investment.43Team Kolzow
    44. 44. Team Kolzow 44FROM VISION TO PLANVisioning clarifies what the organizationwants to become and where it wants togo;Strategic planning clarifies how theorganization is going to get there
    45. 45. Team Kolzow 45HOW DO WE GET THERE?• Customer service• Continuous performanceimprovement• Teamwork• Organizational planning
    47. 47. Team Kolzow 47“EXCELLENT”ORGANIZATIONS &CUSTOMER SERVICEWhy is “customer service” probably themost critical component of an “excellent”organization?
    48. 48. Team Kolzow 48MOMENT OF TRUTHCustomer contact with the organizationImpression of service
    49. 49. 49CYCLE OF SERVICEAwareness ofcommunityPhone contactwith ED org.Staff answeringphoneOrg.’sResponse toinquiryFollow-upcontactQuality ofmaterialsOngoingrelationship
    50. 50. Team Kolzow 50MEASURING CUSTOMERSATISFACTION• Who are your key customers?• How do you know what your customers really arelooking for?• How do you determine when you’re doing a goodjob serving your customers?• How can levels of satisfaction be improved?• What will our customers need in the future?
    51. 51. Team Kolzow 51MEASURING CUSTOMERSATISFACTION• Methods for determining customer needs:• One-on-one interviews or surveys of keycustomers• Focus groups• Asking systematically for input from staff whohave customer contact• Questionnaires that allow for employeecomments• Feedback from key stakeholders and Boardmembers
    52. 52. Team Kolzow 52SETTING CUSTOMERSERVICE STANDARDSWhy is it important to set service “standards” fordealing with prospects, clients, and customers?Customer service standards:• Completeness – essential vs. unnecessary• Timeliness & responsiveness• Competitive with other organizations• Relationship-building for the long term• Adding value – providing more than expected
    53. 53. 53HOW DO WE GET THERE?ORGANIZATIONAL PROGRESSWhat key steps can we take to continuallyimprove the effectiveness of ourorganization?He who stops being better stops being good.Oliver Cromwell
    54. 54. Team Kolzow 54CONTINUOUS PERFORMANCEIMPROVEMENT• Viewing work as a process• Believing the work process can always beimproved• Research and training in betterunderstanding of the process and how toimprove it
    55. 55. Team Kolzow 55QUALITY WORK PROCESSES• Effective – output of process meetscustomer needs & expectations• Efficient – minimizes use of resources &eliminates waste• Adaptable – ease of changing processesto meet future customer requirements &reduce processing time and costs
    56. 56. 56PURPOSE OFPROCESS IMPROVEMENTDeliveringCustomerValueAnalyzing all “key” processes
    57. 57. Team Kolzow 57
    58. 58. Team Kolzow 58PROJECT MANAGEMENT• Managing use of staff time and talent on projects• Allocating organizational resources effectively• Expending funds according to budget• Staying within the timing constraints• Knowing where each project is in terms ofprogress and achievement
    59. 59. Team Kolzow 59SAMPLE GANTT CHARTTASK Week1Week2Week3Week4Week5Week6Prepareleader surveyIdentify localleadersEmail leadersurveyPhone follow-upTabulateresultsPublishresults
    60. 60. Team Kolzow 60“It is not the strongestof the species thatsurvives, nor the mostintelligent, but theone most responsiveto change.” —Charles Darwin
    61. 61. Team Kolzow 61CONTINUOUS PERFORMANCEIMPROVEMENT• Why is training crucial to continuousperformance improvement?
    62. 62. Team Kolzow 62QUALITY TRAINING• Awareness• Focused onprovidinginformation• Overview ratherthan in-depth• Trying to stimulateinterest in furtherlearning
    63. 63. Team Kolzow 63QUALITY TRAINING• Quality (“soft”) skills• Communication• Negotiation• Conflict resolution• Problem-solving• Critical thinking• Team-building• Collaboration• Project management• Customer service
    64. 64. Team Kolzow 64QUALITY TRAINING• Job specific• Computer skills• Using software• Data management• Brochuredevelopment• Researchtechniques
    66. 66. Team Kolzow 66COOPERATION >COLLABORATIONIs it important to determine how we get theBoard, staff, and other key stakeholders towork together productively?
