The Little Hospital that Could!

Sometimes it only takes one person to turn a situation around. I met such a person in Ruleville, MS. I’m hopeful that his success with turning around North Sunflower Medical Center in Ruleville will serve as a model to help resurrect that town and hopefully spread to other parts of the Delta.

Billy Marlow was born at the North Sunflower Medical Center but worked as a catfish farmer and real estate developer before being asked to step forward in 2004 to run the rapidly failing hospital that was days away from closing. He had no experience in the medical field! But no one else would step into a failing situation.

In 2003 the hospital lost $1.7 million but by 2005 Billy had turned that loss into a profit and last year the hospital earned almost $1 million. As importantly, employment has grown from 180 to 266 and the payroll has more than doubled to $9 million. The hospital is a key driver of economic growth in a very poor community and employment growth at the hospital ripples through the community.

With 82% of the hospital’s business being Medicare funded, Billy’s only option was to diversify and grow into new areas. He has grown revenues from $6 million to over $20 million by growing a rural health clinic, open every night of the week until midnight, which also took people out of the high-priced emergency room and saved operating costs at the hospital. Patient visits have gone from 1,458 in 2004 to a projected 14,500 this year. In addition, he also grew the hospital’s nursing home and home health businesses.

It is an amazing turnaround and one of the beacons of prosperity and hope in the rural Delta.

Mississippi Delta

I was back in the Mississippi Delta last week touring Sunflower County (population 31,833) and doing a talk in Ruleville (population 3,234). When you look at the statistics, it is pretty bleak. The poverty rate is 34.3% (8th worst out of 3,141 counties in the USA), they’ve lost 9.4% of their population since 1990 (2,817th) and have only 59.3% of their adults over the age of 25 with a high school diploma (3,046th).

The first two indices are solvable but are directly related to the last one on educational attainment. Digging deeper into the educational shows even more concern. The county has 17% (one out of six) who have less than an eighth grade education (228th in the USA) and 23.7% with some high school but no diploma (42nd).

When I was asked at my talk what is the major obstacle to job creation in Sunflower County, I cited those educational rates telling them that those of us in the site selection business look at statistics like the ones I mentioned to determine whether to keep a community on the list. Unfortunately, Sunflower County’s statistics are so bad that they are rarely going to make it to the next level.

Several groups are working diligently in the Delta to address issues of education, unemployment and poverty. It will be a long, hard journey but there is progress being made. I’ll highlight a couple in the next couple of upcoming blogs.

More Lemonade Stands

Can the world have too many lemonade stands? My answer would be a resounding “NO!!!”

Umpqua Bank from Roseburg, OR has started a campaign to encourage young entrepreneurs to open more lemonade stands this summer. In fact they hope to see over 2,000 new lemonade stands started in the 96 towns where they have branches. Children up to 13 years of age need to fill out an application to receive a lemonade stand kit, which includes a booklet called “How to Become a Lemonaire: A Guide to Starting Your First Small Business,” that includes tips on cash flow, pricing, an advertising plan, general business tips and financial literacy lessons; a yellow, plastic tablecloth; a sign for ‘fill in the name’ lemonade stand; cups; napkins; and a $10 bill for start-up capital.

In addition a drawing will be held to select 105 “lemonaires” who will receive the use of one of the bank’s brightly colored, collapsible, stainless-steel lemonade stands for a week.

“Umpqua’s brand makes it possible for banking to be about more than just suits and handshakes. Unless those handshakes are small and sticky,” Jim Haven, creative director of the Lemonaire campaign said.

Umpqua is a very unique bank that started in rural Canyonville, OR (population 1,293) in 1953. In the past ten years it has grown from $150 million in assets to over $7 billion today as it has transformed itself into a different kind of community bank. It refers to itself as a retailer rather than a bank, offering free Wi-Fi access, its own branded coffee, sewing groups, yoga classes and even movie nights.

They also have figured out that entrepreneurism is the wave of the future and cultivating even young entrepreneurs in grade school makes a lot of sense. Other banks should follow their lead.

