Friday, December 19, 2014

My Apologies

My apologies to regular readers for the sudden “radio silence.”  I had hoped to add a few more to the 238 essays posted this year but that will have to wait until year end.IMG_1162

I got caught up in logistics as well as some fascinating new research discoveries you now have to wait to hear about until after a planned holiday hiatus.

Can’t believe has now been five years since I retired and slipped into obscurity, except for these posts and whenever the local Herald-Sun lifts one up, with standing permission, to republish as a guest editorial, perhaps to confirm I am still exist (smile.)

Life is good and as you can see, my English Bulldog Mugsy waits patiently for a road trip.

Best to you and yours as we ready for 2015.

Tuesday, December 16, 2014

A More Inclusive Way To View Performance

Durham, North Carolina where I finished my career and still live in retirement just issued a report on how well the convention center here has been doing at erasing operating deficits.

There were some inconsistencies and misperceptions.

At both the city and county levels, Durham has always had excellent professional management during my twenty-five years here and none more so that under Tom Bonfield as city manager.

Governments at every level are not known for being able to fully account for and allot both revenues and costs to facilities. But neither are those in the free market economy.  More on that later including a new approach applicable to all sectors.

The convention center in Durham was always expected to run a deficit.

Back in the day when consultants weren’t punished for being candid with both pros and cons and most were not for sale, the consultant for the proposed Durham convention center projected a $450,000 annual deficit, which would be $1.8 million today.

But thanks to new management it now runs a $167,000 deficit and that is without fully attributing all related revenues.

For instance, if parking and ticket assessments are being used to make DPACs performance look even better, as they should, it seems the city should attribute revenues from the lease of “air rights” above it to the convention center’s bottom line.

The convention center here has always been hampered from harvesting more than its share of the out-of-town conventions and meetings drawn to Durham overall by having far too few hotel rooms in walking distance.

That is about to be more than remedied when by this summer the number of guest rooms at or within less than a block will increase nearly double to nearly 400 and another 259 within a few blocks.

A few are made feasible by revitalization but a good share are due to incessant communication, over nearly three decades now, by Durham’s marketing agency to point out downtown’s strategic location.

It is four miles from Research Triangle Park, adjacent to one Duke campus and two miles from Duke’s main campus and that of North Carolina Central University, as well as the most proximate to dining and entertainment districts.

But as the new management company has proven, the original management company back in 1989 could have closed the gap, had it not cursed the facility with a convoluted identity and a sense of entitlement.

When it opened, it not only made sense to contract management with the adjacent hotel owner but that contract was calibrated as an incentive by essentially covering all of the private hotel’s fixed costs.

But instead, the hotel company tried to brand the convention center merely as its private meeting space while still demanding preferential treatment, if not sole-sourcing to out-of-town groups selecting venues.

The city and county bear some responsibility for their own self-inflicted deficits by being passive until a few years ago with everyone except Durham’s marketing agency which it insisted must refer to the facility by it true identity while somehow dealing with the obfuscation it tolerated  elsewhere.

I cringed when news reports repeated (although in much more genteel language) an urban legend that somehow Durham’s community marketing agency felt “uncomfortable” with the arrangement inferring less had been done for the convention center back when I ran the DMO.

The cardinal rule for a DMO is to do what’s best for the community as a whole when it comes to optimizing visitation including the 10% who attend conventions, while maintaining a level playing field.

When it comes to attracting out-of-town meetings, this isn’t just about being fair to local stakeholders such as hotels and other privately-owned meeting space as well as the convention center but to be absolutely fair to meeting planners and organizers.

The job of a DMO is to draw attention to Durham and then assist while meeting planners and other site selectors make the best decision for their groups as to which venue and part of town are best for their needs.

It is up to each facility including the convention center by that point to close the deal and harvest their share while the DMO provides level platforms for information.

A few community DMOs play favorites, but it is at their peril as has been so often proven, including elsewhere in North Carolina.

However, a level playing field meant that the Durham DMO always did much more to promote downtown Durham, and thus the convention center, than it did for other facilities.

