Giants Among Us

Tom Cox
Vice-President of Digital Content
Meredith Corporation

Central Iowa is in a very sweet spot in the U.S. economy.  In addition to being ground zero for agricultural related industry and commodity production, our region is fortunate to be home to the corporate headquarters of the some very large publicly traded insurance, media and financial services companies, or to at least host their major operational centers.  Their campuses of gleaming buildings and manicured lawns, art installations and inspired architecture are sprinkled around downtown and increasingly around the western suburbs.

The thought of contemplating business relationships with these corporate giants is likely very appealing for many of the locally owned businesses that comprise the rolls of the West Des Moines Chamber.  It is however, important for owners and employees of local firms to remember one thing about their friends, neighbors and colleagues who work for these big firms; while these fine folks live in central Iowa and have homes and offices here, and send their kids to school here...they don't really work here.

What?

If you think about the major employers in our community, with the exception of primary health care delivery, almost none of them earn the bulk of their revenue from within the boundaries of our state.  That’s a good thing for the local economy, but it can be challenging for local firms as well.  The majority of the employees of the giants are busy all day long serving customers who live across the U.S. and around the world.  And, like all other major modern enterprises, these corporations are able to source goods and services from across the country and the world.  Personally, I take a phone call a week from any number of earnest sales representatives who would like me to outsource work halfway around the globe.

In my own case, when I go to work each day, unless I am travelling, I may sit downtown but am really in New York, or Atlanta, or Hartford, or Phoenix, or Portland, or any number of other places where we have business units or major vendor relationships.  I do occasionally get to spend budgeted dollars with local firms who directly benefit from having us in town.  But to compete for this, these small firms must continue to provide competitively priced services that go beyond having a local phone number.  All things being equal, it is nice to be able to see the people you work with without going to the airport, but it is no longer essential.

The point of all this is to remember that being near the corporate giants is only an advantage if you are either able to provide a service where relationships and closeness matter, or where your local cost is truly advantageous to the client firm.  Certainly one distinct advantage local firms have is that it is easier to get that first opportunity for a meeting with the folks who they see at school functions or rub elbows with at civic events.  And herein lies a secret... managers like me who have some small part in the overall budgeting process really do like to source locally, but proximity is often far from the top factor in play.  The billions of dollars in earnings the giants bring home each year is a lot of money, but the profits from that are not derived by spending freely or without strict observance to shareholder demands and the "strategic sourcing" of vendor relationships; locally, regionally, nationally and globally.  So when contemplating doing business with the giants among us, find your reason for why being local matters.

Tom Cox is the Vice President of Digital Content for Meredith Corporation's Local Media Group (which owns no Iowa television stations).  He resides in West Des Moines with his wife, Liz, and three children who attend West Des Moines schools.