Who Knew?

When you travel around the country as much as I do, you see some incredible sights. Last week these water towers in Pratt, KS caught my eye.

Who knew that this was how they kept Hot and Cold water separate?

Progress and Frustrations

In the aftermath of a catastrophe like the EF5 Tornado that obliterated Greensburg, KS there is a great deal of aid that comes into the town from private and public sources. I was amazed by the progress that was able to be made within only two months for beginning the clean-up of the town and in constructing a temporary housing area for those displaced by the storm.

The day that we were there the first 28 residents had moved into a 350 unit temporary subdivision on the outskirts of town, complete with its own concrete storm cellar. The FEMA development was well landscaped and built with sidewalks. Benjamin Alexander of FEMA told me, “It is the nicest one that we have ever done so far.”

Think about the logistics required of laying out a subdivision, putting in all of the infrastructure, moving in housing and doing all of that while trying to move yourself into temporary quarters and dealing with typical government bureaucracy. I’m guessing that could only happen in the USA.

Several of the residents expressed concern about the pace of rebuilding, wanting to get started with putting their lives back together. I cautioned them on rushing too quickly and losing sight of the fact that they have an opportunity to rebuild the town with a vision and wisdom to last for generations into the future. Most towns don’t get an opportunity like this, to rebuild exactly as they want themselves to be.

It is a tough and delicate balance going on in Greensburg. I hope that they are able to balance short term desires with a long term vision of the future.

Not a Typical Storm

The last EF5 storm, the weather service’s maximum level, to hit the USA was in 1997. The EF5 that hit Greensburg, KS on May 5, 2007 was on the ground for 30 minutes as it left a path of destruction for 22 miles throughout SW Kansas. Wind speeds exceeded 200 mph!

Ten people were killed by this storm, the first storm related fatality in Kansas since 1967.

There are several websites that have some incredible pictures of the aftermath of the Greensburg storm. I hope to never go through such a storm myself.

http://www.kansas.com/static/slides/050507tornadoaerials/
http://www.ultimatechase.com/chase_accounts/Greensburg_Tornado_Damage_Survey.htm

Recovery and Rebuilding

The devastation and aftermath of the tornado that hit Greensburg, KS (population 1,574) on May 4, 2007 was difficult for my wife and I to comprehend and process. We were there earlier this week to do a talk to the survivors who are slowly rebuilding their lives. It was a very emotional tour, especially in talking with many who hunkered down in their basements as winds of over 200 mph whirled above.

Several told of how their ears popped that night with the pressure from the storm and how their hearing had still not returned to normal. The devastation and complete loss of everything that they and their neighbors owned, including baby pictures and other momentos, was obviously painful for several to retell.

It was, by far, the most difficult talk that I’ve had to give in the 300 or so that I’ve given in the past three years. I wanted to share with them the experiences of other towns that have been devastated by fire, floods, hurricanes, tornados and other natural disasters, hoping that the successes that those towns were able to achieve might console and inspire the citizens of Greensburg to envision how they want to rebuild their community. Their response to what I had to say was overwhelming.

Mayor John Janssen, FEMA Coordinator Benjamin Alexander and local banker Steve Kirk, who invited me to Greensburg, spent several hours with us showing us the remnants of the town. They and others in the town are deep into the plans of how to rebuild the community for the future. A land use plan, rerouted roads and a new industrial park are among the items being discussed.

Freedom

“Few of their children in the country learn English. The signs in our streets have inscriptions in both languages. Unless the stream of their importation could be turned, they will soon so outnumber us that all of the advantages we have will not be able to preserve our language and even our government will become precarious.” Those were not the words of someone in 2007, but rather, those of Benjamin Franklin who found the waves of my ancestors pouring into Philadelphia from Germany “the most stupid of their nation.”

