Strategic DoingGetting From Here to There: Eight Characteristics of Effective Community & Economic Development Strategy

Scott Hutcheson, Ph.D.Purdue Center for Regional DevelopmentPurdue Extension Economic & Community Development

Norfork, Arkansas (1910s)

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Norfork, Arkansas (Today)

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Problem Statement

• Literature gap regarding factors contributing to effective economic development strategy-making processes (Kwon, Berry, & Feiock, 2009).

• Civic leaders face daunting tasks of developing and implementing growth strategies (Markey, 2010).

• Very little research-based information to guide decisions about effective strategy-making processes.

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Purpose & Design

Purpose of the StudyThis two-phase sequential mixed method study developed and tested a grounded theory of strategy-making effectiveness in the context of economic and community development.

Research DesignPhase 1: Qualitative exploration of the variables associated with effective economic & community development strategy making as identified by a panel of experts.

Phase 2: Quantitative test of the relationships between the newly identified variables and reported effectiveness among participants in strategy-making initiatives.

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Phase 1 Research Questions

RQ1-Qualitative: What were the factors that contribute to effective strategy making in the context of local economic & community development?

RQ2-Quantitative: Among individuals who have participated in local economic & community development strategy-making initiatives, was there an association between reported effectiveness of the initiatives and the factors identified in the qualitative phase?

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Literature Review

• Conducted as part of the grounded theory data collection process (McGhee, Marland, and Atkinson, 2007).

• Conducted to provide contextualization (Dunne, 2011) and orientation to the phenomenon (Pozzebon, Petrini, de Mellow, and Garreau, 2011).

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Literature Review

Evolution of economic development1. Institutionalization2. Locus of control3. Complexity

Strategic planning & strategy making in economic development

4. Early models5. Evolving models6. Emerging models

Contributing theories7.Strategy formation8.Collaborative governance9.Social innovation

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Evolution of Economic & Community DevelopmentInstitutionalization• Pre-institutional (Pre- WW2)• Institutional (1950-1990)• Multi-Institutional (1990 to today)Locus of Control • Control in the hands of the “elite” (Perrucci &

Pilisuk, 1970). • Most economic & community development issues

are “Type 3 Public Problems” and control is shared by a group of “nonexperts” (Heifitz and Sinder, 1988).

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Hierarchy of Complex Systems

Social Organizations – economics, education, politicsIndividual Human – language capacity, knowledge accumulation, design and use of toolsAnimal – mobility, information processingPlants – viabilityOpen Systems – matter, energyCybernetics – computersClockworks – enginesFrameworks – buildings, cells

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Boulding, K. (1956). General systems theory—the skeleton of science. Management Science 2(3): 197-208.

Strategy in Economic & Community DevelopmentEarly Models• Late 1980s/Early 1990s first economic development strategic plans

(Blackerby & Blackerby, 1995) • Borrowed from industry models (Blair,2004) Evolving Models• Recognition that corporate models are less effective (Bryson and

Roering, 1987).• U.S. Economic Development Administration’s CEDS; Cooperative

Extension Service’s Take Charge (Hein, Cole, & Ayres, 1990); Asset-Based Community Development, (Kretzmann and McKnight, 1996; Community Capitals, Flora, 1992)

Emerging Models• Effectiveness of strategic planning in business questioned

(Mintzberg, 1994).• Effectiveness of strategic planning in economic & community

development questioned ( Blair, 2004; Robichau, 2010; Morrison, 2012)

• Organic Strategic Planning (McNamara, 2010, Open Source Economic Development (Merkel, 2010), Strategic Doing (Hutcheson, 2008; Hutcheson & Morrison, 2012; Walzer & Cordes, 2012)

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Early, Evolving, and Emerging Models Informing Strategy in E&CD

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Contributing Theories

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Contingent Lines of Inquiry

• Organizational Structure (hierarchy, network, etc.)

• Framework (asset-based, deficit-based)• Processes (planning and Implementation

separate and distinct, planning and implementation integrated and iterative, etc.)

• Timeframe (focused on longer-term goals, focused on shorter-term goals, etc.)

• Implementation (tasks centralized with one organization, tasked disseminated among multiple organizations)

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Phase 1: Panel of Experts• Population of scholars and practitioners who design

curricula for and/or teach strategy to economic and community development professionals (IEDC, OU/EDI, university faculty that teach the “basic” course, university faculty that developed SET curricula

• Sample: N=12• Semi-structured interviews (IRB-approved,

anonymity)• Verbatim transcripts, data spiral analysis with three

levels of coding: open, axial, selective using qualitative analysis software

• 56 single-spaced pages/over 31,000 words of data, 336 coded excerpts

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Phase 1 Findings: Organizational Structure• 31 coded excerpts• One of the most robust discussion items• Two dominant structures: (1) hierarchical and (2)

network• Components of both structures are needed• Network is a key factor in effective strategies

Phase 1 Findings - Frameworks• 43 coded excerpts• The most robust discussion item• Two dominant structures: (1) asset-based and

(2) deficit-based• Unanimous agreement that asset-based

frameworks lead to more effective strategy initiatives

Phase 1 Findings - Processes

• 26 coded excerpts• Two dominant processes discussed: (1)

sequential, in which planning is followed by implementation and (2) iterative, where planning and implementation are integrated

