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Sunday, 07 December 2014 22:00

Klohs drives economic development through strategic planning, rigorous measurement

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Birgit Klohs, president and CEO of The Right Place Inc. Birgit Klohs, president and CEO of The Right Place Inc. PHOTO: KATY BATDORFF

Birgit Klohs’ career has been full of many firsts.

Before ever joining The Right Place Inc., Klohs led a team of West Michigan executives on the first organized foreign trade mission to her native Germany, which landed a commitment from Behr Industries to invest in building a plant on 7 Mile Road in Comstock Park.

When Klohs excitedly agreed to serve as president and CEO of The Right Place in 1987, she effectively became the first woman executive to lead an economic development organization in the state of Michigan, and one of only a handful to do so across the country at that time.

She continues to add to the ever-growing list of firsts as Klohs was selected by a panel of judges to receive the Lifetime Achievement Award as part of the inaugural MiBiz Best-Managed Nonprofit Awards program.

For people who’ve known and worked with Klohs over the years, her career feats come as no surprise.

“She’s established herself as the dean of economic development officials,” said Milton Rohwer, the former president of the Grand Rapids Area Chamber of Commerce, the founding executive leader of The Right Place and one of Klohs’ closest mentors.

Klohs got into the business of economic development “by sheer accident.” She had moved to the United States and was living in the St. Joseph/Benton Harbor area and found that her training as a retail management apprentice in Germany did not translate into the American educational system. In effect, she was already established as a journeyman in her field, but she had no way to parlay those credentials into a career in the States.

So she went to Manpower to find a job, which led to her working for the Berrien County Economic Development Corp. while she took classes at Lake Michigan College. When her summer job assignment was up, the organization offered her a position as an industrial consultant in 1977.

“I thought it was totally fascinating work because it was really working with an employer to create jobs for the unemployed,” Klohs said. “And even today, my passion for this business comes from the fact that we work with a company and enable them to create jobs. That’s what’s really my driver: To drive by a company and to know that someone is working there because of the work we did.”

While working full-time, she finished up her degree at Western Michigan University and joined the Michigan Department of Commerce — the predecessor of the Michigan Economic Development Corp. — to work in the economic development department in West Michigan.

From there, she “ended up taking a detour” to the corporate world at Holland-based Prince Corp., a Tier-I automotive supplier, before jumping back into economic development at Grand Valley State University, where she served as assistant director of the Office for Economic Expansion.

“That’s how I got to know the community, that’s how I got to know West Michigan,” Klohs said of her work at GVSU.

After Klohs got back from leading the first trade mission to Germany and while still working at the university, she got a call from Rohwer telling her that The Right Place was looking for a new executive leader after the group’s first choice to replace him had backed out.

“When the position opened up, I didn’t apply for it. I really wasn’t sure this community was ready for an immigrant young woman to take over what had become known then as a major economic development organization in Michigan, and really the first private nonprofit (economic development partnership) in Michigan,” Klohs said.

But when Rohwer asked her if she was interested in the position, “I immediately said yes,” she recounts. “I didn’t do a good job of job negotiating at all because I was so excited about it.”

Rohwer said he counts appointing Klohs to lead the organization as one of the best decisions he ever made.

“We had a great mutual respect,” he said. “It didn’t take very long until I was well aware of the fact that she would be a more successful Right Place president than I was.”

She’s grown the organization from an offshoot of the Grand Rapids Chamber with three employees into a standalone nonprofit company that employs 22 people and operates with an annual budget of $5 million. In doing so, she’s adopted best practices from the dozens of corporate CEOs in West Michigan who’ve served on her board of directors.

“If you look at The Right Place, we manage this organization as a business,” Klohs said. “We’re a very performance-driven organization.”

In fact, Klohs’ management style has caught the attention of other local nonprofit leaders.

“The thing that really stands out for me with Birgit is that she’s been a consistent leader and she’s really adapted to changing times — she’s not a static leader,” said Diana Sieger, the president of the Grand Rapids Community Foundation.

“She really elevated the community’s attention that West Michigan is an excellent place for a business to grow and prosper … and she’s laser-focused.”

A “great believer in a strong strategic plan,” Klohs took a cue from the corporate world and implemented a five-year strategic planning cycle that outlined key metrics for the organization to measure itself against every two weeks and to report to its board every quarter.

“To me, (a strategic plan) is like a roadmap in how to get from Point A to Point B. If you don’t have a plan, any road will get you there. A plan also gives you the ability to adjust,” Klohs said. “It’s not a document that sits on my shelf, but it informs everything that we do. It informs our metrics. We get measured. If you don’t measure it, you don’t do it — that’s one of the maxims that we have in the organization.”

The internal measurement process also comes in handy when it’s time for fundraising because the organization can clearly articulate what it’s achieved in the previous five years and what it plans to pursue in the next period, she said.

