Inside the Site Selectors GuildMarch 21, 2017
(Episode 14 of “The Project: Inside Corporate Location Decisions”)
The Site Selectors Guild started in 2010 with a dozen or so individuals quietly agreeing to create the world’s first trade association of site selection consultants. Seven years later, the organization has been wildly successful growing their ranks to 43 current members and hosting professional conferences that literally sell out in minutes.
To gain insight into the Guild and its members, “The Project” sits down with Phil Schneider, an industry veteran who has worked nearly 400 site selection projects over the past 31 years. Phil recently stepped down as the organization’s Chair but remains an active member of the Guild’s Board of Directors.
Andy Levine (DCI): In August 2016, DCI surveyed some of the country’s largest economic development organizations, and we asked a series of questions about lead generation. We asked the audience, what are the primary sources of qualified leads for your economic development group? Now, Patience, do you know what the number one answer was?
Patience Fairbrother (DCI): Why yes Andy, it’s right here in my script. And the answer is, site selection consultants. Now, 29% of those surveyed answered site selection consultants, which was higher than referrals from state economic development offices, direct company inquiries, lead generation, and leads generated by their own business development team.
Andy: So we’re talking about site selection consultants today. Back in 2010, a group of site selection consultants got together and they formed the Site Selectors Guild. A professional organization of about 40 of the nation’s top location advisors. We’re gonna take an inside look at this organization today. So welcome to episode 14 of The Project: Inside Corporate Location Decisions. I’m Andy Levine of Development Counselors International.
Patience: And I’m Patience Fairbrother, also with DCI, and Andy’s co-host of The Project. So last week, Andy and I had the chance to sit down with Phil Schneider who is a Board Member and Vice Chair of the Site Selectors Guild. Mark Williams, who we hope to have on the podcast sometime in the near future took over as chairman of the guild just last week.
Andy: So, a little bit of background on Phil. He started his career at Fantus Consulting, which really was the training ground for so many of today’s top site selection consultants.
He left Fantus actually to start a site selection practice at Deloitte, and while at Deloitte, he actually convinced the people at Deloitte to purchase Fantus, which is sort of an interesting little bit of site selection trivia. But overall, Phil has worked on over 400 different site selection projects over the past 31 years. Here’s our conversation with Phil Schneider. Phil, welcome so much to joining us today on The Project.
Phil Schneider (Site Selectors Guild): Well, thank you, I’m glad to be here.
Andy: So Phil, let’s start out…I’d love to get a very sort of quick overview or history of the Site Selectors Guild.
Phil: Yeah. So, it’s seven years old. We just had our sixth annual conference, we just completed that in Tucson. And this idea of a professional association, the guild, has been around for a while, and is really the playing child of Bob Ady. And you may recall that Bob Ady was the president of Fantus for many years and really one of the pillars or the patriarchs of modern site selection consulting. He was at Fantus for many, many years.
And he was the man who actually hired me, as a green bean right out of grad school many years ago. He had this idea that there is no professional association or ever had been for site selectors, because it was a relatively small field dominated by Fantus and Flodden and a few others for many, many years, and started growing rapidly probably 20 or so years ago, maybe 25 years ago.
And he saw there’s a need to create an association so that site selectors would see themselves as colleagues and work together to elevate the image of site selection overall. And to elevate that image, to promote it to companies that may do it themselves instead, that there’s a great value to hiring professionals specialized in this.
And he saw also a need to increase in a more formal way, the networking between economic development organizations, really our allies in the site selection projects to create a forum, a good forum where that would occur.
And so about seven years ago, he got a couple, I think it was 10 or 12 people together to shake hands and say, we’ll start that. I and a number of others joined shortly thereafter, and we got convinced of the value proposition that this was going to flash out in two months, and there it was. And so, created a mission which we’ve been perfecting on, but the mission is basically for site selection professional colleagues to raise the awareness on value of site selection, and to create a great networking organization, so that we can exchange knowledge between site selectors and with economic development organizations.
Andy: So that was 7 years ago, 10 to 12 people started out. Today, you’re at how many members overall?
