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Hess: Despite recession, Wisconsin can excel with focus on details of business climate
1/13/2009

By Brian E. Clark
For WisBusiness.com

Wisconsin -- like most of the nation -- may be in the midst of a recession, but business consultant Robert Hess says that doesn't mean there isn't opportunity now for states that seek it. He is a managing principal with Newmark Knight Frank (NKF Consulting) in Chicago, working to help businesses evaluate their real estate portfolios to make their operations more efficient.

"It's a good time to reinvent and position Wisconsin to make itself more attractive and competitive," said Hess, noting that the next three to six months will be critical for many firms and the nation's economic future.

"You have to be really careful how you look at the business climate for the state," he said. "What industries you target, where you play ... what policies and tools you have, where you are aggressive and where you we you should be passive.

"I think it's a great time for the state of Wisconsin because not everything is going to Brazil, Russia, India and China anymore. I'm very optimistic Wisconsin will seize the opportunity to look at its policies and targeted marketing efforts."
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As an (almost) Wisconsin native who grew up near Superior and graduated from high school there, Hess -- a commercial real estate expert -- has worked with scores of major American and international companies.

"But I'm pretty Wisconsin-oriented," he said, while admitting that he is a Viking fan.

"And I would love to see Wisconsin succeed as a place to do business," explained Hess, who now lives in Chicago but might one day down the road like to return to the Badger State to open his own company.

"I obviously would love to see Wisconsin be a leading state in the nation for many different types of industries," said Hess, who acknowledged that his work has led -- in a few cases -- to companies moving from the Badger State.

When it comes to analyzing where a company is located, Hess said he tries to be completely objective.

"I'm in the business of being a management consultant," said Hess, who helps firms undertake objective looks at what companies produce, where they produce it and why.

"I've been trained by some of the best in the business, and some times, what we do won't even result in a relocation, consolidation or closing," he said. "I take pride in helping them make good, solid business decisions ... that are well-founded and defensible"

Hess said he would much rather talk about helping companies remain and grow in the Badger State. He was instrumental in helping the billion-dollar Kikkoman Corp. keep its plant in Walworth in the 1990s, he recalled. The company recently opened a research facility in Madison.

One of Hess's most recent projects for the commercial real estate firm was working with a consortium that hopes to convince General Motors -- if it survives -- to move production of a high-mileage vehicle to the Janesville GM plant. The facility shut down production Dec. 23 in what turned out to be a tearful ceremony.

He praised the work of the public-private-labor task force working to revive the plant. He said the Janesville model could be used around the state as a powerful tool to not only attract business but promote a "collaborative, creative, can-do attitude."

"We're all working very hard... and the meetings with GM have been very positive relative to Wisconsin wanting to be considered for advanced manufacturing and future flex product lines," he said.

If GM can survive, Hess said he is "cautiously optimistic."

"But obviously, that is a big 'if,'" which is why Janesville is looking beyond GM to make itself to other firms that might want to locate there, he said.

"I've really enjoyed working with people in Janesville. They are very realistic about things they can and can't control and are taking a very smart, strategic and holistic look at their options ... to be well prepared for the future."

To attract more companies throughout Wisconsin, Hess said the state needs to work on a "continuum" of efforts.

"It's not just one solution," he said. "It's really looking at a whole mix of business attraction and retention efforts, entrepreneurship, innovation and having a kind of balanced scorecard approach to making investments.

"There are a lot of states and countries around the world that have very aggressive outreach programs and that certainly has to be one part of the success story. But it also has to be what you do back at home taking care of (existing) companies, helping them be profitable and giving them the resources and tools.

"In a nutshell, what I am talking about is a strong public-private sector partnership ... that tells the world where Wisconsin is taking its business climate," he said.

Hess said Wisconsin has struggled with the loss of thousands of manufacturing jobs -- its historic strength -- but noted that the life science sector has thrived using breakthroughs coming out of labs from UW-Madison and other universities.

"This is a time to look at state programs relative to how they are targeted to enhance where you want to go," he said. "A lot of those programs have been around for years, but it's a new time.

"It's fiercely competitive out there and the world is flat. We've heard about companies that have left the state, but others have done very well here and made big investments in this state."

Hess said Wisconsin needs to do a better job of marketing itself.

"It has to get the word out, be focused about where that word is (what channels) and branding the state as a major player in America," said Hess, who cited several southeastern states that have benefitted greatly from the migration away from the Rust Belt.

"Alabama, Georgia and the Carolinas have done tremendous work," he said, noting their low labor costs, minimal taxes and pro-business climate. Perhaps because of its flagging auto industry, Michigan is working hard to attract companies to its shores with aggressive and targeted incentive programs, he said.

Neighboring Iowa also drew praise from Hess for its biotech programs and efforts to attract data centers. In addition, he praised the regional life science cluster centers in the Research Triangle of North Carolina, as well as around Boston and Austin, Texas.

"They all started with telling others what they did well with innovation, entrepreneurship and working with their universities," he said. "But there is no single way. You have to have a mixed approach and balanced scorecard for putting Wisconsin on the map."

Though other states and regions may have advantages over the Badger State, Hess said the current downturn in the economy has changed the playing field. "Now is the time when the economy rewards change and innovation and it's time for Wisconsin to come out fighting."
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