Sunday, July 27, 2014


Think I will give you all a break.  Its been about 250 essays since Mugs and I have been on the road.  See you in a month.Mugs Riding Shotgun Cross Country February 2011

Unsticking Poverty

Preceded by textiles during WWII, tobacco manufacturing in Durham, North Carolina peaked in 1958, twenty years before manufacturing jobs peaked nationwide.

By the time I arrived here in 1989, all but one factory was gone and that closed a decade later.

The poverty rate nationwide back when Durham’s manufacturing peaked was close to 23%.  But it was 40% in North Carolina at the time and 33% in Durham.

Research shows that communities lose 1.6 other jobs when they lose a manufacturing job.

Poverty in Durham officially took root in the mid 1930s with the closing of the Durham Hosiery Mill nestled within the Edgemont neighborhood.

Soon surrounding businesses also collapsed and unemployed workers were evicted or indebted by speculators who took over the mill housing.

Only two decades before, that hosiery mill had been the largest in the world.  Sociologists here at Duke University, led by activist Dr. Howard Jensen, not only rushed to study the emerging poverty there but initiated a number of solutions still in use today.

Among many of the initiatives, Jensen initiated the precursor to United Way, spearheaded a community center and did much more.

Thanks to strategic foresight nearly four decades earlier,  Durham had already begun adapting its overall economy to research, higher education, healthcare and hi-tech, but these were very different kinds of jobs.

Following the Civil War, people could easily transfer skills from agriculture to working in Durham’s factories with little or no change in education.

In 1860, on the eve of the Civil War, the area surrounding Durham was 30% African-American, a mix of free and enslaved.

That proportion grew to what is today, 4-in-10, when after emancipation and war’s end, African-Americans relocated to Durham to work in its booming tobacco and textile factories, giving it 50% more diversity than the state as a whole.

Today, that proportion is double what it is statewide, one of the reasons Durham is known for being “accepting,” and why it is still a beacon for new talent and the corporations relocating in pursuit.

Many African-Americans drawn to Durham also started service businesses by the 1880s that accompanied each increase in manufacturing, eventually spawning Black Wall Street and a thriving African-American middle class here.

While manufacturing had drawn African-Americans to Durham for jobs after the Civil War, the poor created by that benchmark mill closing in the mid-1930s were predominantly white.

Dr. John Rodman Larkin is remarkable for many reasons.

One is the valuable study he conducted in his native North Carolina based on data collected just four years after that mill closing in Durham entitled, “The Negro Population of North Carolina: Social and Economic.”

Larkin was African-American himself, and in the study he concludes something researchers at Harvard and UC-Berkley recent also concluded in another study published this summer entitled, “Where Is the Land of Opportunity? – The Geography of Intergenerational Mobility in the United States.”

Poverty, especially among African-Americans, settled into specific pockets in communities because unlike other groups they were less likely to relocate or have the means to do so.

Larkin’s observation in North Carolina was that in the wake of that first mill closing here.

These new researchers agree and also find a link to income equality and segregation of the poor.

Anecdotally, Joe Queenan, a conservative commentator and critic who is Caucasian and grew up very poor in Philadelphia projects, agrees.

In a Rotary Magazine article entitled, “The Inconvenient Truths About Poverty,” he cautions the “industriously empathetic” and “professionally compassionate” people such as myself and many others in Durham.

He writes that poverty in pockets where it is especially stubborn can become rooted in an “interlocking series of self-fulfilling prophecies,” where from generation to generation and neighbor to neighbor “the poor become architects of their own destruction.”

He would point, I’m sure, to the fact that more than half of the poor residents of Durham come from families where no one worked and all but 2% of those who did, only worked part-time.

Forever waiting for a “call back” to mill work can filter down for generations.

But Queenan also cautions, that this should never be interpreted that poverty is a “lifestyle choice” and gives a hint as to why poor people walked out of a session where a Durham task force was delving into poverty.

“People who have grown up poor always feel a proprietary attitude toward poor people in general, even when they themselves have migrated to a more congenial economic class.” (paragraph break mine)

“They don’t like to hear well-born outsiders presume to discuss the unexplored charms of slumming. It’s like listening to people who have never left Nebraska rhapsodize about the thrill of sailing the high seas.”

Since its high of 30% in 1960, Durham’s poverty rate dropped by nearly two-thirds to barely above the state average (actually below when weighted for ethnicity,) only to bounce back up during the Great Recession again to around 19%.

Weighted for differences in ethnic diversity, it really isn’t any higher than other urban areas in the state, including those nearby, but it is still vexing to Durham, long identified as an extremely “caring” community.

Several times in the 26 years I’ve lived here some of the very smartest people I’ve ever known have wrestled with the problem, including many globally recognized experts at Duke who have followed in Dr. Jensen’s footsteps.

Even after opponents in high office perpetually tried to starve it of funding, the War On Poverty worked wonders through the ‘60s and ‘70s and intermittently during the ‘80s and ‘90s after being gutted.

But it was never enough, nor was it meant to be a panacea.  Education is a piece because mobility is higher and unemployment lower among college and high school graduates than it is for dropouts.

This is why in his new book entitled The New Geography of Jobs, economic researcher Dr. Enrico Moretti suggests a “relocation voucher” as a means to reduce unemployment.”

The idea was also included a year ago last spring in economist Dr. Michael Strain’s report entitled, “A New Jobs Agenda” in his report for the American Enterprise Institute, a conservative think tank. I think it was one of his better ideas.

The voucher is now part of the bi-partisan American Worker Mobility Act.

Dating from the late ‘60s, researchers suggested the value of mixing the unfortunate in with better off neighborhoods, but Moretti and other believe this is now more a matter of relocation to communities better matched for skill levels.

He suggests the “relocation voucher” as part of the unemployment insurance safety net that was devised back in the 1930s around the time Durham’s poverty took root.

It could be coupled with the federal government’s shift of job training and re-training from just the classroom to apprenticeships and on-the-job training.

It isn’t clear to me if the vouchers will motivate people who are poor to move.  Nearly 40% of Americans overall have never left their hometowns.  But even if some won’t, the fact that others do, experts think will open up more jobs for those who stay.

Durham would be hard to leave.  More than 70% of native-born North Carolinians still live here, making it the second most “sticky” city in the nation according to Gallup.

However, those working hard to reduce Durham poverty might do well to consider these options rather than hoping to somehow restore the magic of days gone by.  Poverty is complex and there is no “silver bullet.”

While we’re at it, we need to look at what the impact will be of Durham’s next economic adaptation and begin preparing residents well before its arrival.

Friday, July 25, 2014

Durham Could Become Detroit If It Doesn’t Adapt

There is much for Durham, North Carolina, where I live, to celebrate in The New Geography of Jobs.

While the author often jumps from metro areas to multi-metro consolidated statistical areas in search of data without distinguishing, it is clear Berkley economics researcher Dr. Enrico Moretti finds Durham one of a handful of centers of innovation.

But the book is more than that.  It is an excellent primer to remind policy makers what is and isn’t economic development and why.  It also pinpoints how some cities avoid decline while others don’t.

They continually and strategically economically adapt.

Detroit was once like Durham is today, a center for research, technology and innovation but it became complacent and peaked in 1950.  Instead of patting themselves on the back, Durham leaders should be running scared.

The community is where it is today because it has economically adapted at least four different times during its history, five or six if you count transitions by Native Americans here.  That this is an almost temporal part of its personality is no guarantee.

Most communities. such as nearby Raleigh, another emerging innovation center, have been lucky to do it once.

When one examines Durham’s economic transitions, they were both gradual and farsighted but each took root long before its then-current economy peaked.

Durham’s status as a center of innovation today is rooted in a time more than a hundred years ago when it was a bustling center for tobacco and textile manufacturing, fifty years before they would dissipate and nearly ninety years before they would disappear.

Architects for new developments around the historic American Tobacco Complex elected to ignore truly historic elements dating back more than a century and emulate instead a building erected in the 1950s.

Those erected by the City ignored even that, defying its own design guidelines.

American Tobacco’s founders, though, began re-thinking Durham’s economic future a little more than 20 years after the final addition to the Old Bull Building was completed in the 1880s (now a National Landmark, it dates to 1874.)

