A Q&A with Asheville Chamber CEO Kit Cramer (full transcript)

Kit Cramer came on board as the Asheville Area Chamber of Commerce’s president and CEO last fall. Xpress sat down with her recently along with Ben Teague, the Chamber’s senior vice president for economic development. They discussed the organization’s new long-term strategic plan for business development as well as the controversy over the Asheville group’s retaining its membership in the http://www.uschamber.com (see “Pro-business or Partisan?” April 20 Xpress). Here’s a transcript of the full interview. For the shorter print version, see “Charting the Future: Asheville Chamber Navigates Controversy, Tough Economy.”

Mountain Xpress: As a new person to Western North Carolina, what do you think about, and what have you seen with small business development in this area?
CEO Kit Cramer: We’re a community of small businesses, so it’s absolutely critical that we support small businesses in every way we can. Tomorrow [March 9], we’re actually leaving for a legislative visit to Raleigh along with Henderson and Haywood counties. One of the things we’re promoting is trying to improve tax reform, as well as anything we can do to support small business growth in this area.

You’ve outlined several areas of growth that you think are particularly important. Could you take me through those quickly?
We’ve developed a business model for how we’re going to approach economic development, and we involved 150 folks in this discussion. We’re going to be looking at industry clusters. So basically…

All right, when you say 150 folks, are these business people?
Business people. Community people. A broad cross section of the community. When the search committee hired me, there was real interest in having more volunteer involvement, and more involvement from a broader base of the community, so as we were embarking on this strategic plan, we saw this as a great opportunity to do both.

We’re looking at industry clusters. In the four quadrants we’re looking at, one is health care. Certainly, one of our largest employers, Mission Hospitals, is in the health care sector. Also, manufacturing, advanced manufacturing. Technology and science. And arts and culture. Those are the four different industry clusters.

So we’re talking about existing businesses that we need to grow as well as ways to capitalize on the clusters that are already here. We’ve talked about an overarching approach of trying to use Asheville’s quality of life as a selling tool. The beauty of this area makes this a place where people want to locate, and there’s a balance to life here that is extremely appealing. So we want to use those natural assets as well as the other natural assets we have here to grow business and to help existing businesses grow as well.

In terms of technology, for example, we’ve got a broadband ring that exists here because of the presence of the National Climatic Data Center. That makes us a very appealing location for other types of technology firms, and those firms can locate anywhere. So when you think about quality of life and balance, which are two very appealing things, we’ve got that in abundance in Asheville. And we can use that to market to those types of firms.

We’ve also talked about overlaying all of these different areas. We’ve talked about knowledge-based businesses—potential places we can grow. In health care, for example, we’ve got an abundance of alternative medicine folks in Asheville. We’ve also got the Bent Creek Institute with the knowledge they have about natural pharmaceuticals. Can we grow industry in that area? So that would be an overlap of an existing industry with new business and new business segments. We’re talking about trying to grow existing business and create jobs, but also look to the future about where we can grow.

One thing I’m intrigued about is there’s no mention of tourism, which is, of course, one of our top industries. Does tourism fall under “arts and culture?” Is that an under riding theme of that cluster?
We’ve kind of put tourism to the side, because we have the Convention and Visitors Bureau—a group that’s the same size as the overall Chamber staff, devoted to tourism, and they’re doing a great job there. We’re growing that industry. So we wanted economic development to focus on some other industry areas, and we’re really looking at diversifying the economy.

Ben Teague: I think this plan is different from our past plans, because we’re looking to be a catalyst for the community and fill gaps. There’s not enough money or manpower for us [the Chamber] to be the solution for every single component piece of the economy, so how do we best utilize our resources to be a catalyst for the rest of the community? So, for example, with tourism, we’ve got an extremely strong tourism team that’s already doing phenomenal things. That’s set, so how can we fill in the gaps and bring the community around on some of these other areas—technology areas, knowledge-based business areas? That’s what we’re seeking to do in this plan.

Let’s look a little bit more closely at some of those areas. What do you mean by “advanced manufacturing”?
We have a great presence of manufacturers working with high-value metals, and they’re using laser cutters, and they’re doing very intricate work. We’ve talked about building that particular segment of the economy. That’s just one example.

Teague: Just to flesh that out a little bit: Unison [engine components], G.E. Aviation, BorgWarner, and Thermo Fisher [scientific] all work with really expensive metals and materials, and at one point in time one of those manufacturers said, “If the power blinks, we just ruined a half million dollars in product.” So it’s not what people think of with [a worker] putting the welding hat down and the welding jacket on, and working with metals, which is still important to our economy. This is the type of area that we want to go after, particularly because in that skill set we’re actually twelve times more specialized in those type of high-end metal working skills than the rest of the nation, and so we have the ability to attract other companies.

