(light music) - Regional economic development nonprofit, The Right Place, is under new leadership.

We talk with its new president and CEO about the people, place, prosperity vision and what's being called a retention blitz on Newsmakers.

(light music) Thank you for joining us on Newsmakers.

The COVID-19 pandemic has changed the business community environment.

While the way we work gets done may be a little bit different, there's still supply and demand.

Place matters, a satisfied workforce matters.

Here to discuss the region's long-term economic growth is Randy Thelen, the new President and CEO of The Right Place.

How are you, sir?

- Doing well, Patrick, doing well.

Thanks for having me today.

- Interesting time to fill someone's shoes.

Birgit Klohs has stepped down, a lifetime of making this region a better place.

Now it's your turn.

- Yeah, it's interesting I get that question quite often, Patrick, what's it like to fill her shoes so to speak.

And after now about six months, it doesn't feel as new any more, frankly.

I feel like we've got a really good race base going from when we took the baton from Birgit earlier this year.

But I also tell people, boy, I think the alternative would be even worse.

I mean, with Birgit, I'm following a legend who has made an indelible mark on the community and it's an incredible legacy she leaves behind.

I consider her a good colleague, mentor and friend, but the alternative to following somebody like Birgit would be following somebody who failed miserably and probably the organization was in disarray, the region might have been in disarray.

And instead, Birgit gave us the baton at the front of the pack, so to speak.

And I've got a great team here, we've got a great organization and board of directors and hundreds and hundreds of folks across the region that really support our work and support our effort.

So now it's on us, it's on me so to speak to really continue the drive forward.

So it's been a great first almost six months now and looking forward to continuing.

- You say looking forward to continuing.

Everybody has their own vision for moving forward.

As you've mentioned, you've got a great team in place, sounds like it's glass half full at this point, full steam ahead, but still, you have your own vision.

You have a past history of where you've been working with other economic development corporations, and we'll get into some of that in a little bit, but where do you see things trending or where you'd like to see things move in the region?

- Yeah, it's an interesting time, just to continue to build on your other question, Patrick, and tie it together.

We've in the midst of this chaos of a pandemic which continues to persist and create this headwind, I think for regions like ours, the winning regions across the country are gonna be those that block out that noise, block out that challenge, let the health experts do what they need to do, but from a business perspective, from a community perspective, we need to continue that push forward.

And those regions that stay focused on their strategies, stay focused on executing are the ones that are gonna find themselves coming out of this way ahead of the pack.

And to do that then we've taken a look.

The Right Place has a great history of strategic planning and really going about executing those plans.

And as I get onboard here and look at our strategy, the strategy is exceptional, it's what you would expect of a strong organization and a strong region.

My twist to it is really to try to bring a little bit more focus to it around three pillars of people, place and prosperity.

I grew up in Michigan, I had a great economic development career here and left for about 10 years to go west to Omaha and to Denver.

And when I led organizations there, what I took away is that focus on talent is paramount and beyond talent, it's really about people, Patrick.

We've gotta find a way to put the person at the center of our strategy, making sure we know it's not the steel that we're trying to put up in the air, it's the people that get housed within that steel that really matter.

And so that has to drive our work.

And all people across the region, as you know, we've had a little bit of a challenge on diversity in terms of unemployment rates and wage rates and opportunities.

And so we've gotta lean into that and really make that people element a stronger part of our push here.

That second pillar then is place and the two are tightly connected.

Place making is critical.

If we think of the markets around the country, of the Nashvilles, the Raleighs, the Austins the Denvers, they've built great places that have become magnets for people to stay and magnets to draw talent in.

And so that place making element is a renewed energy around that for us.

And then the final piece is prosperity.

And that's where more traditional economic development activities take place.

It's how do we continue to help retain and grow employers in this market and how do we attract the appropriate companies to come add to that mix.

And I'll tell you from experience now, prosperity, the business development piece gets much easier if our people and place strategy is on full cylinder, running on full cylinders.

So that's the revision if you will to the strategy going forward.

Same core, same mission, same push but a little bit different framework.

- That sounds a little bit challenging because it seems like it's always this arm race.

You wanna retain the businesses that you have.

