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Effective Strategy in Local & Regional Development
1. Copyright 2014 – Scott Hutcheson
This work is licensed under a Creative Commons Attribution-NonCommercial 2.5 License.
Effective Strategy Making in Local
& Regional Development
Scott Hutcheson, Ph.D.
Purdue University, West Lafayette, Indiana, USA
@jshutch64
The R&D Management Conference
Special Sessions: Open Strategy in R&D
Stuttgart, Germany – June 5, 2014
2. Better understand he nature of collaboration
Identify what stage your collaborations are in
Consider ways to move a collaborations to the next level
Overview
1. Context of the presentation
2. The evolution of strategy making
in local and regional development
3. Study methodology & findings
4. Strategic Doing: A promising
protocol for open strategy
3. Context: Economic Development
3
The purpose of economic development is to build up the
economic capacity of a local area to improve its
economic future and the quality of life for all. It is a
process by which public, business and non-governmental
sector partners work collectively to create better
conditions for economic growth and employment
generation.
4. Context: Local & Regional Development
Local = Typically single urban, suburban, or rural,
municipality (i.e., city, town, county in the U.S.)
Regional: Typically multiple municipalities that can be
within a (a) single state (Dallas/Ft. Worth Metroplex),
interstate (Greater Kansas City), or involving multiple
states (Great Lakes Region) or even along a cooridor (i.e.,
river, interstate, etc. Usually has one or more hubs of
economic concentration.
5. Eaton Corporation Aeroquip Hose Division
Context:
Strategy
Strategy answers two questions:
1) Where are we going?
2) How will we get there?
6. Number of Local & Regional Economic Development
Organizations in the U.S.
13,000
Colson, J. (2008). The Attributes of Successful Business Attraction. Angelou Economics. Retrieved from
http://www.angeloueconomics.com/Articles/Success.html
7.
8. Better understand he nature of collaboration
Identify what stage your collaborations are in
Consider ways to move a collaborations to the next level
Research
Question
Why are some strategy
processes for local &
regional development
successfuland others…
not so much?
9. Answering the Question
A grounded theory exploration
using a sequential mixed method
approach beginning with a
qualitative phase in which semi-
structured interviews were
conducted with a purposively
sampled panel of experts resulting
in data that was open coded using
the spiral analysis method followed
by a quasi-experimental
quantitative phase in which two
contrasted groups of purposefully
sampled, randomly assigned
participants were surveyed,
resulting in data that was analyzed
using Spearman’s rho to determine
correlation coefficients.
1. Literature review
2. Interviews
3. Surveys
10. Better understand he nature of collaboration
Identify what stage your collaborations are in
Consider ways to move a collaborations to the next level
Problem
Statement
• Literature gap regarding factors
contributing to effective strategy in the
context of local and regional
development (Kwon, Berry, & Feiock,
2009).
• Leaders face daunting tasks of
developing and implementing
strategies to address local and regional
development (Markey, 2010).
• Very little research-based information
to guide decisions about effective
strategy-development processes in
these contexts.
11. • Evolution of public issues
• Institutionalization
• Locus of control
• Increasing complexity
• Tools for managing public issues
• Early tools
• Evolving tools
• Emerging tools
• Contributing theories
• Strategy formation
• Collaborative governance
• Social innovation
Insights from the Literature
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).
12. Strategic Planning: A Tool for Local & Regional
Development Strategy
12
Early Tools
• 1960s in universities, schools, municipalities (Hamilton, 2007)
• Late 1980s/Early 1990s first economic development strategic plans
(Blackerby & Blackerby, 1995)
• Borrowed from industry models (Blair,2004)
Evolving Tools
• 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 Tools
• 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;
14. Social Innovation
Social innovations…
• are best designed and implemented in networks
• emerge from heterogeneousness (diversity)
• are framed using existing assets
• are products of co-creation
• are the result of collective action
• should have decentralized implementation
• when implemented should focus on tangible results
Bland, Bruk, Kim, and Lee (2010); Bouchard (2012); Mulgan, Ali, Tucker and Sanders (2007);
Neumeier (2012); Oliveira and Breda-Vazquez (2012)
15. Strategy Formation
Strategies…
• are formed intuitively
• are iterative
• must be designed to account for unanticipated variables
• must take into account contextual values, assumptions,
beliefs, and expectations
• must be flexible
• should be designed collaboratively
• and best developed as an intra-organizational activity
Feser, 2012; Johanson, 2009; Lindblom, 1959; Mintzberg, 1978; Parnell, 2008; Rindova, Dalpiaz, and
Ravasi, 2011; Sminia, 2012; Tapinos, Dyson, and Meadows, 2011
16. Collaborative Governance
Collaborative governance…
• takes advantage of network structures
• connects existing assets
• focuses first on small wins
• Requires decision making to be made by consensus
• works when there is trust among participants
• is efficient
• involves successful management of both internal and external
stakeholders
Ansell and Gash, 2008; Chiclana et al., 2013; Clarke, Huxley, Mountford, 2010; Emerson, Nabatchi, and Balogh, 2012;
Gibson, 2011; Johnston, Hicks, Nan, and Auer, 2011; Kwon, Berry, and Feiock, 2009; Merkle , 2010; Olberding, 2009;
Ospina and Saz-Carranza, 2010; Pammer, 1998; Poister, 2010
17. Better understand he nature of collaboration
Identify what stage your collaborations are in
Consider ways to move a collaborations to the next level
Lines of
Inquiry for
Qualitative
Phase
• Organizational Structure (hierarchy,
network, etc.)