But that also means that we’ve got to ensure that we’ve got a good quality of power to be able serve those folks well—which falls more into the public policy arena than it does in economic development. With this plan, we’ve talked about trying to marry economic development with public policy, so that the Chamber on the whole is all pulling in the same direction, trying to create more jobs and help existing businesses grow.

Right, and I’m assuming that in order to do that, you need not just the Chamber, but you need the help of a lot of different people including City Council, existing small businesses, and larger businesses. Most of those businesses you mentioned are fairly large, and it seems like there’s some overlap too between manufacturing and technology, because a lot of the businesses you mentioned are very high on the technology scale. So specifically, how are you going after some of these businesses out there?

Teague: I would say a fundamental change that I was talking about is filling the gaps in our community. First of all, we’re going to be using our community in a different way. Within the economic development department, we’re seven people, but if we say we’re going to marshal our community, we’re going to marshal the influence of the playmakers here within the community to press a company to locate here from the outside. That’s an important change that we have here, but it’s also about announcements for the community, and those are always important. Those are always nice to see in the newspapers, but what are we also doing to move the economic needle forward for small businesses, for large businesses?

And I think that’s a fundamental shift we’ve had here as well is saying, “Hey, workforce development, we want you to pull the rope in the same direction. Hey, public policy, we have this very specific need.” Maybe what they’re doing doesn’t result in an announcement, but it does help move the economic needle forward. For example, “Hey, we need training for this health care entity, or we need this particular skill set.” And it didn’t result in a new company locating here, but it did aid the 20 percent of our economy that’s made up of health care. It did aid that sector in moving forward. So I think that’s part of the seismic change of the Chamber in saying that we recognize that our entire economy is important, and we need to move the entire needle forward. Announcements are fantastic, but we need to strategically align our resources to move the entire economy forward.

Cramer: Let me give you one other example. In many of these clusters we’ve heard that there’s a need for venture capital, and we’ve heard that repeatedly, so we talked with the folks who were sitting around the table and [told them] we go and visit with site selectors all the time to pitch Asheville as a location for any relocations that are occurring. Should we go visit with venture capital firms? And can we take some of our existing entrepreneurs who have made a decision to locate to Asheville to come along and give a testimonial?

When we talked to the people around the table, they said they’d be more than willing to do that, so it’s then going to be incumbent upon us to then identify which firms specialize in the areas that we’re interested in pursuing, and identify people who can tell the best stories to come along with us, and schedule those trips. So that’s one small example. It’s a lot of small activity that leads to creating an environment here to grow business, and we outlined strategies for every one of these areas. So we’re now in the process of putting a timeline to those strategies, and more importantly putting a budget to those strategies, because we now need to raise money for the next five years to provide the funding, and that’s going to be between $3 and $3.5 million at a minimum.

It’s my hope that we can find a way to find some additional funds to be more aggressive, because another thing that all the folks in all these areas discussed was being more aggressive in terms of marketing. If you think about it, it’s an expensive proposition to do marketing in a less than traditional way than the economic development folks have been doing it. We’ve talked about targeting, for example, Silicon Valley, and trying to attract more technology firms who have the ability to be anywhere they want to be, and presenting the quality of life that we have here. Well, it’s going to take bucks to do that. As we flesh out our plan and develop our budget, we’ve got to make a case for the approach we’re going to take. What I like about this is that we’ve involved all these different business people in the development of the plan, and I think we’ve got some pretty exciting ideas.

Of course, we’ve all been in a recession, and it seems to me that it hit Asheville a little bit later than it hit a lot of places, possibly because of the tourism industry. But it has hit here, and we’ve all had budget cuts, and I’m assuming that the Chamber has had budget cuts too. So where are we going to find this money?
Well, that’s a good question. That is the challenge, and we need to start thinking about dedicated revenue sources. I’m not sure that right now is the appropriate time to be thinking about any new revenue sources. We’re probably going to have to make do with what we have, and what we can raise in the next year or so. But as the economy improves, perhaps there will be opportunities. We’ve talked about, “Could you sell a vanity tag in support of economic development and generate several hundred thousand dollars off of that?”

