Joe Fuller: If you're curious to know what a manufacturing renaissance for America would look like, look no further than a rural region of Eastern Mississippi. It's called the Golden Triangle, but for decades there was little prosperity there. Plants making textiles and hot dogs shut down, and unemployment soared. So the region's economic development agency, GTR Link, hired Joe Max Higgins. His mission as its CEO? To attract new businesses and help the region transition from making toys to making tires, helicopters, and other advanced products that bring well-paid jobs. There was just one problem:

Joe Max Higgins: The skill set level of the people was not at the level that it needed to be. We were going to have to do some skill sets upgrades for our people, or we weren't going to be able to go after the companies that we wanted to go after.

Fuller: Higgins realized that the region's workforce lacked the type of skills employers demanded. His strategy? Build partnerships between manufacturers and the local community college to train workers in the specific skills that employers required. That allowed him to pull out all the stops to attract new businesses. Case in point, GTR Link's efforts to woo Japanese manufacturer Yokohama Tire that intended to build a new $300 million facility in the U.S.

Higgins: We knew we had one chance to impress the Chairman and win this project. He wanted to see a lot of the Golden Triangle. We decided to get a helicopter. "The Chairman does not fly in a small helicopter," is what his staff said. So we rented a Sikorsky 76 helicopter to fly him.

Fuller: That cost $27,000 a day. Due to heavy rain, the county engineer feared the helicopter would get stuck in the mud or topple over. The solution?

Higgins: Well, we actually went to the extent of having a power line removed off of a road where the helicopter could land and the power crews put it back up after we left.

Fuller: The team's heroic efforts paid off. The Golden Triangle won the Yokohama deal and many others. Higgins and GTR Link brought billions in new investment to the once troubled region. Welcome to the Managing the Future of Work podcast, I'm Harvard Business School Professor and Visiting Fellow at the American Enterprise Institute, Joe Fuller. Joe Max Higgins joins us to tell us more about how he and his colleagues brought thousands of new jobs to the Golden Triangle, and how other communities might follow suit. Welcome, Joe Max. We're delighted to have you here at Harvard.

Higgins: Well thank you for having me Joe.

Fuller: Joe Max, let's just start with the headlines. What kind of level of investment have you attracted to the regions and how many jobs have you landed?

Higgins: Well, since the link was formed, about $6 billion in direct investment has been made and about a little bit over $6 billion, and a few jobs over 6,000 advanced manufacturing jobs.

Fuller: I'm sure our listeners are astounded by those numbers. When you first took the job of coming to the Golden Triangle, what were the principal challenges you had to overcome?

Higgins: Well, you know, I tell people when I'm out traveling that I looked at what they had as far as infrastructure and assets. There was river ports, a major university research university, Mississippi State University, nearby. The highway system was good, rail system was good, it had abundant land, water, sewer, and electricity. All the infrastructure things that companies need. Quite frankly when I got there, I saw the assets when I took the job. When I got there it suddenly occurred on me that they hadn't been winning, and they quite frankly didn't know how to win. They wanted to win, they were trying to win, they just didn't know how. And so we had to spend a considerable amount of time explaining to them how we needed to market, how we needed to structure the deals, how we needed to be aggressive in going after some of the things that we've done.

Fuller: One of the things we all read about is the lack of skilled labor in the United States and how that's really inhibiting the growth of companies. What have you found when you arrived in the Golden Triangle in terms of human capital?

Higgins: Well, when I got there we had an abundant workforce. We weren't going in to this thing [saying] we were going to create 6,000 manufacturing jobs. We were going in to this hoping to get a deal here and a deal there. The skill set level of the people, though, was not at the level that it needed to be. They'd been in food manufacturing, production, some light assembly of some recreational stuff, some furniture manufacturing, and quite frankly it became pretty clear early on that we were going to have to do some workforce development, some skill sets upgrades for our people, or we weren't going to be able to go after the companies that we wanted to go after.

