Regional Alliance restructures, focuses efforts on recruitment

By Sharon Hayes

He’s been on the job as interim president and CEO of the Regional Alliance for Economic Development for just over a year now. And already Tom Ferguson has restructured the organization, cut its staff in half, and changed its focus from marketing to recruitment.

Ferguson — who admits he wondered a year ago if the alliance was savable — believes the organization now has a fighting chance, and is hoping it can eventually realize the ambitious goals for job creation that its founders envisioned five years ago.

High hopes

The alliance founders — including some of the most influential business people in the area — had high hopes when they announced their plans in 2005. They wanted to create 7,200 high-paying jobs in five years and increase the region’s average industry wage by 20 percent.

They wanted to launch a regional branding and marketing effort to showcase the region to the rest of the world.

They wanted to commission a study to determine businesses and industries whose needs matched the region’s existing infrastructure, resources and assets.

They wanted to hire an economic development professional with global marketing experience to lead the initiative.

And they wanted to investigate how to work with the region’s World Trade Center effort to help market the area around the globe.

The alliance launched a campaign to raise up to $5 million in public and private commitments to fund the first five years of the effort. And it hired veteran economic developer Andrew Burke, who brought with him an impressive resume of successes that the alliance hoped would be duplicated here. He started his new duties in September 2005.

Under Burke’s direction, the alliance conducted an industry cluster analysis and workforce profiles of the region.

It also launched a new marketing effort, branding the region as “Performance USA.”

And it purchased the license for the Mountain South World Trade Center, resulting in a one-time cost of $250,000, plus an annual $10,000 membership fee. Alliance members were hoping the WTC license would connect the region with other World Trade Centers around the globe, generating new business for the area.

But business leads began drying up as the national economy headed downhill. Burke retired at the end of 2008, and Ferguson — another veteran economic developer who was known for his successes in Greene County — was asked to help the organization find a replacement.

The alliance, however, was in the fourth year of a five-year funding plan, and Ferguson knew finding a replacement would be tough. So he put his own company in mothballs and stepped in to serve as the interim president and CEO.

Changing direction

Right away, Ferguson knew he had his hands full. Financial support for the organization was waning, and too much emphasis had been placed on marketing and not enough on recruiting, Ferguson said.

“I told the executive committee right here in this room — ‘I don’t know if this thing is savable.’ I didn’t think we’d last a year,” Ferguson said.

He dug in his heels and announced internally that he would reorganize the alliance, first by downsizing the Mountain South World Trade Center. That meant the elimination of two positions.

Ferguson also cut a separate administrative job and outsourced part of those responsibilities.

Since then, the alliance’s main marketing guy, Brandon Talbert, left to take a job in Indiana. Ferguson said he’s working to fill that position now.

“When we get that job filled, we’ll have basically three full-time people compared to five or six which is what they had in the past. And we won’t miss a beat,” Ferguson said. “We’re more focused on what we’re doing now than we’ve ever been before.”

Last March, the alliance launched a new Web site at www.tricitiesprospector.com that could lead site selection consultants directly to the region. The Web site provides detailed information about the area, giving site selection consultants the data they need in considering a move here.

Ferguson plans to host consultants in town for the races at Bristol Motor Speedway, which as an alliance member, has provided the organization with a suite to use during NASCAR weekends.

In addition, Ferguson has contracted with a communications firm in Knoxville to craft press releases each month about topics pertaining to the region. The releases, which have included information about the region’s healthcare industry and its plastics and rubber industry, are sent to a network of 85,000 journalists and 4,000 news outlets.

Ferguson said the news releases are simply a way of getting information out about the region.

One of the first news releases the alliance issued was about the Academic Village in downtown Kingsport and the city’s efforts to boost its workforce development. Ferguson said the release caught the attention of Business Expansion magazine, an industry trade publication.

“They’re doing a work force development story, and as they began to look up things, they came across this press release,” Ferguson said.

He said a journalist from the magazine interviewed him and Kingsport City Manager John Campbell for a story.

“That’s why we do it — to get it out there in space. And they found it,” Ferguson said.

He’s also cut back on trade show attendance and is instead focusing on meeting directly with consultants. He said he’ll attend one trade show this year as opposed to six last year, and plans to visit Dallas, Atlanta, Chicago, Boston and New York for face-to-face meetings with more than 35 consultants.

Ferguson said the alliance is now focused on creating jobs — and achieving the goals that were put into place when the organization was formed five years ago.

“We are a different organization than what we were a year ago,” he said.

Another two years

The alliance’s board of directors has voted to move forward with a two-year funding plan to keep the organization alive. Ferguson said most of the major investors are back on board. Others have cut back their commitments due to economic conditions, and others have pulled their support altogether.

“They’re struggling, and we’re not going to twist their arms. But we’re not going to drop them off our membership roles. When things get better, we know we can count on them being back,” he said.

The alliance’s budget for 2010 is $557,000, vs. about $800,000 when the group first started.

The bulk of that funding comes from about 75 private investors.

And while the organization covers a 10-county area, its financial support from the public side comes from only a handful of communities.

“The fact is, when we get companies interested, we focus on the people who are putting the money in. Otherwise, we’re going to lose their support,” Ferguson said.

Local communities contributing the majority of public money are Sullivan County, Washington County and Greene County.

“We’re very frank about it. Most of the economic development is right in those three counties, and that’s where our efforts are going to be focused,” he said.

Moving forward

Last year, the alliance was asked to compile 14 proposals for companies looking to expand or relocate. None of those companies moved here, but three of them short-listed the area and visited, Ferguson said.

“What happened with most of those — they fell off the table. They were delayed, the projects were killed altogether, and there are a couple of them that are on hold and it all has to do with them waiting to see what happens with Cap -N- Trade (legislation),” Ferguson said.

And although business activity has slowed, Ferguson said, he still hopes to bring 10 prospects to the region this year.

Meanwhile, the alliance continues to pay the $10,000 annual membership fee for the Mountain South World Trade Center. But Ferguson isn’t so sure that money is being well spent.

“What we found out is — most of these World Trade Centers around the world are privately owned, they’re not not-for-profit groups like we are. and they all have a monetary mission — make money. And many of them are very much involved in real estate. We just couldn’t get it to work,” Ferguson said.

He said some organizations have stepped forward and talked with him about possibly buying the WTC license for the region.

Asked if the alliance could recoup its initial investment of $250,000, Ferguson shook his head. “We could never achieve that kind of value. Not even close,” he said.

“We can sell it. But we want to be very careful that it’s not seen as something that is lining someone else’s pockets with public money,” he said.

He said the future of the alliance will be determined in the next 24 months.

“People will support organizations that are relevant and are producing results. We got refocused, we reorganized, and started working in some areas that they had not been working in. And we started getting some results,” Ferguson said.

“It’s all going to be based on results. If we get results starting this year and in the next 24 months, we’ll be here in five years. It’s that simple.”