You mean like a car tag? Like “Protect the Blue Ridge Parkway,” but…
Right. Could we do an Asheville-oriented tag that would then provide some additional funds for us to use in marketing this community? I’m open to all ideas. We need some bucks to get more creative in what we’re doing to promote business growth in this area. So I’m open to new ideas, and I’ve asked a lot of business people to put their thinking caps on and help us arrive at some different ways. We’re going to be using a more traditional approach right now, which is to build an economic strategic plan, and ask business to invest in it. That’s the fundraising campaign we’re about to embark upon.

And speaking of creativity, you have this whole new area of arts and culture. It’s not a new area—Asheville’s a very artsy place—but I’m interested in hearing you speak for a minute about where you’re going with that.
I actually asked this question of the staff, and then we decided to ask it of the volunteers, because in all my discussions with folks it just became really apparent what a critical component arts and culture are to this community. So I was asking the question, “What role would a Chamber of Commerce have in the promotion of arts and culture, not just as a quality of life element, but as a business element?” And when we brought the arts and culture folks around the table, they were very focused in saying we need to help our artists be better business people. We could potentially attract suppliers of fine pigments, or other materials that artist use. Those could be the types of businesses we could go after to expand and cement arts and culture in this region, and you’ve got a whole heritage of arts and culture as well that has a ripple effect—gallery owners and marketers, and the ripple effect just continues—so it is a significant piece of business as well. And we need to be able to quantify that.

Teague: It reinforces our brand of who we are. Arts and culture is a large profession of our brand, of our success both personally and professionally that we sell to outside of the community, and if we can allow arts to be better integrated into the business community, it just helps us to be more authentic in our brand. So when someone comes and experiences a business here, and they’re involved with the arts, or they have arts on their table, or they give gifts of local art, that just reinforces our brand as we start to showcase our community.

This plan is obviously out in the public, and you’ve got all these strategies, and you’re committed with a budget, so at some point I’m sure you’re just going to unveil the thing?
It’s interesting. We’ve kind of been rolling it out to groups and getting feedback, because it’s not like it’s a static type of thing. We don’t want to develop a plan and put it on a bookshelf. This is going to be the basis for our program of work, so what we’ve decided to do is lay out our first year of what it might look like and put a budget to it, and hopefully that’ll help establish a pattern for the remaining four years in the five-year plan.  But we’re open to changes throughout, because we certainly don’t have a lock on all the good ideas. And we’ve gone to groups like the HUB Alliance, an important strategic partner. We’re interested in partnering with the important organizations in the community that have a dog in the economic development fight, whether it’s Advantage West, or Mountain BizWorks, or SCORE, or SBTDC, or our colleges and universities, there are all kinds of entities that have a stake, and many of them were around the table as we developed the plan. We’re going to continue to refine it, and move forward with the fundraising.

There’s been a lot of controversy recently over the U.S. Chamber of Commerce giving money politically and being partisan politically, among other things, and you’ve said that you are not going to distance yourself from the U.S. Chamber the way a number of other chambers have, including big cities like New York, Philadelphia, and San Francisco. Could you speak a little bit to that, and tell me how and why you made that decision?
Sure. Actually, I heard from a lot of folks when I first arrived about their feelings — their strong feelings in opposition to some of the positions the U.S. Chamber has taken — particularly some of the very rough advertising that occurred during the last Presidential campaign in this area. If you ask the U.S. Chamber, their positions aren’t partisan, they’re pro-business, but there’s a real feeling from many people that they were partisan. So I wanted to ask our board what they felt about this, to make sure that my thinking was aligned with the board’s thinking. My initial role was, “Yes, we’re a member of the U.S. Chamber, but we’re a member of the U.S. Chamber the same way an individual is a member of a political party.” Just because the political party takes a position, that doesn’t mean that the individual agrees with every aspect of the political party. Nor do we agree with everything that the U.S. Chamber does, and we frequently voice our differences. Policies for the Asheville Chamber are developed by the Asheville Chamber Board without consideration for what the U.S. Chamber is doing. We use the U.S. Chamber as a source of information and research for when we’re facing a particular issue or if we want to follow some particular legislation it’s helpful for us to have that. Could we live without that membership? Yes. We probably could, but it does make the job easier for our public policy staff.