• Overall Framework (asset-based,
deficit-based, etc.)
• Processes (planning and
Implementation separate and
sequential, 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)
• Human Capital (level of trust, readiness
18. Insights from the Panel of Experts
The Qualitative Data
• Population of scholars and practitioners who design
curricula, teach, and/or practice local & regional
development strategy making
• 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
19. Findings from the Interviews
19
1. Inter-organizational structure matters
(hierarchies to networks)
2. Frameworks matter (deficits to assets)
3. Process matters (sequential and linear
to agile and iterative)
4. Timeframes matters (longer-term
transformational goals to shorter-term
easy-win goals)
5. Implementation matters (centralization
to decentralization)
6. Metrics matter (accountability to
learning and adjusting)
7. Social capital matters (trust and
readiness for change)
20. Variables
20
1. Network organization structures
2. Asset-based Frameworks
3. Iterative planning/implementation process
4. Inclusion of shorter-term goals
5. Decentralized implementation
6. Metrics to learn what is working
7. High levels of trust among participants
8. Readiness for change in community
Independent
Variables
Dependent Variable = Effectiveness
21. Effectiveness
For the effective strategy initiative you have in mind, how
would you describe its level of effectiveness:
• Completely effective
• Significantly effective
• Somewhat effective
Ineffectiveness
For the ineffective strategy initiative you have in mind, how
would you describe its level of ineffectiveness:
• Somewhat ineffective
• Significantly ineffective
• Completely ineffective
Organizational Structure, etc.
Measuring
the Variables
Hierarchical, with a clear top
and bottom
Network, with a hub and
spokes
22. Insights from Participants
The Quantitative Data
• Population of individuals who have participated in
community-based strategy initiatives to address public
issues (economic development, community development,
community health, etc.)
• Sample of 300 (plus those reached by use of snowball
sample) participants were randomly selected from PCRD
contact database (N=209). 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
23. Findings from the Surveys
23
Source: Scott Hutcheson, Distributed under a Creative Commons 3.0 License.
Effective & Ineffective Strategy Initiatives – Mean Responses
25. Findings from the Surveys
25
Source: Scott Hutcheson, Distributed under a Creative Commons 3.0 License.
Correlation Between Strategy Initiative Effectiveness and the Eight Independent Variables
26. Recipe for EFFECTIVE Strategies
• Have a network organizational structure
• Frame strategies primarily around
building on existing assets
• Have a planning and implementation
processes that is iterative
• Include short-term, easy-win goals
• Decentralize responsibilities for
implementation among multiple
organization
• Use metrics to learn what is working and
to make adjustments along the way
• Build high levels of trust among
participants
• Assure that participants are ready to
change
27. Recipe for INEFFECTIVE Strategies
• Have a hierarchical organizational
structure
• Frame strategies primarily around
addressing problems or deficits
• Have a planning and implementation
process that is linear and sequential
• Include only long-term, transformational
goals
• Centralized responsibilities for
implementation with one organization
• Uses metrics primarily for
accountability
• Proceed even though there are low
levels of trust among participants
• Proceed although participants are not
ready for change
28. A Protocol for Open, Agile, Iterative Strategy
@strategic_doing
facebook.com/stratdoing
www.strategicdoing.net
29. • Think about strategy differently
• Accelerate the collaborations needed to
create open strategies
• Develop and implement agile, asset-based
strategies to meet strategic outcomes with a
progressive series of Pathfinder Projects.
Strategic Doing enables
people to form action
oriented collaborations
quickly, guide them
toward measurable
outcomes, and make
adjustments along the
way.
31. • Local & Regional Economic Development
Strategy
• Cluster Development
• Innovation Platform Development
• Strategic Alliances
• Inter-unit collaboration within a single
organization
Practicing
Strategic Doing
32. Teaching Strategic Doing
Existing & Emerging University Partnerships
Michigan State University
University of Alaska
University of Missouri
New Jersey Institute of Technology
University of Central Florida
Stanford University
Southhampton Solent University
34. Greater Milwaukee Water Technology Cluster: How
Open Strategy in Local & Regional Development Can
Accelerate Research & Development
34
35. Scott Hutcheson, Ph.D.
Purdue University, West Layette, Indiana, USA
765-479-7704
hutcheson@purdue.edu
www.linkedin.com/in/scotthutcheson/
www.twitter.com/jshutch64
www.facebook.com/scott.hutcheson
http://www.slideshare.net/jshutch/
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Copyright 2014 – Scott Hutcheson
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