Copyright 2014 – Scott HutchesonThis work is licensed under a Creative Commons Attribution-NonCommercial 2.5 License.

EIGHT Secrets of Successful Economic Development Strategies in Small

Towns North Central Indiana Economic Development Partnership

Tipton, Indiana September 16, 2014

What to Expect From This Session

•Explore the 8 secrets of successful economic development strategies for small towns•Consider how knowing those 8 secrets could impact

an economic development strategy for North Central Indiana.

White River Ferry at Norfork, Arkansas, circa 1900

Better understand he nature of collaborationIdentify what stage your collaborations are inConsider ways to move a collaborations to the next level

Norfork, Arkansas

(pop. 550)

What makes some small towns thrive?

What makes some small towns decline ?

?

Hierarchy of Complex Systems

•Social Organizations – economics, education, politics•Individual Human – language capacity, knowledge accumulation, design and use of tools•Animal – mobility, information processing•Plants – viability•Open Systems – matter, energy•Cybernetics – computers•Clockworks – engines•Frameworks – buildings, cells

8

Co

mp

lexi

tyBoulding, K. (1956). General systems theory—the skeleton of science. Management Science 2(3): 197-208.

The Extension Economist Vs. The Rocket Scientist

9

Hierarchy of Complex Systems

•Social Organizations – economics, education, politics• Individual Human – language capacity, knowledge accumulation, design and use of tools•Animal – mobility, information processing•Plants – viability•Open Systems – matter, energy•Cybernetics – computers•Clockworks – engines•Frameworks – buildings, cells

10

Co

mp

lexi

tyBoulding, K. (1956). General systems theory—the skeleton of science. Management Science 2(3): 197-208.

Hierarchy of Complex Systems

•Social Organizations – economics, education, politics• Individual Human – language capacity, knowledge accumulation, design and use of tools•Animal – mobility, information processing•Plants – viability•Open Systems – matter, energy•Cybernetics – computers•Clockworks – engines•Frameworks – buildings, cells

11

Co

mp

lexi

tyBoulding, K. (1956). General systems theory—the skeleton of science. Management Science 2(3): 197-208.

Hierarchy of Complex Systems

•Social Organizations – economics, education, politics• Individual Human – language capacity, knowledge accumulation, design and use of tools•Animal – mobility, information processing•Plants – viability•Open Systems – matter, energy•Cybernetics – computers•Clockworks – engines•Frameworks – buildings, cells

12

Co

mp

lexi

tyBoulding, K. (1956). General systems theory—the skeleton of science. Management Science 2(3): 197-208.

Better understand he nature of collaborationIdentify what stage your collaborations are inConsider ways to move a collaborations to the next level

Recent Purdue

Research

Why are some economic development strategies successful and others…not so much?

Gathered data from 200+ community economic development strategy initiatives across the U.S.

Better understand he nature of collaborationIdentify what stage your collaborations are inConsider ways to move a collaborations to the next level

These Things Matter

1. How strategies are framed2. How strategies are

organized3. How activities are

sequenced4. The timeframe for goals5. Who is responsibilities for

implementation 6. How metrics are used7. The level of trust among

stakeholders8. Whether or not the

community is ready for change

Framing

Effective economic development strategies should be Framed around addressing deficits and challenges.

Effective economic development strategies should be framed around assets and building on what is already in place.

OR

Organization

Effective economic development strategies should should have a hierarchical organizational structure with a clear top and bottom.

OR

Effective economic development strategies should should have a network organizational structure with hubs and spokes.

Sequence of Activities

Effective economic development strategies should be start with a planning phase followed by an implementation phase.

OR

Effective economic development strategies should be iterative with planning and implementation integrated.

Timeframe for Goals

Effective economic development strategies should be focused primarily on longer-term, transformational goals.

OR

Effective economic development strategies should be focused primarily on a progressive series of smaller, near-term, “easy-win” goals.

Responsibilities for Implementation

In effective economic development strategies, responsibilitiesfor implementation should be centralized with one organization.

OR

In effective economic development strategies, responsibilities for implementation should be dispersed among multiple organizations.

How metrics are used

In effective economic development strategies, metrics are used primarily for accountability.

OR

In effective economic development strategies, metrics are used primarily to learn what is working and make adjustments along the way.

Readiness for Change

In effective economic development strategies there is an overall sense that the community is ready for change.

OR

Economic development strategies can be effective even When there is no overall sense that the community is ready for change.