This strategic foresight began to evolve just before the far more distinctive Neo-Romanesque portion was erected in 1900, also reflected in several other thriving historic districts such as Brightleaf.

These historic buildings and more than a million square feet of others of that vintage or earlier are filled with innovation workers today.  But the foundations of that transition were laid in 1892 when Durham’s tobacco and textile generation facilitated the relocation of Trinity College here.

The school was transitioning to the German university model with an emphasis on research over recitation.  This was less than two decades after Durham’s adaptation from agriculture to manufacturing.  Within a decade, seeds for the next adaptation were already being sown.

In 1907, Republican President Theodore Roosevelt moved to break up the massive Duke trust, one of two forged by Durham natives, one tobacco and the other fertilizer created from tobacco byproducts.

Its fall from grace began because of its complete monopoly of licorice, a flavoring used in tobacco.

Two years earlier his father, Washington Duke, had died just as J.B. Duke was founding The Southern Power Company, an entrepreneurial endeavor to help North Carolina adapt economically.  It’s now known as Duke Energy.

He would fight the breakup of his tobacco trust all the way to the Supreme Court four years later, but I think he had already seen the “writing on the wall” based on breakups of similar trusts.

In spite of their differences with Roosevelt, both father and son were also ardent Republicans, subscribing during its last few years to a wing committed to the downtrodden.

After breaking up his trust on behalf of the government, J.B. Duke walked away from tobacco for good just as the Republican and Democratic parties traded places on the issue of social justice during the election of 1912.

Roosevelt didn’t break up the Republican Party.  In fact he won every presidential primary but one that year.

But the party’s Wall Street wing used backroom tactics to block his nomination anyway, leaving the social justice wing no choice but to follow Teddy to a third party and to finally convert to Democrats.

The Party of Lincoln had become one that would have shunned its first President, just as today’s version would probably shun President Reagan.

J.B. Duke spent his last decade setting up another kind of trust, this one to create and endow Duke University from its Trinity foundations with one of the foremost goals of establishing a research-driven nationally recognized medical school.

By the end of WWII, Durham and Duke leaders were at the forefront of pushing a proposal by a UNC-Chapel Hill professor to forge a university park out of southeast Durham pinelands.

It would be solely dedicated to research and development. It’s known today as Research Triangle Park, “triangle” emblematic of the first three of now four universities involved, half of them also based in Durham.

The Park’s tenants are corporations, but employees have always spun off to launch another economic transformation, this time smaller innovation concerns.

By 1987 when time American Tobacco abandoned its plant in Durham for good two years before I would arrive to jumpstart the community’s first destination marketing agency, innovators were already beginning to gravitate to downtown to live and work alongside artists in converted lofts.

Even the city center district of Downtown Durham was receiving positive reviews for sense of place and authenticity long before it began trying to earn them.

Moretti cites research in his book for why innovators like to congregate in Durham besides the fact they like authenticity in their surroundings.  “Geography matters for the spread of knowledge, and knowledge quickly dies with distance.”

He cites research that the transference and synergy important for innovative ideas falls off dramatically between zero and 25 miles.  In fact Harvard researchers have correlated it to being less than a kilometer away or just over a half mile.

RTP is four miles from downtown Durham and Duke ranges from being adjacent to two miles from downtown.

Similarly, he notes that it is equally important to venture capitalists to be in very close proximity to their investments.

Clearly Raleigh developers and realtors who beginning in 1960 hoodwinked so many newcomers into commuting to Durham by disguising the location of RTP, undermined more than the housing market and philanthropy here.

In his book, Dr. Moretti also explains another reason innovation centers are very geographically compact.  Innovation concerns not only locate in clusters for the exchange of ideas, but like Facebook has recently admitted, they also buy other concerns and close them down.

This isn’t to eliminate competition but because the true objective of the transactions was to secure more talent.

Durham leaders, especially those responsible for economic development would do well if they haven’t really read and re-read The New Geography of Jobs, not to reinforce self-perceptions of exceptionalism but to see and understand broader influences.

For example, it may take decades before we know whether downtown revitalized because of shifts in macro-psychographics nationwide including whether it would have happened even without massive subsidies.

But far more important is that Durham learn from its adaptive past and also the past of great cities now in decline.

Other than accredited community destination marketing organizations, economic developers are not known for strategic thinking, especially on the supply-side.  Often this is because governing boards and stakeholders limit them to just “shoveling more coal on the fire.”

But for continuing and never-ending economic adaptation to perpetuate, strategic thinking is imperative, especially among elected officials.

It isn’t enough to celebrate today’s accolades, really a credit to preceding generations of Durham leaders.  But we can learn from their example and be inspired by their witness.

Judging by how far ahead past economic transformations took root in Durham, today’s leaders need to be focus on 2050 and beyond or risk Durham becoming another Detroit one day.

Thursday, July 24, 2014

Leaving Something of Ourselves Behind

A friend of mine who teaches strategic thinking and consults for organizations from time to time estimates that 2% to 3% seem to come by this skill naturally.

It was probably embedded beginning at age 3 in the way their parents and grandparents schooled them in pre-school foundational skills.

The professor estimates the percentage rises to 10% at college graduation and then levels off.  He finds it curious that so many  that pick it up naturally studied history in college, not business.

I’m not surprised, really.

Interest in history is piqued during those very early years, and when studied,becomes a way to make connections and see patterns in the world.  It’s about looking back to see forward, all foundations of strategic insight.

Maybe a required course in historical analysis should be required in business schools.

Driving  home from giving a lecture in the mountains earlier this week,  a passage penned by Dr. Peter Bieri for a “philosophical thriller (smile)” and published under the name name Pascal Mercier kept running through my mind:

We leave something of ourselves behind when we leave a place, we stay there, even though we go away.

And there are things in us that we can find again only by going back there (Night Train to Lisbon.)”

When my paternal great-grandparents and grandparents homesteaded the ancestral ranch the shadow of the Tetons, where I was born and lived until the age of accountability, only one had Idaho roots dating to when it became a territory during the Civil War.

At the time, only 20% of Americans lived outside of the state in which they were born.  Today, it is 33%, half of college graduates by the time they are thirty but only 17% of high school dropouts according to the research in the book The New Geography of Jobs by UC-Berkley economist Dr. Enrico Moretti.

The book is an excellent primer on economic development.

When my paternal great-grandparents and grandparents homesteaded ancestral ranch more than a hundred years ago in the shadow of the Tetons where I was born and lived through the age of accountability, it was so the younger generation could afford land of their own

Only one had Idaho roots dating to when Idaho became a territory during the Civil War but all of them had been born in the Rocky Mountains.

Idaho, at the time, had fewer than 2 persons per square mile, “the census classification for frontier.”  At the time, only 20% of Americans lived outside the state where they were born.

Today, it is only 33% including half of college graduates by the time they are thirty but only 17% of high school dropouts according to the research in the book The New Geography of Jobs by UC-Berkley economist Dr. Enrico Moretti.

Homesteading land made available by the federal government back then worked much as a “relocation credit” Moretti proposes for today.

Homesteaders in the first two decades of Idaho statehood anticipated the routes of soon-to-be-laid railroads which those companies, such as the Oregon Short Line, actively promoted through intensive marketing.

Founded by Union Pacific, “short line” stood for the shortest route between Wyoming and Oregon but by 1889 that railroad was laying tracks north to Ashton four miles from our ranch, then by 1908 up 57 miles over the Rea’s Pass across the Continental Divide to the western gateway to Yellowstone Park.

By 1912, a spur had also been laid from Ashton southeast to Victor where connections were made over the Tetons and up the Jackson Hole to the southern entrance to Yellowstone and the much anticipated creation of Grand Teton National Park.

In 1954, my entire elementary school took a field trip along that spur behind a steam engine a few years before the demise of the Yellowstone Special and the Yellowstone Express passenger trains, one from Chicago and one from Los Angeles.

It was the end of an era but the old rail lines are now being leveraged into another kind of economic development.

Abandoned rail lines are now trails throughout Idaho including the two routes out of Ashton, a thirty mile rail-to-trail along the length of the Tetons and the 34 mile Yellowstone Branch Line Trail through the canyons of the Henry’s Fork from Warm River to the Divide.

