Guest Columns

GUEST COLUMN Lou Glazer Five essential economic development lessons

Oracle announced in April it is bringing 8,500 jobs at an average salary of $110,000 to central city Nashville. The company will invest $1.2 billion to build out its new campus, including $175 million for public infrastructure.

The city, in its statement about the Oracle investment, writes:

“We are thrilled that Oracle is ready to make a billion-dollar bet on Nashville,” said Mayor John Cooper. “Oracle will bring a record number of high-paying jobs to Nashville and they will pay upfront all the city’s infrastructure costs. This is a huge win for our city. In an unprecedented deal

What Michigan needs, first and foremost, is a human capital-centered economic strategy, not one centered on business creation, retention and attraction. The 21st century economic development foundation is high-quality education systems that prepare the next generation for the economy they are going to work in and communities where mobile talent wants to live and work.

structure for Nashville, no new debt is being issued and there is no burden on our taxpayers. Oracle’s presence will transform the East Bank, and I’m equally excited about the ways Oracle can transform education and career pipelines in Nashville.”

The deal would not burden the city with any additional debt. The proposal does not require any funds from the operating budget. There are no job grants or bonds required as part of the proposed deal.

In the proposal, Oracle will make a $175 million investment in public infrastructure that a city would ordinarily be required to purchase itself. This includes costs such as a pump station for water and sewer, a pedestrian bridge, wider streets and environmental remediation. Per the economic impact plan, half of Oracle’s future property taxes would go to reimbursing the company for its upfront infrastructure investment, without any interest payments.

The other half of the new property tax base would benefi t the city’s general operating fund, from which funds can be directed to investments in aff ordable housing and neighborhood infrastructure. “The remaining property tax revenue from the project, the ‘Oracle bonus,’ can fund investments throughout the city. Creating and preserving aff ordable housing will be my top priority with those funds,” Cooper added. In addition to the increase in the property tax base, local sales and use tax collections from the proposed project are expected to reach about $8.8 million annually.

News 4 Nashville describes Oracle’s reasons for choosing Nashville this way: “Oracle is interested in Nashville because it provides access to world-class higher education institutions and a talented workforce, boasts a diverse population with a vibrant culture, has a high quality of life while maintaining aff ordability,

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MI VIEW WEST Garth Kriewall Michigan journalist, kriewall@hotmail.com

Yeah, I know a dealer who can supply you. Just bring the cash and he can get you all the lumber and building materials you want.

GUEST COLUMN

Dave Kahle Developing your salesperson

Which of these issues are worrying you these days? •Keeping the good salespeople you have? •Motivating your salespeople? •Stimulating your salespeople to become more productive? •Attracting good quality, new salespeople?

If you are concerned about any one of these issues, you are not alone. These are near the top of almost every businessperson’s list these days. With good reason. If you can positively resolve each of these issues, you’ll go a long way to profi tably growing your business. If you can’t, you may have a very rocky road ahead of you.

Now, suppose you could focus on one initiative that would help positively resolve each of these issues. With one simple move, you could help yourself on every one of these troublesome issues. Is there such an initiative? Is there one thing you can do that will help you keep the good salespeople you have, motivate your salespeople, stimulate your salespeople to become more productive, and attract good quality candidates?

The answer? Yes. It’s this: You can build a systematic approach to developing your salespeople. And in successfully accomplishing that one thing you’ll resolve all the others.

First a defi nition. By “development” I mean this: “Continuous improvement in the knowledge, processes, skills and tools necessary to be ever more eff ective and effi cient.” I don’t mean that once a month you have a sales meeting when you talk about problems, new company policies and procedures or discuss a new product. Those kinds of meetings are necessary, but hardly suffi cient.

Nor does it mean that you expect your salespeople to learn on the job by trial and error. At best, that is a very time-consuming and costly approach. At worst, it leads to mediocre performance, confusion and frustration on the part of the salesperson as well as his boss. Most companies who claim to do on the job training are really making an excuse for their lack of ability to do anything better.