The thing that probably got my attention early on is I went out to East Mississippi Community College to the Center for Manufacturing Technical Excellence. And they had what I viewed as - and I've been doing this almost 30 years now - they had what I viewed as one of the best technical training centers I'd ever been in, and I said, "This is where we will do this work."

Fuller: How did that come about, that that center existed already and was in place before you started landing these manufacturers?

Higgins: Well, several years before that, when Mississippi had landed the Nissan plant that went to Canton, Mississippi down near our state capital of Jackson, a gentleman that was president of Mississippi State University named Malcolm Portera had helped raise money to build this training center. Because he's got some pretty good insight into what companies need, He built this training center and made sure that it was equipped with hydraulics and pneumatics and programmable logic, the kind of things that advanced manufacturers need. And so I inherited that. I walked in and that existed, and it was more than sufficient enough to meet our needs for probably the first seven, eight, nine years that we've been in existence. We're about 15 years old. So about over half the time it worked well for us.

Fuller: Joe Max, one of the important events in the development of the Golden Triangle was your receiving Tennessee Valley Authority mega site certification. Could you tell our listeners what that means?

Higgins: Simply put, a mega site with the Tennessee Valley Authority is a site somewhere about 1,500 acres with all the infrastructure in place, shovel-ready, ready for a company to come in, set up shop, and make product.

Fuller: Why was it so important that the Golden Triangle got a certification?

Higgins: Well, you must understand [that] up until that time, and I hadn't been there very long, we were working smaller projects. A charcoal plant was looking at us. A sweet potato food processing plant was looking at us. The mega site program was probably the inciting incident that changed the Golden Triangle forever. In 80,000 square miles of Tennessee Valley Authority's service territory, all are parts of seven states, only two sites were certified. Us and Hopkinsville, Kentucky. And right after we became certified, the steel mill came knocking on the door and actually took that site. Once they took that site, we said, "Hey, this wasn't that hard." It was, but we'd forgotten it. We developed another mega site that PACCAR located on. We developed another mega site that Yokohama located on. And we actually have a fourth mega site that was unveiled about last year called the Infinity Mega Site that we're out marketing today.

Fuller: Joe Max, I'm sure that there were multiple other geographical regions that had their eyes on that certification, and you were only one of two to land it. How'd you do that? How do you run the process in order to win?

Higgins: Well, it was the most ambitious program I've ever seen in my 30 years. They called all the key people in to Nashville, they went over the criteria. All the communities left to go back and huddle up. They gave you six weeks to put together a 1,500 acre site, with all the water and sewer in place, or designed to be in place. You had to have your funding in place. Everything that you had to do. And they made it simulate as if an automotive car company was in site search.

Quite frankly, there were a lot of towns that probably had the assets to do it, they just didn't have the will to. We worked literally seven days a week, 12 hours a day, for about six weeks, to get it ready. And spent about a quarter of a million dollars in consulting fees, rolled the dice that it was a good gamble.

Fuller: Joe Max, what were the responsibility of you and local authorities, and what role did the State of Mississippi play in this?

Higgins: We both had roles, and quite frankly it was hand-in-glove. We had things we had to do, like put the land options together, figure out where we were going to put the water and the sewer, what road improvements needed to be built. Those were all our responsibilities. Their responsibilities were dealing with taxation issues, finding incentive monies from the state.

Fuller: Joe Max, you just mentioned incentives. I think in the case of Steel Dynamics that was around the order of a $100 million. How do you measure success when there's that type of money on the table?

