"What’s been missing in this region with respect to economic development? A good road map and a clear destination."
—Jim Baumgartner, Peoria Journal Star, August 5, 2012
On July 26th, more than 230 people—a diverse cross-section of community leaders from Peoria, Tazewell, Woodford and Mason counties—gathered together at the Peoria Civic Center. The evening’s forum—convened by the Tri-County Regional Planning Commission (TCRPC) and facilitated by ViTAL Economy, a nationally recognized economic development firm—was a regional “meeting of the minds.” Its purpose: to gather input and lay the foundation for the future of economic development in Greater Peoria.
“There is a sense of urgency about improving our economic development efforts,” proclaimed Jim Baumgartner, director of corporate public affairs for Caterpillar Inc. and chairman of the newly formed Regional Strategy Policy Steering Committee, in his opening remarks. “And we have the momentum and drive to make change happen.”
The response, by all accounts, was extraordinary. Most attendees stayed for the entire three-hour session, illustrating their deep commitment to the cause at hand. The “energy in the room,” remarked more than a few, was palpable, an impression reinforced by the large numbers who volunteered their assistance on behalf of a truly regional plan for economic development.
Here in central Illinois, there has been no shortage of such plans over the years. Too often, they’re rolled out with great fanfare but little follow-through—and even less accountability. One could be forgiven for wondering if this latest plan was merely the same old song and dance, led by a new conductor.
Findings & Recommendations
Unless you’d been paying close attention, that meeting in July might seem to have come out of nowhere, but in fact, it was more than a year in the making. Having identified economic development as a top priority in early 2011, the Tri-County Regional Planning Commission first invited Frank Knott of ViTAL Economy to speak on the topic in Peoria last October. “Though we did not know at the time,” explains Larry Whitaker, TCRPC chairman and Woodford County Board member, “it was then that this economic development journey was launched.”
After this successful forum, the Illinois Valley Council of Governments (IRVCOG)—a bipartisan group of elected officials from the Tri-County Area—requested that TCRPC hire an outside consultant to evaluate the region’s economic development plans against the best practices of similar efforts across the country. And so, with that charge, Knott and his team at ViTAL Economy got to work.
The first step was to collect personal snapshots of the local economy from a range of stakeholders involved in every aspect of the four-county region. More than 300 people were interviewed by the ViTAL Economy team, including business leaders, elected officials, labor representatives, educators, entrepreneurs, social service providers and more. From small agriculture to big manufacturing, nearly every facet of the community was represented, including many people who said it was the first time they had been approached for their input. “They were interested,” says Whitaker. “They were excited. And they were engaged.”
In April of this year, ViTAL Economy released the initial findings of its study. Most significantly, Knott and his team found no clear strategy with regard to regional economic development. Despite a general willingness among stakeholders to collaborate with their peers, he found that the relationships needed for such collaboration—and the trust required to build those relationships—were sorely lacking. Finally, in Greater Peoria, Knott found a region unusually rich in assets that haven’t been fully leveraged. It was clear that something had to change.
A month later, the ViTAL Economy team issued its primary recommendations for moving forward: simplifying the governance of The Heartland Partnership, the region’s primary economic development organization, and reorganizing the Economic Development Council for Central Illinois, which falls under its umbrella; merging the TCRPC, IRVCOG and Economic Development District (a federally-designated economic development organization); and integrating the region’s multiple workforce development programs. Finally, and most importantly, Knott and his team recommended the launch of a top-down/bottom-up, asset-based economic development strategy.
Knott’s recommendations were quickly adopted by TCRPC and IRVCOG, followed soon after by Peoria, Woodford and Tazewell counties. Meanwhile, in light of this new direction, The Heartland Partnership began to examine its own structure, which eventually led to a staff shakeup and the resignation of long-time CEO Jim McConoughey. Amidst this organizational reshuffling, Knott and ViTAL Economy were again called upon to help prepare a strategy for regional economic development, and in June, the Regional Strategy Policy Steering Committee, chaired by Jim Baumgartner, was formed to oversee the effort.
From Here to There
Mirroring the diversity of stakeholders initially interviewed by ViTAL Economy, the 30-person steering committee was assembled from a representative sample of organizations—public and private, large and small, urban and rural, for-profit and not-for-profit—involved in industries ranging from hospitality and education to banking and logistics. On August 9th, the committee held its first meeting. Facilitating the discussion once again was Knott, who posed three questions to his audience: What does the region want to change from? Where are we trying to get to? And how do we get there?
Having benchmarked the Peoria area against the ten best practices of asset-based economic development, ViTAL Economy ranked the region “average,” “below average” or “weak” on each count, reflecting the general consensus that the status quo was not working. According to Knott’s study, the most-cited barriers to success were the lack of collaboration, lack of a strategic vision or plan, poor business climate in Illinois, and skills issues with the regional workforce. Three of these four barriers, he noted, can be controlled, or at least impacted to some degree.