So I went to the board at our last retreat [in March], and asked them how they felt about this situation, and told them I wanted a vote on whether or not they wanted to retain membership. We had a lengthy discussion, and there are pros and cons, and there are people who, while they are supportive of retaining the membership in the U.S. Chamber, are very uncomfortable with the tenor of the discussion and the tenor of the ads that were appearing. We had people who were uncomfortable enough that they didn’t want to be affiliated, and we had people who said it’s not about their political views. It’s more about the research. We need that information. It’s helpful to us in helping our members. So everybody was all over the board. So they asked when our dues were up, and found out that it’s the end of October. The board feels we should be a values-driven organization. They want us to do some work at defining those values, and making sure that we’re cemented behind them, and then we want to come back and revisit the membership and see what the correlation might be. And then they’ll make a decision before we have to renew those dues or not renew those dues in October.

When you say “values-driven,” that’s a pretty loaded term. Can you give me a hint about what they’re thinking, or what you think they’re thinking?
They want to have laid out what we believe in as a business organization. We are a business organization. We’re about growing jobs, and helping this community through job growth and job retention, and serving as a voice for business. So they just want to explore that, and make sure we put on paper what are those values that we believe in, and then move from there, so we still have a lot of work to do in that regard.

How do you feel about Asheville Chamber employees running for political office?
I was an elected official with the Charlotte Chamber, and it was in a nonpartisan race. Actually my boss came and asked me to run. I was a member of the School Board in Charlotte. On the whole though, I find it’s very, very difficult for a chamber employee to be an elected official. I understand that Kelly Miller did a magnificent job as a member of the City Council, but I guess I’d have to cross that bridge when we come to it.

Ben, did you want to say something to the [previous question]?
Teague: I just wanted to highlight that, on the values, as we nail those down, those become a filter not just for the U.S. Chamber but for a lot of decisions, so that’s a baseline that we need to be able to nail down with our board, and it’s not that we couldn’t give a stab at what our values are. We want to make sure that our membership and our board are completely comfortable with those values, because that does serve as a filter for a number of local, and regional, and national considerations that are constantly thrown at the chamber whether it’s known in the public or not. That becomes our filter.

Kit, you’ve been here about four months. You haven’t made a whole lot of changes, but it sounds like you’re moving forward with a very unique kind of plan. What else are you thinking about doing?
There are so many things that we’re talking about. In fact, I was just talking with the staff this morning about one particular program that I want to implement. It’s called “Business First,” and I’m stealing that from my previous role with the Charlotte Chamber. It allows a group of volunteers to become trained in questions we can ask to existing businesses to figure out how we can be more helpful to them, and that information is fed into a database that then allows us to track over time whether we’ve got issues that are public policy related, or infrastructure related, or economic development related that we need to address, but it also allows us to do case work with individual businesses. Because we want to retain as many existing businesses as we can, not just attract them but also retain what we have here.

What’s your membership right now?
1,973 was my last count, which makes us the third largest chamber in the state. We’re very proud of that number, and hope to see it go above 2,000.

So, that’s just one part of the plan.
That’s just one small part of the plan. There are plenty of things that we’re working on, and it’s an exciting time, because we’re in the process of putting together a program of work for the coming year. In addition to doing this fundraising for our economic strategic plan, we’re in the middle of a total resource campaign for the Chamber also, and about to do this legislative trip to Raleigh on behalf of the region. So there are all kinds of exciting things going on.

(to Kit Cramer) How are you liking Asheville so far?
Love it. Absolutely love it. On a regular basis I have to remind myself that I’m actually living here. My husband and I are both thrilled, and we find it’s a great place to be.

Anything else you want to address while we’re here?
Teague: I would just say that there are a couple of graphs that are kind of dramatic as to where we are versus January of last year. We track the economy by different sectors, and this way [holds up paper] is negative. We’re losing jobs in the different areas, and this way is positive. [points to paper]. This is where we were in January of last year. Just about every sector of the economy was losing jobs. This is where we are now [holds up another paper]. Almost every sector is either break-even or positive; including manufacturing, which is interesting because that particular sector has been losing for several years, and it’s actually made it back to break even. So if nothing else, this particular graph makes me bullish on our future as our economy goes.

What do you think has changed? That is pretty dramatic.
Teague: I think the economy is improving in general, and I think that our base of the economy, what makes us who we are, is stable and starting to come back and pick up faster than the rest of the nation. So something we should be cultivating as part of this plan is why we feel so strongly that moving the economic needle forward instead of searching for a specific announcement is what we should be focusing on as a Chamber as a whole. And so, I think that’s driving that point home.

Cramer: You’ve got to think about the environment for business, and creating fertile soil in which to grow business as well. And not just hunting for someone to fill this particular building. Certainly, we’ve got to continue to do that kind of thing, but we’ve got to think bigger than that, and that’s what the plan is all about.