    67. 67. Team Kolzow 67CONFLICTMy needs Your needs
    68. 68. Team Kolzow 68CONFLICTWhat are the positive aspects ofdisagreements and conflict in anorganization?
    69. 69. Team Kolzow 69IMPORTANCE OF CONFLICT"Strength lies in differences, notin similarities"--Stephen R. Covey
    70. 70. Team Kolzow 70CONFLICTIf you have a disagreement or conflict withanother person in your organization,whose behavior or attitude do you havethe power to change?
    71. 71. Team Kolzow 71MOVING FROM CONFLICT TOCOLLABORATION• Connection – getting people and organizations tocommunicate• Cooperation – Various organizations or memberswithin organizations are able to work well witheach other; getting along• Coordination – Working toward some commonresults and goals; trying to reduce overlap orvoids• Collaboration – Members of organizations attackand resolve problems together, creativelyexploring alternatives and possibilities – the markof an effective “team”
    72. 72. Team Kolzow 72ECONOMIC DEVELOPMENTPROFESSIONAL• Why is “collaboration” critical tocontinuous performance improvement?• As a CEO or Executive Director, what isthe difference between “leading” and“managing” an organization?• What is the difference between afacilitative leader and a “boss?”• What should the executive director of theorganization be doing to build strongerand better relationships with his/herBoard?
    74. 74. Team Kolzow 74FROM PRIORITIES TO GOALS• Who should set the priorities for theorganization?• How is this best accomplished?• If the priorities of the Board and stakeholders arenot in agreement with those of the organization’sexecutive director and staff, what should be doneto remedy the situation?• Goals should reflect the organization’s priorities
    75. 75. Team Kolzow 75ORGANIZATIONALSTRATEGIC PLANNING• Why is a written strategic planimportant to the organization?
    76. 76. Team Kolzow 76MOVING FROM IDEAS TOACTION PLAN“Strategies that don’t make use of identifiedstrategic advantages, address key priorities, orresolve major problems aren’t really strategies,just nice ideas.”What do you thinkwe ought to do?
    77. 77. MeasuresIndicators of our progress and achievementStrategic Goals and ActionsHow we accomplish our mission and visionVisionWhat we aspire to beMissionWhat we doTHE STRATEGY-FOCUSEDORGANIZATION
    78. 78. PUTTING MISSION & VISION INACTION• The Vision and Mission set the generaldirection for the organization• They are intended to help shareholders,customers, and employees understand what theorganization is about and what it intends toachieve• But these statements are far too vague toguide day-to-day actions and resourceallocation decisions• Organizations start to make the statementsoperational when they define a strategy ofhow the vision and mission will be achieved78
    79. 79. • Get down to a set of quantifiable strategicoutcomes:Too vagueMore precise• Make sure your outcomes have a directrelationship to your goals and your goals have adirect relationship to your vision, mission, andvalues.Before you can develop yourstrategiesImprove Customer ServiceImprove average customer responsetimes by 30% by year end79
    80. 80. Team Kolzow 80HOW DO WE KNOW IF WEGOT THERE?
    81. 81. Team Kolzow 81MEASUREMENT: KEY TOPERFORMANCEIMPROVEMENTWhat gets measured gets done,and what gets recognized getsdone best. Maison Haire
    82. 82. Team Kolzow 82SOURCE OF DEMAND FORACCOUNTABILITYWho is demanding improved accountabilityfrom the typical economic developmentorganization ?