Phil: We are at 43 at the moment. We’ve created quite a process. I mean, the basic idea is that we want the actual site selectors. As you may know, you don’t need to be licensed to be a site selector and thereby, there are a lot of people out there that claim to be site selectors. You know, to me, it’s always been akin to somebody who’s, you know, they moved into a new house and went through the process of finding a new house, so therefore, they must be a broker, you know.
Anybody can claim to be so, but we know in the field, that there are a limited number of people who actually know the process, do the process from start to finish and have the experience to do it. So we have quite a process to select new members. Many apply, relatively few get through the door, and that’s for a good reason. It’s very much a peer selected organization.
New members are generally recommended by other members or by leading economic development professionals that we know and work with regularly. So these are professionals that our members are seeing in the marketplace, perhaps at their regular competitors that they see on projects or that they see them at other industry related events and conferences and forums on a regular basis. So they know that they are the true players, they’ve spoken with them and they know what they’re doing.
They’re now often senior members from an existing member’s firm. You know, they’re people who’ve been doing it for… The minimum criteria is 7 years, but most of them have 10, many have more than 20 years of doing this.
So, we’re currently at 43. Our strategy for growth is pretty simple. Highly qualified applicants that meet all the criteria and make it through our due diligence process, and then are voted on by our shareholders and board, become new members. It’s not easy, but we generally add between two and four new members each year, but we know that there’s a natural limit to membership. There are only so many that really do this, and will actually get through our stringent criteria.
Patience: So Phil, let’s just switch gears for a second. This is a question kind of from the perspective of a corporate executive who is tasked with making a location decision. If I’m a corporate executive, what is the case for using a guild member as a guide rather than going it on their own?
Phil: That’s a good question, we get asked that a lot in this field. First of all, just from a site selection perspective, guild members are the most experienced site selectors in the world. You just heard the criteria for getting in, it’s not easy to get in. Collectively, guild members have worked on literally thousands of site selection projects across probably all industries, all corporate functions, all over the world, and representing billions and billions of dollars of capital investment.
Then they’ve advised everything from small companies, to startups, to the largest multinationals, working on truly global location strategies anywhere in the world type of questions.
I’d venture to say that there are few if any companies out there these days that have the depth and broad range of experience in site selection matters that our senior guild members possess. Back in the day, some companies did that because they were building so many plants and they had large internal management functions, and that has gone away over the years for, not all companies, you know, but most.
So, and our members worked on such a wide variety of projects and such a wide variety of settings, that that kind of experience is almost impossible to replicate within a company or even in any one industry. We bring perspective from so many projects and so many other industries, so it’s not as insular as they may be looking at internally. We can bring them ideas from the way other functions or industries make these kind of decisions.
A company that would somehow have a broadly experienced site selector, like an SSG member for example, probably, I would say almost undoubtedly had hired them from one of our member firms. So when you see rapidly growing industries out there right now, let’s say like the tech industry, you know, the Googles, the Facebooks, the Amazons. If they have internal site selection teams and many of them do, they probably have gotten them or gotten several people from member firms, because that’s where that experience really resides these days.
Patience: So, the guild just held its annual conference in Tucson this past week, which about 300 economic developers attended. So, Phil, why do you think the economic development community has embraced these conferences so much? Do you think… Is it about the networking? Is it about the education? What’s your perspective on that.
Phil: Yes. There’s really nothing like this in all honesty, and it was really designed that way. I mean, if you’re an economic development professional or from an investment promotion agency, where are you going to meet 43 of the most experienced site selectors in the world, in one place, at the same time, over 2 days, in a forum that is designed for networking interaction, really designed for this? I mean, I can’t speak for the EDOs, but my guess is that there is no other marketing opportunity for them, anything close to this.
As you know, they may spend a fair amount of time and money marketing during the year, going to see companies, going to see site selectors all over the world. Here, they can concentrate it in one place. So, you know, I know that may sound immodest, but like Bear Bryant used to say, “It ain’t bragging if it’s true.”
Andy: Let me take you to a different area Phil, and this is kinda the third rail perhaps, but incentives are a topic that never seem to go away too much. In fact, in today’s front page of today’s “Wall Street Journal”, is a story about incentives. And critics of course, yeah, like to use the word corporate welfare when they’re talking about incentives. I’m sure the guild has a different perspective, but help us understand that perspective. And also, perhaps, where do you see incentives going in the next five years if you can look into your crystal ball?
