STRATEGIC PLANNING FOR COMMUNITY AND ECONOMIC DEVELOPMENT
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1 STRATEGIC PLANNING FOR COMMUNITY AND ECONOMIC DEVELOPMENT Presented to: The 2018 Arizona Basic Economic Development Course David Roderique City of Buckeye David B.
2 What is Economic Development? Any activity that creates, generates or increases economic activity in a region/community; often measured by increases in the number of jobs, local tax revenues, new capital investment, and construction activity.
3 Real Economic Development Increasing area s standard of living by: Creating jobs with higher wages than the area s average Creating tax revenues greater than cost of providing governmental services Supporting projects which will enhance, not detract from, the overall quality of life
4 The Strategic Planning Process The process by which a community envisions its future and develops the necessary procedures and operations to achieve that future Source: Dr. David Kolzow Strategic Planning for Economic Development, 1988, IEDC.
5
6 Why Do Strategic Planning? Communities have limited resources Helps you realistically target opportunities with greatest likelihood of success Helps a community understand its strengths and weaknesses, and helps to prioritize its desires/improvements Brings together key stakeholders to help shape a community s future, and promotes better understanding and communication It helps provide metrics to measure success
7 Five Key Elements of a Strategic Planning Process 1. Initiating/organizing the process 2. Data collection and analysis 3. Formulating the plan 4. Implementation 5. Evaluating the process
8 Strategic Planning Process I 5. Evaluation (Performance Measures) 1. Initiate and Organize Process Ongoing Process 2. Data Collection & Analysis 4.Implementation (Responsibilities & Resources) 3. Formulate Goals, Strategies and Actions
9 Phase 1: Initiation/Organization Key questions to think about before you start: Why do you want to do this? What do you hope to accomplish? Who are you serving with this plan? When should it be done? How is it best accomplished?
10 Focus on How Internal -- do it yourself Better control of process Typically much less expensive Usually quicker (if you have time to do it) External -- hire a consultant Time savings for your organization Greater experience and knowledge Independent, unbiased view of situation Often have greater credibility to community
11 Strategic Planning Details Cost: Widely varies (particularly on whether or not you do it yourself or hire someone), but typically can run anywhere from $15,000 $250,000 Time: Depends on complexity of the project, but typically anywhere from 3-12 months, with 6-8 months typical timeframe
12 Who are the Key Stakeholders? Economic Development Agency Public Sector (City, County, State) Elected officials Key staff (planning, building, finance) Schools and Universities Private Sector Business Organizations (Chamber, unions) Banks, Utilities, Major Businesses Developers, Realtors, Landowners Area Stakeholders/Residents/Naysayers
13 Strategic Plan Stakeholder Hierarchy 1. Champion -- runs process 2. Exec. Committee approvals, establish policies, raise funds 3. Committee - Key Stakeholders 4. Subcommittees focus on specific issues 5. Community ,000 s
14 Key Takeaways of this Phase Pre-planning often is what makes or breaks a strategic planning process Must pull together a committed team with broad community representation, and must actively involve them in order to establish a true sense of ownership Building community consensus often takes time, but is imperative for the process to be successful.
15 Phase 2: Data Collection/Analysis Why? Ground the vision in reality Possibilities with greatest likelihood of success Take an honest look at itself Key Components Data collection both facts and SWOT Issues identification local perceptions Analysis of all the collected information
16 Key Considerations Internal vs. External forces Internal: those factors you can control External: those factors outside of your control Current vs. Future Facts vs. Perceptions Important to be honest and realistic
17 Data Collection Need to collect a variety of relevant and current data about the community Useful to have comparative data about your region and key competitors Focus on data that potential prospects are going to want in their own evaluations of the area Critical to keep data updated
18 Typical Data Requirements Demographic and socio-economic info. Access to markets / transportation Access to resources Labor force (education, skills, availability) Land, facilities, infrastructure, utilities Access to capital / financing capacity Governmental impacts (taxes, regulations) Quality of life E.D. program resources, incentives, etc.