That strategic planning process led The Right Place to add the key component of business retention to the organization’s original focus on outside business attraction. It was a recognition that keeping businesses in the region could also help drive the organization’s efforts in attracting new businesses to West Michigan.

“If we had a business that’s been here for 40 years walk out the back door, it’s going to be really hard getting one in the front door, and it takes you five times as long,” Klohs said.

The Right Place also developed the Manufacturers Council and started paying attention to industry clusters in food processing, medical devices and design as part of its strategic plan, she said.

“We have a board that’s not afraid to stay current, to look around and say, ‘What are other communities doing? How do we compare? How do we continue to position ourselves?” Klohs said. “If you stand still, you will eventually go backwards because your competitor never stands still.”

That drive to keep moving the community forward led the organization to adopt a three-year strategic plan after completing its most recent cycle in 2013. The shorter time frame provides The Right Place with more flexibility to react to the rapidly changing global business environment, she said.

For example, the organization had “made a very big bet on alternative energy” in a previous strategic plan, but after a year or two, the industry had collapsed and consolidated with the recession and Klohs and her board realized The Right Place needed to pivot.

“Not every product you make is going to be successful. You bet on the product, and it doesn’t sell. This was the same case. It doesn’t mean we’re not believers in alternative energy, but that bet did not pay off,” she said. “We make new bets.

We still are one of the most dense and successful smart manufacturing communities in the country. We’ve never not made that bet on that sector — often to the ridicule of others who said that was a silly thing to do.”
In its most recent five-year planning period that culminated last year, The Right Place delivered 67 projects in which companies invested a total of $749 million in the region, despite the effects of the Great Recession that spanned the entire period.

“I can’t say enough about the impact she’s had,” said Larry Erhardt, Jr., the founder of Ada-based Erhardt Construction Co. and a former board member of The Right Place. “She’s one of the top business women in West Michigan, and she’s among the best in her profession, not only in West Michigan and across the state, but across the Midwest.”

Fulfilling The Right Place’s mission of attracting and retaining globally competitive businesses in West Michigan starts with staffing the organization with people who are passionate about economic development and the community at large and who are willing to bring their “whole person” to work, Klohs said.

She developed her leadership style, which she describes as “quite direct,” by learning from the examples set by her board members, all of whom have been CEOs of leading corporations in West Michigan.

“Every one of them has a different style, but I learned something from each one of them,” she said. “They mentored me even if they didn’t recognize it sometimes — by observation, by suggestions, by advice.”

Klohs’ role at The Right Place has also led her to other leadership opportunities. She currently serves on the board of directors for the Gerald R. Ford International Airport, ADAC Automotive, Burgaflex North America Inc. and Macatawa Bank Corp.

This summer, Gov. Rick Snyder also appointed her to the six-member International Crossing Authority that’s overseeing the construction of the new bridge between Detroit and Windsor, Ontario.

“She is a community resource that has done marvelous things to help the business community develop and grow in West Michigan, and particularly in Grand Rapids and Kent County,” said former Grand Rapids Mayor John Logie. “She really is a visionary who could take ideas from zero and develop the people and money to make them happen.”

Klohs says she has no plans to retire anytime soon as she continues to work to position Grand Rapids and West Michigan to be competitive on a global basis “so that we can create the jobs that our citizens need.”

“Everyone thinks that I’m this tough woman, but underneath it all, I’m this big softie that really cares about people,” Klohs said. “I do this because I care. … I truly believe that the best social service is a good job. That’s why I’m really here.”

Sidebar: Birgit Klohs

  • Title: President & CEO of The Right Place Inc.
  • Mission: The Right Place concentrates on leading West Michigan business development efforts, identifying and developing emerging growth opportunities, and strengthening the global competitiveness and innovation of existing regional manufacturers.
  • Service area: 13-county region in West Michigan including Allegan, Kent, Mecosta, Newaygo, Ottawa, Barry, Lake, Montcalm, Oceana, Ionia, Mason, Muskegon and Osceola counties
  • Number of employees: 24
  • Annual budget: $5 million
  • Best practices: For Klohs, hiring and developing an effective team of professionals is key to the organization’s success.
    “I need to make sure that we have a very functionally outstanding team, and that we are living up to our mission for the community. … I’m here today because of them. They are as good as I am, and I can only be as good as they are. I’m very proud of who I work with and who I work for,” she said.

    Additionally, Klohs said nonprofits need to keep an eye on big-picture trends to anticipate how they could affect their operations and how they fulfill their missions. It’s particularly important in economic development, she said.

    “You have to constantly keep your ears to the ground for the changes and the nuances that are coming out of Lansing, out of Washington, out of local (government) because it has a direct impact on what we do,” Klohs said. “(Having) an ear to the ground to what is happening regionally, statewide, nationally and internationally is very critical. What’s happening in China will impact us eventually — or even tomorrow.”
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