We made sure the other facilities understood why, but that this extra effort would stop short of ever “sole-sourcing” the convention center to a meeting planner which is what the management company and owner of the adjacent hotel demanded.

What did we do extra?  A special section on downtown including several pages of schematics on the convention center, dining maps to show proximity of restaurants, a walking tour, a time/distance/frequency shuttle schedule to and from other hotels and facilities to name just a few examples.

We even intervened to smooth over relations between the convention center management and planners from time to time back then when a sense of entitlement threatened to poison the site selection process.

But none of this overcame the primary reason the convention center performance was limited – the lack of nearby hotel rooms.

Of course there were market trends to blame.  The facility opened just as the nation’s meeting planners shifted preferences to hotel meeting facilities and away from downtowns and conventions centers because the number of facilities rapidly increased, while the number of conventions went into a long slow decline,

That is still underway today.

Until now, Durham’s local governments have avoided the slippery slope many communities have fallen down when they disguise deficits by creating special slush funds to pay out of town groups subsidies to use certain facilities.

Durham visitation outperforms those communities that do “pay for business” according to analyses of participation in activities such as conventions, sports and performing arts where that tactic is used.

Sadly, community marketing organizations and chambers of commerce are often the ones leading communities over this cliff.  But ultimately, the problem is not just a failure to understand the law of supply and demand.

If instead of subsidizing events, cities and counties as well as surrogates such as DMOs and chambers, where they contract other, traditional economic development services, would adopt full cost as well as full attribution accounting, they could make or recommend much better decisions.

This would be looking at the benefits as well as costs of events and facilities more holistically, like an ecosystem.

Maybe the convention center deserves partial credit for an event its existence helped intrigue even when another local facility in the community is selected.

Maybe the Museum of Life & Science deserves partial credit for increased property values in surrounding neighborhoods.  Maybe facilities and events that cannibalize underwriting, should deduct that from overall an event’s overall impact.

It isn’t as far-fetched or complicated as it sounds.

But cities and counties are not alone in the struggle to adapt accounting to be more consistent and inclusive when it comes to fully allotting costs and benefits.

The free market has long avoided “full cost accounting,” instead pushing what are called negative externalities (certain costs) off on consumers and taxpayers.

Even countries are now being challenged to move beyond merely using GDP (gross domestic product) or inputs minus subsidies in value as a measure of economic health.

An alternative to using only GDP is called IW (inclusive wealth) an approach that measures the positive change in human well-being across generations in a country by factoring in the social value of all capital assets, natural, human and produced.

It is consummately free market, just without opaque freeloading.

It has been under refinement since at least 1987 and linked here is the 2014 Inclusive Wealth Report. It doesn’t reject the value of GDP.  It just takes a much more full-accounting approach to growth, and particularly sustainable growth.

Natural capital includes fossil fuels, minerals, forests including non-timber resources and agricultural land.  Human capital involved education and health.  Produced capital includes equipment, machinery, roads etc.

Add them up and deduct things like oil capital gains and carbon damages and you have an Inclusive Wealth Index.  My interest is in natural capital so I’ve read and re-read the 2012 report with a focus on that area.

Each report gives a rating overall for 140 countries and then zeros in on one of the three areas of capital, sort of like a balance sheet is used by the private sector but far more inclusively.

Accounting and metrics such as these are important because they help individuals, communities, states and countries make decisions with a full understanding of the inherent tradeoffs.

To bring it back to subsidizing events, even when the dollars are raised privately, they didn’t just magically appear without having an adverse impact on areas including other events.

Failing to grasp subtleties such as this is how communities make decisions that gradually hollow out unique sense of place.

Inclusive Wealth is a better way of looking at deficits and surpluses as well as a far more inclusive way of measuring impact.

The sooner it filters down to the local level, the better it will be for communities still able to salvage the distinct sense of place that make them worthy of love by both those who live there but those who visit regardless of purpose.

Monday, December 15, 2014

The Rare 2.5%

Over lunch, prior to giving a guest lecture a few months ago, a college professor friend of mind told me I had always been entrepreneurial.

