Monday, June 1st, 2009

The Talent Equation

Nancy Kaffer’s column over at Crain’s Detroit Business is all about attracting college educated youth to that city, and extensively features an interview with Yours Truly. This piece is subscription only, so I thought I would restate the case here in brief.

The Logic of Talent

There are three potential sources of talent:

  1. Retention
  2. “Boomerang” migration
  3. Net new immigration from people with no previous affiliation

The majority of Midwest talent initiatives focus on “brain drain”, which almost entirely targets retention and boomerangers. It also treats out-migration as the problem. But the problem isn’t too much outflow, it is a lack of inflow. All talent hubs, places like NYC and Silicon Valley, have large outflows of the educated. But they make up for it with inflow. Silicon Valley didn’t become a talent magnet by retaining its home grown talent. It did it by hoovering up everybody else’s home grown talent. Being able to attract people without a pre-existing connection to your city is an essential third leg of the stool, and arguably the most important.

Plus, in an ever more rapidly changing, inter-connected world, a city’s best interests are not served by being full of people who’ve never lived anywhere else. Retention strategies should focus on making sure people who want to stay have a place to do so, but that is only part of helping our citizens succeed no matter what their preferences in where to live. Like universities, cities can be recognized for being sources of great talent, and also leverage their expatriate population as an urban alumni network.

The Path to Attraction

The key is to figure out how to attract new talent, that which does not already have a pre-existing connection to a city. To do that, you need to:

  1. Customer Segmentation and Targeting. Figure out segments of the population to target, based on its necessity to other civic goals (e.g., life scientists for a life sciences econdev strategy), a city’s ability to successfully cater to it, other other basis. Generic strategies are hard to pull off.
  2. Blocking and Tackling. Make sure you’ve got the basics: safe streets, good schools, jobs, efficient and fiscally responsible local government, as well as basic amenities. This gets rid of “knockout” criteria. It’s a necessary, but not sufficient plank.
  3. Branding. Create an “aspirational narrative” for your city that people in your target audience can imagine themselves being a part of and wanting to be a part of. Think about the civic brand you want to promote, the associations it conjures up, and how you create stories in people’s minds around it.
  4. Strategy Development. Identify the type of urban landscape and environment you need to create, across every dimension, to make the narrative real.
  5. Execute. Make it happen – where too often things fall down.

That’s what cities as different at Portland, Houston, Charleston, and Austin did to create their own personal civic success.

Why So Few Good Talent Strategies?

Kaffer was prompted to write this column by a $500,000 study done on this subject whose recommendations were a collection of truisms anyone could have developed off the cuff. She wondered why anyone would pay for this.

There is certainly a lot of low value consulting out there. I don’t fully profess to understand it all myself. Various others have critiqued these studies as stemming from basic illegitimacy. That is, they don’t believe that the studies were undertaken with the serious goal of creating a plan. Two theories – which I should stress originate with others – are:

  1. Patronage. That is, civic development groups have lots of high paid staff jobs which are sinecures for the connected, and likewise the consultants benefit from political connections.
  2. Bread and Circuses. Many places in the Midwest really don’t have a bright future any time soon, but you can’t tell the voters that, so politicians have to gin up studies and programs to prove that something is being done and success is on the horizon. In this world, genericism is a plus since that makes the results harder to critique.

I gave these hypotheses because I thought Kaffer would find them amusing. I must say, I’m sure there is some of this in play in various places, but the people I’ve personally dealt with on the issues seem to get it. Maybe that’s because I’m dealing with cities that know what they’re doing.

My personal speculation is that this is just a hard problem to solve. Thus people are desperate for answers and like most of us who are unfamiliar with a particular problem space, are attracted to simple, easy to comprehend answers with apparently large explanatory power. Really changing the game will require complex, multifaceted solutions operating on many fronts and will require sustained commitment over time. In a place like the Midwest, big results are likely to require longer than an election cycle to see.

Further Reading

Some previous articles on Talent:
Out-Migration Devastates Michigan – and the Midwest
Rethinking Brain Drain

On Branding:
The Brand Promise of Indianapolis
Our Product is Better Than Our Brand
Louisville: Vice City

On Strategy:
What is a Strategy?

Credit Where It is Due

My thinking on talent has been heavily influenced by Jim Russell, whose writings appear at Burgh Diaspora and Greater Youngstown 2.0. A commenter named Lord Peter and Mike Doyle crystalized the notion of the aspirational branding narrative and stories for me. And for the two individuals who most suggested the Patronage and Bread and Circuses theories, I’ll let them remain safely anonymous.

10 Comments
Topics: Civic Branding, Talent Attraction
Cities: Detroit

10 Responses to “The Talent Equation”

  1. Jim Russell says:

    Aaron,

    I greatly appreciate the attribution. Thanks. But I would add that you've done much to advance the policy perspective in a direction that is distinctly your own. I think the piece in Crain's is testament to that.