I was reflecting on the Fourth upon the yearning for freedom and opportunity that drove those ancestors to journey half-way across the world in rickety ships. They came with an ideal in their heart, a willingness to work hard and their children and grandchildren quickly assimilated into the “American Way.” Yet, they and every other major immigrant group had to overcome the sentiment of not being welcomed from those firmly planted on American soil.

They say that history repeats itself. Are we witnessing such a repeat today?

New Ten Commandments

“The Ten Commandments of Community Leadership” is Maury Forman’s newest book, which he co-authored with Michelle Harvey of the Association of Washington Cities. Maury is a good friend who is an icon in economic development in the northwest. This is his ninth book on economic development and one that I thoroughly enjoyed.

Each of his new ten commandments has a number of sub-headings with ideas and tools that relate to that commandment:

Thou shalt create a vision for the future

Thou shalt develop a strategic plan

Thou shalt build a sustainable economy for the next generation

Thou shalt seek public/private partnerships

Thou shalt invest in education and training

Thou shalt promote respect

Thou shalt demonstrate a high standard of ethical behavior

Thou shalt value history, art and culture

Thou shalt prepare for a global environment

Thou shalt develop future leaders

Maury and Michelle’s book is one that many ED professionals are going to want to buy for their boards and allies. To order contact Linda Alongi at LindaA@cted.wa.gov or 360-725-4031. Cost is $10

Unexpected. Unforgettable.

Columbus, IN (population 39,059) was ranked as one of my top 100 agurbs® in our original research for BoomtownUSA. I use Columbus in most talks I do, citing how the community is ranked as the sixth most architecturally significant city in the USA by the Architectural Institute of America.

Recently Columbus unveiled a new brand for the community…Columbus, Indiana. Unexpected. Unforgettable.

Mayor Fred Armstrong said of the new brand, “We will be able to promote our community more effectively, with a single, well-researched message that is true to both our community’s assets and aspirations.”

What is your brand?

Developing Tech Jobs in Rural Communities

One of my favorite email news lists is Russ Fletcher’s MATR Newsletter. It is a twice weekly compilation of several dozen interesting articles on items of interest in the area of economic development, primarily in rural areas. If you aren’t a subscriber, you should be. Sign up here.

An interesting section of his website is where he archives articles within a specific area of interest. One of those areas is Developing Tech Jobs in Rural Communities. Two articles on that site that were particularly interesting were: Microsoft expanding operations in North Dakota and Average Seattle worker can’t afford to live here.

In the first article, Microsoft announced plans to increase their 1,200 employee campus in Fargo, ND from two to three buildings because of the lower costs of operation. The second article bemoaned the fact that the typical school teacher in Seattle can only afford to buy about half of a typical house or face a commute of over one hour.

Making a Difference

I thought that this true story of how one person can change attitudes was excellent. Please take three minutes to view it.

If a simple bagger can change an entire store, imagine what you could do!

A Fifty Story Farm?

I’m a sucker for new ideas, but I’m not buying what Dr. Dickson Despommier of Columbia University is trying to sell to people in New York City. Dr. Despommier is getting serious consideration and a number of articles written on his concept of implementing Food Production Skyscrapers in NYC and other urban centers. He thinks that “it would only take roughly 150 such buildings to feed the entire city of New York for a year.”

Dr. Despommier and others in urban centers really need to get out and see the vastness of the U. S. and other countries. They need to fly over the country, not at 30,000 feet but a few thousand feet to get a feel for the amount of land that is available in places other than New York City.

They also need to realize that world agriculture is evolving, very productive and innovative. Comments they make, such as, “__________xxx acres of new land will be needed to grow enough food to feed them, if traditional farming practices continue as they are practiced today,” don’t take into account progress being made in crop production around the world.

As an example, when I was growing up 100 bushel/acre corn was considered a good yield. Today, on those same fields, 200 bushel/acre is the norm and scientists are getting over 400 bushel/acre with new experimental hybrids and production techniques. In addition, new technology will allow corn and other crops to be raised on much less water than is normal today, opening up vast amounts of new land all over the world.

