West Michigan economic development organizations are in a transition period — much like the industry itself during the COVID-19 pandemic — as multiple agencies take on new leadership.
Those transitions include The Right Place Inc. President and CEO Birgit Klohs retiring after 33 years, Ron Kitchens resigning as CEO from Southwest Michigan First after 15 years, Discover Kalamazoo President Greg Ayers resigning in April 2020, and the resignation of former Saugatuck Douglas Area Convention and Visitor Bureau Executive Director Josh Albrecht in 2019.
New leaders at these organizations could add another layer of uncertainty to what these entities and their communities will face in 2021, or they could serve as a useful tool to forge new business relationships, according to economic development experts.
“Those relationships are really hard to pass on or give to a new owner,” said Dean Whittaker, an economic development and real estate consultant who is the founder and CEO of Holland-based Whittaker Associates Inc. “Those relationships build up over a long period of time. But I see it as an opportunity for new relationships to be formed. The organizations we’re trying to recruit in West Michigan are also going through a similar transition.”
Whittaker attributes the leadership turnover to a natural progression of Baby Boomers reaching retirement age.
“The change in leadership could be a good thing because it also gives a fresh pair of eyes,” Whittaker said.
The profession also has natural turnover, but the longer someone stays is usually better for a community, said John Avery, executive director of the Michigan Economic Developers Association.
“The most important thing is identifying someone who has a vision and can follow the vision of a community, and their relationship-building is critical,” Avery said.
Any time the CEO leaves is somewhat unexpected, said Carla Sones, interim CEO of Southwest Michigan First. However, when Kitchens announced his retirement, he had been working with the board for the past several years to ensure the organization had a succession plan in place, Sones said.
“We were set up better for his resignation than we realized we would be,” said Sones, who took on the role of managing partner while Kitchens was CEO. “We were all shocked in the moment but really quite prepared to move forward in the interim.”
Despite pandemic recovery being the main priority for many organizations, Whittaker said West Michigan economic development remains active.
“I talk to a number of economic development organizations across the country and their pipeline of new projects has not changed,” Whittaker said, noting that planning for new facilities, expansions and relocations for larger companies can take two to three years. “There was a little dip in March and April, but now the pipeline is just as full as it’s ever been.”
A major theme Whittaker expects to see from the Site Selectors Guild — a national trade group for site selection consultants — is an even higher prioritization of how communities are addressing social justice issues.
“Economic development organizations and communities have got to step up their game if they want to be considered,” Whittaker said.
The work-from-home trend that was spurred by the pandemic is also putting skilled employees in the driver’s seat, Whittaker said.
“What if instead of recruiting a company, we focused on recruiting people instead?” Whittaker asked. “Economic development is about trying to increase the portion of the economic pie so we all get a bigger piece, and create jobs and wealth in the process.”
This has played out particularly in Southwest Michigan, where an influx of people are moving from larger cities because it is viewed as a safer place with less population and more outdoor access during the pandemic. Economic development organizations should focus on opportunities the pandemic has created as opposed to what it has restricted, Whittaker said.
Sense of place
Southwest Michigan First’s main focus over the last few years has been attracting talent to the region, Sones said. The immediate focus of the organization is assisting businesses with COVID-19 relief and helping downtowns recover in the region.
“Downtowns have experienced a lot of loss because of the office buildings being closed and not having patrons in the shops,” Sones said. “We’ve worked so hard establishing that sense of place. That’s a priority the community is worried about. Recovery for hospitality businesses as well as the retention of talent is what we’re focused on, and we know those two are married together.”
Restaurants and hospitality businesses are generally not the focus of economic development organizations, but that is part of the formula that retains and attracts talent, said Paul Isely, associate dean and a professor of economics at the Grand Valley State University Seidman College of Business.
“What is interesting about West Michigan is our exposure to manufacturing, which is outsized compared to other areas of the country,” Isely said. “There are some ZIP codes here where fifty percent of the jobs are manufacturing, and that’s also a sector that throughout the pandemic has struggled finding workers to replace people.”
Drawing and retaining businesses to the area requires talent, and a selling point of West Michigan used to be the affordable cost of living. But that is going away, Isely said.
“The leadership of these economic development organizations and companies is going to have to start finding new ways to draw companies to West Michigan other than what we have been using for the last 20 years,” Isely said. “Some businesses that are successful here in West Michigan right now are going to have to grow and change, or else they will be replaced.”