Wednesday, November 08, 2006
Turning The Corner Is Turning Into Big Announcements for Chamber
The Memphis Regional Chamber is back from the brink. With a vengence.
Just slightly more than a year ago, the city’s lead economic development agency was looking for a new president, and it was uncertain which would come first - the end of the Chamber or the beginning of a new president/CEO. Relations with local government were nonexistent on their best days and openly hostile on their worst, membership had floundered, and a discernible lack of focus characterized the organization.
It all seemed so familiar. After all, 30 years earlier, the Memphis Chamber of Commerce was shut down, bereft of money and ideas about what to do to lead Memphis into the realities of a new economy. The organization was so rooted in old thinking and unresponsive to the new realities of the city that it seemed paralyzed to shift direction. There were more than a few people a year ago that saw the same things in the Chamber and predicted a similar fate for it.
But that was then.
New Leader, New Momentum
Now, the Chamber is winding down a year that is as impressive as anything in its recent history. And giving credit where credit’s due, it’s no coincidence that it is also the first full calendar year under the leadership of its new leader, John Moore, former Northwest Airlines executive.
In a determined, methodical way, the Chamber has spent 14 months righting itself, making some hard and often painful decisions that led to staff changes that saved money, but more importantly, infused the organization with a sense of purpose that had been lacking for some time.
Of course, fighting for survival is a proven way to focus your energies. The Democratic Party proved that convincingly last night. But it seems increasingly clear that the Chamber has done more than just survive.
The most telling sign of improvement came a few months ago when Memphis and Shelby County Governments restored funding to the Chamber after turning off the spigot of public money that had flowed for about a decade. To city and county legislators, the Chamber had become that great-looking girl in your senior class who only managed to speak to you when there were cheerleader elections, and she wanted something.
Winning Back Good Will
The Chamber mainly talked to elected officials when they wanted something – money – and to make that relationship even rawer, Chamber leadership saw no conflict between accepting public money and attacking City Council for suggesting ways to raise more tax revenues. According to City Council members, largely to give Mr. Moore a fresh start and to give the Chamber another chance, the public money was approved again this year. As one person in City Hall put it, “at the very least, we’re not getting those letters from the Chamber that laid in your mail box smoldering because it was yet another rebuke to something we had proposed.”
Meanwhile, the Chamber has strengthened relationships with other local nonprofits who can contribute to its mission of creating a better, more prosperous Memphis. These too had grown strained over the years, as the Chamber had developed a reputation for grabbing the glory – and more importantly, the money – after a team effort had produced a major win.
That, too, is changing, as the Chamber appears to be purposefully reaching out to other organizations and establishing relationships with some untraditional partners. Most of all, Chamber leaders appear to be less fixed in their opinions and more determined to explore the leading edge issues in modern economic development. The most dramatic symbol of this shift was the Chamber’s sponsorship and support for the My Memphis DVD aimed at young creatives directed and filmed by Christopher Reyes.
A year ago, we offered the Chamber search committee some unsolicited advice. We called for it to hire a president who would pursue new and innovative approaches to economic growth, approaches rooted in talent strategies and entrepreneurial incentives.
Six Suggestions From A Year Ago
Our six suggestions were:
#1 – Quit selling Memphis on the cheap.
#2 – Exhibit loyalty to Memphis citizens, not just blind loyalty to new businesses.
#3 – Define success by people, not buildings and real estate.
#4 – Abandon “commodity economic development.”
#5 – Set national standards in economic development.
#6 – Don’t wait for the game to come to us.
Based on what we are hearing and seeing, the Chamber is close to being six for six. It of course has a way to go with each, but at least it appears to have begun the journey, something that was unimaginable only two years ago.
Diplomacy Equals Dollars
For example, in the debate about reining in the over-use of tax freezes, its officials took a modulated view, proposing that the payment-in-lieu-of-taxes remain but in a more targeted way. There was no shots taken at City Council in the newspaper and the sky-is-falling hysteria of the past was noticeably gone.
As for the tax freezes, we understand that the Chamber is part of a process to determine what a full set of business incentives should look like to relieve the over reliance on tax giveaways. That too is progress.
We recognize the balancing act that economic development officials have these days. Unemployment here has increased, jobs growth is generally flat, our Milken Index rating is #159, our median household income has fallen, our tax structure is one of the three most regressive in the U.S., one-third of Memphians earn less than $25,000 a year, and population growth fails to keep pace with our regional rivals.
On the other hand, we remain the economic anchor for the region, home to the vast majority of jobs and wages of $92 billion (growing six percent in a recent reporting period), St. Jude Children’s Research Hospital is spending $1 million a day for research, the BioWorks Foundation is staking out a unique niche for us in that industry, NIH research is up by almost 50 percent, and Memphis City Schools has increased attendance and graduation rates.
In other words, it’s a mixed bag, but it’s one that demands honesty and innovation, and that’s something that seems to come through loud and clear in all that the Chamber is doing these days. The global economy requires new strategies if we are to compete for knowledge-based jobs, and exercising the same old Chamber-type economic development strategies just don’t work in the global context.
No one knows this more than Mr. Moore. As an executive of an international air carrier, he saw the ways that the global economy transformed his industry. Most of all, he saw firsthand that the ultimate competitive advantage is found in quality, and that in the end, to compete, Memphis must have a quality workforce, high quality of life, quality higher education, and quality research.
If Memphis has anything engrained deep in its collective consciousness, it is entrepreneurship – first overnight delivery network, first after-market customer-friendly auto parts company, first motel, first drive-in restaurant, first self-service grocery store, first bus line, well, you get the picture.
Our innovations have sprung from the creativity of uniquely innovative entrepreneurs. The challenge today is for Memphis to become part of the interconnected pools of intellectual capital that are linked together by a network of computers that join the smartest minds in the world together. It helps to have the best and the brightest wanting to move and stay here, but it’s also about remembering that the computer revolution is really just now starting in earnest. So, why shouldn’t Memphis be the place that invents how cities like ours can plug and play in such an environment?
In reinventing itself and instill new attitudes, the Chamber shows that we can compete and win in national competitions if we align our resources and our energies and quit selling Memphis at a discount. If the past year is any indication, the Chamber is not content any longer to be a regional player. It’s looking to be an impact player at a national level. The best news of all is that it seems to be working.
Just a few weeks ago, ServiceMaster announced that it’s moving its HQs from Chicago to Memphis, an announcement that came months after International Paper to bring its New York headquarters here to join its operations center. In the middle of that, Nucor Steel announced that it would open a plant here, too. And there were even others, too.
Creating A Ripple
These are the kinds of companies that pay good salaries and create tax-paying citizens. They are exactly the kinds of companies where tax freezes make good sense. Best of all, the recent flurry of announcements in Memphis has created a ripple that’s causing economic development types outside of Memphis to sit up and take notice.
While all of these announcements are exciting news for the Chamber – and for our community – we admit that what really caught our eye was this headline in The Commercial Appeal: Memphis courts Air France. Mr. Moore was instrumental in convincing KLM to put a direct flight to Amsterdam in Memphis 11 years ago, a flight that has produced economic spin-offs that are almost impossible to measure completely.
The opportunity to enter into serious discussions with Air France for a direct flight to Paris would cap an impressive year for the revived Chamber, but even without it, it’s been exciting to see the organization come back to life.
Posted by Smart City Consulting at 8:17 PM