I don’t know of any other sophisticated area of human labor where it is expected that every practitioner will fi gure out how to do the job well on his/her own. I, for one, would not want to settle into my seat on an airplane and have the pilot announce that he’s fi gured out how to fl y this plane on his own. Nor do I want to put my life in the hands of surgeon who learned a surgical procedure by trial and error. The list can go on and on. It includes almost any profession you can think of: lawyers, teachers, social workers, ministers, engineers, repair technicians, etc. In every one of these sophisticated jobs, there is a body of knowledge, of principles and procedures, that the practitioners are expected to master. While all of these professions expect people to practice, none of them expect them to learn the basic principles on their own by trial and error.

Are fi eld salespeople somehow diff erent? Are their jobs so simple that it’s easy to learn how to do it well? Or are they somehow super-intelligent and able to fi gure it all out on their own? Clearly the answer to both questions is no. Sales is an incredibly formidable profession that off ers its practitioners a lifetime of challenge. No salesperson is ever as good as he/she could be. And salespeople are no more or less intelligent than their counterparts among teachers, social workers, ministers, and the like.

Not only that, but every other profession expects its members to continually improve themselves. Show me a doctor, lawyer, CPA, teacher, social worker, minister, etc. who has not gone back for additional training and development in the last two years, and I’ll show you one who is either retired or dead. Show me a salesperson that hasn’t invested in improving themselves in the last two years and I’ll show you 80% of the salespeople in this country.

Why is that? One major reason is that most of the companies for whom they work don’t require continuous improvement. One of the main reasons they don’t require it is that they don’t know how to pull it off . So, they busy themselves with “product-oriented” sales meetings and complain often about unmotivated salespeople.

Being systematic about development is far more extensive than that. Here’s what your organization might look like after you have invested in developing your salespeople.

How to develop salespeople

You’d have a structured training program for all new hires. There would be a body of knowledge they would need to acquire, skills and processes they would need to master, and benchmarks along the way by which you could measure their progress. This program would teach such important practices as: •Developing territory plans •Planning for sales calls •Strategic planning for account penetration •Relationship building •Prospecting and cold calling •Making appointments •Collecting information

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Five essential economic development lessons

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and is a top destination for new employees.”

Wow! 8,500 new high-paying jobs with very little public subsidy.

Why? Because this is an economy in which talent attracts capital. The asset that matters most to high-wage employers is concentrated talent, especially young professionals in a wide variety of professions. More than 45% of Nashville/Davidson County residents 25 and older have a four-year degree or more. And Nashville has become one of the nation’s leading talent magnets.

The new economic development success recipe is driven by talent, not business incentives.

There are five essential lessons our state and regional economic leaders can and should learn from Nashville’s success in attracting Oracle: 1. The core of being an economic development competitive state and region is a region’s human capital, not what is included in the offer for a specific business investment opportunity. 2. Placemaking — creating a place where people want to live and work — is key to retaining and attracting high-wage employers. 3. Creating places where people want to live and work is driven by public investments in quality basic services, infrastructure and amenities. 4. Welcoming to all is a core characteristic of high-prosperity regions. People will not live and work in a community that isn’t welcoming. 5. High-wage jobs will continue to be concentrated in offices in high-density, high-amenity big cities. As we bring the virus under control, people — particularly young professionals — are going to want to live in high-density, high-amenity central city neighborhoods and employers are going to want their high-wage employees working together to boost productivity.

For Michigan and its individual regions to be competitive with leading-edge communities like Nashville, the state and its regions need to completely redesign their economic development strategy and practice. What we think of as state and regional economic development now is the icing on the cake, not the foundation of building a highwage economy. What Michigan needs, first and foremost, is a human capital-centered economic strategy, not one centered on business creation, retention and attraction. The 21st century economic development foundation is high-quality education systems that prepare the next generation for the economy they are going to work in and communities where mobile talent wants to live and work.

