Birgit Klohs of The Right Place joins us to talk about the private/public partnership that helps build a strong economy in Grand Rapids. With over 30 years in the industry, Birgit’s insights into the future of work and labor can help you understand where your business needs to go within the next three to five years. Listen today on Money, I’m Home!

If you need help starting or expanding your business, reach out to us! Our Commercial Loan Officers

 

 

are ready to answer the questions you have about your future.

 

Federally insured by NCUA.

 

Transcripts

[music]

 

00:06 Lynne Jarman-Johnson: Money, I’m Home. Welcome on in, I’m Lynne Jarman-Johnson, from Finance to Fitness. This is Consumers Credit Union, and today we have the right place for you to be. We are talking with Birgit Klohs, the president and CEO of The Right Place. Tell us all about The Right Place, and how did this all begin.

 

00:24 Birgit Klohs: Well, it began in 1985, or actually earlier, it began in 83-84. Very much a West Michigan sort of thought process, if you will. There was no economic development organization in Kent County at the time, the unemployment rate was 11%.

 

00:41 LJJ: Eleven?

 

00:42 BK: Eleven percent. For your listeners who are of a certain vintage, [chuckle] they will remember the mid-80s, when Michigan was in very, very bad shape.

 

00:50 LJJ: Tough.

 

00:53 BK: And the auto industry was down… And, of course, we have a large manufacturing sector, and a group of committed community leaders, under the leadership of Jay Van Andel, looked around and said, “If we don’t grow jobs and investment, then our companies can’t succeed here, either.” So they created a committee of 13, and started ruminating on how do you actually create an economic development organization. They hired the Battelle Memorial Institute, they looked at our pluses and minuses, if you will, in the region. And then, after about a year of doing that, analysts said, “Okay, you need a number of things. You need a one-door organization that a company can walk through to get assistance to grow, invest, and create jobs.” There wasn’t anybody, at the time. So, if a company in Kent County wanted to say, “Hey, I’m investing 10 million dollars for… In 100 new jobs, there was nobody to talk to, actually. You would have to go to a number of different spots or organizations that may or may not put this whole package together for you.

 

02:00 LJJ: Overwhelming.

 

02:00 BK: Overwhelming. You… Put yourself in the place of a company. You know, when they walk into your Credit Union, they get a bundle of services.

 

02:09 LJJ: Right there.

 

02:11 BK: There was no bundler of services for economic development, and so they created an organization that became known as The Right Place.

 

02:19 LJJ: What is interesting, when you look back on that, is how visionary you have to be. Because a lot of people, when you’re in a situation where there are stagnant numbers, frustration all around, how do you get out of that box?

 

02:33 BK: Exactly. And what was interesting about it is that the private sector took the lead. It was 13, 12 business leaders and the Chairman of the County Board who said, “What are we going to do to change the trajectory we are on?”

 

02:49 LJJ: Wow!

 

02:50 BK: And that was visionary. Because today, economic development organizations around the country are often private-public partnerships, and that is what The Right Place is. We’re a private-public partnership for economic development. We service six counties: Kent, Ionia, Newaygo, Montcalm, Oceana and Lake, right? We started off with Kent. We are still self-funded, after all these years.

 

03:16 LJJ: Wow.

 

03:19 BK: Eighty percent of our funding comes from the private sector, private companies.

 

03:24 LJJ: Passion and commitment.

 

03:24 BK: Passion and commitment. And continued interest in continuing to grow our regional economy.

 

03:32 LJJ: You know, there will be people who are listening who think, “Well, how does that affect me?” And I grin, because it affects you every single day.

 

03:40 BK: Every single day. Every single day. When we help a company grow and expand, somebody’s going to have a job. They can go shop for groceries at our local grocery stores, they need a home mortgage, they may buy a car, they will go to a restaurant. It’s things that maybe they couldn’t do without that job. And the other thing is we have to remember that you have competition. We have competition, so when we work with a company, and I want to underline something, 80% of our work is with companies who are already here. Now, your listeners may say, “Well, who cares? They’re already here.”