In 1896, when Butch Cassidy and his Hole in the Wall Gang robbed a bank in Montpelier, Idaho near where my maternal grandparents would live during my early years, my paternal ancestors were still living just across the Bear River Range.

Soon they headed north to homestead against the Tetons when Idaho barely had 160,000 residents, after the National Forests were first established but before Targhee National Forest was created up behind the ranch in 1908.

But in 1906, Congress responded to powerful special interests by gutting some of the national forests and reopening some of the less forested land to homesteading through the Forest Homesteading Act.

Public use back then did not include recreation and although only 1.8 million acres were eventually patented for homesteads, the act effectively pried 12 million acres away for developers.

In all, by WWII, only 19% of public land had actually been leveraged into  homestead ranches and farms.

When the first of six transcontinental railroads began to tunnel through the Bitterroot Mountains of Northern Idaho, there were less than a thousand non-native people living there.  By 1900, there were more than 10,000 living in each of the two counties through which I’ll soon pass.

Many had moved there because of inexpensive public land given to the railroads and then sold to settlers before construction crews even began grading.  By 1900, these land sales reached 105,000 acrese a year.

That’s the year the lumbering industry arrived after depleting stands in the upper Midwest.  Before 1891, the land from near Spokane, across to Montana and north to Lake Pend Oreille belonged to the Coeur d’Alene Indians, about 500,000 acres left of their ancestral lands by treaty.

Responding to special interests, all but 70,000 acres was pried away.  Even given the Forest Homesteading Act, settlers were soon overrun by lumber “robber barons,” some through legal means, but much of it through fraud.

As I drive down from Lookout Pass and across northern Idaho again, three things will be on my mind.

First is that one day, we need to build in time to detour down the St. Joe River Scenic Byway along a series of Forest Service roads, hopefully astride my Harley Cross Bones.  For now, having Mugs along and my grandson’s eagerness to get to the lake take precedent.

Second is how ironic it is that the route of the Milwaukee Road’s old Hiawatha passenger train is now a 15-mile trail in Idaho alone from Lookout Ski Areas to Pearson for trail bikes and hikers, alternative forms of National Forest economic development.

Another rails-to-trails adaptation is rated one of the 25 best in the nation, a 72 mile asphalt Trail of the Coeur d'Alenes greeneway from the Tribe’s reservation at Plummer, along its namesake lake and up to the early 1850s Cataldo Mission before ending in Mullan.

One of the most spectacular views during my hiking days was heading up the St. Jo River north of St. Maries to its headwaters, a must for fans of the book The Big Burn.

One or the Forest Service heroes of the firestorm, 25-year-old Joe Halm, took his crew to safety there.  Little did I know as we hiked that stretch, that a few years earlier, a group of University of Montana students had climbed up the other side.

Well into a second century of controversy over Northern Idaho logging on public lands, they have been advocating for over 40 years for the roadless area to be set aside as a 275,000 acre wilderness area straddling each side of the Bitterroots.

Third, is what will soon be two Tribal Casinos on the plains above Spokane, near the original Longhorn (southern pit-style) Barbeque restaurant, one a leisure and convention resort opened by Idaho’s Kalispel Tribe and nearly through the approval process by the Spokane Tribe, just desserts I suppose.

To paraphrase Pascal Mercier,There are things in us that we can find again only by going back to the places were we have left parts of ourselves behind.”

Thanks for keeping me company.

Wednesday, July 23, 2014

"Is This ‘The End Boom, Boom, Boom’? - Part 2 of 2

I wrote yesterday about lessons learned and a situation I faced running the destination marketing organization for Anchorage, Alaska.  This, as Paul Harvey would say, is “the rest of the story.”

They went to the press with a story, just not the real story.

Unfortunately, those attempting the coup chose a straw issue that was very easy to refute, but it was clear the conspirators all had one thing in common, reliance on and allegiance to tourism originating out of Seattle and heavily invested in Southeast Alaska.

This calculation relied on gridlocking a generations-long web of economic and personal relationships.  It also played to a deep insecurity, particularly in small towns in Southeast Alaska that Anchorage, with half the state’s population, wanted it all.

The board to which I answered unanimously held fast.  The complainants followed through and publicly dropped their membership, but they miscalculated the reaction.

News editorials saw through it as did our Anchorage membership along with nearly every elected official including those in high office.

While from opposing political parties and ideologies, both the mayor and the long-time former mayor who was an officer on our board at the time especially understood.

Even several CEOs of Seattle interests saw through the vendetta and backed away. Meanwhile, many of us worked tirelessly behind the scenes to help those involved save face, but to no avail.

Within a few months or so, those involved in the coup were being transferred or had faded behind the scenes. However, Alaska tourism relationships, stretched thin, would never quite be the same again.345882026_03d978c5ba_b

Nor would Alaska tourism.

I pressed on for another year after that, going on my ninth there and one of our most productive given the distraction.

But I also knew from experience that once again I had been unavoidably “splattered with blood.”

Completing startups is incredibly stressful, especially those that shift paradigms.  Not yet 40, I had already spent two-thirds of my adult life forging intense change.

I felt exhausted, teetering on burn out, but more than that I suddenly felt a flood of repressed anger.  Even after venting to friends, anger “colonizes the emotional life” and clouds one’s judgment.

As Dr. Robert Karen would pen a dozen years later in a small but powerful book entitled, The Forgiving Self, unresolved anger:

“…is like a cancer, sapping our vitality, aggravating our feelings of shame, weighing us down with depression, and secreting a steady stream of bitterness throughout our being.”

I needed a pause for reflection and rejuvenation.  I realize now I also needed to find a way to forgive and hope to be forgiven, especially forgiving myself.

The DMO board and Anchorage community were extremely disappointed when I told them I was moving on - first to help the mayor jumpstart the foundation of and a governing board for a traditional supply-side economic development corporation, then - to take a hiatus from DMO work.

At a farewell dinner thrown by several hundred community leaders, I encouraged them to think only of what we had achieved together by being strategic and data-driven.

I thanked them for forgiving me my mistakes and asked them to forgive others, but it would be another 16 months before I would truly forgive, especially myself.

For two decades after I left, Alaskans would write or call to check in.  A long-time newspaper editor there would regularly post updates on my whereabouts. It’s that kind of place.

A little over a year after I left Alaska and was fully rejuvenated, I landed in Durham, North Carolina to participate in my fifth DMO or economic development start up if you count the one I did in college at BYU.

This time, the challenge included reclaiming Durham’s story, assets and identity from Raleigh, a separate but then over-reaching metro on the other side of the co-owned airport.

Having by then just turned age 40, I knew full well what the drill would be.

That certainly didn’t make it any less intense.  Within a few years, Raleigh interests were repeatedly calling for me to be fired and openly lobbying for Durham’s DMO to be disbanded, often strapping a sycophant to the front bumper.

It only fueled resilience and hardened support, but I had also learned to look past such threats to try and see opposing points of view while still coming to admire those who couldn’t yet do that in return.

And, as so often happens in life, this story circles back around. Eventually one of the participants in the Alaska coup attempt relocated to North Carolina.

Friendship and mutual respect renewed once he let slip details as to who was behind it.

I wasn’t surprised to learn the ring leader was Seattle-based with long ties to Southeast Alaska but it didn’t matter.  I had long ago forgiven - as well as come to grips with the fact - that there was so much I could have done differently, too.

Soon another friend who had lived in Southeast Alaska during that time took charge of a DMO across the state, but we never spoke about what happened other than in coded references and jokes about the job hazards that came with our chosen profession.

Over my more than two decades on the job in Durham before concluding my four-decade career five years ago, I probably made just as many mistakes as I had elsewhere, some the same, just maybe not as stupid.

Whenever I clashed with interests not Durham’s it merely seemed to raise my stock.  It’s just that kind of place.

I had not only learned from Spokane and Anchorage, but found Durham even more gritty in my defense. Someone defending me once told someone complaining about me, “he may be an a**hole but he is our a**hole.”

I suspected a few for whom I had long been an irritant might have gloated when I retired but they didn’t.