GUEST COLUMN Gaëtan Gerville-Réache Vacation rentals: Before you invest, know the risks

The vacation-rental boom spawned by Airbnb and similar services is undeniable, and there is seemingly no end in sight. If you are thinking of taking advantage by purchasing a summer cottage with the expectation of recovering the costs or even turning a profit, be careful.

For some buyers, this investment works out just fine, but for others, the venture will end in civil infractions, costly lawsuits and financial loss.

You would think that some pre-purchase due diligence could save these investors from trouble, but unfortunately, even savvy buyers are asking the wrong questions of the wrong people.

Short-term rental pitfalls

Most people think they can just ask their local zoning and planning department whether local ordinances allow the property to be rented short term and get an answer they can rely on. They will typically get an answer, but not one they should rely on, even when it is coming from the zoning administrator. Their interpretation of the ordinance is not binding on the local government.

As soon as a neighbor complains, the local government or neighbor can sue to enforce a different interpretation than the one given by the zoning administrator. If the courts agree short-term rentals are prohibited under that ordinance, it is game over. It will not matter what you were told before you purchased the property.

Another mistake would-be cottage owners make is thinking that if local ordinances do not expressly prohibit short-term rental of property, then it is allowed. Not true. With zoning ordinances, it works exactly the opposite.

If the zoning ordinance does not say a particular use is allowed, then it is prohibited. Even some zoning administrators fail to fully grasp that concept, which is another reason why relying on the staff’s interpretation can be a bad idea.

On top of that, discerning whether the ordinance actually does allow short-term rentals can be tricky. Last year, the Michigan Supreme Court took up just that question for Spring Lake Township and concluded all four lower court judges who reviewed the case had misinterpreted the zoning ordinance.

Purchasers sometimes fail to realize that even if the local zoning ordinance clearly allows shortterm rental of the property, that “right” may not be one they can purchase with the property. For example, deed restrictions may limit property rights by prohibiting anything but “residential” use, or the property may be subject to association rules that ban rentals.

As with local ordinances, it is not always readily apparent in reading those restrictions and rules that the terms mean shortterm rentals are prohibited. Michigan courts sometimes give the words a meaning that is not obvious.

How to avoid problems

Do not despair. There are ways to avoid winding up with a doomed investment.

First, share your intentions for the property with your real estate attorney. Not your realtor, not your friends — your real estate attorney, whose practice is focused on real property law. If you need to know the property can generate revenue before you purchase it, then you need the assurance of legal counsel that the law does not stand in the way.

Second, get a binding interpretation of the zoning law from the zoning board of appeals if there is any question. The local government will be legally required to abide by its decision.

For associations, there are ways to get greater assurance from the association board as to what the rules mean. An argument could be made that those assurances are binding in court, if they induced you to purchase the property.

The old adage that it is easier to seek forgiveness than permission does not apply to short-term rentals. The law is unforgiving: you either have permission or you do not. So above all else, find out whether or not short-term rentals are permitted before you make that purchase.

Gaëtan Gerville-Réache is a partner in the law firm Warner Norcross + Judd LLP who focuses his practice on appeals, real property litigation and environmental litigation. He regularly argues in the Michigan Supreme Court, including on short-term rental issues. He can be reached at greache@wnj.com.

Some tips toward developing your salesperson

CONTINUED FROM PAGE 16

•Maintaining good records •Getting organized •Making persuasive presentations •Gaining commitment •Implementing customer decisions •Following up to assure satisfaction •Penetrating key accounts

Once a certain minimum level of competency is attained, the salesperson would then be required to continually improve on his/her skills by investing time and energy in getting better at the job. You’d make that happen by: •Requiring monthly or quarterly involvement in “learning experiences.” These could be anything from classes at the local university and audio or video training programs to something as simple as checking a book out of the library and sharing a list of good ideas at the next sales meeting. •Holding regular developmental sales meetings in which you focus on a special behavior or practice and help people improve in that one area.