It's the attracting piece and if those are the profiles that you're looking at when it comes to people and equity, you're looking for businesses that believe in that as well, or those specific companies that are a fit to this community.

Does that limit your field of who you're trying to attract?

- No, and Patrick, I would start like any good business, you're not gonna be able to attract a new customer through your door if you're not serving your existing customers exceptionally well.

So our focus first and foremost is always how do we retain and grow those great businesses that we have in the market.

And so we put a lot of emphasis there.

And then as appropriate let's find those opportunities to bring new companies to the market that will add to what we have here.

I think sometimes if communities attract a company that comes in and takes advantage of all the assets of that particular region, it's good from an employment standpoint, but they're really coming in as taking mindset.

We need companies that come here and help build and grow and make us even better.

And I think we have every opportunity to do that.

We've had successes like that over the three-plus decades we've been operating of course and we just wanna continue that push going forward.

- You have left the neighborhood, we'll just put it that way, and you have been out west.

Culture matters, how would you describe the West Michigan business culture compared to some of the other places where you've called home?

- Yeah, so we've as I said lived throughout Michigan of course and 10 years here in West Michigan leading economic development over in the Lake Shore and then ventured west to Omaha and the home of Warren Buffett for five years and Denver for just short of four years.

And in those markets, comparing and contrasting to here, and frankly other markets that I've served, we speak of this often and it's true.

The collaborative nature of our region in the business communities is really something to behold.

Walking through our fierce competitors and seeing how they operate, now what we've seen is a blend.

So we've had a manufacturing council for decades which was par excellence, but now we've begun to take that manufacturing council experience and bring other industry groups together.

The technology council in particular is one that's really ramping up and growing with us.

What's really fun though is when we can take a manufacturing group of companies and a technology group of companies and put them together and see what happens, what innovation takes place when those collisions occur.

And part of our work at The Right Place is to be intentional about making those collisions happen so big bold innovations can take place.

So that openness to collaboration, that openness to those kind of creative collisions is I think one element that sets us apart.

- It seems that the more progressive cities, the ones that are on the move tend to have some kind of a higher ed base.

There are universities, institutions of higher learning.

Here you have a number specializing in different areas.

Grand Valley is a hub here.

You see Michigan State here, Ferris State is here, U of M and some of the healthcare that's here.

You're seeing this hub of higher ed, which is also part of the support group for industry.

- Yeah, it's one of those things where you don't fully appreciate until you go away and look at from afar.

And frankly, Denver for all of its success does not have that.

They do not have the same sort of education and research horsepower that we have in Michigan or even here in West Michigan.

So they've been able to find their way without it, which gives us a unique advantage.

When we think about how we stack up with some of these superstar cities or aspirational cities, we have assets, we have capabilities that frankly outpace what they can offer.

We just have to find a way to stand a little bit taller and promote that advantage, promote those unique elements even stronger.

It's not our Midwest culture certainly to sit here and brag about how incredible we are, but when we step back and reflect on the assets across West Michigan, we can compete with anybody.

- What is your sales pitch?

What do you generally go in with?

- Well, it really depends on the industry, Patrick.

If you think about a company that's in the manufacturing space, I mean, we are one of the few select Centers of Excellence for manufacturing, design, engineering, manufacturing and supply chain management.

You can't find those elements.

Very few places around the world that have what we have in that space today.

So whether you are making a food product, whether you're making a medical device, whether you're making furniture or an auto component, you could do it here about as well as anybody.

And so today if you think about the electrification of the vehicle and the investments of tens of billions of dollars that are being invested in that space, we're aggressively competing for those kind of projects.

On the technology side, so if we wanna consider growing the tech space, we have some great software and development type companies in town.

We need to continue to build that tech sector.

So if we were to make a case for a new tech company to come to town, I would say you can go to a Denver where in my three years there were almost 100 tech companies that moved from Silicon Valley to Denver, which was a remarkable run.

We're not gonna see something like that here.

Certainly we're not to that scale just yet, but to make a case for a tech company to come to Grand Rapids, those companies, they're gonna want to be the big fish in a relatively small pond and help build that ecosystem.