Phil: So look, incentives have been with us for many years, many years. And by us, I mean the entire industrial world, not just the US. There seems to be this understanding this is a US issue. This is the way all over the industrial world, is the way capitalism is played and has been played like this for many, many years. It’s not a new issue. Incentives have been around for my entire career and before me, for sure. So why is that? You know, first of all, I take issue with calling incentives corporate welfare, in many if not most cases.
People who say that often have no idea what actually goes on in a competitive site selection project or a negotiation process during final location selection. And they don’t have a good grasp on why incentives exist in the first place. I know you do, but just bear with me for a second.
Andy: Absolutely, go ahead Phil.
Phil: The projects that guild members would be dealing with, for the most part, are helping companies to identify the optimal location for their new plant, their office, R&D facility, distribution center, what have you. So there are many, many factors involved as you know. Talent, supply chain, utilities, transportation access, quality real estate, and so forth. So, a completely perfect location and site is unlikely to exist. But great contenders do exist. So done properly, if this process is done correctly, there are two, three, four, really good locations, all of which could work by the end of this process, but each has its own unique set of strengths and its own flaws and weaknesses as well.
So during the final negotiations process, companies are seeking to address those weaknesses in those locations. And if that cannot be done, if there’s some sort of real physical reason or even policy reason that that just cannot be fixed, then at least they’re gonna try to improve the strengths that that location has. So a more clear location candidate emerges, you know, the optimal location emerges.
And it’s during that negotiation process that some of those weaknesses are fixed or some of those strengths are enhanced, so that a clear decision can be made, a clear winner can emerge. So that’s where incentives come into play. They’re addressing a factor or set of factors that otherwise would be a flaw preventing that area from winning those jobs and investments.
People have to understand and a lot of people…I know you do, but a lot of people don’t understand that there is a public private partnership that has emerged over the years. Companies are establishing jobs and investment and they have choices of where they can make them. There can be good choices between various cities and states and sometimes even countries that all could work. Those cities and countries need those jobs and investment to improve or retain their economic health. So they both are bringing something to the table, to this deal, and they both wanna be successful.
So, done right, and this process is done professionally, each side wins, each side gets what they want, and that’s what the incentive negotiations at the very end help facilitate. So, I fail to see how this is some sort of nefarious giveaway. Now, the last point. Do bad actors exist? Sure. Bad actors exist in every type of business and social situation. So it’s not unique, but I’ve been around this as my colleagues have for many, many years, and bad acting is the exception not the rule.
Andy: Phil, just on the bad actors issue, do you see any scenario where there could be a way of weeding out the bad actors and sort of dealing with that issue? Because those are of course the ones that the media often gets a hold of and turns into a big issue.
Phil: I wish there was a clear answer to that. What we’re trying to promote as part of the guild is professional site selection from start to finish, from the initial, you know, strategy and decision framework design, all the way down through final negotiations and announcing a winner. And guild members by and large are doing that. And even a number of non-guild members who are out there are very good actors.
So, part of our mission is to convince the corporate world and also even the economic development world, that if you’re using a Site Selectors Guild member or an equivalent I will say, if there is one, that you’re not likely to be in a bad actor situation.
Andy: I think that’s a very impassioned defense and candid perspective on things. Switching gears, maybe two final questions here. You obviously are very happy with the way the guild has developed over the past seven years. Do you see it any differently in the future? You know, what do you see is the future of the Site Selectors Guild?
Phil: Well, first, I think it’s a bright future. As I said, this is a pretty unique organization and it’s very popular not only with our members, but I would say our constituents as it were. You know, the economic development organizations, the IPAs, and I think both parties, both groups really wanna see this thriving evolve because it’s unique and it’s successful. Will we be different?
Probably. We’re very different now than we were seven years ago, as we’ve mature and evolved, but I don’t think dramatically. So really, I think we might look different in terms of how our conferences and forums are conducted. Perhaps, you know, their size, their content, the number, you know, the sort of physical model issues are likely to continue to evolve.
