Location Strategy Decision Chain
The role of the key groups involved in location selection - and how and when they fit into the decision - must be established early in the process.
Lawrence Moretti, Principal, LFM Corporate Location Solutions (Apr/May 09)
(page 2 of 3)
The Evaluators: "What are the benefits and risks, real and imagined?"
is a rather diverse group of parties who determine or influence the
decision, objectively or subjectively. Evaluators include:
• Executive Leadership
- This group includes the C-suite, business unit leadership, or board
of directors who will authorize spending for the project and be driven
by bottom-line considerations.
• Corporate influencers and gatekeepers - These may be crucial links to access executive leadership and gain their endorsement.
- Their role is to provide objective framing, consistency, experience,
and unbiased decision support to the project team and /or executive
leadership. The consultant also provides a crucial firewall to protect
confidentiality relative to external groups.
• Political leadership
- Although local, state and/or national leaders usually want to add
jobs and capital investment for the citizenry, they will likely
evaluate the project relative to community benefit. They hold the purse
strings to approve incentives and other means of supporting project
start-up and long-term operation.
• Permitting authorities - Zoning, regulatory, environmental and other public officials will weigh in at some level for nearly all projects.
• Financial analysts
- The role of Wall Street is occasionally very visible, e.g., in
considering the bottom-line benefits of a post-merger footprint
rationalization or the subtle messaging that headquarters relocation
communicates about the company's vision.
• Family members impacted by relocation
- Personal move situations can quickly become emotional, and can
sidetrack a project if key employees or their families are distressed.
• Current employees - Workers impacted by the decision represent both a sensitive, and potentially costly and disruptive issue.
• Other local constituents
- Neighbors, local competitors, community groups, and the media may
seek to influence (positively or negatively) political support for the
It is crucial to understand these groups, as much rests on
their leverage and acceptance. It is the role of the project team -
sometimes with the objective support of consultants - to deliver the
facts to the internal and external parties authorized to approve the
project. It is the role of the project team and the economic developers
to separate fact from fiction, communicate balanced messaging to those
concerned about the project's impact, and to manage mitigation as
The Decision Chain Evolves during the Site Selection Process
The underlying process serves as the control point for managing the decision chain and the changing roles of parties during the project stages, as follows:
Strategy: During this stage, the key questions concern project feasibility and rationalization. The decision chain will most likely be internal to the company and confidential to a core planning team. At this stage, it is critical to clarify the vision of the project, develop a business case and roadmap for further actions, and to clearly establish the stakeholders who will be part of the decision and when they should be involved. Overall clarity of leadership is essential.
Search: As the process evolves into a feasible plan for action, other parties may be brought into the decision chain including consultants, other internal experts, and economic development organizations. The stakeholders now need to have a clear understanding of the command and communications structure. Information overload can be an issue during this phase. Sorting through voluminous amounts of - and often inconsistent - data is frustrating; having a tight decision process to manage information, messaging, and the expansion of the decision chain is essential. Many project teams go off-track by letting the information at hand take charge of the decision, or by becoming too focused on specific factors, such as incentives or particular sites.