What CEO Succession Planning Has to Do With Site Selection (And Why EDOs Miss It)

Most economic development organizations think they have a pipeline problem. They don't. They have a memory problem.

The CRM is populated. The contacts are tagged. The quarterly reports show 40 active prospects. But when the executive director accepts a position in another state — and they always do, eventually — the organization discovers something uncomfortable: the pipeline was never really in the system. It was in one person's head, embedded in years of informal conversations, half-remembered introductions at IEDC, and a working knowledge of which site selectors actually respond to emails versus which ones only move on a warm call.

When that person leaves, so does the pipeline.

How Corporate Projects Actually Form

Before a corporate expansion project ever surfaces as an RFI or an RFP, it has usually been in quiet conversation for 12 to 24 months. A site selector gets retained. They have a preliminary call with their client. They start building a mental map of which communities might realistically compete for this type of project.

That mental map is built almost entirely from relationships developed over years — not from published community profiles or economic development websites. The site selector knows which ED directors return calls promptly, which ones provide accurate utility data without being asked twice, and which ones they have personally walked a prospective site with. They know which communities overpromise on incentives and which ones have a governor's office that actually follows through.

When they start quietly mapping a shortlist, they are drawing on all of that. And if your community's ED director has a deep, trusted relationship with that site selector, you are probably on that shortlist. If your new ED director has never met them, you are probably not.

The project never shows up in your pipeline as a miss. It just doesn't show up at all.

The Institutional Memory Problem

Every ED organization understands, at least abstractly, that relationships matter. What most of them underestimate is how much of the value in those relationships is context, not contact information.

Knowing a site selector's name and LinkedIn profile is worth almost nothing. Knowing which communities they have placed projects in recently, what their client's typical profile looks like, what they complained about on the last project that went sideways, and how they like to be communicated with — that is worth a significant amount. It is the difference between a cold outreach that goes unanswered and a conversation that starts with, “We were actually just talking about your community last week.”

That context lives in people. It accumulates over years of site visits, conference dinners, and phone calls that were never logged anywhere because there was no outcome to record. When an ED director leaves, that context leaves with them. The incoming director inherits a contact list, not a relationship.

This is the institutional memory problem. It is not unique to economic development — it shows up in any field where business development is relationship-intensive and cycles are long. But economic development has a particularly acute version of it because the timeline from first informal contact to signed project agreement can stretch three to five years, and because the informal conversations that shape a deal rarely get documented at all.

What This Actually Costs

The costs are largely invisible, which is part of why they don't get addressed.

Communities do not typically know when they were removed from an informal shortlist. A site selector does not call to say, “We were thinking about you but your new director doesn't have the track record we need right now, so we went elsewhere.” The project just goes to a competing state. The community's annual report shows a strong pipeline for the year and a few deals that came in through the utility partnership, and nobody asks too hard about what didn't happen.

But the costs are real. A well-positioned community can expect to convert informal relationship capital into 15 to 20 percent of its major project wins in any given year. In communities where the ED director had strong national relationships with the consultant community, that share is higher. When that director leaves and the relationship capital resets, communities often see a two-to-four year lag before the new director builds enough informal credibility to attract the same caliber of projects. During that lag, competitors with stable leadership compound their advantage.

Why EDOs Treat This as a Personnel Problem

The standard response to losing an ED director is to hire a replacement and give them 90 days to get up to speed. That framing treats the loss entirely as a personnel gap: there is a vacancy, the vacancy gets filled, the organization continues.

This approach is not wrong, exactly. Hiring a good replacement matters. But it misidentifies the structural problem. The issue is not that you temporarily lacked a person. The issue is that your organization was entirely dependent on one person's accumulated knowledge, and that knowledge was not stored anywhere that survived their departure.

That is an organizational design failure.

Most private sector organizations with significant relationship-driven pipelines have figured this out. Investment banks have coverage models where multiple bankers are attached to client relationships, ensuring that no single departure collapses the account. Law firms have client relationship protocols that involve partners at multiple levels so that losing a senior partner does not mean losing the client. CRM systems in sales-intensive businesses are built not just to track contacts but to capture context — deal history, communication preferences, past objections, and the informal intelligence that shapes future conversations.

Economic development organizations have been slower to adopt this thinking, for understandable reasons. They operate on thin budgets with small teams. Their work is genuinely relationship-intensive in ways that resist easy systematization. And unlike corporate sales, there is no immediate financial feedback when a relationship deteriorates — the miss shows up years later, if at all.

But the logic is identical. The organization's competitive position in the site selection market depends on relationship capital. If that capital is held entirely by one person, the organization is one departure away from starting over.

What a System That Survives Leadership Transition Looks Like

The goal is not to replace relationship capital with database entries. That cannot be done, and attempting it produces something that looks like institutional memory without actually being it.

The goal is to capture enough context that a successor can warm a relationship meaningfully faster than starting cold — and to ensure that the organization maintains continuity of contact with its highest-priority relationships even when leadership is in transition.

This requires a few things that most EDOs are not currently doing.

Relationship context documentation. Beyond contact information, capture the substance of key relationships: how they were built, what the other party cares about, what live conversations are underway. It does not need to be comprehensive — it needs to be sufficient for a successor to pick up without losing six months of ground. A structured quarterly note from the ED director covering the ten most strategically important relationships would accomplish most of what is needed. Two hours per quarter.

Warm handoff protocols. When a transition is planned, the outgoing director should spend their last 60 to 90 days explicitly warming their successor into key relationships — joint calls, joint site visits, deliberate introductions at conferences. The site selection community is small enough that a trusted introduction carries real weight. This almost never happens because organizations default to operational handoff rather than relationship handoff.

Distributed ownership. In larger EDOs, multiple staff members should have working relationships with the highest-priority contacts. In smaller organizations, board members or partner organizations — utilities, port authorities, chambers — can hold some of the relationship redundancy, with shared visibility into who is in contact with whom.

The complication is cultural, not operational. It requires treating relationship capital as an organizational asset rather than a personal one. Most ED organizations have not made that shift.

The Practical Starting Point

If you are an ED director reading this and you are not planning to leave anytime soon, that is the right time to start. Documenting relationships is easiest when there is no transition pressure. A simple discipline — a quarterly log of your 10 most important external relationships, capturing recent interactions, current standing, and active conversations — takes less than two hours per quarter and creates a record that will survive you.

If you are a board member or a state economic development official responsible for organizational performance, the question worth asking is: if your director accepted an offer tomorrow, how much of the pipeline would you be able to reconstruct from what is currently documented? If the honest answer is “not much,” you have an organizational design problem that a strong hire will not fully solve.

The communities that win consistently over long periods are not always the ones with the best incentive packages or the most shovel-ready sites. They are the ones that show up on informal shortlists year after year — and that happens because the relationships that put them there have been built and maintained as an institutional capability, not a personal one.