Evaluation of the Kansas Department of Commerce

Abstract

This report presents the findings from a comprehensive evaluation of the Kansas Department of Commerce (hereafter “Commerce”) business assistance activities. The evaluation was designed to answer the overall question of whether Commerce business assistance activities are achieving their stated mission of “advancing prosperity for all Kansans.” To answer this question we spent 12 months – from October 2006 through September 2007 – collecting a variety of information about Commerce programs. We reviewed thousands of pages of Commerce documents; interviewed 52 Commerce staff across the six divisions that deliver the majority of the agency’s traditional business assistance services; spoke with other personnel across state governments who coordinate with Commerce; reviewed business assistance programs in five other states; surveyed nearly 1,200 Kansas businesses to gather their perceptions of Commerce; held focus groups with local business and community leaders in five different communities across the state; and interviewed more than two dozen executives in the business and site location communities.

Our evaluation reached three basic conclusions. First, we found a preponderance of evidence that Commerce business assistance programs are achieving their stated mission. Virtually all of its key stakeholders, both inside and outside of Kansas, are positively impressed by Commerce’s programs and staff. The vast majority of businesses that receive Commerce assistance were satisfied with the experience of working with Commerce, and virtually all businesses that have interacted with Commerce said its assistance enabled them to hire new employees, increase profits, or expand other opportunities. Most of the evidence we collected suggests Commerce programs are generally well-run and make accountable, effective use of public dollars. Executives in both the business and site location communities consistently called Commerce staff some of the best, most professional economic development personnel in the country.

Our second conclusion is that Commerce’s organizational capacity is eroding, which might jeopardize its ability to achieve that mission in the future. By capacity we mean three things. The first is human capital, which as mentioned, is clearly one of Commerce’s most valuable assets. Business assistance is a “relationship business,” and current Commerce staff have well-established relationships throughout the business community. But those relationships are more closely tied to individuals than to positions or institutions, and the agency stands to lose that advantage absent an effective transition of new individuals into those same relationships. A second concern is leadership. We found much evidence that changes in executive-level leadership, regular modifications to the agency’s structure and organization, and a slow but steady increase in responsibilities have harmed perceptions of Commerce throughout Kansas. Those changes, along with the recent shift of the Workforce Development function to Commerce from the former Department of Labor, have contributed to a sense of “mission drift” and disconnect among some of the agency’s key stakeholders. A third aspect of capacity is information technology. We found little evidence of effective communication across divisions within Commerce, and stakeholders consistently said they do not feel as though they are well-informed about the agency’s people and programs. We suggest policy options for addressing these concerns in our conclusions.

And third, we found evidence of a growing incongruence between the programs and assistance Commerce offers, and the state’s economic development needs. Across the state, and in developing areas in particular, stakeholders envision Commerce providing a broader palette of more flexible economic development tools designed to have “real time” influence on business decisions. In rural areas this incongruence has to do with scope; Commerce stakeholders envision a much broader role for the agency, including expanding its programs to assist existing businesses and broader involvement in economic development-related needs like housing and workforce training. We also make recommendations that might help to mitigate this concern.