It was a mixed message to me.

The same observation had been made by others but I always took it to mean that during my now concluded career, I had specialized in startups for community marketing three different destinations.

The mixed message came from other friends and associates who criticized me for being too data-driven, for not “thinking big,” for being too strategic and process oriented, even too altruistic.

To them, the latter were not hallmarks of being entrepreneurial which contrasted to their view of me they instead fashioned themselves to be.

It wasn’t until the last few years of my career, when I met Christopher Gergen, who walks the entrepreneurial walk and also teaches innovation and entrepreneurship at Duke University that I began to grasp why he and others such as Dr. Dana Clark at ASU saw me as entrepreneurial.

The idea that entrepreneurism could, in part, be altruistic was also becoming clear to me by then.  The organization I led until retiring five years ago spearheads the Durham’s Annual Tribute Luncheon, in lieu of an annual meeting.

The idea was and maybe still is to shine a light on people who fostered and shaped Durham values and unique sense of place.  In the year I retired, the event honored social entrepreneurs such as my neighbor Kevin McDonald.

Being entrepreneurial has become one of those traits that without any idea of what it means now gets salt and peppered into resumes.

For others who boldly claim to have this trait, I am reminded of a saying by a friend of mine had that “there is only room for one person at a time to stand on principle.”

Actually, being entrepreneurial, as a trait, exists along a spectrum.

Over three decades of research and analysis, Gallup has zeroed in on the ten talents exhibited by successful entrepreneurs.  On a scale of 1 to 10, I score higher than six on all but one of them and through working hard brought that one up to a 4 or 5.

Turns out I score much higher on “thinking big” than I was given credit for by detractors, because as Gallup has ascertained, I took an “analytical approach to challenging or uncertain decisions.”

Who knew?

“Replacing emotion with a rational thought process,” according to Gallup’s findings, “helps accurately calculate their odds of success.”  By this this they mean in the long term and in association with other needs.

Looking at a distribution of entrepreneurial talent nationally, Gallup calculates that just 5% have it at a level that produces “significant superior business performance. 

Gallup also calculates that of those working adults in the US who currently do not own a business, about 2.5% have very high-level entrepreneurial talent.

That’s about 5 million people who could, if tapped, generate an addition $25 trillion into the US economy.

Or a few may get scooped up by community marketing organizations tasked with generating visitor-centric economic and cultural development by guarding and leveraging sense of place.

Judging by Gallup’s calculus, that means for those community DMOs wanting to scoop up an exec with talent for innovation and entrepreneurialism, there would currently be about 15 in the entire U.S. currently at the helm of community marketing organizations.

I know of two and possibly even three running DMOs in North Carolina which matches Gallup’s calculation.  Most communities won’t despair because they don’t value those traits anyway beyond lip-service.

Even those that do and are fortunately to land someone with those talents must be eternally vigilant against some in the community who instead will try to undermine them.

Hopefully, my friends in the program at Appalachian State University are fostering students with natural talent for innovation and entrepreneurism in quantities sure to increase that pool beyond just replacing those who retire.

Gallup ascertains that we are born with certain talents but rarely would anyone be born with very high levels of each of the 10 talents found in high-performing entrepreneurs.

Training, support and development such as education won’t create a talent where it doesn’t exist but they can move someone with those traits up the scale.

That’s why, for instance, I was only able to get one of those traits up to average while some that came easier moved much higher on the scale.

But the challenge for educators seeking to generate a new generation of DMO execs with these traits, it is a challenge.  The typical management program may find that 17% are interested in tourism including 4% who are inclined to DMO management.

Between 2.5% and 5% will have the innate talents to work with that will make them highly successful in as entrepreneurs and innovators. 

Of course, many communities only give those qualities lip-service but for those seeking leadership with those capacities, the odds are very tight.

I hope that colleges now use tests such as Gallup’s StrengthsFinder to help students understand their particular latent talents so they can work at improving them and avoid thinking these can be accumulated merely with coursework or certifications.

