Finalizing the Skykomish Plan

Mayor Tony Grider (left) participates in an exercise to rank economic development goals

On October 17th our firm held an implementation work session with the Skykomish Town Council and members of their Planning Commission.  The goal of the work session was to prioritize economic development goals in consideration of the Town’s budgeting for 2019, as well as the connections between multiple goals and tasks requiring additional coordination.

The Skykomish Plan was put together using the Toyer Framework® – our signature approach to economic development strategic planning that focuses on implementable action plans, not binders that collect dust on shelves.

For more information about this project or how your community can benefit from the Toyer Framework®contact a member of our team.

Overcoming Bias in Strategic Planning

Our company’s approach to strategic planning is changing, shifting from large public forums to assessments and interview.

Preface

Caution – this article is still a bit of a work in progress.  However, I believe it’s purpose is valuable in starting a dialogue on whether the open public workshops, board meetings and other ‘group-think’ planning sessions are beneficial to the development of strategic plans.  And investigating whether there are effective alternatives is important to ensuring the strategic planning remains not only relevant, but effective at producing results.

Finally, before I get into the details, I want to emphasize that the following is my experience and not a scientific study despite the parallels I personally think can be drawn between what I’ve seen and the scientific work in areas such as social influence theory.

About Traditional  Planning

For many years, I accepted that model for strategic planning needed to involve one or more meetings of a task force, board, etc., or a one or more open public forums or workshops.  As it stands, this model is the most common way communities, boards of directors, organizations, etc. go about developing any plan.

Such traditional planning processes are responsive to three key fears most all of us share:

  1. Trust.  How can a plan developed outside the group or public eye represent the group or public?
  2. Right vs. Wrong.  A community planning process without public input is inconsistent with our a core principle that we can’t have public planning without public representation.
  3. Narrowly-focused.  A plan can’t represent the group if it wasn’t developed by the group.

The ‘Group’ Challenge

Over the last several years, I’ve seen the traditional planning process be ineffective because of:

  1. The decline of the number of people that attend, let alone participate in, public workshops or forums (unless it’s a controversial topic, ‘wedge’ issue or a “not-in-my-backyard” reaction).  In these cases, the participation is more personally motivated by individual impact as opposed to broader vision, strategy, etc.
  2. The dynamics between individuals within the group are more frequently running counter to the group’s ability to develop forward thinking strategies using collaboration, cooperation and consensus.

For what it’s worth, my perception is that the influence of technology on our social behaviors and face-to-face interactions appears to be spilling over into the these planning processes.  Not many years ago I’d occasionally see one or two people affect group dynamics through loud or persistent commentary, but as a facilitator I could counter or at least account for it.  However, more and more I’m seeing the same scenario have a more profound effect that is harder to recover the process from.  While this perception is a large enough topic for a different article all together, the best example I can compare this to is how viewpoints and disagreements are now shared on Twitter and Facebook.

Stepping Back & Looking at the Process

Given all this, I’ve spent the last couple of years dissecting a few specific experiences and looking for relevant research and areas of study that help explain the dynamics behind the challenges I’ve seen – an odd combination of self-reflection, evaluation and reading.

I’ve come to believe:

  1. Part of the challenge may be that common biases that often influencing strategic planning are more engaged (I don’t mean consciously or purposefully engaged, but engaged as sort of a baseline that’s been normalized due to frequency of use).
  2. Differences of opinion appear harder to reconcile at a time when consensus solutions are more widely viewed as a loss instead of a win-win

So what are those biases and what alternative approaches am I using?

Common Biases in Strategic Planning

Some of the most common biases I’ve observed in previous economic development strategic planning engagements are:

Social Influence Theory
Theorizes that a person’s emotions, opinions and/or behaviors are influenced and affected by others.  Herbert Kelman in 1958 identified three varieties of social influence bias:

  1. Compliance – responding favorably to an explicit or implicit request or suggestion by others, but can also be represented as keeping dissenting opinion private due to social pressure
  2. Identification – being influenced by someone admired
  3. Internalization – acceptance of a belief or behavior based on a feeling of an internal reward

Cognitive Bias
Cognitive biases are a systematic deviation from rationality in judgement, arguing that individuals create their own “subjective social reality” from their perception of inputs.  Related to heuristics[i] (a/k/a cognitive short-cuts or rules used to simplify decisions), cognitive biases can be useful when timeliness of decisions is more important than accuracy.

Example:  ‘representative heuristic’ or the tendency to judge the frequency or likelihood of an occurrence by the extent to which the event resembles a typical case

Ambiguity Effect[ii]
Decision making is affected by a lack of information or “ambiguity” and people tend to select options for which the probability of a favorable outcome is known.

Anchoring Bias
The tendency to rely too heavily, or “anchor”, on one trait or piece of information when making decisions (usually the first piece of information acquired on that subject)

Bandwagon Effect
The tendency to do (or believe) things because many other people do (or believe) the same.

Conservatism Bias[iii]
The tendency to revise one’s belief insufficiently when presented with new evidence.