At some point in the development of a salesperson, he/she will likely look for additional career challenges. When that happens, the focus of development should be on providing the salesperson opportunities to expand his/her competency into areas that can be of assistance to the company in areas other than sales. This is when some salespeople want to focus on training or coaching others, for example. They can be channeled into learning how to do that. Others may want to expand into management and should be encouraged to begin gaining management skills and practices. Others may want to pursue team leadership, etc.

A comprehensive development system should account for three things: •Learning the basic principles, processes and tools for effective selling. •Continuous improvement in the sophisticated practices of highly effective salespeople. •Opportunities to expand in complementary careers and learn the skills necessary to do so.

How will this help you retain and attract good salespeople, motivate the ones you have and improve the productivity of the entire group?

Which would you want to work for? A company that doesn’t invest anything in developing its people, or one that has a regular, formal and systematic approach such as the one I described above?

Silly question.

Imagine yourself interviewing a prospective salesperson, before and after you’ve implemented the system described above. Before that, you say to your candidate, “We expect you to learn on the job.”

After that, you say, “We have a structured training program to assure that you master the basic practices that will ensure your success. Then, when you’ve mastered those, we have a system to stimulate your continuous career growth so that you are always growing better at your job. Finally, we have a system to help you expand your knowledge and skills into complementary areas like sales management, team leadership, and so on, if you are so inclined.”

Everything else being equal, which company would you rather work for? That’s how a development program will help you attract the right kind of people. Clearly, the same is true of your current sales force. Begin to require continuous improvement, provide the means for them to do so and invest in them, and you’ll be surprised how loyal they become.

This kind of program cannot help but improve your sales productivity. When all your salespeople know that constant and measurable improvement is required, most of them will begin to work on that. And you’ll begin to see the results in increased sales and gross profits.

Training and development like this can be one of your best investments. If only one salesperson acquires only one new account because of your investment in their development, it’s likely that one new account will more than pay for a year’s worth of development costs by itself.

Moving in the right direction

Here are some small steps you can take toward becoming the kind of learning organization I’ve described.

Budget for development. As simple as it may seem, this one step will be a major one. Once you have a budget, you’ll find it much easier to actually spend that money. The decision will not be “if” but rather “how.” Also, by budgeting money for development and then letting your managers know, you will have sent a powerful message that you are serious and willing to invest some of the company’s resources in it.

The natural question is, how much should you invest? There are some benchmarks available. The “Facing the Forces of Change 2000” study found that high-performing wholesale distributors spent about 2.5% of payroll on training, while an ASTD member survey found that its member companies averaged 3.2% of payroll. Since training is a smaller issue than development, and since salespeople can generally benefit the company more than drivers, warehouse workers and production personnel, I’d suggest a bit higher number. I like to see 5% of payroll invested in continuous development of the sales team.

Have your sales managers create individual development plans with each salesperson. It is common practice for sales managers to hold annual goal-setting meetings with their charges in which performance goals are identified.

That’s a great opportunity to create annual development goals and strategies at the same time. Doing so lets everyone know that continuous development is a requirement of the job.

Regularly generate learning opportunities. Learning opportunities are events at which salespeople are exposed to new ideas or reminded of good practices. They can encompass a wide range of possibilities, from reading a new book on sales strategies to having roundtable discussions of success stories and common problems.

The point is that you generate learning opportunities on a regular basis and require your salespeople to take part in them.

While not everyone will gain the same thing from each event, over time they’ll understand that you are serious about their growth, and that their continuous development is your priority and their responsibility.

Dave Kahle is an author, consultant and speaker who has presented in 47 states and 11 countries, improved the performance of thousands of B2B salespeople and authored 13 books. Receive his insights on a regular basis here: https://www.davekahle.com/ subscribe-daves-e-zines/.