When he was younger, one of my grandsons used the term “talkers” to describe news and sports analysts and commentators. Perhaps I am considered one in retirement (smile.)

Many communities now have boosters capable of being “talkers” about the importance of drawing talent.  Being a “talker” is a talent in and of itself.

But this doesn’t mean these people realize how rare entrepreneurial talent is let alone understand the community attributes and values people with those talents find most essential and appealing.

More can often be ascertained by the values a community consistently exhibits across each and every touch point than from any volume of marketing materials.

When it comes to fostering community brand appeal, it is as much about “storydoing” as “storytelling,” and many who are only “talkers” when it comes to attracting talent are betrayed as otherwise by their “storydoing.”

Hubs such as American Underground with two sites in Durham nurturing 158 startups and a satellite in Raleigh with 32 are pivotal.

But venture capital and nurturing become less relevant to retaining entrepreneurial talent when communities fail to exhibit other core values and traits that are important to them.

Only with that understanding and alignment at every touch point across both public policy and every organization related to economic and training will the best and most consistent decisions be made.

Friday, December 12, 2014

The Folkloric Key to Telling a Community’s Story

My former field of community marketing is storytelling that involves weaving the history and culture as well as the inherent and distinctive traits and values of a place into a coherent narrative.

The objective is to safeguard a community’s unique sense of place by giving it prominence while helping prospective visitors, which includes more than 8-in-10 newcomers and relocating executives decide if it is a good fit for them while secretly shopping a community.

The trick is not just to be appealing but appealing to the right prospects.  There are several reasons a grasp of folklore comes in handy.

Folklore involves much more than legends and myths.  It begins orally but a good deal of folklore eventually makes it into news stories and sometimes even contaminates any official record before being re-injected back into folklore once again.

This process may be the result of our need as humans to, adapting the words of journalist Bill Moyer, harmonize or re-harmonize our lives from time to time with our stories.

Shaping a community’s story requires not only understanding this process but then relentlessly drilling down through layers of modifications and contemporized revisions to get at the most authentic roots of the story of a particular place, an almost temporal strain.

At about 10 p.m. on October 27th, a mutual friend emailed me with the news that former Durham City Council member, Chuck Grubb, had passed away unexpectedly a few hours earlier.

Chuck and I were only eight months apart in age in 1989 when he was elected to office a few months after I came here to jump start the community’s official marketing organization.

We continued to work on projects from time to time for another two decades during which he repeatedly made me promise that one day I would tell the real story of how Durham saved the Bulls.  More recently, our contact was via social media.

I could never find a time that was right but it will have to come soon.

Now there are only two of us left who really know how much that narrative has been truncated over the years, who know the full story first hand.

Over the years, It always gnawed at him when accounts including those in news reports would neglect to mention this essential piece of the story or when some who were only later involved would have so much to say.

But we also knew that, in part, we were to blame.

Once the turnaround had been achieved, the three of us agreed that first and foremost, it was vital to moving forward for us to help people save face.

Each of the three of us took an assigned role and mine was to absorb any fallout or retribution but we didn’t realize that wouldn’t be entirely possible or how long those resentments would last.

Keeping my promise to Chuck is for another essay.

Patti Sanchez, who graduated from college about that same time, has spent the last 25 years helping organizations such as Apple, Adobe and Oracle tell their stories.

Last summer, she blogged on Harvard Business Review that like the storytelling organizations I led on behalf of three different communities, all businesses and organizations need a designated folklorist on staff.

She describes folklore “in a cultural sense” as “the sum total of anecdotes, artifacts, and rituals that unite a group of people – the common language that creates shared meaning.”

As you can tell, I am not much of a storyteller myself but during my now-concluded career, I led organizations officially tasked with that mission and I had a knack for how to ferret out a community’s story.

In January of 1972, I took an upper level English course in folkloric research at BYU where I studied, in depth, and documented a specific seven month period in 1969 and 1970 and how variations of a story had flowed through a society in the west, even migrating into news reports and back again.

