Before the extended feast that is Thanksgiving comes upon us, I wanted to share my thoughts on one more article from CoreNet’s magazine The Leader. Dennis J. Donovan, a site selection expert, wrote an article entitled Location Velocity: Good Today, But What About Tomorrow? Using a term that he coined – “location velocity” – Donovan introduces the reader to the key indicators and questions to answer in preparing the short list of potential sites for your firm’s relocation. Through a couple of graphical charts and an extensive collection of bulleted lists, Donovan lays out the process to complete the two steps of location screening (generation of the short list) and location evaluation (grading of the short-listed sites). However, where the article goes beyond traditional site selection strategy is a thorough analysis of trends that may reduce the advantages of an otherwise desirable site.
Donovan’s approach reminds me of the same approach my financial advisors use. Among their various principles is that “a plan should work under any circumstances.” While site selection is not quite analogous to a financial plan, it still requires a significant investment on the part of the corporation and requires a long-term outlook. Any firm looking to make a major investment in its future would do well to consider Donovan’s points.
The one thing that I would identify as surprisingly absent from Donovan’s guidance is incentive packages. Although he discusses the need to be competitive with one’s benefits packages, he does not touch upon the potential influx of cash or tax credits offered by municipalities, states or countries to encourage business development. Following my first read, I skimmed the article twice to ensure that I was not missing anything related to incentives. Readers have probably heard of Volkswagen of America’s incentive package from the State of Virginia to relocate there or the number of data and call center incentive packages offered to firms like Microsoft and Google over the last few years. There can be millions of dollars available as part of a relocation package and the benefits of such a package can potentially counter some of the negatives of an otherwise suitable site. Of course, as Donovan himself declares at the end of his article, “the spoils generally go to the first on the scene.” Just something to keep in mind as you begin the site selection process.