But that part of our organization is pretty stable and it’s really just process improvement. But there are a number of directions that we wanna focus on going forward. A key part of our mission, in fact, the number one part of our mission is to elevate the profession, and really for lack of a better term, promote or market this profession. Why hiring a professional experienced site selection consultant is valuable. So we have to turn and we are turning our focus more on delivering directly to the corporate world, to companies, and providing content directly to them and for them.
Patience: Speaking of the future of the Site Selectors Guild, could you just tell us a little bit about your upcoming conferences, perhaps as a final question?
Phil: Sure. We’ve just announced that our fall forum, which is a smaller conference that we hold in the fall, will be in Seattle at the end of September of this year. That’s been announced. And then our annual conference, which, you know, you may call it our spring conference, for 2018 is gonna be in Cincinnati. And then we’ve had the good fortune of also having a lot of interest, so we’ve already announced that the 2019 conference will be in Salt Lake, and the 2020 conference will be in Atlanta.
Andy: Excellent, excellent. Well, I’m sure you’ll continue to have exceptionally strong responses there and things will continue to sell out in minutes. Phil, we really appreciate you taking the time to come on the podcast with us today. There are a lot of both economic developers and corporate executives that are interested in knowing more about the guild, and you’ve just helped fulfill that message a bit. So, thank you so much for your time today Phil, really appreciate it.
Phil: Oh, you’re quite welcome. Thanks for inviting me.
Andy: So that is our conversation with Phil Schneider of the Site Selectors Guild. I just found it to be a pretty interesting conversation. We covered a lot in a short amount of time, Patience. Why don’t we get to in a moment sort of what our takeaways are. I just wanna say a quick word about the Site Selectors Guild from my perspective. This really is the brainchild of one man. A guy by the name of Bob Ady, who I knew very well, my dad knew very well, was just really the godfather of site selection consultants and it was his vision to get this started. I don’t think it ever would have gotten started without him.
He got, as Phil described, 10 to 12 people around the table, he got them to agree to this, and so they started. It really has been wildly successful over the past seven years, in terms of the growth of the number of site selection consultants in the guild, as well as sort of the embrace by the economic development community or the site selectors guild.
So it’s been really tremendously successful overall. But let’s go back to our conversation with Phil for a moment. Of all the things we covered Patience, what was at the top of your list in terms of most interesting from his comments?
Patience: I think without question our discussion with Phil about incentives was the most interesting to me. And he had an interesting argument. You know, he takes issue with the fact that some people and the media often in particular, view incentives as kind of a form of corporate welfare. And his argument is basically that, a community needs jobs and investment in order to stay economically healthy. So for them to be offering something up in return to the company in the form of an incentive isn’t, you know, an outlandish thing. And basically, it’s both parties putting something on the table and at the end of the day, they both get something in return.
Andy: One of the lines I wrote down in my notes was, he used the term, “each side wins”. And I think that’s a good description of in the ideal situation, what comes out of this negotiation, what comes out of this process. Each side gets a piece of what they’re looking for.
Interesting discussion, I think the other thing that sort of caught my attention was the desire of the guild to really build up the perception of site selection consultants with the outside world. Economic developers know the guild well, know site selection consultants and what they do. Beyond that, there are a lot of people in corporate America that don’t really understand the site selection consulting field. So, I think that’s a sort of higher hill to get up from Phil’s perspective and his colleagues, but I know they’re working hard at trying to achieve that. And certainly, this podcast will move mountains and try to [crosstalk 00:22:07]. So, yes. Okay. Anyway, but it was a great conversation and I think we both enjoyed it.
Patience: It was great.
Andy: So that is a wrap on episode 14 of The Project: Inside Corporate Location Decisions.
Patience: A sincere thank you to Phil Schneider for being so open about the guild and its workings. Thanks also to Michelle Comerford who is a guild member and Biggins Lacy Shapiro Consultant, who helped set up this interview for us.
Andy: The Project is sponsored by DCI. We are the leader in marketing places and have served over 450 different cities, states, regions, and countries. You can learn more about us at our website, which is, aboutdci.com.
Patience: We’re planning to profile projects in New York, Michigan, North Carolina, and California, in the weeks ahead. So we hope you will keep listening, there are many more projects to come.