Authority Bias[iv]
The tendency to attribute greater accuracy to the opinion of an authority figure (unrelated to its content) and be more influenced by that opinion.

Availability Cascade Bias
A self-reinforcing process in which a collective belief gains more and more plausibility through its increasing repetition in public discourse (or “repeat something long enough and it will become true”)

Confirmation Bias[v]:
The tendency to search for, interpret, focus on and remember information in a way that confirms one’s preconceptions.

Shared Information Bias
Tendency for group members to spend more time and energy discussing information that all members are already familiar with (i.e., shared information), and less time and energy discussing information that only some members are aware of.

Many of these biases have been stymieing strategic planning more than they have previously.  And more and more open public engagements are failing to attract diverse community or board opinions and the perception that those who want to complain are more likely to show up has never been more accurate.

Use of Interviews & Assessments as an Alternative
I (and my firm) am now relying more and more on assessments and interviews (even earlier in our engagements) to identify both the individual and group values, themes (components of a shared vision) and inputs (strengths, weaknesses, opportunities and threats) needed to structure draft plans and project group engagement.

Our approach relies on a modified Delphi method a/k/a Delphi Technique), being that the modification comes from using interviews to both support and supplement a comprehensive assessment (a/k/a survey) as opposed to Delphi’s typical use of multiple rounds of surveys (assessments).

In our recent experience (purely observational), the group consensus formed in through this approach more often resembles a ‘group conscious’ than ‘consensus’ – a distinction explained by the definition of  ‘group conscious’ as the individual awareness of the identity of the group’s shared believes, thoughts and feelings and ‘consensus’ as the general agreement of a group.  Further, ‘consensus’ typically involves negotiation, elimination or substitution of parts from the whole based on individuals making decisions.  By contrast ‘group conscious’ involves individuals making choices based on their awareness and understanding of common beliefs, values, thoughts and feelings (e.g. a town’s vision) without that same level of individual decision making.

In a recent project example, I used interviews and an assessment, plus a more traditional public workshop (which took place during the assessment).  The result was an 18% participation rate in the assessment, which was nearly double the 10% participation rate in the public workshop.

In additional to attracting more participation, the assessment also yielded a greater depth of opinions, community insights and ideas for projects and goals.  Subsequent use of this approach thus far appears to have produced similar outcomes, yet more analysis is required.

For those interested, below is more specific information on the Delphi method (also referred to as the Delphi technique).

Delphi Method[vi]
A communication technique or method, originally developed as a systematic, interactive forecasting method which relies on a panel of experts. Experts answer two or more rounds of questionnaires. After each round, a facilitator anonymously summaries the experts’ forecasts and reasons for their judgments. Experts are then encouraged to revise previous earlier answers in light of information from other experts.  It is believed that during this process the range of the answers will decrease and the group will converge towards the “correct” answer.  The process concludes after reaching a predefined terminus (e.g. number of rounds, achievement of consensus, stability of results).

Developed[vii] by Project RAND[viii] in the 1950s for a report on the future technological capabilities of the Army Air Corp, its purpose was to overcome situations where experts were often influenced by cognitive biases.  The method relies on using of a series of questionnaires to narrow the range of focus and arrive at an expert opinion.

Footnotes/Citations
[i] Originally discovered by cognitive scientist Herbert Simon, heuristics were studied further by psychologists Amos Tversky and Daniel Kahneman in the early 1970s and became the subject of a well-known paper, “Judgement Under Uncertainty: Heuristics and Biases” published in 1974 in Science.
[ii] First described by Daniel Ellsberg in 1961, it was part of his dissertation on decision theory looking at decision making under conditions of uncertainty or ambiguity and how the outcome may not be consistent with well-defined probabilities.  This work is now a part of what is referred to as the Ellsberg Paradox and it later influenced other approaches including Choquet’s info-gap decision theory.  Mr. Ellsberg was a U.S. Military Analyst and for RAND Corporation employee; however, he is most known for his role in releasing the Pentagon Papers.
[iii] Ward Edwards, 1968.  Underweighing new information because of an existing belief of base distribution of information.
[iv] Reference Milgram experiment in 1961
[v] Identified by Psychologist Peter Wason (1960s).
[vi] Wikipedia; International Economic Development Council
[vii] Attributed to Olaf Hemmer, Norman Dalkey and Nicholas Rescher
[viii] a/k/a RAND Corporation

Project Update: City of Pacific WA

Toyer Strategic Consulting has completed the Phase I of a two phase business retention and expansion project for the City of Pacific and Port of Seattle.  The Phase I inventory discusses our methods for data collection, and categories and analyzes the types of existing businesses within Pacific’s corporate limits.  Phase II of the project (now underway) involves distribution of a general business survey and completion of business retention and expansion (BRE) visits.

Check out the Phase I report:

Phase I Business Inventory for City of Pacific

What Economic Developers Should Learn from Seattle’s Head Tax

It’s been a little over a week since the City of Seattle voted unanimously to enact a $275 per employee tax on it’s for profit businesses grossing more than $20 million per year in the City – expected to raise around $48 million in new tax revenue that the City indicates it will spend on homelessness.