• Near unanimous agreement that iterative processes leads to more effective strategy initiatives

• Factor in which interviewees thinking has evolved

Phase 1 Findings - Implementation• 19 coded excerpts• Two dominant structures: (1) centralized and (2)

dispersed• Near unanimous agreement that dispersed

implementation is a characteristic of effective strategy initiatives

Phase 1 Findings - Timeframes• 18 coded excerpts• Two dominant structures: (1) shorter-term early

wins and (2) longer-term goals• 14 coded as “early wins” and 4 as “longer-term” • Factor in which interviewees thinking has

evolved• Early wins were always seen by a majority as a

characteristic of effective strategy initiatives• Longer-term goals seen by a minority as a

characteristic of effective strategy initiatives

Phase 1 Findings – Social Capital• Emergent factor• 17 coded excerpts• Two dominant social capital characteristics

emerged: (1) trust and (2) readiness for change• Trust seen especially important when new

partners were working together• Readiness for change was difficult to access• High levels of trust and readiness for change

were viewed as characteristics of effective strategies

Phase 1 Findings – Data & Metrics• Emergent factor• 14 coded excerpts• Interviews pointed out two ways in which metrics

can be used: (1) accountability tool and (2) learning tool

• Metrics used specifically as a tool for learning was seen as a characteristic of effective strategy initiatives

Phase 1 Findings: Summary

1. Network organization structures2. Asset-based Frameworks3. Iterative planning/implementation process4. Inclusion of shorter-term goals5. Decentralized implementation6. Metrics to learn what is working7. High levels of trust among participants8. Readiness for change in community

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Phase 1 Findings: Summary

1. Network organization structures2. Asset-based Frameworks3. Iterative planning/implementation process4. Inclusion of shorter-term goals5. Decentralized implementation6. Metrics to learn what is working7. High levels of trust among participants8. Readiness for change in community

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Phase 1 Findings: Summary

1. Network organization structures2. Asset-based Frameworks3. Iterative planning/implementation process4. Inclusion of shorter-term goals5. Decentralized implementation6. Metrics to learn what is working7. High levels of trust among participants8. Readiness for change in community

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Independent Variables

Phase 1 Findings: Summary

1. Network organization structures2. Asset-based Frameworks3. Iterative planning/implementation process4. Inclusion of shorter-term goals5. Decentralized implementation6. Metrics to learn what is working7. High levels of trust among participants8. Readiness for change in community

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Independent Variables

Dependent Variable = Effectiveness

Phase 2: Hypotheses

1. Network Organizational StructureH0: There is no correlation between strategy initiative effectiveness and network organizational structure.

H1: There is a positive correlation between strategy initiative effectiveness and network organizational structure.

Additional hypotheses were constructed for the other variables: (2) asset-based frameworks, (3) iterative-based processes, (4)

shorter-term timeframes, and (5) decentralized implementation, (6) high levels of trust, (7) readiness for change, (8) metrics

used to learn what it working 27

Phase 2: Survey of Participants• Population of individuals who have participated in

economic & community development strategy initiatives within the last few years

• Sample of 300 participants were randomly selected from PCRD contact database (N=108). Assured that Indiana was not over represented

• IRB-approved survey constructed using the factors identified in phase 1, participants randomly assigned to two contrasting groups: (1) those who would answer with an ineffective strategy process in mind and (2) those who would answer with an effective strategy in mind.

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Instrument

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Phase 2 Findings: The Means

Source: Scott Hutcheson, Distributed under a Creative Commons 3.0 License.

Phase 2 Findings: CorrelationFor the effective community or economic development strategy initiative you have in mind how would you describe its level of effectiveness:

• Completely effective• Significantly effective• Somewhat effective

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For the ineffective community or economic development strategy initiative you have in mind how would you describe its level of ineffectiveness:

• Completely effective• Significantly effective• Somewhat effective

Completely Effective

Completely Ineffective

Significantly Effective

Somewhat Effective

Somewhat Ineffective

Significantly Ineffective

Phase 2 Findings: Correlation

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Summary

• Have network organizational structures

• Are framed primarily around building on the community’s (local or regional) existing assets

• Have planning and implementation processes that are iterative

• Includes short-term, easy-win goals• Decentralized responsibilities for

implementation among multiple organization

• Uses metrics to learn what is working and to make adjustments along the way

• Have high levels of trust among participants

• Have communities that are ready to change

Effective Strategy

Initiatives

Summary

• Have network organizational structures

• Are framed primarily around building on the community’s (local or regional) existing assets

• Have planning and implementation processes that are iterative

• Includes short-term, easy-win goals• Decentralized responsibilities for

implementation among multiple organization

• Uses metrics to learn what is working and to make adjustments along the way

• Have high levels of trust among participants

• Have communities that are ready to change

• Have hierarchical organizational structures

• Are framed primarily around addressing the community’s (local or regional) problems or deficits

• Have planning and implementation processes that are sequential

• Includes only long-term, transformational goals

• Centralized responsibilities for implementation with one organization

• Uses metrics primarily for accountability

• Have low levels of trust among participants

• Have communities that are not ready for change

Effective Strategy

Initiatives

Ineffective Strategy

Initiatives