And when I was in Omaha, we were able to recruit a tech company that did just that.

And that's the type of opportunity that I see for us in the near future.

- And then there is that retention.

There's a retention blitz that's underway.

You met or you heard from some of the investors in the area.

What were you hearing and then how do you translate that into action?

- Yeah, great question.

So like any business, we're not gonna be successful serving the needs of our customers unless we listen to them carefully.

And then after a year or so of Zoom calls, we got unleashed if you will in June, and so our team was right out of the gate meeting with our business leaders across the region, really just sitting across the table from them and asking them set aside your P&L for a moment, set aside the drama of the day.

How is your business performing, what are the key opportunities in front of you and what are the key challenges?

And in that month of June, we visited with 118 businesses in that fashion.

Everybody on my team did at least one visit and we got to put our fingers on the pulse of the economy.

Over 60%, I'm sorry, 80% of our companies have reported an increase in sales.

So of all those companies we met in June, 80% increased in sales, 60%, just shy of 60% are looking to expand their business and hired new people.

So we come through this chaos as we talked before in an unbelievable position.

Truly, it is an incredible opportunity for us to take advantage of this moment and really leap frog competition and come out ahead.

Our business community is certainly doing that and our public sector having really been the front line on COVID, now that they have this unprecedented level of federal stimulus, our communities now have a chance to help further propel us forward.

So really a fascinating time going back to your very first question, Patrick, it's a fascinating time to be taking the reins at The Right Place and I could not be more excited.

- It seems as though every industry was affected a little bit differently and we know that.

You can look at the numbers.

But it seemed as though manufacturing somehow got it right early and was able to put the safety measures in place and to keep humming along.

How much of that was a part of that conversation and how much are they the drivers in a lot of what we're seeing?

- Yeah, it's a big part of our economy.

It's about 20% of our employment, it's an even greater percentage of our local domestic product.

So it's a foundational piece for our economy.

Manufacturing, the beauty of it is it's a very controlled environment.

Everything is precise, every aspect of the manufacturing process is precise.

And so now during COVID, we just had one more layer of precision that had to be adhered to.

So that collection of companies and collection of incredibly talented workers were able to adjust safely, remarkably.

I think our friends that work in the hospitality space had a little bit, quite a bit different environment frankly where they can't control who's coming in and out, their customers change by the hour.

And so they had a little bit harder challenge and I think they're seeing a bit more challenge coming out of this as well.

- What were some of the other key areas that you investigated back in June?

- Well, the big one far and away was finding people.

About half the companies said they could find the talent, just short of half said they were struggling.

And those that were struggling are struggling mightily.

We see it around the community.

I'm sure on your TV station there's advertisements from companies looking for talent, there are billboards everywhere.

You drive through any business park and you'll see help wanted signs out front.

It almost looks like an election season with all the signs out.

And frankly if you look at the raw numbers, Patrick, before COVID, Greater Grand Rapids had 15,000 people unemployed.

Today, it's about 25,000 people.

So we gained about 10,000 and given everything that we've gone through, that's pretty remarkable.

I mean, that's a pretty strong position.

And relative to our peers, relative to the communities we benchmark against, we're in a really strong position from an unemployment rate.

But what gets lost in the news sometimes is that there's 25,000 people who have left the workforce altogether.

They're not unemployed technically, they're not looking for work.

They're just saying, you know what?

I'm gonna sit this out for awhile.

So if you add those 25,000 unemployed plus 25,000 out of the workforce, that's about 10% of the local economy, 10% of the local workforce.

And we have to get our arms around that.

We've gotta find a way as a business community to better invite them back in because all of the research shows for people who are sustained unemployed, their economic prospects are pretty poor.

And we know folks with idle hands start to do things that are socially unacceptable.

Crime rates go up and what have you.

So we've got to find a way to get people back into the workforce and into productive activities.

Today, we have about as many jobs available as we've ever had.

Last I checked, we have 30,000 open positions.

So it's an incredibly robust job market.

And for your viewers at home who are looking for work or maybe have family members who are, now is about as good a job market as you could possibly imagine.

And I encourage people to start looking at those opportunities.

- And wages have gone up.