Leading up to the decision, the business community tried to send Seattle a message. Amazon, who many other communities around the country are pursuing with vigor, paused construction and discussed not creating up to 8,000 additional jobs. In the days since, Pierce County (neighbor to the south) and its cities have since announced a $275 per employee incentive per year for five years in addition to up to $1,500 per year in incentives that businesses creating at least 5 jobs can already claim.

The decision in Seattle has been made subject to the success of any referendum to repeal it. However, are there lessons from Seattle that businesses, economic developers and even cities can glean from this? Yes. Here are my top five.

  1. Be prepared to defend economic development decisions. Collectively, we want jobs. . . better jobs. . . jobs for our kids. . . etc. And elected officials know that and usually campaign on things like low unemployment and higher wages. Despite the fact that creating jobs is still the political will in most communities, those winds can swiftly change. Typically, this happens when an incentive package is viewed as being too rich or the intensity of growth in a specific location enlists a greater negative public response than the positive attitude associated with jobs. Every economic development project should prepare and have ready an economic impact analysis and/or a return on investment statement that show how that activity benefits a community. More and more this is becoming critical to not only sell elected officials on the benefit of economic development, but to give the public confidence it is in their best interest as well.
  2. Include political due diligence in any site location decision. Businesses base site location decisions on a combination of factors including site development costs, logistics, operational cost factors, tax liabilities and a judgement as to whether the incentives offered can be delivered as promised. Additionally, they will look at the current political situation, but they often stop short of fully assessing the local political history of the community or evaluating future political risks. These risks come from natural cycles at the local level which are tied into the leadership of the community, the health of the community and the amount of growth it may have already embraced. I’ve written a previous blog about this topic which goes into more detail here.
  3. Know the facts and be honest about them. It appears from some reporting that misinformation about the cost of homelessness in Seattle may have been circulated and used a justification for the adoption of the head tax. Unfortunately, misinformation spreads immeasurably fast these, which justifies the attention to detail that economic developers need when it comes to attracting new economic development projects and putting the deal together. Often, I’ve seen how easy it is for a city to say, “Yes, we can do that” only to realize they can’t. I’ve also seen examples like that of a community that touted its available water capacity as the basis for attracting an economic development project. But after some digging into the details, the capacity was only ‘on-paper’ – the water could be produced but couldn’t be distributed. One solution to ensure accuracy for all is the use of third party site certification. However, even site certification has its challenges, which I discuss here.
  4. It’s not good business ‘poaching’ businesses from your neighbors. There is a difference between a business deciding it is in their advantage (lower rents, closer to customers, etc.) to relocate from one community to an adjacent community and the instance where a neighboring community acts to lure businesses. The latter creates negative competition and distrust locally. Moreover, when the gloves come off and incentives are involved it can often raise to the level of being addressed by a state legislature, which often results in further restrictions on the right kinds of economic development activities.
  5. Be aware that policies like “Growth Management” lead to future political, social and economic challenges that place business and economic development in the center of debate. One of greatest challenges in the greater Seattle area is its complex state growth management laws restrict nearly all development to within defined urban growth boundaries that have not had any significant revisions since established in the early ‘90s. Well intended in vision, this governing regulatory approach has some critical flaws in implementation. For example, the “density” first approach to accommodating future population and job growth in the Puget Sound region has driven up the costs of housing, construction and infrastructure because vacant land supply is critically low, and redevelopment built-out areas to higher intensity uses adds expense. Unfortunately, expanded growth boundaries aren’t expected soon. Second, the reality is that investments in infrastructure to support growth have very rarely been made prior to and in full knowledge of the growth occurring, relying on a “growth should pay for itself” philosophy that clashes with legal requirements that a development only pay its fair share. Even mitigation collected from development has six years to be spent. It’s no wonder there is public outcry. This disconnect has left cities in the position of always playing catch up on infrastructure, services and capacity

It will be awhile before we know the true impact of Seattle’s head tax. But what is clear is that it has broad implications on economic development – implications that may not be the solutions advertised.

About the Author
David Toyer is the founder of Toyer Strategic Consulting – a firm that advises businesses and communities on economic development and land use. David has nearly two decades of experience and has worked on projects throughout the country. For more information about David Toyer or Toyer Strategic Consulting, visit www.toyerstrategic.com.

Pellerin Annexation Completed

We are pleased to announce the completion of the Pellerin Annexation – an addition of 27 acres to the City of Lake Stevens (WA) with high urban residential zoning. The annexation was formalized by the city council on May 22 with a 7-0 vote approving Ordinance 1028.

Our involvement in the project on behalf of the landowners in the area included determining which type of annexation to use, collection of signatures, facilitating a community meeting and processing the annexation through the law’s various requirements.  Annexations in Washington State are procedurally complex and time consuming even though state law provides for several types of annexations. For this project we used the direct petition method annexation process.

For more information about annexations, please contact us.