From the bottom up

by Peter Donovan

This article first appeared in Oregon Business Magazine in March 2000.

Walk down Main Street in the small town of Joseph and you're walking on new sidewalks under the light of new street lamps--part of a $3 million facelift funded mostly by state and federal grants. But you may also pass empty storefronts and businesses struggling to earn a profit.

With sawmill closures and Forest Service cutbacks in Joseph's county of Wallowa, the unemployment rate hits 15 percent some winters. Family-wage jobs are hard to find, but people want to live here for the rural lifestyle. Wallowa County has one of the highest self-employment rates in the state, with estimates as high as 25 percent of the labor force. But economic survival remains a challenge for many.

Over the years, efforts to encourage economic development in the area have focused on building infrastructure, providing revolving loan funds, and promoting tourism. Recently a proposed resort and ski area near Wallowa Lake has created conflict among residents, some of whom do not like the consequences of large-scale economic development.

"I've seen a lot of economic development efforts come and go," says Jerry Perren, who directed the first countywide chamber of commerce in 1979. "We haven't had a lot of success, except by accident, when the first bronze foundry came."

Citizens in Wallowa and Baker counties are now getting serious about an alternate approach to generating new economic activity. The concept, "Enterprise Facilitation," was introduced in the two counties last year by its creator, Ernesto Sirolli.

Enterprise Facilitation offers an alternative to the traditional economic development focus on infrastructure. Not that improving roads, sewers, and structures isn't necessary. But you cannot expect, says Sirolli, to create a resilient and diversified local economy within a rapidly changing and increasingly global economy with infrastructure alone --you need entrepreneurs. His method focuses on helping entrepreneurs turn their ideas into viable businesses.

"Enterprise Facilitation starts with a person, rather than trying to create the climate to attract business," says Perren, who is working with others in Wallowa County to find funding for the program. "You allow the entrepreneurs to do that work."

Rather than a government program with eligibility requirements, Enterprise Facilitation is owned and operated by a community or neighborhood. A volunteer board of directors raises $180,000 for a two-year trial, preferably from a variety of sources including local business. About half of the money pays a full-time enterprise facilitator, hired by the board and trained by the institute Sirolli has founded. The facilitator provides free and confidential coaching to anyone who wants to start or expand a business, while the board helps find resources -- work space, capital, and expertise in production, marketing and financial management.

Enterprise facilitators are management coaches, according to the Sirolli philosophy: They help steer but do not row. The idea is that people do best when they do what they love, and they're most likely to succeed if the initiative comes from them.

"Enterprise Facilitation really addresses the human aspects of people's dreams," says Baker City manager Gordon Zimmerman, who has led fundraising efforts and lined up city and county money to implement Enterprise Facilitation in Baker County. "It puts the human back into economic development."

After nearly a year's efforts, Baker has enough money to hire a facilitator. "It took eight months for the ideas to percolate," Zimmerman says. "Now we're ready to go."

A few years back Baker recruited Iowa-based Behlen Manufacturing, now a sizable regional employer making farm equipment. "You get a home run every once in a while [by recruiting]," Zimmerman says. "But if Enterprise Facilitation can build 30 companies in the next three years, 30 singles is still about 27 runs. I've won the game 27 to 1."

He also sees the potential cost of recruitment. Had the new Tillamook cheese plant in Morrow County gone instead to Baker, Zimmerman says, the city and county would have given away $5.5 million in property taxes over 10 years. "We can't afford that. Whereas if we build 10 companies with those same 50 employees, we haven't lost the tax money, we've got 10 companies that are flourishing."

Success inspires success, Zimmerman adds. "Somebody is looking and saying, 'If he can do that, I can do that.'Then we have our 11th company and our 12th. For the price of paving three city blocks, $180,000, we may get 20 companies."

Enterprise Facilitation may also foster community leadership. "Rather than recruiting one big industrial company with one or two people in top management," Zimmerman says, "if we can build 20 or 30 companies [that] develop management capacity, those are the people who are going to give back to the community, spend time on the city council, the school board, planning commission."

The human dimension seems to be the critical factor. Says Lisa Lang, the Wallowa-County based director of the Northeast Oregon Economic Development District, which sponsored Sirolli's second visit last November, "our community can be supportive and use this model in a productive way. I don't think it could work anywhere, but I think we've got the people resources in Wallowa County to make this work."

A diverse group has coalesced around Enterprise Facilitation in Wallowa County. "Environmentalists and ranchers," says cattle rancher Jeff Parker. "Almost everything that comes up here has people polarized. This so far has not."

In agriculture, Parker says, "the level of adversity tends to encourage people to think outside the box. But they need help. Getting something done is difficult. This program would draw a higher level of entrepreneurship."

Other area residents think the new approach is at least worth a try. "There seem to be large amounts of money spent on economic development, and there isn't a lot of visible success," says self-employed Jean Pekarek of Enterprise. "We're gambling with all of our economic development money. Let's take a risk on something else."

Some experts at the state level seem to agree. "We'd like to generate more alternatives from the microenterprise side," says Jerry Hoffman of the Oregon Economic and Community Development Department. "We need more passion in this field. We're too analytical sometimes."

People in Hoffman's department have been talking with advocates in Baker about funding the training component of a pilot project --$54,000 over two years.

Cheri Smith, who directs the Baker County Chamber, sees Enterprise Facilitation and large-scale economic development as complementary. "It's kind of like putting the chocolate and sugar together to make fudge," Smith says. "You're going to have something really great if you have both things working well."

The Man behind the Idea