Higgins: Well, we have a model that we use. And when you walk in our door and tell us how many dollars you're going to invest, how many jobs you're going to create, what you're going to pay, we can, in a few key strokes, kind of figure out what our breakeven is, what we can put into the deal. When that deal came in, we ran that model and we decided that we could put about $12 million in the deal. For the county, that would still net them a profit of about a quarter of a million dollars a year, based on a project about $625 to $650 million, and we would net a profit of about a quarter of a million dollars. Get the jobs, the construction jobs and the rate jobs, all the things can win, and put money in our pocket. As it turned out, the company, the team that built that, had built several mills, but they hadn't built one in a few years. They knew the materials, but construction costs had kind of gotten away from them as far as knowing what things cost. The mill did not cost $625 or $650 million. It cost a billion. When we calculated the incentive cost, at $625 [million], it was contractually obligated. When they came in at a billion, instead of making a quarter of a million dollars' profit on the deal, we made a million dollars' a year profit on the deal. That profit has allowed us to go on land acquisition, infrastructure. We've basically taken that profit and plowed it back into projects. I'm glad to report that as of February 1st of this year that project is no longer under that tax incentive and that million dollar profit this year turned into $2.5 million.

Fuller: Well, beyond that, how do you keep score in terms of jobs? How many jobs, the quality of jobs, or are there jobs that are going to stay for a long period of time? Are there associated follow-on jobs in the supply chain, or services to these big plants that you've attracted?

Higgins: We really don't track the indirect jobs. We feel like, if the deals that we do, if they don't justify the expenditures we make on the direct jobs, then we probably don't want to do them. So we just look at the direct jobs. We go after companies that are advanced manufacturing, but that are building products that are going to be around for a long time. Things that we know. Nobody's surprised about tires, nobody's surprised about diesel engines, nobody's surprised about steel. It's part of our life. We also make helicopters, and we make UAVs, and other products too. But we don't track the indirect jobs, just the direct jobs. While I say we don't track them, we notice. In the 14-and-a-half, 15 years that we've been doing this, I think we've built six, seven new hotels in our area. And when you go to talk to the hotel owners they say it's not the tourists that fill up the hotels, it's the business travelers that fill up the hotels. So, we look at the direct jobs, we look at the rate of pay. We do not recruit companies that pay at or below our county averages. In other words, if we create a job, we want it to be a better job than exists today. And we structure each and every deal based on what they do, what they make, the level of risk that we're willing to accept. We'll structure every deal that way. I've been in business 30 years, I've been there almost 15. We've lost money on one project that we've done in 15 years. Now the state's lost money on some projects that have been done there, but we've lost a grand total of $35,000 on one deal in 15 years.

Fuller: Joe Max, you mentioned PACCAR, which has built a state-of-the-art diesel engine manufacturing plant in the Golden Triangle. I was interested when I read that story about how, after you won the deal, the work had really just started, particularly on the workforce side, that you had to partner with them to make sure that they had staff in place when they opened the factory gates. Could you talk about how you went about that?

Higgins: Yeah. Well, PACCAR is one of our flagship companies. They are a corporate giant and we knew that we had to deliver with them or we would be in deep, deep trouble moving forward. We came up with the idea when they picked us to come, and by the way, once you're selected, a lot of communities will pat themselves on the back, open the champagne, and then they'll go off to the next deal. Our philosophy is much, much different than that. We call it our after-care program. Once they commit to come, we put every ounce of resources we could in the deal to make sure they succeed because we know it's important for our future growth. We came up with the idea to actually house their management team at the community college where the industrial training was taking place. They actually moved into two bays of the training center and the community college built them offices where the plant manager, the HR person, were all there. They could see and interface with the community college on a daily basis. They could walk the halls and see prospective employees that were students at the school either getting retrained or going through training. So, that's something that I think at the end of the day was just a brilliant stroke for us to do because they got to know firsthand the community college, the first community college got to know firsthand them, and they got to sit around over lunch and talk about what they needed to do to move forward. And as it turned out, they had a very methodical hiring process, very slow process. They were very selective in who they hired. It worked great. I asked Lance the other day, the general manager, I said, "What's your turnover at your plant?" He said, "It's less than one-half of 1 percent."