Trust Among Stakeholders

In effective economic development strategies there is usually a low level of trust among stakeholders.

OR

In effective economic development strategies, there is usually a high level of trust among stakeholders .

Findings from the Research

24

Source: Scott Hutcheson, Distributed under a Creative Commons 3.0 License.

Effective & Ineffective Strategy Initiatives – Mean Responses

Completely Effective

Completely Ineffective

Significantly Effective

Somewhat Effective

Somewhat Ineffective

Significantly Ineffective

Findings from the Survey

Effectiveness Continuum

Dep

ende

nt V

aria

bles

Correlation

Findings from the Research

26

Source: Scott Hutcheson, Distributed under a Creative Commons 3.0 License.

Correlation Between Strategy Initiative Effectiveness and the Independent Variables

Recipe for EFFECTIVE Strategies

• Frame strategies primarily around building on existing assets • Have a network organizational structure• Have a planning and implementation processes that is iterative • Include short-term, easy-win goals• Decentralize responsibilities for implementation among multiple organization • Use metrics to learn what is working and to make adjustments along the way• Move forward only when there is an overall readiness for change in the community• Build high levels of trust among participants

Recipe for INEFFECTIVE Strategies

• Frame strategies primarily around addressing problems or deficits

• Have a hierarchical organizational structure

• Have a planning and implementation process that is linear and sequential

• Include only long-term, transformational goals

• Centralized responsibilities for implementation with one organization

• Uses metrics primarily for accountability

• Move forward even when there is not an overall readiness for change in the community

• Proceed even though there are low levels of trust among participants

Frame Strategies Around Assets

Frame Strategies Around Assets

Frame Strategies Around Assets

Asset-Based Frameworks

Network-Based

Organizational Structures

10 nodes, 9 connections

10 nodes, 45 connections

Iterative with Shorter-Term Goals

Dr. Lowell CatlettEconomist, Futurist, and Professor

New Mexico State University

Iterative with Shorter-Term Goals

One study looked at 7,000 different economic predictions and found 47% of them was correct.

Iterative with Shorter-Term Goals

Flip a coin and you beat the economists by 3%.

Iterative with Shorter-Term Goals

Doubt and dwindling motivation comes on quickly when a big goal is missed. On the other hand, small wins lead to the progress principle - more confidence, high performance, and motivation to keep moving forward. - Teresa Amabile

Collaboration & Trust

Turf

Trust

TIME

SharingResources

Sharing Information

MutualAwareness

Co-Execution

Co-Creation

AcknowledgmentExploration Cooperation Collaboration Innovation

Adapted from Collaboration Continuum from ACT for Youth

What Are North Central Indiana’s Most Significant Economic Development

Assets?

Moneyball Economic

Development

Moneyball Economic Development

Asset: Most Competitive Industry Clusters

Asset: Most Competitive Industry Clusters

Asset: Most Competitive Industry Clusters

Primary & Fabricated Metal Manufacturing Economic Development Strategy

• 49 firms in this cluster• Firms in all six of the region’s counties• 2,431 jobs in the cluster• Average wage = $47,305

Primary & Fabricated Metal Manufacturing Economic Development Strategy

How could we best accelerate growth in this cluster that would result in an additional 250 new jobs within the next 24 months?

•Who would be in our network?•How would we identify specific assets?•How could we move forward iteratively, setting our first shorter-term goals?•How could we engage multiple organizations in implementation?•How could we build trust among our stakeholders?

Strategic Doing enables people to form action-oriented collaborations

quickly, move them toward measurable outcomes, and make

adjustments along the way.

Practicing Strategic Doing

48

• Local & Regional Economic Development

• Workforce Development• Community & Neighborhood

Development• Cluster Development• Local/Regional Food Systems• Community Health• Innovation Ecosystem Development• Strategic Alliances• Inter-Unit Organizational Collaboration• National Associations

Practicing Strategic Doing

To know what you’re going to draw, you have to begin drawing.

- Pablo Picasso

Scott Hutcheson, Ph.D.765-479-7704

hutcheson@purdue.eduwww.linkedin.com/in/scotthutcheson/

www.twitter.com/jshutch64www.facebook.com/scott.hutcheson

http://www.slideshare.net/jshutch/

For More Information & to Connect

Copyright 2014 – Ed Morrison & Scott HutchesonThis work is licensed under a Creative Commons Attribution-NonCommercial 2.5 License.

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