The economic development journey, Knott suggested, should be guided by the following set of best practices, successfully employed in other communities across the country:
- Regional collaboration. Meaningful, sustainable grassroots collaboration across the public and private sectors and traditional political boundaries.
- Leadership excellence. Empowered, proactive leadership marked by accountability, authority, legitimacy and transparency.
- Change management. Adoption of the eight critical steps for managing change that enable effective participation in the global economy.
- Balanced approach. Integration of economic development, education and workforce development assets with the private sector to build knowledge-based centers of excellence.
- Asset-based approach. Identifying and leveraging tangible and intangible assets for the sustainable growth and transformation of the regional economy.
- Measurable outcomes. Employment of measurable benchmarks, goals and strategies to transform the region.
- Innovation and entrepreneurship. Building “innovation ecosystems” that create a lasting climate of entrepreneurship, risk taking and innovation.
- Life-cycle finance. Access to a life cycle of funding, as well as equity and debt financing to sustain public, private and nonprofit ventures.
- Brand promise. The definition, communication and delivery of a clear regional brand that promotes and sustains the region’s competitive advantages.
- Transformational mindset. Sustained commitment to economic development as a marathon—not a sprint—that is transformative, not incremental.
Coupled with what he calls S.M.A.R.T. (Specific, Measurable, Attainable, Relevant and Time-Based) goals, Knott outlined a basic framework for creating this new economic development strategy, the beauty of which lies in its simplicity. It begins with a single, regional economic vision—the end game toward which all efforts are directed. To implement this vision, Knott’s “4-4-4” plan calls for no more than four specific goals, each containing no more than four strategies, with each strategy containing no more than four action steps. Every action is tied to a strategy, every strategy is tied to a goal, and every goal supports the vision.
While the steering committee oversees the high-level vision, a myriad of action teams at the municipal and county levels will address the details of specific initiatives to bring this vision to life. A technical working group, distinct from the steering committee, will guide these teams to ensure they maintain their focus and make progress toward the established goals. The result of this process, which will continue to unfold over the next nine months, will be a comprehensive, five-year regional economic development strategy, to be announced publicly next summer. This is the road map that’s been missing: the one that clearly defines the end destination and the steps it will take to get there.
Plans like this have come and gone over the years. Often they arrive with great fanfare, only to collect dust on a shelf somewhere, their findings unaddressed, their recommendations unimplemented. So what exactly is different this time?
First and foremost, the process is inclusive of a much wider range of participants. Unlike previous efforts, there has been a concerted outreach to members of the community that have traditionally been overlooked. “Our new strategy… relies on all of us in central Illinois to work as a team,” explains Diana Hall, a member of the steering committee. “In the past, economic development discussions appeared to be debates between ‘experts’ in the field. By contrast, our new strategy embraces the idea that we all have valuable ideas to share when discussing the future of our regional economy.”
Secondly, it is being conducted in a transparent manner. “Data collected through ViTAL Economy showed a lack of transparency when it comes to how economic development has been organized and delivered in the past,” notes Baumgartner. “The data reveals a general lack of trust for the way economic development has been managed in recent years.” While the steering committee is not an official governmental body, it is nonetheless operating under the parameters of the Illinois Open Meetings Act, its meetings open and accessible to the public. This is being done as a measure of good faith—and proof of how different this plan is from previous ones.
Third, the plan will be based on the region’s unique assets. “Our community has had a ‘needs-based culture',” explains Peoria City Councilman Chuck Weaver. “In other words, talking about the needs of the community in order to get money from state and federal governmental entities... We must instead have an ‘asset-based’ culture, where we focus on the assets of our community and capitalize on those assets.” This issue is not unique to central Illinois—90 percent of all economic development activities, says Knott, are performed under a needs-based approach.
Finally, and perhaps most importantly, the new plan will offer tangible metrics. “The biggest single difference [from previous plans] is the fact that everything is going to be measured,” declares Baumgartner. “There really haven’t been any metrics here… ever. It’s difficult to measure performance unless you have something to measure against. The beauty of this process is that we’ve engaged an organization with proven processes that do have tangible metrics.”
Workforce, Workforce, Workforce
It’s easy to talk the talk, but can we walk the walk? As the planning process moves forward in the coming months, there will naturally be doubters and skeptics. Baumgartner believes that with time, their doubts will be assuaged as they see the committee living up to its promise of inclusiveness, transparency and collaboration.
“I think that early on in the journey of the steering committee, we need to demonstrate some ‘quick wins,’” he says. “How can we really deliver a positive impact to the region? [We need to] help people feel comfortable that the steering committee is more than a body that gets together once a month just to say hello and compare notes. Rather, we will set priorities, get things done, measure the performance, and move on to the next initiative.”
