A recent article in the Minneapolis/St. Paul edition of Business Journal cited research results published in Chief Executive magazine which rank Minnesota 31st of the 50 states as places to do business. According to the article, 651 CEOs provided perspectives on a “broad range of issues, including proximity to markets and resources, regulation, tax policies, workforce quality, education resources, quality of living and infrastructure.” Even though Minnesota “scored high in the magazine’s rankings for factors such as education, health and livability,” the article infers that its ranking as 43rd worst for “business tax climate” likely outweighed these other factors significantly.
In conducting research about how entrepreneurs communicate and present their businesses to potential early stage investors, I spent a fair amount of time talking with angel investors and other knowledgeable local business people. These folks would quickly agree with the idea that taxes, and other governmental issues (such as marginal incentives for start-ups) can have a chilling effect on some aspects of business. However, when it comes to the kind of growth industries that Minnesota could benefit from having do business here, the effects of the other factors weigh heavily as well. Technology businesses, in particular, depend on having access to pools of appropriately educated employees, or a “livability” factor that allows the firms to attract precisely skilled individuals from other parts of the country. When other groups are surveyed on these broader quality of life issues, Minnesota ranks well. In fact, a recent CNBC listing puts Minnesota at 13th for quality of life, but sixth overall in climate for business.
Is Minnesota really 31st or sixth? Do 651 CEOs know best, or CNBC… or someone else? It depends.
With seas of data available and limitless opportunity to survey, it’s easier than ever to “talk about the numbers.” However, details about the generation of those numbers can be elusive. We might dig up that the 651 CEOs were all subscribers to the magazine that published the results, and that may be a perfectly representative sample selected in the most scientific of methods. We more likely will never know.
So, does the state of Minnesota need to organize a comprehensive campaign to change its perception among readers of Chief Executive magazine? Or begin touting its ranking by CNBC?
In a world of light speed communication and mega-data overload, the time, energy and money might be best spent on considering whether the substance of the data may be true and allowing that to impact strategy. While negative results from credible sources shouldn’t be ignored, reactionary responses to fleeting data reporting can distract from the mission of an organization.
So, if you find yourself facing published data that produces excitement or anxiety… take a deep breath… and five minutes to think about it calmly before calling a press conference.
Dr. Michael C. Porter, APR is the director of the UST MBC program.