 

04:21 LJJ: It’s retention.

 

04:21 BK: Well, but will they be here forever? It’s totally retention. Because they’re being talked to by my colleagues and competitors from Indiana, from Ohio, from Mississippi, from South Carolina, who come North and say, “Why don’t you come South? The weather is better, we got incentives, we got all of these things for you.” So, we are very, very focused on making sure that our local businesses know we are here to help them first. And then we market the region to new businesses.

 

04:54 LJJ: To new businesses.

 

04:56 BK: So, it impacts everybody, because investment of that nature ripples through the entire community.

 

05:03 LJJ: Well, and when you hear that a company is laying off or moving out, there is a gasp.

 

05:09 BK: Yes, there is.

 

05:09 LJJ: You know, you feel that, whether you’re involved with that company or not.

 

05:14 BK: Precisely. Precisely, so what we’re… We call on 300 to 400 of those companies a year, to make sure they know we’re here. And sometimes they call us and say, “Hey, Birgit, we need your help.” I had an email this morning, “We’re looking at something, send somebody my way, please have a meeting with us. We want to examine things on how we can grow and expand.” We recently helped a small local tech company grow here, and our competition was in Denver. And the folks in Denver were offering them free lease space. So you, you… We are competing every day.

 

05:50 LJJ: From around the world.

 

05:52 BK: So, we’re out there every day, making sure that they know we’re here to help them.

 

05:55 LJJ: How did you find your journey here?

 

06:00 BK: Well, my journey in economic development… So, I obviously was born and raised in Germany, came to West Michigan via your husband, and never even…

 

06:00 LJJ: How lucky are we!

 

06:00 BK: And never even heard of the word “economic development”. I landed at an economic development organization many years ago, in Berrien county, and then eventually came here. And worked for a while for Prince Corporation, a great, great company, it’s a great company. And then, ended up with Don Lubbers, at Grand Valley. And they had started an economic development organization for Grand Valley, and I became the assistant director. And I watched the formation of The Right Place with great awe, anticipation and amazement. Because I came from a public sector point of view for economic development working for a county and to have the private sector leadership create an organization like this was really quite remarkable, and they were looking for, of course, a director. I never applied for the job because I was new in town, nobody knew me, but I had a mentor and he was the COO of Amway at that time, and we had worked together for small business which was my job at Grand Valley. And when the job became open, I kind of helped them through some searches and they found someone who then elected not to take the job after all. And so Orvil, who has since passed away said, “You know what, why not Birgit.” And nobody knew Birgit. This board didn’t know me.

 

07:35 LJJ: Right.

 

07:36 BK: And so, with the help of that mentor…

 

07:39 LJJ: Well, and the town is small.

 

07:40 BK: Yeah, oh yeah, it’s… Yeah, it is. Everybody… It is a very connected…

 

07:45 LJJ: Connected town.

 

07:46 BK: Community and I’d only been here a few years because I had lived in another part of Michigan. And, so on November 30th, 32 years ago, I started this position, and I frankly I’ve never looked back. It’s been a phenomenal, phenomenal opportunity.

 

08:02 LJJ: If you could think of the top two wins that in your heart you just think, Wow.

 

08:08 BK: I know that’s really hard because we’ve had so many. We’ve done over four and a half billion dollars-worth of investment and over 40 some thousand jobs. This past year alone, we did over 20 projects, and over the three years of our last strategic plan, over $800 million in new investments. So, there are many that stick in your mind, some are really large, we fought hard to keep Farmers Insurance when it was foremost, huge project during the middle of the recession. $84 million.

 

08:41 LJJ: So many lives.

 

08:43 BK: So many lives are affected. 1,600 jobs down there and it’s cemented that company here, so you can actually do… They are just phenomenal projects that we’ve touched.

 

08:58 LJJ: When you look at going forward and you talk about the competition, prior when you say unemployment was 11%. That’s you’re looking for people. Now, there is really concern about what is that talent depth that you need to have.