But for such a complex issue with so many moving parts, where does one start? Exactly which areas are ripe for these “quick wins?” The answer was clearly stated at that first steering committee meeting. “Workforce is everything,” proclaimed Knott. “In a knowledge economy, the first, second and third priorities of economic development need to be workforce, workforce, workforce.”
“Just from the companies [of the leaders] represented on the steering committee, there were at least 400 jobs that couldn’t be filled because they can’t find the skilled workforce,” affirms Baumgartner. “They would fill those jobs tomorrow if they had the right people. So how do we get that in place? How do we provide access to qualified labor to fill some of these open positions?”
Indeed, the skills mismatch issue has long been understood as critical to the region’s future economic health. And yet, despite 800 current job openings in Greater Peoria in the manufacturing sector alone, little has been done to ensure that people are being trained for those jobs. “How can we bring new companies to town or expect our current companies to grow when we have 800 open jobs in our community?” asks Councilman Weaver. “We must develop a workforce that allows our current employers to hire locally. It’s a simple, economics-101, supply-and-demand issue. We will see more jobs come to the area when we can meet our current employment demands.”
The regional workforce, then, will be a key component of the strategy being developed. Other ViTAL Economy recommendations that might be embraced include a leadership training program, small business incubator, e-connectivity strategy and numerous centers of excellence.
The Future of H-P
So what is the future role for The Heartland Partnership? After all, it has been Greater Peoria’s lead economic development organization for years, responsible for major successes like the Regional Economic Scorecard, Peoria NEXT Innovation Center and the Cancer Research Center at the College of Medicine. And beneath its umbrella remains a host of organizations vital to the region, including the Economic Development Council for Central Illinois (EDC), Peoria Area Chamber of Commerce, Peoria NEXT, Illinois River Road National Scenic Byway and Heartland Capital Network.
“There needs to be an H-P-like organization,” Baumgartner confirms. “The more important question is: What should this organization be accountable for?” There has been great confusion, he says, over how the organization had been structured—a somewhat unwieldy combination of public and private entities “cobbled together over the last 10 years”—in addition to its financial shape. “Part of the work that’s going on right now,” he adds, “is to reinvent the H-P and determine what [functions] they should keep.”
“I’m hoping to clarify the roles of the organization as we embark on this new journey of collaboration in economic development,” says interim CEO Cal MacKay, the former chief financial officer of Methodist Medical Center, who took the reins of the organization after McConoughey’s resignation. “We have streamlined our cost structure, which has meant changes in staffing. We are still in the transition phase, which means there is the possibility for more changes in the future.
A reconstituted Heartland Partnership,” he adds, “will be able to focus more specifically on developing a stronger environment for entrepreneurship and innovation, along with a more positive business environment in general.” MacKay’s vision aligns nicely with the organization’s strengths: advocating for business; rallying the community around large, complex projects; cultivating a strong entrepreneurial ecosystem; and bridging the funding gap for promising business and community ventures. In addition, MacKay suggests that metrics will be created to assess its progress. “The restructured organization’s outcomes will be evaluated through a scorecard that will serve as a platform on which community and business leaders can build future strategic development efforts.
In early September, the board of directors of both the EDC and The Heartland Partnership voted to approve the ViTAL Economy recommendations, and H-P Board Chairman Mark Spenny was appointed to the regional steering committee, opening the door for deeper collaboration between the two entities. “We are all on the same team,” says Baumgartner, “and moving in the same direction.”
The Big Game
“Economic development is a competition,” asserts Diana Hall. “We are competing against other regions… to retain and attract new businesses and grow an educated and trained workforce. We cannot sit back and hope our economy will remain strong.
“Let’s call it our Olympics—or even our Super Bowl,” she suggests. “This is the most important game our region will ever play. Our team must gather input from all of us and create a strategy that highlights our strengths and improves our weaknesses. In the end, we are all economic development experts because we all have something valuable to add.”
For Jim Baumgartner, the time to bring a disciplined approach to the region’s economic development activities is now. “Take an inventory of all the great things happening here: the construction of a $40-million visitors center and $100-million museum; the $100-million-plus Marriott hotel project; Bass Pro, Embassy Suites, and everything on the east side of the river. How do you not get excited about all of this development activity?
“Our goal is to make central Illinois the benchmark for regional collaboration with a unified approach to economic development,” he adds. “But we can’t do this alone. We can’t do it in silos. And we can’t keep doing it the same way it’s been done in the past.”
“This is about legacy,” he adds. “Whether you work in government, agriculture, business, industry, healthcare or the arts; whether you lead your community or are critical providers of the social safety net, your participation makes a difference. This is your opportunity to be part of a process that can truly make a meaningful difference in central Illinois for many years to come." iBi