That didn’t stop a Durham sycophant or two from taking a cheap shot but the only rumor I ever heard involved the ever worsening “essential tremor” in my hands, there from childhood.

Instead several people, thinking it was a degenerative cousin such as Parkinson’s, whispered to friends of mine, “Is this it?,” meaning The End and thus the title of this essay, a hit song by the The Doors when I was in college made even more memorable as the intro during my time in Anchorage for a movie classic.

It wasn’t, but it was time to move on toward an entirely new stage of life.

Looking back I have no regrets.  But I can more easily spot what I could have done differently or better.  This is human.

Due to the power of forgiveness as well my brain’s innate ability within a short time to shed rather than obsessing over bad experiences I can relay them to help someone learn from my mistakes.

As I hope any of my former antagonists are,  I am entirely at peace.

No longer a “hired gun,” but each day still pursuing change.

Tuesday, July 22, 2014

Finding Myself Still Alive At 30 - Part 1 of 2

When I landed in Anchorage, Alaska thirty-six years ago this summer, I knew what I was in for.  I also knew the reason I had been recruited to complete its fledgling DMO startup.

Still facing my 30th birthday, I had cut my teeth as a DMO exec in Spokane, where business executives had tasked me with separating that startup from the Chamber of Commerce then under a very powerful executive who took it personally and made it personal.

I jumped at the opportunity when Anchorage made the offer for many reasons.

As a good friend put it once regarding something similar that happened to him - once a struggle like that is concluded it is very complicated for anyone in the room who has “blood splattered all over them.”

Possibly this is also what led a later successor to apparently whitewash the history of that organization leaving himself at the center or possibly I failed to leave a folklorist in place (smile.)

But I had already exceeded the average tenure nationwide for DMO execs surprised to find myself still alive at 30 five years seemed like an eternity.

Anchorage found me appealing that due to my Expo ‘74 experience I had a grasp of the far greater potential of tourism beyond just conventions, rare at the time for peers in that profession.

The governing board in Anchorage also knew I had proven to have grit and they tasked me with something even more difficult.  They wanted me to pursue Anchorage’s full share of tourism economy.345897070_aabb0989de_b_thumb1

That meant gently weaning it out from under the control of then interlocking tourism interests in Seattle and Southeast Alaska but without taking anything away from what had long been the Alaska tourism “establishment.”

As we left the room after our first meeting, I remember telling a member of our governing board who happened to head a major Seattle-based Alaska-focused tour company (who became a good friend,) that to achieve that end, it would take between two and five years, but I might not survive that long.

The easy part was exceeding Anchorage’s fair market share for regional and national conventions.  But even adding in state meetings that segment would be but a small fraction of Anchorage’s visitor potential.

Even back then, the convention and meetings segment was showing some signs of losing steam, what we know today was in fact a long, slow decline as a proportion of overall travel.

The real potential for visitation to Anchorage would be doing something Alaska had never done.

We strategized that the real potential was going after travelers who, with only a few days to visit, wanted to experience the full breadth of what Alaska had to offer without spending two or three weeks jumping all over the state as had been customary.

This was an untapped segment focused on minimizing costs and logistics in what would be the equivalent of a long weekend’s stay but it meant breaking with the tradition.

Instead of the way each community had traditionally been identified for tourism with a particular feature to maximize tourist frequent movement and stay, we would reveal to this untapped segment that all of these could be done in day trips around Anchorage.

Analysis showed if carefully communicated to target markets, this new segment would be value-added to Alaska, and Anchorage could still serve its assigned role as an overnight stop for escorted tours or as a jump-off point for expensive fishing and hunting lodges.

The strategy also included tapping into visitation from Asia and Europe, working to develop stopover visits from air passengers refueling during flights over the pole and opening up winter tourism.

We also sought to persuade cruise companies to add itineraries that came all the way from Seattle and Vancouver into the Port of Anchorage without sacrificing their traditional itineraries limited to Southeast Alaska.

The reason I told our governing board I probably wouldn’t last very long is that back then Alaska tourism was very incestuous and heavily under the influence if not the thumb in some ways of a few Seattle-based businesses.

Alaska tourism had always been primarily about Southeast Alaska because this historically originated with cruise excursions to Glacier Bay organized by naturalist John Muir in the late 1800s.

We knew that when Anchorage ventured outside its designated role as an overnight, it might set off alarms in other parts of the state which would cause some to appeal for protection to powerful allies further south.

We had to try even more than Anchorage already had to simultaneously fulfill our role in traditional Alaska tourism promotion while repeatedly making the case that what we were doing differently was a win/win for Alaska.

Many understood, but suspicions of Anchorage motives ran deep, some with good reason, thus the pejorative at the time that its best attribute was that it was 10 minutes from Alaska (insinuating it wasn’t really Alaska.) 

To build good will, I spent a lot of time on projects that, while they didn’t benefit Anchorage that much, they did other parts of the state.

I tried to make friends and alliances all over Alaska and took time to call and meet with them frequently to allay any concerns burning up the grapevine.

But I also made more than my share of mistakes, many of them really stupid.

“Suffering fools gladly” is not my default, and I made a mortal enemy one day when I told a senior Alaska tourism operative in front of his friends that I didn’t appreciate his off-color jokes, especially those denigrating people of color.

Telling or listening to these jokes back then was a sign of fraternity, at least for the “good ‘ole boys.”  Regardless of how offensive it was, I could have handled that much more smoothly and without humiliating him.

Twice the age I was then, I know now that people can often read what I’m thinking on my face anyway.

But it also didn’t take long for us to begin tapping into Anchorage’s fair share of tourism which we confirmed with research.  The findings contradicted long established “conventional wisdom,” unavoidably stepping on some toes.

The more we tapped into a fuller share of visitor-centric economic and cultural development, the more the Anchorage community wanted us to do even more.

It was difficult not to cross the line, even in a state as gracious and accepting as Alaska.

So sure enough, in my fifth year, right on schedule, cabals of Alaska and Seattle interests began cornering me in private to press for us to step back.  Way back.

Often they would drop the name of a local constituent intimating it was someone over which they felt they had influence or insinuating the threat of losing lucrative contracts.

In hindsight, I should have raised an alarm more vigorously with my board as a whole, but instead, my low key summaries were designed to reassure them I had it under control.

That was a mistake.  Never underestimated the power of gridlock on personal relationships as a trump logic and metrics.

I went to great lengths each time one of these sessions took place, to review the data and how what we were doing was both/and, and not a threat to Alaska’s traditional tourism infrastructure.

But it was compliance not reassurance they wanted.  It only further alienated me from them.  Fueled by success and feeling threatened, looking back I’m sure my intensity and frustration came across with more than a little hubris.

Within little more than a year, a handful formally threatened my board with resignations of membership support (a small part of our funding) if I wasn’t fired and a course change made.

If not they would smear us in the news media.

To be continued…

Monday, July 21, 2014

The Pivotal Bitterroot Event That Still Shapes America

Today I’m headed up to Appalachian State University (ASU) nestled near North Carolina’s border with Virginia on the western slopes of its namesake range.

Durham, where I live, lies in the foothills of the Appalachians which gives way to the Eastern Coastal Plain just east of Raleigh.  Whoever wrote on Wikipedia that Durham is flat doesn’t walk much.

In just a quarter of our two and a half mile walks each morning, we climb up and down the equivalent of nearly a 15 story building.  I kid my friends down in Raleigh that based on what the legislature is doing there, Durham will be beachfront in a couple of hundred years (smile.)

Invariably, I gravitate to Southern Rock during this twice yearly three hour drive (with stops) up and over the Eastern Continental Divide to ASU where rivers run west toward the Mississippi.

It is a fusion of rock, country and blues, with gospel and jazz that falls under the genre of Americana or “roots” music. East of Blue Ridge, think Marshall Tucker Band and Allman Brothers.

Knowing I am the only son of an only son descending from generations of Idaho ranchers with roots back to before it became a territory may hint at the country music in my genes.

But the truly common thread through my seemingly eclectic taste in music is “roots” music.

On arrival, I’ll be speaking for two hours about strategic thinking and insight to seniors completing a “capstone” course in the ASU business school, with majors evenly divided into accounting, management, marketing and hospitality.