- They have, you see that in the windows of every restaurant and hospitality type of company.

You see it in our manufacturing community, technology workers, healthcare workers.

It's across the board, we are seeing wages climb pretty aggressively.

And we're seeing signing bonuses.

Companies are being aggressive in trying to recruit people back into the workforce.

So they're pulling out all the stops.

- Where are we on talent because talent matters in a lot of these positions.

- It does, it's unique.

I mentioned the unemployment figures.

And so we have people out there that have been great workers before.

We need them to come back and be great workers again and participate in the economy.

What's unique about this recession is usually recessions are not consistent across the country.

Parts of the country suffer more than others.

Unfortunately, the upper Midwest, we tend to suffer through economies like we did in '08 and '09 much greater than the balance of the country.

This one, our unemployment rate here is much better than our peers across the country.

Our economic output is much greater.

And so we're actually outperforming through this recession which puts us in a unique positive advantage.

But it also means because it's everywhere, companies can't look for greener grass on the other side of the fence or the other side of the country if you will.

It's just not there.

Companies are gonna have to find ways to retain their workforce and then build it over time and continue to attract new people in.

- I'm curious your take on why we have people who are sitting out right now.

I've spoken with different economists.

You just performed a study.

So I just want your take because there are different perspectives on why.

I'm curious to know yours.

- Yeah, I mean, no question, the school dynamic, school from home, daycares closing down, that is a massive, massive impact.

And if you dig into the unemployment numbers I shared before and the leaving of the workforce, it's disproportionately women who continue till this day to cover most of the daycare or the childcare responsibility.

So that is paramount.

And so getting our schools launched this fall, mission critical if we're gonna grow the economy back to where it needs to be and frankly support the families with great jobs the way we need to.

We've gotta get our schools, we've gotta get our daycares dialed back in.

We still have those that have concerns over public health issues and that's gonna remain an element.

And then the last piece which gets a lot of headlines and it's real is the unemployment boost.

It's a rational economic choice for somebody to stay home and take that unemployment benefit boost.

It's last I've seen it's about a $16 an hour wage if you will on unemployment right now, which is a record high.

So as that falls off in September, people are gonna be making new choices.

The income stream coming in is gonna be different and they're gonna start to make different choice or have to make a new choice anyway.

They may still choose to stay out, but for them to have the greatest economic success for them to take advantage of this incredibly hot job market, at the moment I think is September for us to really start to see an uptick in employment.

- So that's why you were making the appeal earlier to get in now.

If you have an idea of where you might wanna redirect your future, this is it.

- This is a pivot point for everybody.

I'm an economist at heart.

I think everything boils down to supply and demand.

And right now, there's greater demand than there is supply for labor.

And if you're on the supply side, if you're a potential worker, this is a favorable moment for you to find that bonus potential, to find that career.

And, Patrick, this is an important point.

I think we need to distinguish between a job and a career.

I think a job is more of a task to be done and it doesn't necessarily have a pathway forward.

Whereas a career puts you on a trajectory as an individual where you can see a future where your income grows, your responsibilities grow, your value add that you provide to your company grows.

And suddenly, you find yourself in a far better financial position.

This is a moment if you've been on the fence to come back in for those out there, this is a moment to get back in and find that career that sets you on a whole new trajectory.

- And still there are fears of now the COVID-19 variant that's out there and businesses are dealing with that.

I don't wanna get you into too much trouble here, this may be a third rail, but I will ask you this and that is short of mandates, it appears that business and industry is now stepping in to fill the void.

It might be driving policy a little bit more right now and perhaps the law is on their side because you see the behavior of some businesses and the direction that they're taking.

They take the advice of their legal teams.

What are you seeing out there when it comes to getting over this hump and finally moving forward?

Because it feels as though we're just in this stagnant period and we may be going back.

What's your take on this?

- Yeah, I mean, that's a tough one to speculate on, Patrick.

I don't pretend to be a health specialist.

That's where when the news came out this week about Kent County being a high rating if you will by the CDC, we leaned on the health professionals to guide our work and employers are doing the same.

You are seeing some going back to some degree of masking, you're seeing more mindful of social distancing.

