In the dynamic world of state government relations, it is vital for organizations, lobbyists and decisionmakers alike to keep a finger on the pulse of the industry in order to enact change. With four decades of experience, McGuireWoods Consulting President and former South Carolina Governor Jim Hodges is one of the industry’s best, having served clients in all 50 states. He sits down for a Q&A with McGuireWoods Consulting and shares his expertise below.
How did you get started advising clients about state government contracting around the country? From my time as South Carolina governor, I saw an opportunity to provide clients with insight on how to better position products and services to elected officials and career public servants, particularly in areas like health care, education, technology and infrastructure. I found that the private and public sector frequently talked past each other, and there was a need for someone who spoke both languages.
What are the biggest pain points in state government? Health care continues to crowd out spending on things that increase productivity. Health care cost increases take up a large portion of annual state budget growth, leaving little room for future investments in areas such as education and infrastructure. Within health care, government leaders are interested in innovations that can help improve overall public health and better manage costs. Any new initiatives will be viewed through the lens of a strong return on investment for the state. We have several former Medicaid directors on our team, and they consistently preach the need for clients to show unique value in product or service offerings — just showing the shiny new toy is not enough!
What about technology? Obviously, everyone is interested in artificial intelligence (AI). There is an interest in embracing AI to better assist employees in performing essential tasks. However, this is coupled with a great fear of the unknown surrounding AI, particularly as it relates to privacy, job preservation, regulatory controls and appropriateness of capital investment. It is causing a great deal of heartburn, and that is not stopping anytime soon. Clients should watch for the increasing public hearings and legislative activities around AI as the year unfolds. Despite federal efforts to clamp down on state AI regulation, state governments will have a say in what AI looks like in the future.
What do you see on the public education front? At the state level, there is a considerable amount of activity around charter schools and vouchers. A focus on career readiness and vocational training remains of interest as well. On the business side, there is a great deal of private equity funding backed innovations to address unique challenges or groups, and we see that in the contracting space. State and local officials fund most of the public education costs in our country, and they continue to look for ways to intervene earlier to improve student outcomes. You really can get a good picture of a student’s potential for success by looking at where reading and math skills lie after the third grade.
What about higher education? Higher education has more classroom seats than qualified bodies to fill them, increased scrutiny from federal and state officials around oversight, cost and value, as well as increased costs to run their operations. Otherwise, everything is fine! The more successful institutions are better articulating its value proposition to students, families and government officials.
What is the biggest mistake you see government contractors make? I have been around state government for over 30 years, and the consistent mistake I see government contractors make is failing to understand the needs of its audience. Too many contractors fall in love with their product, and care more about describing its beauty than understanding the government’s problem and articulating how the product might help address it. It also helps to understand the different perspectives of policymakers and career employees in preparing presentations
Any final thoughts? Our team works across the country. We have seen about everything imaginable in state government. We have seen the good and the bad. Understand that you have no more than fifteen minutes to grab your audience’s attention. Think about what you need to say in that fifteen minutes to convince that public official it is worth a longer look.