But, take a look for yourself. It is fun to see some of these futuristic ideas, even if they probably don’t make any sense.

Family Business Moves

I mentioned the impact that Bob Potter, an 80+ year old former VP of sales for AT&T, was having on recruiting in new businesses to Coeur d’Alene, ID in BoomtownUSA. Potter continues his tireless efforts, concentrating mostly upon family run businesses.

In the past fifteen years, he has brought in 70 new businesses into the Inland Northwest area of WA and ID. Of those 66 were family run businesses that relocated for lower operating costs and a better quality of life.

He talked about this importance of quality of life for family businesses, “family members of succeeding generations have different lifestyle interests and seek a quality of life different than that of their parents and grandparents. They not only seek bottom line dividends through relocating their business, but lifestyle dividends as well.”

If you’ve got tremendous quality of life attributes like the Inland NW, you might want to think of targeting second and third generation family businesses.

More Corporate Headquarters?

Michigan has been in a funk for the past six years, with growth at half of the U. S. average. That lagging was the focus of the Detroit Chamber’s annual Mackinac Policy Conference last week. Edsel Ford II and others urged business and political leaders to collaborate in order to diversify the region’s economy away from its reliance upon the industry that his great-grandfather launched into overdrive a century ago, pushing for a regional effort under the banner of One D (for Detroit).

Most of the sessions centered upon the changes in the automotive industry and its deterioration impacting so much of the Michigan economy. Several suggested that Michigan needed to focus upon bringing in more corporate headquarters. The loss of headquarter companies like Kmart, Crowley, Gantos, Old Kent, Michigan National, Standard Federal and others has very adversely affected the state’s ability to withstand this recent automotive downturn.

HUH!!! Recruiting in HQs is old thinking, of people wishing that they could turn back the clock. Instead, the focus should be upon the development of entrepreneurs from the core of talented people who have been building products like automobiles for their entire life. Unfortunately, many of them learned their craft in a tightly controlled, non-entrepreneurial environment. They’ve got the skills, but need encouragement to make the entrepreneurial leap. Until Michigan figures out how to move from a corporate, bureaucratic, headquarters mentality into an entrepreneurial model, I’m concerned that they will continue in their economic stagnation. I hope that they embrace entrepreneurism quickly.

Magnet for CEOs

“I moved back here in 2003 to start this business with my brother, who was living in Los Angeles but he and his wife didn’t want to raise their young daughter there.” Quay Chilcott was explaining to me how he started By the Bay Shuttle in Traverse City, MI as he drove me up to Petoskey, MI. Both Traverse City and Petoskey were rated as Golden Eagles or top 100 agurbs® in BoomtownUSA.

Chilcott explained to me his newest venture, “We found that we were increasingly transporting CEOs and their families around the area. One of them suggested starting a specialized service for them, using late model SUVs. We started that last year and I’ve been amazed at the way it has taken off. We’ve already signed up 83 CEOs at $3,000/year.”

Chilcott didn’t have any idea that there were that many presidents, CEOs and business owners in the area until he started the business. He’s finding that more are moving in, choosing to raise their families in a more tranquil, rural setting even as they are jetting off each Monday to their offices.

The development of broadband, video conferencing and other distance-reducing technologies have spurred this search for better quality of life alternatives for these CEOs. The advent of the new Very Light Jets (VLJs) with their dramatically lower costs will allow for VPs and others down the corporate ladder to also make such choices.

Chilcott is already looking at how he might be able to incorporate the VLJs into his burgeoning shuttle business. Areas like Traverse City/Petoskey and others that offer a higher quality of life will be the big beneficiaries of these new technologies.

Entrepreneurs from Corporate Bureaucracy

“We’ve had our wheels on Orange County Choppers and other shows,” Rob Rodems explained to me as he gave me a tour of his manufacturing operations in Jacksonville, IL (population 18,940). “I started this with my brother and sister in 2000.”

