The Great Lakes Mid-Market Business Study: Giving Middle-Market Companies a Voice 
Universal Advisor, 2007 Issue No. 1

In the fall of 2006 Plante & Moran contracted with the Center for Urban Studies (CUS) at Wayne State University to obtain the viewpoints of business leaders in the middle-market segment. The research project conducted by CUS consisted of telephone interviews with 102 organizational leaders who were primarily chief executive officers (CEOs) of businesses headquartered in Illinois, Michigan, and Ohio.

Organizational Characteristics

• 30% of the organizations were headquartered in Ohio; 53% were in Michigan; 17% were in Illinois.
• Nearly half of the respondents (49.5%) were Plante & Moran clients.
• The average age of the organizations included in the study was 50 years.
• The median number of employees for the organizations was 130.
• Almost half (47%) of the organizations reported their scope of business to be in a specific state.
• Nearly one-third of the organizations (31.3%) were in the manufacturing and distribution field; 16.7% were health care organizations; 15.7% were financial institutions.

Great Lakes Strengths

Respondents were asked to evaluate factors and rate them as to their strengths for doing business in the Great Lakes Region. The factors most frequently ranked high in importance (four or five on a five-point scale) dealt with the labor force of the region:

• The strong work ethic of the region was rated as important by 86.2% of the respondents.
• 73.5% rated the abundance of an available workforce as important.
• 69.6% rated the overall experience, training, and skill sets as important.

Great Lakes Weaknesses

Respondents also rated factors as weaknesses to doing business in the Great Lakes Region. The factors most frequently cited as weaknesses (four or five on a five-point scale) all dealt with the high cost of doing business and the decline of automotive manufacturing:

• 82.4% felt that the rising cost of health care was an important weakness factor.
• 63.4% felt the high cost of doing business in the region was an important factor.
• 62.8% rated the decline of the automotive/manufacturing sector as important.

Industry & Organizational Outlook

Respondents were also asked to rate their level of optimism for their industry and their organization. Specifically, leaders were asked to rate their level of optimism about the current economic health of their industry segment and its prospects to improve over the next few years.

Almost half (45.1%) of the 102 respondents were optimistic or very optimistic about the current economic health of their industry, while 41.6% of 101 respondents were optimistic or very optimistic about the improvement of their industry’s performance over the next few years. Those optimistic about the industry noted the importance of remaining competitive by acquiring more market share through acquisitions and diversification and investing in innovation and technology. Those who were pessimistic about the outlook of their industry cited external influences: the government, increased competition, and the general economy.

The business leaders were then asked about the outlook for their own organizations. More than half (55.9%) of the respondents were optimistic or very optimistic about the continued growth of their organizations (in terms of revenue), while 71.3% of the 101 respondents were optimistic or very optimistic about the improvement of their organization’s performance. Contributing factors to the leaders’ optimism about their organizations (as gathered from open-ended questions) included a strong staff and management team and cost-efficient, lean operations.

What Does This Mean for the Region?

In the survey, middle-market leaders in Michigan, Ohio, and Illinois acknowledged the challenges they’re facing. On balance, they’re hopeful about the prospects for success, especially when looking at their own organizations. It’s heartening that there was strong consensus that the region’s workforce is one of the greatest strengths for doing business in the Great Lakes Region.

Middle-market companies form the backbone of any economy, and focusing on their core strengths sheds light on the potential for growth and development in the Great Lakes Region. With these advantages, why has this region waited for the kind of development that has favored other areas of the country? Although it’s partly due to the global change in old-economy industries that dominated 20th century economic success, we feel the region has not yet unified to capitalize on its strengths or to market them to the world.

This issue of Universal Advisor focuses on recognizing these strengths. We hope that these reports will contribute to the constructive dialogue that will lead to regional success.