Road construction will prevent a jog in my route along a portion of the Pisgah National Forest set aside in 1912 three years before it was given that name and just two years after a horrible calamity ignited public opinion.

When I arrived here in 1989, less than 30% of its trees dated to that time because industrialists had logged it so heavily before the 1891 act creating forest preserves was finally adjusted to allow set asides in the east.

By then they were forests in name only on lands nobody wanted.  In photographs taken two decades later to document construction of the Blue Ridge Parkway, the devastation is still apparent.

Forestry education first took root further south along these ranges in North Carolina, but conservation didn’t.

President Theodore Roosevelt and Gifford Pinchot, who got his start working on the Biltmore Estate near Asheville, made Conservation a national overarching strategy.

But strategic preservation of forests is an idea that took shape in 1876, a year before the dawn of the “Gilded Age” and four years after Yellowstone was created as the first national park during a fifty year period dating from the Civil War when Republicans were in control.

Things weren’t gilded for 9-in-10 Americans getting by on less than $1,200 a year and most had a sense that deforestation beyond clearings required to make a home didn’t make sense.

John Muir echoed this sentiment that year with one of his first op-ed newspaper essays entitled “God’s First Temples: How Shall We Preserve Our Forests” but scientists were also worried and sounded alarms to Congress based on a paper by Dr. Franklin Hough.

On the Duty of Governments in the Preservation of Forests,” outlined a case for government action based on a study of the fate of countries that ignored the overuse of forests.

Three years later, a month after dispatch riders reached my ancestor’s Idaho settlement and telegraphed word of Custer’s Last Stand, Congress finally responded.

Hough was embedded as a government researcher where he would conduct five more years of forest and timbering analysis.  It would take another another ten years before the forest preserve act would be enacted.

President Benjamin Harrison, the great-grandson of one of the signers to the Declaration of Independence, showed his independence from powerful special interests in his party by setting aside the first 12 million acres of national forest, including a portion of Yellowstone Park.

The same year, John Muir and some friends formed the Sierra Club, modeled after the Appalachian Mountain Club which in 1876 had been formed in the northern reaches of the range I will cross today by vacationers seeking to preserve forests.

The time of Harrison’s bold move was also when Gifford Pinchot went to work for a branch of the Vanderbilt's at their vacation estate in the North Carolina mountains tasked with rehabilitating deforested land following earlier advice from Fredrick Law Olmstead.

Teddy Roosevelt was serving as Governor but a naturalist by inclination he had already cut his teeth on conservation as a New York State Assembly member during the mid-1880s debating the Adirondacks as a forest preserve.

Today’s trip across the Blue Ridge is a warm-up for a cross-country trip I will soon take with Mugs, my English Bulldog.  The route each year is different, with one segment always in common.

After collecting my grandsons and daughter we all head up into the Bitterroot Mountains, an iconic northern Idaho range that suddenly cuts east behind our ancestral ranchland to touch the Tetons.

Regardless of where we cut through these forests, I can’t help but think about the fact that 104 years ago next month, it would have been a scene similar to the aftermath of an Atomic bomb blast.

In 1910, 3,000 fires combined into one and burned 3 million acres, an area the size of Connecticut including a fifth of the entire forest area of northern Idaho.

In the aftermath, the image shown in this essay was taken along Idaho’s St. Joe River, depicting the devastation across the state’s panhandle leading to the destruction of several towns and killing nearly 90 people.

Led by a Republican Idaho senator, Congress had been trying to decapitate the fledgling National Forest Service by starving it of funding.

This forced Rangers to pay for their own supplies including firefighters out of their own paychecks.  Adding insult, special interests and their Republican allies blamed these public servants for the devastation, a tactic often deployed today when funding cuts results in dysfunction.

As a final insult they even stiffed those who were grievously injured but not killed their medical costs and then denied a proper burial for the nearly 90 who died.

A recent book about the event is The Big Burn, written by journalist Timothy Egan, but it’s more than a riveting account of the massive fire. (For any non-readers who made it this far or those who want to see images click here for a documentary.)

Egan’s book weaves accounts of the event with its impact on the American public and a turning point in public policy. As he documents, “conservation was no longer an abstract debate.”

Outraged, Americans turned against the Republican Party and its special interest wing, many leaving for the Democratic Party which found its voice for social justice.

The forest I see carpeting the Bitterroots today began to come back three decades later later after persistent nurturing and experimentation by the Forest Service.

But the impact was still clearly visible in my early years.

Forest products today are turning more and more to commercially grown forests, leaving National Forests for recreation and tourism.

But urban and roadside forests which are even more crucial to tourism, especially in states such as North Carolina, are now under threat of desecration from a different set of special interests

These include insatiable clear-cutting-enabled Billboard companies and developers who are too lazy too lazy to get off their mechanized assets to bother with sustainability.

It isn’t clear when enough will be enough and the American public will rise up again.

Friday, July 18, 2014

When Cultural Facilities Become Means Not Ends

In the mid-1970s as a newly minted community marketing exec for Spokane, Washington, one of the first people to drop by my office was an ad rep named John Kelly.

We couldn’t afford what John was offering, but in the process he gave me a peek at his parent company’s new research: one of the first, if not the very first, in-depth breakdown of the entire marketplace of conventions and meetings.

The next year John joined Alaska Airlines but our paths would cross several more times.  He was head of marketing there when I was running Anchorage, my second DMO.  Shortly after I was recruited to Durham he became head of Horizon Airline and then head of Alaska Airlines.

But the day of our first meeting sticks in my mind because the sixteen subsequent reports commissioned by M & C Magazine that I utilized before I retired from that profession, were something for which I found an alternative use.

Even more important than rationalizing how to reach convention decision makers,  I somehow saw them as a way to zero in on metrics that would help us calibrate market share not only for Spokane, but for the two other community DMOs I ran during my career.

Market share is a way to set realistic goals and allocation of resources based not only on generating demand but calibrated to changes in supply.  It is also a means by which a community can assist developers and avoid the churn that comes with overbuilding.

It also helps a community avoid over-reliance on any one market segment of visitors.

As John and I talked that day, Spokane was spending $2 million to convert what had been the state pavilion during the just-concluded World’s Fair into its intended after-use as a convention center, for which it had been carefully designed.

It was also from these reports and warnings from the sentinel heads of a few major hotel chains, that a few DMO execs began to detect in the early 1980’s that the meetings market was losing steam.

But for fits and starts, it has declined now to about 10% of overall visitors potential.

A consultant isn’t needed to compute a community’s fair market share or potential. Roughly it goes as follows:

Take the gross number of meetings and attendees nationwide.  Separate corporate and small association/government meetings from the 1% that are major conventions.  Separate the groups that rotate across the nation from groups that stay within a region or state.

Take size breakdowns and calibrate them for the roughly half or more that are day trippers from those who use hotels e.g., 57% market-wide and match it against overall community capacity.

Discount for the proportion that meet in a community’s peak season for transient business or leisure leaving the percentage that meet in a given community’s “needs” seasons.

Narrow down potential by those rotating to any given region during a given year, e.g. 23% in the South Atlantic.  Separate the proportion that use convention centers e.g. 30%, from those that use hotels, broken down by downtown, suburban and airport etc.

The result will help calibrate reliable goals for that segment of visitors as well as inform any discussion about facility needs.

In the 1890s when destination marketing organizations first evolved to shape community identities as a means to leverage visitors, conventions were not only a purpose for which people traveled but the easiest to pursue.

Back then few hotels had meeting space and most meeting facilities were privately owned.  In the 1910s, cities began building public civic centers and auditoriums.

They were first a qualify of life amenity for residents and second a way to potentially appeal to conventions as value added.

Thus they were called civic centers.  That may be the last era in which convention centers truly made sense.

By the 1920s and 1930s mass leisure travel gave cities far greater and broader potential for visitation but many communities and their DMOs remained fixated on conventions, as many do today.

They imagined that segment as an ever expanding lake of potential, never making adjustments for the fact that even when and if that were true, the number of cities competing was growing far faster.