The company has over 50 different wheel designs, selling mostly to Harley Davidson riders through a series of over 3,000 dealers in its database. Increasingly the internet is becoming an important marketing tool for them, with over 500,000 hits per month on its website.
The company is an offshoot of JMI (Jacksonville Machinery Incorporated), a custom machining company that does specialty parts for companies like Caterpillar, Owens-Illinois and others. However, its main customer for many years was Pactiv, which has a major presence in Jacksonville.

Another entrepreneurial company in the town that Terry Denison, head of Jacksonville ED, took me to visit was CCK Automations. The company was started by J. J. Richardson and his wife Sherry when J. J. became disillusioned with his engineering job at Pactiv in 1994 and took the entrepreneurial plunge.

CCK has developed into a leader in the engineering, design and manufacturing of circuit boards and control panels. Its boards cover a wide range of uses as evidenced by a price range from $2.16 to $3500.00 per board.

Both companies are competing in a global marketplace but both came out of corporate bureaucracy of a big company like Pactiv. I’ve seen a number of entrepreneurial firms spawned in such a manner. They often result in other start-ups, the clustering of similar new companies and can help to shape job growth and economic prosperity in a region.

Manufacturing Exports

“We are losing all of our manufacturers and manufacturing jobs!” You can’t imagine the number of times that I hear that every month. It grates on me to hear such statements. I blame their misinformation upon our news media and a few pundits who prefer to prey upon fears rather than look at facts.

I patiently, and sometimes not so patiently, respond that we are today producing more manufactured goods than at any time in the history of the USA. I also add that we have more people working in the manufacturing of automobiles than at any time in history. I hope that I’m having a small impact, but based upon the sometimes dumbfounded look on their faces, I’m not so sure. Here’s some new ammunition that I’ll be able to use.

Data from the Federal Reserve Bank of Minneapolis shows how exports of manufacturing goods are soaring in the USA. Look at the graphic which shows the percentage increase in manufactured goods exported on a state by state basis.

The largest states for manufactured exports are (in order): TX, CA, NY, WA, IL, MI, OH, FL, PA and NJ. All showed gains in 2005, 2006 and in the first quarter of 2007. The states that showed a decrease in 2006 with state rank in parenthesis were: GA (15); SC (24); VT (39); WV (43); AK (52) AND HI (54).

U. S. exports grew from $805 billion in 2005 to $923 billion in 2006, a gain of 14.5%. In the first quarter of 2007 they were up another 9.6% when compared to the first quarter of 2006.

I love manufacturers and the jobs that they create. There are many that are growing and prospering in today’s economy.

Entrepreneurial America

Each year the Kauffman Foundation ranks states on their entrepreneurial activity. This past year MT was ranked as the most entrepreneurial with 600 entrepreneurs for every 100,000 residents (0.60 percent). The others in the top five were MS (0.52%), GA (0.44%), OK (0.43%) and ME (0.42%). The lowest levels of entrepreneurism were in MI (0.16%), PA (0.17%), SC (0.18%), IL (0.18%) and DE (0.19%).

The states that have experienced the largest percentage increase in entrepreneurism over the past decade we MS, HI, RI and AR. Those with the largest decrease were AK, ND, NM, TN and KS.

Entrepreneurism is the key driver of future economic development in rural America. Those communities, regions and states that have it is a priority are the ones that will thrive.

Wall Street West

Leveraging their proximity to New York City (less than a two hour drive), the nine counties in northeastern PA have banded together as Wall Street West to market their rural location as a second home for Wall Street. Being on a separate electric grid, reasonable proximity to NY and NJ and lower operating costs are all keys to developing this regional designation into a key economic cluster.

The Pocono region was known for years as the “honeymoon capital of the world.” My parents drove from IL out there in 1951 for their honeymoon and proudly showed us their home movies of being stranded by a huge snowstorm, something they didn’t seem to mind at all. It is a beautiful, rolling country with a great deal of history. Hopefully, this new regional initiative will breath economic life and good paying jobs into the rural communities in these nine counties.