19 SWOT Analysis Strengths and Weaknesses Focus on current situation (static) What are the current assets and liabilities? What today makes us unique or puts us at a disadvantage compared to other places? Opportunities and Threats Focus is on the future trends (dynamic) What are changes that we know will occur? Look at future scenarios and determine how they will impact the area positively/negatively
20 Perceptions What does the community see as the key economic issues now and in the future? (unemployment, low wages, lack of future opportunities, need to diversify economy, etc.) Community perceptions may not necessarily match with the facts, but nevertheless are a factor that needs to be considered. Often surveys are used leadership, business, and residents Issues should be prioritized
21 Analysis Once you have collected all of the data, the next step is to analyze it to look for issues, trends, opportunities, problems, etc. Comparison to other areas is very useful to see where you stand in particular categories to determine your selling points Focus on key strengths and weaknesses, and then try to match those to the needs of particular industry sectors
22 Target Market Analysis There are many different types of analysis and models which can be used: Economic base analysis Location quotients Shift-share analysis Input output analysis Cluster analysis The bottom line is to focus on target markets
23 Target Market Analysis The purpose of target market analysis is to try to match your area with strategies and industry sectors that need the strengths you offer, while avoiding those sectors that rely on key things your area is weak in. It can be done more generally for your area to help provide a guide for prospecting, or you can do a very detailed analysis designed to go after specific targets.
24 Target Market Analysis: Examples Likely Prospects: 1. General: Your community has an underused airport, centrally located in the country, with many large, vacant warehouse buildings adjacent what should you focus on? 2. Specific: Your region has a growing population of about 19,000 people with no major home improvement stores. You find that home improvement stores usually look for a trade area of about 20, so which retailers would it make sense to target?
25 Target Market Analysis: Examples Unlikely Prospects: 1. Your community has limited water supplies and high electricity costs compared to other areas, so you don t want to target industries that require lots of water and power, such as semiconductor manufacturing. 2. While your area has all the locational attributes desired by book publishers, you probably don t want to go after publishing since that is a rapidly declining market segment.
26 Target Market Analysis While you can do this work yourself, especially if you are doing a cursory level of analysis, most places will either hire a specialized site selection consultant, or purchase existing data sources that help to provide this information. Difficult to know needs of every industry It is also critical to look at what is happening within desired industry sectors, i.e. growing/shrinking? One drawback is that this information has short shelf life, so once done you have to move fast, esp. for fast moving industries like technology.
27 Key Takeaways of this Phase In this phase more is often better, and timely data is critical Need not only facts, but also perceptions Look to the future not just the current Target market analysis can help you start to focus on the most likely opportunities and prospects
28 Phase 3: Plan Formulation Once the second phase is complete, you will have a significant amount of info: Community facts and data SWOT analysis Issues identification and prioritization Target Market data The next step is to take that data and use it to formulate your new strategic plan
29 Strategic Plan Hierarchy 1. Vision the big picture 2. Goals Specific statement of what the community wants to be (aspirations) 3. Objectives Specific performance targets to achieve the goals 4. Strategies Specific programs and actions needed to meet goals/objectives 5. Workplan Most specific who, what, when, etc. (implementation stage)
30 Example of Hierarchy Vision: A growing and diversified economic base Goal #3: Provide the local E.D. organization with resources needed to carry out strategic plan Objective #3a: Within the next year, the Board will raise $1 mil. in public and private sector funding Strategies: 3a1: Develop fundraising materials, 3a2: Organization will make a formal request to City for funding, 3a3: Meet w/ local businesses Workplan: Joe will develop a fundraising brochure by September of this year Note: a detailed workplan is typically not part of the Strategic Plan, but rather a separate annual workplan
31 How do you formulate a plan? Using all the information that has been gathered (facts, SWOT analysis, issues and perceptions, target market analysis), start to formulate the strategic plan top down Often done by subcommittees or small groups Take a look at the plans for similar places Individual responses are combined in an iterative process, with prioritization and consensus-building being the key goals Typically will go through several drafts, and will need to seek community input throughout
32 Formulating the Plan Ultimate goal is to create a series of specific strategic actions that will help the community achieve its vision and goals It needs to take into account: Community s vision, goals, and objectives Amount and type of resources available Creating maximum positive impact Local leadership s level of commitment Typically will have both realistic and stretch goals
33 Create a Holistic E.D. Plan While many communities tend to focus their E.D. plans only on new business attraction, a good strategic plan should also consider other components that are just as critical to a complete economic development effort. These can work holistically to create positive economic and quality of life success for a community.