And frankly we come out of this I think or we head into whatever this next phase is with two better bits of knowledge.

One, we understand how to be safe ourselves with our actions.

So we can understand that a little bit better this time.

And second, a healthy percentage of us are vaccinated today and those numbers are starting to pick up again.

And so that at the end of the day from everything I read and see, that's where we have to stay focused on.

And it is confusing I will say this.

It's interesting, nobody likes the mandates.

I certainly didn't either.

Nobody likes to be told what to do.

At the end of the day though today, the confusion that employers are facing without that mandate is probably equally challenging.

- But it's just difficult when schools are closing down, we're quarantining kids.

That means parents have to alter their work day.

There's just this domino effect and it seems as though we need to somehow get past all this.

- Yeah, there's plenty of chaos as we talked before.

I mean, this is clearly an element of that chaos and that noise in the system.

The supply chain too is equally disruptive.

The lumber costs made a lot of headlines, the chip shortage makes a lot of headlines.

Well, it's real.

We can all go to a restaurant and see the sign on the door that says tonight the service is gonna be partial because we don't have enough staff.

And so we feel that directly when we go there.

We don't necessarily see what's taking place behind the walls of a manufacturing company that is struggling to get chips delivered or maybe their customer is struggling to get chips delivered and now their volumes are down.

And so there is tremendous noise in the system, no question, but I would reiterate those businesses and those communities like ours that can cut through that noise and stay focused on our strategy, those are the markets that are gonna come out ahead and that's where we're trying to be especially focused.

- What's the data telling you right now?

You mentioned the bottlenecks that we're seeing in supply chains and we get the sense that people will be returning to the workforce hopefully sooner rather than later.

How long do you think or what is the data telling you that we will begin to see some of those pinch points level out and go away?

- Yeah, my sense is we're gonna see chaos to some varying degrees throughout 2022.

We have companies though that understand if you invest now and be ready so when we're fully back to "normal", they'll have their expansion project underway, they'll have their team in place and they'll come out of this faster and further ahead.

That's the interesting dynamic right now is which companies are deciding to cut through this noise and continue to push forward and which ones are waiting for a little bit more stability in the market.

Frankly, what is this, those who are bold come out ahead and I think that's the mindset that we're trying to take.

- Some of the industry clusters here in West Michigan, where are we gonna see more expansion and growth under your tutelage?

(Randy laughs) (Patrick laughs) - Well, I don't know this is necessarily something we can take credit for here at The Right Place, but if you just look at the sectors that are growing, health sciences and the recent move from Spectrum to consider that merger with Beaumont I think bodes really well for the region from an employment standpoint.

So we're gonna see continued investment there.

In fact today, BAMF, which is an incredible cancer research company had their groundbreaking at the MSU Innovation campus.

So health sciences for us still has tremendous upside potential.

Manufacturing, advanced manufacturing is going through an incredible transformation, whether it's electrification of the vehicle which creates chaos but it also creates opportunity.

And we're seeing companies go after that space aggressively.

And so advanced manufacturing really moving from, I heard in a local company the other day on a visit talk about going from mechanical to digital.

They've been making this particular product for over 100 years.

They know the mechanical elements of this through and through.

There's not much that can be gained there now.

So now the trick for that company is can they attach digital, can they attach AI, artificial intelligence or data analytics to it that'll make it even more valuable to the customers and therefore more valuable to them as a business?

So manufacturing that is progressing from mechanical to digital I think is a big wave.

And to make that happen then, we've gotta build out a tech sector.

I touched on it earlier.

We have some strengths in this space already, but finding ways to add technology because the beauty of technology is it certainly is an industry cluster to your point, but it also cuts across.

It serves all of our other industries.

It makes our manufacturing companies more competitive if technology can be embedded in their process or in their product.

And so that's a big push for us going forward.

- Randy Thelen, President and CEO at The Right Place, continue your work.

You're just starting out, you have plenty of work ahead of you, young man.

It's all good.

- We do, thanks for calling me young, Patrick, that made my day.

- Well, thank you for joining us.

You're always welcome back.

We thank you for everything that you do.

- Thank you.

- Thanks, Randy.

And thank you for joining us.

We'll see you again soon.

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