They also failed to account for the explosive growth and popularity of major convention hotels as an alternative or that improvements in transportation meant that attendance at conventions gradually began to skew based on the region and state in which they were meeting.

Failing to grasp that the genius of visitor-related economic development is that it is meant to be “demand-driven,” ironically, many cities and their DMOs have fixated on the supply side of facilities instead, emulating old-school, Industrial smoke-stack chasers.

The unfortunate result has been erosion of the sense of place and community distinctiveness that DMO’s are sworn to defend, making their communities less and less differentiating and less and less appealing or worthy of affection.

Following World War II, officeholders, downtown developers and their allies cities stopped viewing convention centers, stadiums and performing arts facilities for their inherent potential and began to coopt them as a means for the public sector to prop up private property values.

After researching nearly nine decades of documents in scores of cities, in a new book public policy expert, Dr. Heywood Sanders has followed up his controversial  2005 study for the Brookings Institution with a much more in-depth analysis of these phenomena and the history behind convention centers.

For neighborhood activists, officeholders, policy makers and expecially DMO executives, Sander’s book belongs on the shelf of required reading of this nature such as Dr. Mark Rosentraub’s Major League Losers and the follow up Major League Winners.

And out next year, Building Cultural Facilities in U.S. Communities by Drs. Joanna Woronkowicz and  Norman Bradburn, an elaboration on the study Set In Stone they authored along with five other researchers for The University of Chicago Cultural Policy Center.

Convention Center Follies is a page-turner for anyone who has witnessed or be party to the backroom processes and copy-cat techniques so often used to rationalize these facilities along with stadiums, ballparks and performing arts centers.

Some in my former profession along with feasibility consultants are quick to quibble with details of these studies but a few are having a  critical-thinking epiphany.

First, if they are half right, the problem is just as big.  Second, it DMOs and consultants want clearer information, they need to become less defensive and far more reflective and critical themselves.

The communities I served may have dodged the bullet but that doesn’t mean they have been immune to the group think that has led to so many billions of dollars of public facilities being spent less effectively than it could have.

During my career, I witnessed first hand many of the things Sanders reveals, both as other communities followed this path but to a lesser degree in my own communities as well.

The formula hasn’t varied for almost 90 years.

Hatch the plan in private.  Find a way around voter approval.  Shop for data to support proposals rather than build proposals based on data.  Avoid factoring in macro overbuilding or long term trends.

Let the ends justify the means.  Never go back and recalibrate expectations based on performance or admit things that didn’t work. Hope memory fades before the even bigger down stream costs come.

As business professor friend of mine has written.  Communities are in denial that initial constructions costs are only a tiny fraction of the ultimate cost of facilities.  Officeholders rotate off, developers flip, community memories fade.

Seldom does the outcome endure.

Sanders reminds us that in 1956 when Booz and Allen conducted the first independent feasibility assessment of a convention center in the nation, it concluded the new facility was not feasible.

Developers and officeholders insisted that the head of the DMO in that community, probably with a gun to his or her head, insisted that it crunch numbers more favorable.

Today, it happens in reverse but that is probably when the ugly business of consultant shopping was born.

As feasibility consulting rapidly grew lucrative, many acknowledged that the accuracy of the reports was made irrelevant because community’s had already made up their minds by that time they were engaged.

If a DMO’s research was felt too conservative or one consultant’s numbers didn’t work, another would hastily be contracted as happened more than once during my career.

In 1984, when a new convention center was built in Anchorage as part of Project 80s (along with a sports arena and a performing arts center) the total amount of convention center space nationwide was closing in on 32 million square feet.

By the time my career ended two and a half decades later, that amount more than doubled during a time when it was clear that demand was in a long, slow decline, especially as a proportion of overall travel.

A look at the data shows the same thing has happened with sports facilities and performing arts theaters, far outstripping demand.

Cultural facilities are important, especially when they are carefully evolved as part of a diverse ecosystem designed to differentiate communities and foster unique sense of place but built in response to demand, not as a means to create it.

As Rosentraub cautions, cities need to do a whole lot more planning and a lot less hoping.

Thursday, July 17, 2014

The True Usefulness of A Common DMO Ethical Code

In my opinion, one of the worst decisions made in the 100-year history of the governing board for the 100-year-old association for professionals in my former career of community destination marketing (DMO) occurred just a decade ago.

Quietly deep-sixed was a common code of ethics that every member DMO’s staff had been required to sign each year.  Ironically, it was the adoption of a code of ethics more than 90 years ago that helped spur formation of the organization and draw membership.

I still wasn’t aware when I served on that board a few years later or with incredulity I would have the code of conduct back up for reconsideration.

In Durham, my last DMO before retiring, we not only continued the practice but had a consultant update and expand it to a “best practice,” expanding the name to read Code of Ethics & Conduct.

Not only was this much improved version readopted by our governing board in Durham, but reading and signing the code was made mandatory for each board member as well.

Of course, DMOs individually must still show evidence of a code of ethics to be Internationally accredited.  But the DMAI board that deep sixed having one in common among members missed the point of why it had been so useful.

Its wasn’t about enforcement.  Should anything get appealed all the way to that level, someone is clearly over the line.  The real value of having one in common was as a communications tool among individual community DMOs when competitors crossed the line.

Sadly, I was forced to use it that way once to inspire a counterpart to stand up to unethical behavior among his staff and stakeholders that was undermining my community.

DMOs operate in the “commons,” and abiding by a common code of conduct permits them to be extraordinarily competitive while at the same time being cooperative, often lost on private sector executives or even local officials prone to be cutthroat.

It is not without reason that the general public is so uncertain of the ethical standards of officeholders, business executives and community boosters.

On another occasion, I used DMAI’s now defunct common code of ethics as the reason not to comply with a request from another community’s stakeholders that would have undermined it.

In this way, codes work best not as a means to resolve disputes once out in the open or as some kind of self-righteous one-upsmanship.  By then it is usually too late for someone to modify behavior without losing face and way too much energy goes in to proving who is right.

As an friend of mine in high office once remarked, “there is only room for one person at a time to stand on principle.”

Common codes of ethics and conduct work best as a gentle nudge when someone appears conflicted or passive about crossing the line such as I did in a very uncomfortable first meeting with a relocating hotel executive in the 1980s.

Chillingly, he unsuccessfully offered me a bribe if I would pave the way for him to jump onto a governing board, which was self-appointed.

Ironically, researchers have found that signing a code of conduct is no guarantee, nor is transparency, about avoiding conflicts of interest.

To bolster them, research has found that putting the signature line at the top of the document helps, but so does having people ask publicly for forgiveness.  Both are moral cues.

But too often those prone to stray merely find these enablers.

Unfortunately, within their communities, DMOs are still the exception  among business-related community organizations when it comes to codes of conduct, where among strategic partners they would come in even more handy.

When the association for DMOs adopted a code of ethics in 1923, members were routinely buying conventions (paying bribes or subsidies,) and selling facilities that didn’t exist or that they knew wouldn’t be ready.  “Anything goes” had been the model.

DMOs were first organized in the wake of the sense-of-place movement fueled during the Progressive Era, and an exhibit of the ideal city created by Fredrick Law Olmsted and a partner for the 1893 Chicago World’s Fair.

By the 1920s, civic boosterism was in its heyday and mass leisure tourism by roadway was emerging, giving communities far greater potential than just the 10% or so that has always been represented by conventions.

But shady convention practices were only one way community destination marketing was being ethically abused.

Many who were marketing places as a commodity began to erode the very identities they had created by falling in with billboards and other forms of desecration and blight.

This was also when destination marketers fell under the charm of downtown developers and allies who, rather than funding stadiums, convention centers and cultural facilities themselves, began to push communities to fund them publicly instead.

While tourism was given as motive, as it is far too often today, researchers have uncovered that the real reason was to shore up and increase private property values.

Rather than focus on uniqueness, destination marketers falling under this spell became enablers of homogenization.

DMO’s would be well advised to reinstitute a common ethical standard but this time, part of the conduct should be a return to the primary role of safeguarding the distinctiveness of their communities.

Wednesday, July 16, 2014

Access to Opportunity - The Downside of Proliferation

As Mugs and I drive on cross country road trips each year, some places where we stop for gas will have mini-gambling casinos attached to the convenience store.