It also works the other way around.  When editors establish a premise before assigning a reporter, even when the facts don’t seem to fit, the story and subsequent headline will still echo the original premise leaving only the few consumers who read in-depth to ferret out the full story.

When I studied folklore, I had my sights on being a lawyer, but it is a course I would highly recommend for anyone who by intent or serendipity finds themselves in a career in community marketing as I did.

There are many ways an understanding of folklore is useful in that career besides finding the common threads that tie contemporary community traits back to their distinctive roots.

One example where understanding folklore came in handy in Durham was unwrapping image issues driven by word of mouth in rival communities or water-cooler myths dispensed by commuters.

These people were literally hijacking Durham’s story and holding it hostage.

A decade before I took that course, a folklore researcher named William Hugh Jansen coined the term “Esoteric-Exoteric” factor.

Esoteric refers to the mystical, subjective conception we have of ourselves [or our community] vs. the exoteric or objective, external conception we have of others.

Another influence in that class were some writings by Joseph Campbell who was just then retiring from Sarah Lawrence College and would continue until his death the year before I came to Durham to write about mythology, the human impulse to create stories.

By the way, last summer Sanchez posted a series of interviews with Christopher Vogler, the author of The Writer’s Journey: Mythic Structures for Writers and Memo from the Story Dept.

He is a Hollywood veteran and disciple of Campbell who lectures and consults on organizational stories.  The videos are approximately 2 to 6 minutes each and a great introduction to consistent elements in folklore.

Sanchez would probably point to a documentary commemorating the 10th anniversary of the adaptive re-use of the old Lucky Strike Factory in Durham, which aired last week on the Raleigh TV station owned by the same company.

It is an excellent example of a firm that fully understands the importance of folklore.

I am amused now from the vantage point of retirement as I read or hear of things that happened long before being repurposed and attributed to contemporary actors, events or developments.

It is very natural for people to reweave narratives to fit current perceptions.  An example is when the story of Yankee soldiers writing back for resupplies of the tobacco they had used while waiting for the culmination of the surrender here that effectively ended the Civil War.

The story about the letters was later rewoven into the story of a person who later came to prominence.  That is an example of one generation reweaving a legend to give contemporary meaning to events and people.

The era we’re in now isn’t the first time this has happened during the course of Durham’s history, nor will it be the last.  But I remember how confusing it could make distilling the community’s narrative.

Maybe that’s why, occasionally with these essays, I try to leave “bread crumbs” for future Durham generations trying to drill down through these conflicting narratives for a longer view.

Thursday, December 11, 2014

A Raleigh Best Practice

There are several reasons why a community won’t seem to have or value its distinctive sense of place.

The most common is that its boosters and politicians may place emphasis not on what is unique or distinctive but instead on the promotion of mainstream venues and events, chasing after the appearance of seeming “major league.”

The reference was coined as a way to be distinctive but the reality is that a community then becomes just one of many.  For a classic essay on this, click here for a 1997 essay Garrison Keillor penned for Time Magazine.

But research reveals that even visitors, convention planners and relocating executives who may seem to be enthralled with the ubiquitous are always drawn more to authenticity in a place.

Below the surface though, while at risk of being suffocated, these communities usually have pockets of ardent “stayers” vs. “boomers” who work tirelessly to breathe oxygen into its sense of place before it really is too late.

Communities such as Durham, North Carolina can seem to have more of their sense of place remaining, because their community marketing organization hones in on distinctive ingredients and used them as leverage to outperform counterparts in other communities that don’t.

But even in these communities, sense of place remains at risk if it isn’t also embraced by other boosters and politicians.  In fact, taking it for granted, they may be in greater danger of being complacent.

Raleigh, North Carolina, a metro area distinct from Durham with which it shares a co-owned airport located in a community midway between, is one of those places that to many, has seemed to surrender its sense of place.

But below its “mainstream” hype and veneer, there is a valiant cohort fighting to save its soul and because it is so much more at risk, possibly making up with desperation and determination what the community’s distinctiveness lacks in promotional materials and visibility.