Fuller: I can't imagine any employer that wouldn't envy that number. Your most recent big win was a Yokohama tire plant. And I read that 3,000 communities made initial expressions of interest in pursuing that project. By the time you all won that, the secret was out, you were known to be a tough competitor. How did you win that? And how is the change in your status from aspiring center for advance manufacturing to consistent winner of these big projects made you change your game?

Higgins: Well, it was a nationwide search for the Yokohama project. We ended up beating a community out of South Carolina and beating a community out of Alabama to win the project. How we won it, gosh, there's a thousand different things. I will tell you when I think we won it. We went to Japan. We went to the Philippines and Japan for a week. They wanted us to tour their facilities. See their workers. See how they made their products. Then, we went back to Tokyo and we met with the C-suites. CEO, COO, all their key board members were there to meet with us. When we got ready to go home on a Thursday, they told us, they said, "Hey, you did a good job. The Chairman of the Board will be there Monday." We were leaving Tokyo, coming home, and they said, "He'll be there Monday and you need to host him." FULLER What'd you do to put your best foot forward?

Higgins: As soon as we landed, well, before we landed, we started giving out orders. "You do this. You do this.” We knew we had one chance to impress the chairman and one chance to win this project. The weather was inclement. He wanted to see a lot of the Golden Triangle. We couldn't do it by car in the time that we had, so we decided to get a helicopter. “The chairman does not fly in a small helicopter,” is what his staff said. We rented a Sikorsky 76 helicopter to fly him. We put Yokohama tires on every vehicle that he would get in or see. We found out what shoe sizes all the C-suite and people accompanying him wore so we could have galoshes for them to put on their shoes. We ordered a fleet of brand new Polaris all-terrain vehicles to be on the site so they could ride on the site and see it without getting muddy because the weather had been bad. We actually went to the extent of having a power line removed off of a road where the helicopter could land and removed it on a Sunday afternoon so the helicopter could land on Monday and the power crews put it back up after we left. I told him in a tent, setting out on the side, that four generations of workers had worked at Sara Lee making their product and that I believed, that when that plant closed as with the other closures that you referenced earlier, when that happened, that community's heart was ripped out. I told him, I looked him straight in the eye, and I said, "Chairman Nagumo, you sir, and your company, can be the phoenix coming up out of the ash. You can get four generations of people working for you building tires in this community." We flew around the Sara Lee site on our way to Mississippi State two-and-a-half times. We were sitting knee-to-knee. We banked in and we looked at site that was being demolished. It looked almost like it'd been hit by a tornado or a bomb. It was in a big kind of disrepair. It's being torn down. Two-and-a-half times around that and he looked at me and he nodded. I think that's the day we won the project. I think you have to make that emotional tie.

Fuller: Sounds like a pretty good payback. Well, there's some other people, I think, right now, preparing to get their hearts broken and that's the cities that are pursuing the second headquarters for Amazon. Let's take a step back. What kind of advice would you have for those semi-finalists? What are the principles you would apply in weighing their ongoing pursuit of what seems to be the big iconic project available out there right now?

Higgins: That project, quite frankly, I think, is beyond what I can fathom personally. I will tell you that, though, if you boil it down to just some brass tacks and some things that people need to know is, in the heat of the battle, you need to make sure that whatever you commit to do, you can do. It's real fun to win, but if you win with a bad deal, that's not fun. Don't let your eyes be a little bit bigger than your stomach. You've heard that phrase and make sure that whatever you promise, that you can deliver. Remember, if you get picked, the after care program starts. Making sure that you can do everything that you have to do and you want to do it with a smile on your face. You don't want to be doing it reluctantly because you kind of got excited and went overboard. My advice to whoever wins it is remember: it's a big project and the whole world's watching. If you do it and do it well, that's going to bode very well for you. If you fail or you stumble, the world's going to be watching you. Don’t screw it up.

Fuller: Joe Max, thanks for joining us to tell us about the Golden Triangle’s remarkable recovery. This is the Managing Future Work Podcast. I'm Joe Fuller of the Harvard Business School. Thank you for joining us.