Gambling was common in places such as Idaho up until I was born, but limited to slot machines and table-card games in bars or the entrance to restaurants with a bar.  Voters outlawed them there in the 1940s with a constitutional amendment.

Legalized gambling goes back to Colonial times but scarcity created modern casino havens such as Las Vegas as much or more than promotion or investment by gangsters.

But gambling casinos began popping up across the country when Congress passed the 1988 Indian Gaming Regulatory Act, a few months before I arrived in Durham, NC and midway through my now concluded, forty-year career in community marketing.

The Act has not been a boon to tourism nor to economic development.  Around 8-in-10 of the patrons of this proliferation are local or in-state patrons, making them the antithesis of economic development.

At the end of this week, community marketing execs from across the globe will gather in Las Vegas to celebrate the 100th anniversary of their association.  I’m not sure why they chose Las Vegas since it’s not the site of the first DMO and certainly not because it reflects what DMOs are about at their most elemental level, guarding sense of place.

Following World War II, Las Vegas was an early innovator in the use of publicity rather than advertising as a core community marketing strategy.

The first hotel-casino complex opened in 1932, but Las Vegas as a destination for gambling launched later as other states such as Idaho banned it. 

That’s an image of the Strip at the time I was born.

Long ago, Las Vegas surrendered its sense of place to fantasy but at least it leveraged it into actual economic development, even if it is at the expense of stoking a gambling problem among residents several times the national average.

Atlantic City is the other destination that surrendered to gambling but now that gambling has gone hometown everywhere, or at least home state, its casinos are closing including this fall the vaunted Trump Plaza.  But this doesn’t mean the democratization of gambling.

Vegas and Atlantic City once drew 85% of their patrons from out of state according to an excellent article this month in Pacific Standard by Philadelphia researcher and journalist Jake Blumgart.

One of the hardest things for many government officials to understand is that resident spending does not contribute to economic impact.  It would have been spent locally anyway, just on something else.

Or is it that elected officials don’t care when it comes to gambling because it hauls in taxes. Visitor spending (any non-resident visiting for purposes other than school or work) is the only true economic value added.

Despite the incredible increase in gambling casinos, the proportion of visitors who travel 50 miles or more and participate in gambling has remained at about 6%

Take a performing arts theater, as another example with the same 6%-7% appeal to visitors.  Residents attending events in these facilities don’t count as economic impact.

They would have spent the same amount on leisure anyway, in fact they may redirect what they spend from another leisure activity.

Performers then?  Nope, they take their cut and send it back to where they live.  Employees?  Residents, yes.  Commuter spending work-side is small.  Spending on purveyors?  Only if they are local, meaning based in the same county as the theater.

Additional visitors then?  Under the overarching brand promoting the community as a whole, spending by up to 20% of day-trippers who come just for the performance could be attributed as impact from the facility.

A new study shows that even any development spurred is limited to that same area.

But back to gambling.  Proliferation has meant that it is even less of a draw for visitors.  Through 2012, 17 states now have casinos, 28 have tribal casinos, 14 permit casinos horse races, 5 permit card rooms and 7 permit electronic gambling.

There is a consumer behavior called “access to opportunity” which means that the more opportunity there is do something, the less urgency there is to do it.  Its why attendance at touring Broadway shows peaked in the mid-1990s when the number of cities/theaters exploded.

Gambling may reach that tipping point soon.  Several states are already in decline.  About half of Americans now play the lottery and one third gamble in casinos like the ones Mugs and I see along the roadsides.

Telling is that casino gamblers are much more likely to play the lottery, more than a third more likely among younger adults.

Americans now lose $119 billion annually to gambling, up from $10.9 billion in 1982 and nearly double at the turn of the century.  The portion lost in casinos peaked in 2006, plummeted during the great recession, and has now bounced back.

Only 16% is generated in Las Vegas, about 8% from Atlantic City, half from the top ten locations including four other metro areas.  The industry now relies on new casinos, a sign it is plateauing.

At the same time, the amount of true economic value added is declining as fewer and fewer are drawn from beyond the local area. The impact for tribal casinos comes from a transfer of funds from other parts of the economy, just desserts, I suppose.

Another sign that gamblers are staying closer to home is the sea change underway in Las Vegas.  In 1984, casinos accounted for 59% of the spending on the Strip, now even after the recovery it is down to 36% and gambling revenues are well below what they were in 2007.

Trip spending while in Las Vegas is down 23%.  What’s left is more likely to go to nightclubs ad shows, shopping and dining.  The proportion now whose primary purpose is to gamble is not much more than the proportion there primarily to visit friends and relatives.

The proportion there to attend a convention or meeting has fallen to 7%, half the proportion seven years ago and less than a fifth of the proportion there for pleasure.

While the percentage there primarily to gamble is consistent among repeat visitors, it drops by 75% among first time visitors.  The 24%reporting that they would be “more likely” to visit Las Vegas even with more places to gamble elsewhere has plummeted to 24%.

Attendance at events in the convention center there are now down to what it was when it was half its current size, a reflection of the continuing decline in conventions and meetings nationwide as well as attendance at events.

During their stay in Las Vegas, those in my former profession may be witness to the fact that destinations are shifting away from gambling and conventions and because interest in pure fantasy is also waning, possibly shifting back to the authenticity of its sense of place.

My guess is eventually, gambling may fall back as a backdrop and instead of creating fantasies of other places, the Strip may return to its far more genuine and broadly appealing roots.

Tuesday, July 15, 2014

Being Inconsistent with Community Values

If they could pull the wool over the eyes of the local chamber of commerce, I suspect it wasn’t too difficult to trick the police department where I live.

But a city agency lending credibility to roadside billboards in a community overwhelmingly opposed to them illustrates why citizens must never become overly reliant on the judgment of public servants to defend the community’s values.

With a sense of irony, I suspect, the local newspaper’s print version ran directly under one asking residents to be sure to keep trees healthy by watering them during dry spells and between issues lamenting the demise of a historic tree and lauding its repurposing at a local museum.

Billboarders do everything possible to clear cut trees, including recently denuding a stretch that screened a city greenway from a highway, probably emboldened because it ran through a poor neighborhood.

Neighborhoods that recently fought hard to preserve Durham’s billboard ban will still support the cause.  After all, this is just one of several publicly funded agencies to flaunt their disregard for this community value.

Enabling qualifies as flaunting even if born of obliviousness.

Even though by 9-to-1 Durham residents support the community’s ordinance banning billboards including, I presume, at least four of the residents depicted on this one, neighborhoods here will try to overlook the faux pas in support of a good cause.

But research shows ill regard will accrue more to the agencies involved than the billboard companies donating the space as part of a strategy to prop up their reputation.

Nationally, only 1-in-6 Americans even pay attention to billboards now which is why researchers measuring their distraction to drivers must now study roadways before and after they are erected to detect their devastating impact.

Billboards now appeal to fewer than 1-in-10 consumers, making the claims of some state elected officials that they are good for campaign donations, I mean the economy, puzzling.

Fewer than a fifth of one percent of consumers buy something based on billboards.  Consequently, even 24-out-of-25 marketers now shun them.  Those who don’t, have yet to connect this practice to their company’s social responsibility and sustainability policies.Paying Attention

To put this all into perspective, the number of people paying attention to billboards is a fifth as many as those paying attention to speed limits and just a third the number paying attention on average during office staff meetings (smile.)

Still, why would public servants paid by local tax dollars be oblivious to city ordinance, let alone the opinions of more than 7-out-of-10 Durham residents?  Or the fact that the billboard’s use will insult 7 residents for every 1 who may find it appealing?

Why take that risk for such a negative return?  Frankly, I doubt it was given much thought, let along any strategic review.  Lest any administrator or elected official who isn’t defensive try to point the finger, let us look at why they need to look in the mirror instead.

The fact is, many who make such decisions are not strategic thinkers by nature, let alone concerned with aligning decisions with overarching community values or even metric-driven decision making.

It is the same reason so many in my former profession of community destination marketing are able to swear to be guardians of community sense of place and then hypocritically sanction billboard blight by their use elsewhere.