34 25 Strategies to Consider Building Communities: 25 Strategies to Advance America 1. Business Recruitment 2. Business Retention and Expansion 3. Business Cultivation 4. Entrepreneurial Development 5. Energy Development 6. Environmental Restoration 7. Transportation Distribution Center 8. Telecommunications Businesses 9. Value Added Agriculture 10. Value Added Forest Products 11. Value Added Fisheries 12. Value Added Mining
35 25 Strategies (cont.) 13. Destination Tourism 14. Cultural Tourism 15. Local/Regional Tourism 16. Pass Through Visitor Services 17. Downtown Development 18. Education Development 19. Health Care 20. Bedroom Community 21. Infrastructure Development 22. Attracting Retirees 23. Attracting Lone Eagles 24. Attracting Government Jobs 25. Attracting Government Funding by Brian Cole, 2010,
36 Key Takeaways of this Phase Using your collected data develop a plan which a hierarchical structure from broad to detailed start with your overall vision, and work to create goals, objectives, strategies This is an iterative process, and will require significant time and community input both to develop and to prioritize the plan It should be holistic and look at a variety of potential economic activities
37 Phase 4: Implementation Once the strategic plan is developed the next step in the process is to develop an actionable implementation strategy. It is important to transfer the desired outcomes into a series of specific action steps that can help the community realize its vision.
38 Strategic Actions Implementation phase needs to include: Organizational responsibilities Time schedule Funding requirements Desired impacts Monitoring and evaluation process
39 Organizational Responsibilities Many options for who will carry out plan: Public (City E.D. department) Private (Chamber of Commerce) Public/Private Partnerships Regional agencies Multiple agencies No best answer depends on many factors, such as the community s needs, resource availability, leadership, etc.
40 Specific Work Program Translate the strategic actions into specific workplan (usually 1-2 yrs), which includes: Specific tasks to accomplish Prioritization of work effort Timeframe Staffing responsibility Resource requirements Performance measures
41 Implementation Implementation is a community effort you can t just develop a strategic plan and then expect the E.D. organization to do everything and be successful Often, there are infrastructure needs, community services, etc. required This is a team effort It also typically will take many years so make sure you manage expectations
42 Key Takeaways of this Phase Once the strategic plan is developed the next step is to implement it Figure out who will do it, what resources are needed, what the priorities are, and how you will measure success Implementation is a community-wide team effort which can take a long time, but if you have engaged the community throughout the process it will be easier
43 Phase 5: Monitor/Evaluate Final phase is the ongoing monitoring and evaluation. Monitoring is tracking of performance, while evaluation compares outcomes towards goals These often are measured in 2 ways: Direct Performance those things in your control (did you accomplish specific tasks?) Indirect Results out of your control (did those actions result in the desired outcomes?)
44 Managing Expectations Need to be realistic in terms of timing of the economic development effort E.D. tends to be a long term process rarely will you have immediate success, and most often the plan will evolve It is important upfront to try to manage expectations; let stakeholders know that it will take time to achieve desired results
45 Evaluation Evaluation needs to be honest and fair It is not meant to be a blame game It s a critical tool to help the community understand what has happened, what it can reasonably expect to achieve, and what changes need to be made Communication is critical Don t try to do infrequently regular communication is better
46 Economic Dashboard Newer technique which tries to measure and benchmark economic performance on a relative basis to region/competitors Can use a variety of metrics, not only economic, but also demographic and social factors, to help gauge success By comparing yourself to similar cities or regions, you can better see how you are fairing with your program.
47 Continuous Change As a result of monitoring and evaluating the strategic plan, there will likely be the need to make ongoing changes Why? Changes in priorities, changes in resource levels, evaluation of success/ failure, changing community desires, changes in local/national trends The strategic planning process should be one of continuous evaluation and adjustment it is a dynamic process.
48 Strategic Planning Process I 5. Evaluation (Performance Measures) 1. REInitiate and Organize Process Ongoing Process 2. Data Collection & Analysis 4.Implementation (Responsibilities & Resources) 3. Formulate Goals, Strategies and Actions
49 Revising Your Plan Therefore, every few years you may need to go back and redo this process You don t necessarily need to scrap the entire thing and start over, but rather do an abbreviated version that takes into account changes that have occurred Keep your plan current, relevant, and use it as a key tool for your organization
50 Common Problems Failure to involve broad representation of leadership and the general public Too much time spent on visioning, and not enough time spent on plan/implementation Strategies that don t address real problem Failure to assign implementation actions Failure to monitor/evaluate progress Lack of commitment plan sits on a shelf
51 Key Takeaways of this Phase Your strategic plan will be a constantly evolving work in progress Honestly evaluate the progress made, with knowledge that this will take time, and that many factors you can t control Benchmark not only against yourself and your goals, but also against a your competitive set, to evaluate progress
52 Summary Strategic planning is the critical first step in the development of an effective economic development program. This ongoing process enables a community to most efficiently and effectively focus its resources to create desired outcomes.
53 Sample Plans City of Phoenix: Downtown Phoenix: Greater Phoenix Economic Council: Strategic-Plan-extra-small.pdf Town of Queen Creek:
54 Contact Information David Roderique City of Buckeye Economic Development Dept. 623/
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