Raleigh may look generic because it often gives promotion emphasis to aspects you can find almost anywhere including mega-facilities, but below this mainstream veneer are some incredible sense of place best practices.

Far ahead of Durham, officials there have steadily funded historic assessments not only inventories by neighborhood but by period.  Of course, having a unique sense of place is about far more than just history or historic structures.

For instance, Raleigh had not done as well when it comes to growing indigenous festivals, seeming more interested in importing them or in the natural elements of sense of place, e.g. its tree canopy, which has now shrunk to just 36%.

Evidently, Raleigh failed to heed the unsolicited observations published by America’s soon-to-be foremost architect of sense of place when in the early 1850s it was a village of only 2,500 souls:

“It is hard to admire what is common; and it is, perhaps, asking too much of the citizens of Raleigh, that they should plant for ornament, or even cause to be retained about such institutions as their Lunatic Asylum, the beautiful evergreens that crowd about the town…”

These things are all emblematic of sense of place, which at its core is about values and traits that while not unique are distinctively manifest.  Unlike Durham, Raleigh has not yet plumbed that deep.

When, or if, it does, it may find that placing the ambitions of “boomers” above the values of “stayers,” to adapt the words of Wendell Berry, has always been one of its near-temporal but fatal values.

But I want to share a study just completed for Raleigh that is the envy of many communities concerned about retaining sense of place.  It is a plan unveiled a few months ago that quantifies the value of its historic assets and its cultural identity as part of its economic development, at least on the traditional supply-side.

The study quantifies the role of its historic districts as havens and magnets for creative class workers (knowledge workers) and enterprises as well as various measures of livability including walkability, property values, ownership, stability, diversity and tax base contribution.

It was conducted by a team of real estate and economic development experts led by Donovan Rypkema at PlaceEconomics.  Click here to review slides from a presentation Rypkema made on this topic a few years ago in Mississippi.

What caught my eye is how much more powerful and effective historic tax credits have been as a self-funding form of economic stimulus.

Most of the areas studied in Raleigh have undergone gentrification, yet the analysis documented that historic districts there, at least collectively, have retained a healthy mix of household incomes.

Raleigh is much less diverse than Durham, which no longer has an ethnic or racial majority.  But the historic districts there are more diverse when it comes to whites and African Americans than the Raleigh is as a whole.

For anyone seeking secondary research, a good amount can be gleaned from this report as well.  One reason Raleigh is now the second largest city in North Carolina has been its ability to sprawl out into one of the largest counties in the state, three times larger than Durham County’s footprint.

Before the recession, a friend in economic development there told me that the area surrounding and including Raleigh had been developing at a rate of an acre a minute.

That is far too fast a rate for rational decisions to be made about sense of place.  In fact, in the thirty years prior to the great recession of 2008, The county including Raleigh increased impervious surface by 7.6 acres a day.

Ironically, Durham may owe some of it sense of place to Raleigh.  A third of Durham was set aside in watershed and a huge reservoir that fueled Raleigh’s much-too-rapid growth, while incessant bad-mouthing of Durham may have also helped tap the breaks on Durham growth.

But it was interesting to note in the PlaceEconomics report that a little more than a hundred years ago, Raleigh’s population density was three times what it is today.  Development such as this puts incredible pressure on taxes.

This is not only because residential development does not pay for itself but because with sprawl, while the tax paid by individual units is higher, the tax revenue generated per square foot and per acre plummets.  Meanwhile, the cost of replacing infrastructure is much higher in newer developed areas than it is in historic districts.

Myrick Howard, a native of Durham who lives in Raleigh as head of Preservation North Carolina recently penned a very thoughtful piece entitled Ten Reasons Historic Preservation Matters for North Carolina.

He touches only briefly on tourism.  But I know from the metrics, that communities, such as Durham, that put their authenticity and distinct sense of place forward in their community marketing are outperforming those that focus instead on mainstream facilities and events.

Even more intriguing, those that do the former also outperform or at least hold their own for visitor participation in less authentic areas such as performing arts, sports and conventions.

Want the best of both?  Always lead with what’s distinctive and authentic about a community.