 

09:16 BK: It’s the biggest issue we face. It is not just our issue however, it’s a national issue, it’s a demographic issue. The birth rate in the United States is below replacement rate. The birth rate in Michigan last year was very low, so you can actually… It’s a demographic game. You have to look at… The kids who were born in 2018 are going to be the 18-year-olds in 17 years. So, you have to count heads and say, “Okay, there aren’t that many.” How do we then educate them properly? How do we make sure that each and every one of them has an opportunity for a good education? Everybody needs to read and write. This is a really a community issue that we have to get our heads around. So, you’re dealing with young people coming up and making sure they know what is available in terms of jobs and careers, and it doesn’t always have to be a four-year degree.

 

10:18 BK: It can also be a certificate, it can be two-year technical degree from community college. But we need to make sure that each… We can’t afford to lose one, we can’t. Talent is a driver, and talent is fungible, and they can go anywhere. But the other thing we need to look at as a region is who is sitting on the sidelines? While we have a low unemployment rate, we also need to make sure that we have a high labor participation rate. Now ours is pretty high at 72%, nationally, it’s only 60% which… So, it means there are folks not participating in the economy. Why is that? Because they lack the skills for the jobs of today.

 

11:01 LJJ: You know, that brings you to technology.

 

11:03 BK: A huge issue, huge. You’re looking at robotics, you’re looking at the internet of things, you’re looking at automation, you’re looking at industry 4.0, so how do we not only make sure that our, the young people who are graduating today get exposed to that technology early middle school, not when they are ready to graduate. Here is a good statistic, there is something called Discover manufacturing, it’s a manufacturing weekend that takes place all over the country. And during that week, we try to expose young people to careers particularly in the manufacturing sector. We had 197 companies participate and almost 9,000 students visit companies…

 

11:56 LJJ: Wow.

 

11:56 BK: To see what they do because a young person today, doesn’t really know. So, we know Autocam Medical or we know Amway, or we hear of Steelcase, or we hear of Striker, and name them, name them, name them, but those young people don’t really know what careers are available in those companies. So, through Discover manufacturing, we’re trying to expose them to those opportunities so that it opens their eyes to say, “Oh I could do this.”

 

12:27 LJJ: And what’s the path to get there?

 

12:28 BK: Exactly, exactly, yeah. But talent is for sure the key ingredient here. That means though that organizations like economic development organizations like us, the community, philanthropy, the employers, we all have to be education, we have to have a systemic approach to how do we do this.

 

12:42 LJJ: Well, if you look back on when you started and how you started, it’s truly looking forward on making sure that that stays.

 

12:42 BK: No doubt. We just finished our… The Right Place has always done one thing that has been my passion and that is you have to have a plan. We just finished our strategic plan yesterday for the next three years.

 

12:42 LJJ: Oh, excitement.

 

12:42 BK: So, we worked on this plan for 11 months. It involved our board, our team, and over 100 community leaders. What should The Right Place be doing for the next three years? To me you can get into that car and take a nice ride in the country if you, on a Sunday afternoon. But this is not just a nice drive in the country. This is really positioning this community and region for the next three to 10 years. And so we’re very deliberate about it and talent, talent, talent. Strategic planning in terms of what do we need to do, what are the strategic issues that are facing us? Talent is one, infrastructure is another one, and I know there is all this, it’s not just about roads and bridges, we have aging infrastructure around water and wastewater treatment, and the biggie is broadband. Our rural communities don’t have enough broadband access. So, if you want to have and be an entrepreneur in Newaygo County, we need to figure out how to get that last mile built. So, there are challenges, but we’re working on them.

 

14:23 LJJ: Well I’ll tell you what, we are going to continue this conversation because I’d really like to know how companies can get involved with helping on that strategic plan. This is Money, I’m Home! From Finance to Fitness with Consumers Credit Union. Birgit Klohs, President and CEO of The Right Place. And thank you Aaron for always being the awesome producer that you are. Join us next week From Finance to Fitness, Money, I’m home.

 

[music]