Consistent support of community values, I presume, is why Durham’s DMO not only avoids the use of billboards but discourages their use by peers because of the desecration they create.

Far too many truly experienced marketers fail to grasp that generating awareness is not all about “turn-on” but must net out the “turn-off” factor, including the medium used.

Even advertising during the Super Bowl comes at the price of turning off more viewers than the ads engage, proving that ego often trumps smarts.

Of course, in Durham, it would be too easy to lay the enabling of blight, such as the decision to use this billboard, off on non-residents who now make up 2-out of-3 people working here, including the majority working for local government.

Even if that is the case, someone living in Durham let it pass.

It is no wonder that public servants nationwide struggle with being strategic, when economists estimate the time horizon, on average, for issues debated by those in high office is now “six months or a year at most.”

A communications audit conducted in Durham during the mid-1990s recommended that the two local governments and public school system greatly expand and centralized both their communications staff and capacity to better serve the public and reduce mixed messages both internal and external.

The city, at least, paid attention and for a couple of years moved toward implementation but then while still light years better, quietly slipped back into a more fragmented, dispersed and underfunded approach resulting in inconsistencies such as the use of this billboard.

The importance of coherent messaging consistent with brand values often distinguishes high performing organizations.  But it is often lost on large organizations where it is even more critical as evidenced by the huge fines being assessed on super-banks right now, much of it due to poor messaging.

Especially when it comes to governments at any level, both external and internal communications are undermined by constant turnover or undervalued and under resourced by both management and/or governing boards at the expense of achieving alignment and synergy.

Bringing back a 100+ year old tactic, the North Carolina General Assembly recently reduced the state’s appeal by several notches while drawing national ridicule by outlawing the use of climate change science for decision-making along the state’s coastline.

Nationally, this approach traces back at least a hundred years, when Republican Presidents began executing new legislation creating forest preserves which ultimately led to creation of the National Forest Service.

Unable to repeal the popular effort fronted by Idaho Senator Weldon B. Heyburn, special interests prevailed on allies in Congress, also in control of Republicans, to instead just choke off funding for the new agency.

But far more significantly, Congress also voted to prohibit the new agency from communicating in any way with the American public.

Only in America!

Monday, July 14, 2014

The Meaning of Ideal Community

While discussing what makes Durham, North Carolina so textured and real recently with a Raleigh friend and native of East Jerusalem, I touched on the fact I had a friend in “DERM” who is Jewish and married to a Palestinian Christian.

During my now-concluded career, my job was to differentiate Durham in every way possible, not only because that is a “best practice” in community marketing, but because that is what surveys showed Durham residents wanted, especially the cohort showing as most attached.

This, of course, meant carefully moving Durham out from under Raleigh’s shadow while ensuring bonds were left in place.

Differentiating is a much more effective way to help visitors, including newcomers, make decisions that are best for them rather than blurring distinctions as a means to try and appear to be all things to all people as so many in my former field try to do.

I can still tick off two dozen ways Durham and Raleigh are inherently different, e.g. sense of place, architecture, authenticity, business climate, geology, diversity, tree cover, climatic zone, activism, attachment, distance and visitor/newcomer origins, lack of overlap, etc., etc.

Another I spotted recently is by its largest non-Christian tradition. Durham’s is Judaism, Raleigh’s is Islam. In this way Durham even differs from other counties actually in its metro sphere, e.g. one Baha'i, another Hindu.

One of Durham’s biggest challenges to differentiating was convincing businesses predicated on appearing the same no matter the location (formula businesses) and those whose fortunes were built on on erasing distinctions that:

  • The advantages of congregating just to give the illusion of size has far fewer advantages than distinguishing community brands.
  • Communities can constructively compete at the same time they are cooperating.  Businesses often fail to grasp that things in the “commons” don’t have to be cutthroat.
  • More than 8-in-10 residents prefer to characterize where they live by a distinct city, town or county.  Next comes neighborhood and a sliver who don’t care.
  • Differentiating creates much more tourism appeal and more “bites of the apple,” especially in polycentric areas.

For many years now Gallup has drilled down to isolate the ingredients that make some places more ideal than others, now one of five indices that feed into its overall well-being index.

Community has a lot to do with resident pride and liking where one lives as well as clear air and water and being able to walk alone in neighborhoods.

Almost two-thirds of Americans are not satisfied with where they live, although 4-in-10 who live in the South and West are, as are half of people my age, 65 or older.  At the extremes, the satisfaction ratio nationwide is about 2.5 to 1.

Durham residents hover at 80 to 1. Making that even more striking is that the ratings North Carolinians give our state rank it 38th out of 50 as a place to live, 12th from last - the bottom quartile, in a state where 7-in-10 residents are natives.

Instead of lobbing pejoratives, some in high state office would do well to examine what it is that makes Durham worthy of this affection.  Gallup provides some clues.

While honing the index, Gallup uncovered what makes a community ideal to Americans.  First comes aesthetics, trees, parks, trails and playgrounds.

Another key differentiator for the “ideal” community is having “ places where people can meet, spend time with family and friends, and enjoy nightlife.”

The third quality that “distinguishes near-perfect communities from the rest is a general openness to all types of people, regardless of race, heritage, age, or sexual orientation.”

“Durham isn’t for everyone” as a popular saying goes, but Gallup’s findings confirm why annual surveys here show such a high percentage of residents here consider it ideal for them.

Of course, these ingredients are always at risk.  Local governments, both officials and administrators, are a critical line of defense if it isn’t too late, as is a community’s destination marketing organization, if its takes seriously its role as guardian of sense of place.

Far too many, though, fall into the categories that sense of place experts label as “boomers” (Berry,) “raiders” (Stegner,) or simply “scary people” (Kunstler.)  Others listen carefully to “stickers,” only to surrender sense of place for fear of losing when threatened by developers.

Many developers are “stickers,” which is far more than just tenure, a reference to a state-of-mind.”  Far too often those with attachments to communities fail to make that distinction and paint them with the same brush as “boomers” and “raiders.”

In his wonderful 1996 cover essay in The Atlantic entitled “Home From Nowhere,” John Howard Kunstler argues that the year America won World War II is the year that marks when we began the wholesale surrender of sense of place in our communities.

Three years earlier, I had devoured his book The Geography of Nowhere: The Rise and Decline of America’s Man-Made Landscape, which earned a place on my sense-of-place bookshelf with Stegner, Berry and Sanders.

In 1927, Durham was the second community in North Carolina to develop a comprehensive plan for development, but it would be some time before communities began to rely on municipal ordinances to preserve sense of place.

Kunstler reminds us that for the previous 300-odd years, Americans had relied instead on “cultural agreement,” an inclusive consensus so firm that it didn’t have to be reinvested every few years because gatekeepers had forgotten what was agreed upon or had given way to special interests.

He sums up that - “Community is not something you have, like pizza. Nor is it something you can buy.  It’s a living organism based on a web of interdependencies- which is to say, a local economy.”

Kunstler continues that community “expresses itself physically as connectedness, as buildings actively relating to each other, and to whatever public space exists, be it the street, or the courthouse or the village green.”

Studies abound confirming the economic importance of being “real and authentic” to a community’s ability to engender resident affection, draw talented newcomers and attract visitors and related cultural and economic development.

Kunstler reminds us that “a land full of places that are not worth caring about will soon be a nation and a way of life that is not worth defending.”

“Authenticity” of community is an ever-evolving “cultural agreement.”

To adapt a process identified by the late Vanderbuilt sociology researcher Dr. Richard A. “Pete” Petersen, community authenticity emerges from the interplay in a historical context between affectionate residents, visitors, government officials, environmental science and the development industry.

Kunstler is no fan of zoning ordinances, making the case that like the so-called Highway Beautification Act did by enabling billboards, these regulations often become a pretense to undermine sense of place while giving a false sense of security.

He also argues persuasively that the idea of Americans being able to do whatever they want with their land and that “impediments are somehow un-American,” is a fallacy, “the result of a propaganda campaign from the promoters of suburban sprawl and the real estate industry.”

According to Kunstler, “we actually have a long history and a fat body of law for land use and the regulation of things we can do on it and with it.”

“Community,” he concludes, “is foremost a “public service.”