Dispatches from EDiS Institute – Economic outlook, customer service, building communities

After taking a couple of years off, the EDiS Institute resumed on Thursday with a sobering look at the economy,  tough advice on customer service and a call for less regulation on redevelopment of suburbs and cities.  The institute, held every two years, had taken two years off, due to a sluggish economy.

EDiS Chairman Andrew DiSabatino said the resumption of the event is evidence of an improving economy and the fact that  nearly 300 persons filled the room at the Chase Center on the Riverfront. EDiS is a regional construction management and development firm based  in Wilmington.

Sobering news on economy

Economist John Stapleford, with the Caesar Rodney Institute conservative public policy group, says the economy is “running on fumes.” Stapleford founded the Delaware Small Business Development Center.

“It’s like a house of cards,” he said in reference to the  growing federal deficit.

Growth in the Northeast will remain sluggish, Stapleford said. That’s not good news for construction, he said.  He later noted that in-migration of retirees that has bolstered the Sussex County economy will slow down, despite a growing population of those over 60.

Turning to Delaware, Stapleford noted that the state is 24,000 jobs short of the figure posted before the economic downturn. In order to get back to normal, 47,000 jobs need to be created.

Stapleford also appeared to take issue with the state’s Strategic Development Fund, claiming it does not track how investments work out. Also a target was the state’s alternative energy policy, which is driving up electric rates, the economist said.

He also took swipes at government corruption, including scandals at the Delaware Department of  Transportation and noted that government, due to rising spending and the decline in other sectors,  is now a leading player in the Delaware economy.

In turning to New Castle County, Stapleford said the Unified Development Code did what it was intended  and halted growth, pointing to a lack of job creation since the code went into effect.

He told vocational education students in attendance that construction jobs will not explode in the next few years. However, demographic factors will reduce competition as older workers retire and population growth slows among younger people.

Customer service in ‘wired world’

Customer service speaker John Patterson, http://www.johnpatterson.com, said the ability to provide excellent customer service is the key to sucess in the kind of economy Stapleford described.

Patterson  said the ability to fix  problems can bring 8 percent more business, if that customer is satisfied with the resolution of the problem.  At the same time, the chance to resolve those problems is reduced if word of mouth, Internet or social media mention of the difficulty shows up. In those cases, a majority of those who read or hear about the problem will not become new customers.

An extreme example is the case of a musician whose guitar was broken by a United Airlines ground crew.  After a bad experience in resolving the problem, the musician produced a music video that drew more than 11 million visits on YouTube and aided his career. For United, it was a different story. According one calculation,  the video had a $180 million negative impact on the airline’s bottom line (profits).

Patterson said customers remain  angry about the economic downturn and some of the technological changes that have taken place, pointing to the self checkout line at a grocery store

“It never works for me,” he said.

The solution is “high tech, high touch,”  as a way to make sure that the equivalent of the self checkout line does not drive away a customer, Patterson said.

He then proceeded to tell a story of a series of snafus at a high-tech operation of a leading rental car company malfunctioning and resulting in a series of  irritating errors that included the company losing the keys to the rental car.

These problems come at a time when customer expectations are rising rapidly, thanks to the ability to use information online and stellar performance by companies such as Amazon, Disney and FedEx.

Executives are usually in the dark about customer experiences, with 80 percent of managers rating customer service as stellar,  but only 8 percent of customers feeling the same way.

Smart growth and the economy

Keynote speaker was Andres Duany –  the pioneer of New Urbanism, a movement to end the suburban sprawl in Delaware and elsewhere. He came armed with a bold plan to reduce bureaucracy that he sees as stifling efforts to redevelop declining suburban and urban areas.

Duany’s firm has been involved in a couple of hundred town development projects and has not been a stranger to Delaware. His principles have been used to form New Castle County’s Smart Code that aims to encourage development of  neo-traditional communities.  He was quick to note that his firm and outlook has changed with the changes in the economy.

His next book will focus on building  communities that supply their own food, electricity and other resources.

One underlying problem, according to Duany, is a nation dependent on cheap energy, not a lack of energy. That increases the inefficency of suburban sprawl.

“This country with an  advantage (from cheap energy)  is now at a disadvantage,” he said.  At the same time, the country’s enormous wealth can no longer hide these flaws through heavy spending.

Duany then  turned to the controversial issue of climate change and offered no comfort to believers and non-believers.

He said not believing that climate change is taking place should be “kept at home by business owners. The belief is so widespread that it can’t be ignored in business planning, he said.

“We cannot be stupid anymore,” he said, referring to development of housing in areas dependent on building new highways.

Certifications and marketing your company as “green”  isn’t enough, Duany said. He advised those in attendance to “learn to study”  and gain exposure to different points of view, while understanding the various shades of   green consumers.

He  came up with the  the phrase “grim greens,”  a minority of earnest people who almost enjoy bad news on the environment.

Another is the Cool Greens, who want well-designed products that are environmentally friendly. An example, according to Duany, are buyers of the Toyota Prius.  By contrast, a competing Honda did not sell well.  High-tech bicycles are another popular option.

A third are Greenbacks, who want to see a dollar impact and are not adverse to subsidies.  Another group is the survivalist, who fears the worst, but is likely to be skeptical of climate change.

Given the fact that current green efforts will not reverse climate change globally, due to growth in China and other nations, contractors and developers have to focus on building  communities, Duany said.

That is actually good news for contractors and developers as it can result in communities that can be built without subsidies.

Duany then turned to ways to revitalize suburban areas.

He said the focus has to be on rebuilding suburbia into  “town centers” that combine retail, housing and other amenities in an environment that encourages walking.

He proposed something known as a “code free zone” that allows development with architects and other professionals policing projects without stifling government bureaucracy “one townhouse at a time.”

Aiding vo-tech student.

Proceeds from the institute  helped to underwrite the attendance of 140 of Delaware’s vocational education students and will provide a $10,000 contribution to the three vocational education school districts in Delaware. Past EDiS Institutes have contributed a total of $150,000 to vocational education that has been used to help students purchase tools and for materials, supplies and equipment used in hands-on student construction projects at the schools.

 

Sponsors

The 2012 EDiS Institute Presenting Sponsor is R.C. Fabricators, Inc. with additional support from PNC Bank; Richards, Layton & Finger; Tri-State Carpet, Inc.; WSFS Bank as well as ING Direct and the Welfare Foundation. An additional group of industry and business contributors have also assisted in making the EDiS Institute possible.

 

Organizations that have cooperated with EDiS Company to help promote the EDiS Institute include the Associated Builders and Contractors of Delaware and Eastern Pennsylvania Chapters, Chester County Bar Association, Chester County Chamber of Business & Industry, Commercial-Industrial Realty Council, Delaware Contractors Association, Delaware State Chamber of Commerce, Greater West Chester Chamber of Commerce, National Association of Women in Construction and The Committee of 100-Delaware.

 

For more information about the EDiS Institute please visit ediscompany.com/institute.

-Doug Rainey

 

 

 

 

 

 

 

 

 

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