    83. 83. Team Kolzow 83EVALUATION• An ongoing process that helps in decision-making• Should be used to improve projects andprograms, not just measure results• Did we achieve our desired outcomes; if not, whynot?• Are we meeting ourcustomer’s expectations?
    84. 84. Team Kolzow 84EVALUATION• Accountability implies evaluation• Goals define what you want to accomplish• Outcomes provide measurable results• Evaluation tells you what you have accomplished• Activity does not necessarilyequal progress
    85. 85. Team Kolzow 85MEASUREMENT: KEY TOPERFORMANCEIMPROVEMENTAll of us need to know how we perform; themost important thing is to find out whatwe do well so we can do more of it, andwhat we do not do well so that we canstop doing it. If we don’t do it well, wemust accept that maybe we shouldn’t bedoing it.Peter Drucker
    86. 86. Team Kolzow 86Subscribe to the Daily Dilbert Buy this strip E-mail this strip
    87. 87. EDO OUTCOMESAn economic development organization ideallyseeks to accomplish two sets of outcomes:• Ability to demonstrate that the region’s economyand quality of life are improving.• Ability to demonstrate that its actions are leadingto improvement in the regional economy andquality of life.Team Kolzow 87
    88. 88. EDO OUTCOMES• Why is it important for yourstakeholders to know andunderstand the difference betweenthe desired outcomes for theorganization and for those of thecommunity or region?Team Kolzow 88
    89. 89. Measurements Should:• Translate customer/stakeholderexpectations into measurable outcomes.• Evaluate the “quality” of organizationalprocesses.• Track improvement.• Focus efforts on customers.• Clarify and support org. strategies.Team Kolzow 89
    90. 90. MEASURING PERFORMANCETeam Kolzow 90
    91. 91. • How does the organization demonstratewhat it is accomplishing?• Inputs – allocating our resources (budgetingfor trade shows)• Activities – our tasks and actions (organizingfor and attending trade shows)• Outputs – the level of activity (the number oftrade shows attended)• Results – (the results from trade showactivity)• why we are doing what we are doing;• what kind of impact are we having;• what positive changes occurred as a result of ourwork?Team Kolzow 91RESULTS-BASEDPERFORMANCE
    92. 92. PERFORMANCE CRITERIA• “Traditional” economic developmentcriteria are specific values that can beeasily measured• Examples:• Number of companies contacted• Completion of a strategic action by designateddate• Number of volunteers trained• Number of responses from an ad• Number of trade shows attendedTeam Kolzow 92
    93. 93. PERFORMANCE CRITERIA• Traditional performance measures don’tnecessarily relate to the desired outcomes, suchas higher incomes or increased tax revenues• Relevant performance measures lead to theachieving of desired outcomes; they measureand quantify progress• Effective performance measures allow policy-makers to determine the success or failure of aprogram or activityTeam Kolzow 93
    94. 94. PERFORMANCE CRITERIA• Examples of performance measuresleading to desired outcomes:• Percentage of customers/clients that aresatisfied with the product/service• Number of workers graduating from thetraining program that received higher-payingjobs• Awarding of incentives led to desired numberof higher-paying jobs• Business incubator generates a high rate ofsuccessful graduatesTeam Kolzow 94
    95. 95. Team Kolzow 95MANAGING FOR RESULTSIf you don’t measure results, you can’t tell successfrom failure.If you can’t see success, you can’t reward it.If you can’t reward success, you’re probablyrewarding failure.If you can’t see success, you can’t learn from it.If you can’t recognize failure, you can’t correct it.If you can demonstrate results, you can win publicsupport.Tom Peters
    96. 96. Team Kolzow 96CONCLUSIONWhat will you do different next week inyour organization’s management asa result of our session?
    97. 97. Team Kolzow 97HOW DO YOU CONTACTTeam Kolzow?• Telephone:• 615-972-4801 – Dr. David Kolzow• E-mail:•• Address:Team Kolzow, Inc.505 Leicester Ct.Franklin TN 37067