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Corporate Executive Survey Commentary: Finding Optimal Tradeoffs While Achieving Competitive Advantage

Although no single factor reflects the needs of all businesses, there is an increase focus on talent and other qualitative factors, which must be weighed against costs.

Q1 2016
Reviewing 30 years of survey responses was an interesting check against my own perceptions and experiences from advising site selection clients over those same years, beginning in 1987 with a company that had built its reputation around locating industrial facilities, but was now expanding into the white-collar world of assessing locations for high-tech operations, R&D, headquarters, and the emerging functions of customer service, data, and operations centers. Along with this came a new client emphasis on technical and managerial skills and issues related to quality of life and attractiveness for recruiting, transferring, and retaining professional and administrative talent. Feasibility analysis of trade-offs involved “stay/go” decisions, comparing the benefits and cost-savings of a new location against the substantial business disruption costs and risks of relocation. These resulted in decisions not to move 50 percent of the time, especially for complex headquarters moves.

The changing factor emphasis over these 30 years, as reflected in the surveys, reveals trends that have steadily put more emphasis on quality-of-life measures as the competition for talent has become more intense due to evolving industry sector needs, as well as demographic challenges. Not only has this affected location decisions about R&D centers, headquarters, engineering, and other operational units, but also manufacturing as all industry sectors have adapted advanced digital technologies and additive production processes.

As my career evolved, I saw the impacts of globalization became major drivers in location strategy and site selection. Access became the client priority. Access to intellectual capital and talent, to markets, and to suppliers rose to be top weightings in executive decisions, with quality-of-life and other qualitative factors often identified as the most critical success factors. There is no single factor chart or survey that reflects the needs of all businesses. Not only are the requirements of manufacturing vastly different from those used in siting a research center or headquarters, but also even within a narrow industry sector, competitive strategies, corporate culture, and individual requirements demand tailored approaches. Location analysis and decision-modeling has become ever more comprehensive and complex, but as the 30-Year Comparison of Site Selection Factors chart shows — the trend toward more focus on talent and other qualitative factors, while keeping an eye on costs, is prominent.

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