Final Analysis: Out of Their Minds

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When I moved to Seattle 22 years ago, I remember thinking I had never lived in a city where so many people had moved here not for a job, but for a sense of place. I had relocated from St. Louis, and I love St. Louis. But trust me: No one moves to St. Louis because it is geographically blessed, whereas hordes will move to Seattle precisely for that reason. Even during the 1990-91 recession, I kept encountering people who had moved here for the hiking, the climbing, the sailing. They sang the praises of the scenery, the temperate climate. They figured the career thing would eventually take care of itself. They wanted to live here because the place is so incredibly special.

A lot of people who don’t live here also think Seattle is pretty special. We know this because they pump $16.4 billion a year into the state’s economy and assure the employment of people who make $4.5 billion in wages.

How long that attraction continues will have a lot to do with how well we continue to promote Washington tourism. The state of Washington right now isn’t spending a penny on tourism promotion. A revenue-strapped Legislature shut down the state tourism office last year and eliminated its $1.8 million budget.

A makeshift private organization called the Washington Tourism Alliance is now the de facto promoter of state tourism. People who work in tourism created it, knowing that while Washington will always remain an attractive vacation option, it’s hard to compete with other inviting places that pump tens of millions of dollars a year into promoting their attractions. The thinking is that once we’re out of sight, we’ll quickly be out of mind.

At a public forum on travel and tourism recently, the sponsor of the event—a major bank—declared it had become the first financial institution in Washington state to join the Washington Tourism Alliance.

The announcement did not lead the 11 o’clock news. But it opened my eyes. “The health of the tourism industry does not just affect hotels and restaurants,” said KeyBank executive John Roehm. “The hundreds of attractions, retail and hospitality businesses, and the 160,000 people employed in this sector are our bank customers. They open checking accounts, they pay mortgages and they make investments. It is in our interest to ensure the industry survives and grows.”

That was my “well, duh!” moment. For some reason, we who live in this geographically blessed place don’t seem to think of tourism as an industry, at least not in the same way we think about airplane manufacturing, software development or even online retail. There’s no one going to a factory or an office building to “make” something. We seem to think it just happens. But if we take it for granted, it will go away.

In 1993, during an anti-taxation frenzy, Colorado voters apparently thought the same thing. They cut the state’s travel-promotion budget from $12 million to zero. Colorado’s share of the domestic travel market plunged from 2.7 percent to 1.8 percent. State funding returned about seven years later, but it took 19 years for Colorado to get back to the market share it had enjoyed in 1993.

In Washington state, the Alliance realizes it cannot continue relying on the kindness of strangers. Its ultimate goal is to persuade the Legislature to devise a promotion model that keeps travel and tourism a viable industry in Washington state. But until that happens, you may want to consider ponying up for a membership in the Alliance. After all, this is a special place. But, as Colorado quickly discovered, it’s not that special when an entire industry dries up.

JOHN LEVESQUE is the managing editor of Seattle Business magazine. Full disclosure: His wife is employed by KeyBank. 

CEO Adviser: Paving the Way to Digital

CEO Adviser: Paving the Way to Digital

How the Northwest’s leading asphalt company is embracing technology.
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“What’s the ROI on software?”

This is the question facing many leaders of traditional mid-market companies. For a well-established family-run business, there is often the temptation to invest in assets that can generate revenue faster in the short term instead of technology upgrades that don’t deliver immediate profit.

When I first met Mike Lee, president of Lakeside Industries, he asked an interesting question: “Are we doing the right things when it comes to technology?” Lee understood that his 600-person asphalt company in Seattle’s Fremont neighborhood had to make technology a strategic objective in order to ensure the future of the business.

Here are a few ways Lee showed leadership in making ones and zeroes important in an industry focused on rock and oil.

Establish crystal clarity about how digital can support the overall vision.

Lee had a compelling “why” and vision for the company in place: to make a lasting impact on our community, our relationships and our people, and to be the low-cost supplier that provides an exceptional customer experience. The core values focused on safety, environmental responsibility, quality and profitability. But there was no solid technology vision to realize it, and IT didn’t have a presence at the business table, so Lee made a point to involve the CFO/acting CIO. The beauty of setting a digital vision is in its simplicity — not looking at every solution available, but only those that can further the company’s reason for being. In Lakeside’s case, how could new technologies bring it closer to its employees, its community and its customers? How could software make it improve efficiency, visibility and environmental commitments? When Lee looked closely at his vision, it became clear that technology could help bolster it, but that it couldn’t happen without tech being elevated.

Identify the gaps that technology can fill. 

“There is more to our business than asphalt and paving,” says Lee. “We have to keep up with plant and equipment management, communications, competitors, security and environmental regulations.” Lee met with his CIO and IT directors to determine how technology was going to add value inside and outside the business. The firm developed a digital roadmap that provided clarity around the technology initiatives people were going to work on; for each, it set accountabilities, timelines and goals. They used this roadmap to manage ongoing progress and to determine whether or not the new “shiny technology objects” matched the vision and strategy. The most important initiative was to replace Lakeside’s aging enterprise resource planning system. This would require modernizing processes and technology infrastructure to support collaboration with business management across the company — a broad impact to the business. Another key initiative was improving how it estimated projects and managed customer relationships. This new system would only be successful with buy-in from the people in the field using the software.

Communicate the importance of technology to the management team.

While its employees are part of a family, Lakeside Industries is also a distributed business run by a group of autonomous regional managers who needed to believe in the vision. Lee presented the specifics of the strategy to all managers: The message was “IT can no longer be just a department.” Business and technology leaders — who rarely interfaced — had the opportunity to discuss and debate what was at stake. Their conclusion? Software isn’t a gutsy gamble or a bold bet — it’s table stakes. The result was a set of guiding principles, alignment and excitement for what’s ahead. For the first time in the company’s history, business and technology people now have harmony around a shared digital vision — working together as one to contribute to healthier profitability and improved customer relations. In the end, Lakeside Industries’ road to the future has been paved with much more than good intentions. 

TIM GOGGIN is president of Sappington, a Seattle consulting firm that advises clients on digital change. Reach him at tim.goggin@sappington.co.