    I've thought a lot about why brain drain policies are often brain dead. Traditional workforce development is the cause. Spending money on going after talent outside of the region is like trying to sell a bond issue for better schools to a household with no kids.

    What's in it for me?

    I read, weekly, about brain drain anxiety in brain gain states such as Colorado and Texas. Thus, I think it is important to convince communities that they benefit from graduates leaving the area. We need a new workforce development paradigm.

    A bit less cynically, I offer the case of the Pittsburgh Promise. The mayor primarily sold it to his constituency as a brain drain plug for the city. The architects know full well that the game is attraction. The idea is to entice suburban families to move into city and register their kids in public schools.

    Today's narratives combine retention with attraction, but the version presented to the public usually describes only retention. Also, I'm afraid that most talent initiatives are a waste of money, a boondoggle. I've seen a few good ones, but they are rare.

  2. David says:

    Today, NCR (Fortune 500) announced they were leaving Dayton for the Atlanta area after 125 years.

    Curious to thoughts your readers would have on the 'talent equation' for that announcement.

    Also, in regards to "Portland, Houston, Charleston, and Austin"

    - Portland has most excelled in the fact that it is a lower cost refuge for CA and more recently Seattle.
    - Houston: among my colleagues it would rank as the most unattractive big city in the country (can you say heat/humidity and no zoning for huge swaths of land, plus south Houston which is physically about as ugly as it gets)
    - Charleston – beautiful, quaint, old and not lots of opportunities in the scheme of things because it is small
    - Austin – state capital, UofTexas, Dell, and it is not Houston: enough said

  3. Jim Russell says:

    Concerning NCR's relocation, one comment sticks with me:

    “They [NCR] can’t recruit talent to move to Dayton, Ohio,” the source said.
    ———————————-

    I read another article recently that revealed the same problem in Ann Arbor. This is a branding issue. Despite different situations in different cities, the rest of the world paints the entire Rust Belt with a broad brush.

  4. thundermutt says:

    Dayton's not even a first-tier city in Ohio, much less the Midwest.

    The interesting part is that their destination is Atlanta and not a first-tier Midwestern city or the Midwest's World City (Chicago) like Mead-Johnson.

  5. Anonymous says:

    If NCR were purely making a "business" decision then GA would not have to spend $60 million dollars to buy them to move.

    Are we really to believe that they could not find talent, even regionally with Cincy, Columbus, Indy, Toledo, Ft Wayne and Detroit (among others) all within 1-4 hours from Dayton…?

    JoeP

  6. Anonymous says:

    Tiers…schmeirs.
    Are you suggesting that Fortune 500 type companies should only be in Tier one metros?

    Tier One metro choices in Midwest? Hmmm…think there is probably just 1-2 of those and you have monikered one of them "World"…the other is in MI (but it has its own challenges these days). There are a bunch of Tier 2's.

    NCR actually had more employees in the Atlanta area than in Dayton which likely tilted the balance. Also, NCR C-Suite remains in NYC and will not be trekking South.

  7. hharrington says:

    I'm not going to pretend that I'm up on NCR leaving Dayton, but if you've been to both cities its easy to understand why they left. I'm also sure it helps that most of their operations were already in the ATL.

    As far as the Talent equation goes, I think it's more about recruitment and getting the most out of the talent you have.

    Every city has some really talented people. It's up to the "establishment" to either help them innovate for get out of the way and let them do their thing. Renn wrote about that in his social networking piece a while back.

    I think the biggest problem going forward for most midwestern cities is going to be branding, doing something really well that most cities don't, and getting the message out.

    What magnifies the problems of branding and getting the word out is that the midwest doesn't have the climate of the New South. The chic hippie greeness of the west (or the climate)

  8. Stephen Gross says:

    A few thoughts…

    (1) I lived in Cleveland for 5 years. I was struck by how surprised everyone was when they discovered I wasn't from Cleveland. "My god! How did you end up here?" They were mystified… Why would anyone move to Cleveland? What would an outsider find appealing?

    It's ironic, too, since there was a time–not so long ago–when quite a lot of immigrants moved to Cleveland. There's a huge eastern European population there–Hungarians, Poles, Czechs, etc. But they've forgotten what it means to welcome in newcomers; their reactions verged on xenophobia.

    (2) A narrative is a good idea. A powerful one, not to be underestimated.

    (3) What about marketing a city elsewhere? A colleague of mine reflected on his time working for IBM. They had a difficult time recruiting people to move to their location in the midwest. He had spent time in Silicon Valley. His idea: Put up a HUGE billboard on Route 101 (the main artery of Silicon Valley) reading: "3 Bedroom homes under $300k!!!". In Silicon Valley, those are bargain basement prices. Why not tempt people to move to the midwest by trumpeting how cheap it is?

    –Steve

  9. The Urbanophile says:

    Thanks for all the comments. I'm going to weigh in on NCR soon in one of my posts.

  10. thundermutt says:

    Steve, somehow a race to the bottom (even on housing prices) doesn't seem like a talent attractor.

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