To be successful, an economic development effort must define and meet the needs of those it is designed to serve. The quality movement, stimulated by the philosophical and practical leadership of W. Edwards Deming, is transforming the way in which a wide range of private and public organizations do business. During the late 1980s, the U.S. Department of Commerce developed the Malcolm Baldrige Award to recognize United States companies that achieved high standards of quality. This award is now being applied in several states, and governmental and educational organizations are now using the Baldrige criteria in assessing their performance. Central to the quality improvement approach advocated by Deming and contained in the Baldrige criteria is knowing who your customers are, their expectations, how well you meet those expectations, and how to use feedback from customers to improve products and services.
Baldrige award core values and concepts
*Richard M. Hodgetts, Blueprints for Continuous Improvement: Lessons for the Baldrige Winners, AMA Management Briefing (New York: American Management Association, 1993).
Primary customers of economic development programs are businesses. It is important for economic development organizations to have good feedback mechanisms to determine how well economic development efforts are addressing business problems and improving economic competitiveness. Customer feedback may be based on regular surveys, interviews, focus groups, or other approaches. Economic development agencies may also serve other customers, such as communities and tourists who visit the area, as well as citizens who derive the ultimate benefit of economic development programs in terms of jobs and income. Customer feedback on service quality and program impacts can also be important in shaping and continually improving economic development strategies and programs.
In 1988, the Minnesota Department of Trade and Economic Development initiated a performance monitoring system to obtain regular customer feedback to improve economic development programs. The Urban Institute, with funding from the Economic Development Administration, foundations, and state government, developed the approach and system for Minnesota. Customer surveys include questions that cover service quality; intermediate outcomes, such as foreign trade contacts; and final outcomes, such as jobs created or increased foreign sales. The performance monitoring approach started with five department programs serving business and community customers and since has been expanded to all department programs. The surveys are now used regularly for gathering customer information on the performance of the Small Business Development Centers, which are funded by the Small Business Administration and managed by the state economic development department.