Lessons in Diversification by the Chickasaw Nation
Silicon 66, April 18th, 2017
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In ancient times, the Chickasaw Indians were revered as the “Spartans of the Lower Mississippi Valley.” An agrarian tribe, the Chickasaws boasted of a lively trade business with other Southeastern Indians, and the French and English nations, but were also feared as fierce warriors.
Even after the “Great Removal,” commonly known as The Trail of Tears when the Chickasaws and other tribes were forced from their homelands to Indian Territory in Oklahoma, the Chickasaws regained prosperity, and its people became successful farmers and ranchers, building many of the first schools, banks and businesses in Indian Territory.
Today, The Chickasaw Nation is among Oklahoma’s most successful and powerful business entities as well. With a Tribal Jurisdiction Area that includes all or part of 13 counties in south-central Oklahoma, the Chickasaw Nation operates a diverse portfolio of more than 60 businesses including gaming, manufacturing, finance, banking, retail, commercial health care, retail and hospitality.
While many people think casino gaming is the heart of tribal success, the Chickasaws prove that diversification and adaptation is what drives success.
“We are also developing a diverse portfolio of technology companies with tremendous growth potential,” said Chickasaw Governor Bill Anoatubby. “We have invested in innovative companies such as Ekso Bionics, iRpowr, Capstone metering and Corvid Technologies, which are creating new markets in their respective industries.”
A recent economic impact study revealed that the Chickasaw Nation contributed more than $3.18 billion to the Oklahoma economy in 2015. That figure is a $750 million increase over the tribe’s $2.43 billion contribution to the state economy in 2011.
Almost $180 million of that increase can be attributed to growth in non-gaming business revenue, which grew from just over $117 million in 2011, to more than $296 million in 2015.
In 2015, the Chickasaw Nation employed an average of more than 12,000 workers. Accounting for all direct and multiplier impacts, the Chickasaw Nation supported 18,356 Oklahoma jobs paying more than $900 million in wages and benefits.
Governor Anoatubby shared lessons from the Chickasaw Nation on how to strengthen business through diversification and adaptation.
NOT JUST GAMING
Business diversification has long been an integral part of the Chickasaw Nation mission to enhance the overall quality of life of the Chickasaw people.
“Our business diversification efforts contribute to our mission by helping us build a more stable financial foundation, offer a greater number of meaningful employment opportunities and fund a wider range of services,” Anoatubby said.
“Business diversification is an important strategy regardless of the nature of your business. While it is important to reinvest in our established business operations to maximize their growth potential, it is also important to develop a wide range of businesses. A diverse business portfolio helps ensure we are insulated from the vagaries of any one sector of the economy and creates a more reliable revenue stream.”
Today, The Chickasaw’s business diversification efforts to date have been successful, and Anoatubby said the corporate development team is actively engaged in evaluating a wide range of new business opportunities.
DEVELOP A DIVERSIFICATION STRATEGY
Anoatubby said developing a business diversification strategy is important for all entrepreneurs; otherwise, business diversification may become an afterthought.
“Strategies may vary significantly from business to business, based on a variety of factors. While there are a wide variety of diversification strategies, two of the most common include managing risk and leveraging knowledge and experience,” he said.
Business diversification may be used as a way to manage risk and develop new opportunities by branching out into completely new businesses. Diversification may also offer a way to leverage expertise and experience in a particular industry by developing related businesses.
“In the Chickasaw Nation, business diversification has been used to manage risk and leverage knowledge,” Anoatubby said. “While our primary source of revenue for some time has been gaming, we have been able to branch out into manufacturing, government contracting, banking and other industries unrelated to gaming. This helps contribute to greater economic stability by developing more diverse and reliable revenue streams.
On the other hand, The Chickasaw Nation has also expanded on its core competencies by leveraging knowledge of gaming to create Global Gaming Solutions, which offers consulting services and explores gaming opportunities outside the geographic boundaries of the Chickasaw Nation.
“We have also utilized this strategy to leverage knowledge gained through providing health care services to Native Americans to create Sovereign Medical Solutions, which operates health care clinics, pharmacies and other commercial health care businesses,” Anoatubby said.
CREATE A DIVERSIFICATION TEAM
Anoatubby sees a number of benefits in creating a team focused on implementing business diversification strategies.
Successful business diversification requires a variety of specialized knowledge, skills and abilities In addition, having a team focused on business diversification allows for a more thorough evaluation of opportunities that may arise.
“A team dedicated to seeking out and evaluating diversification opportunities is better able to stay informed of new technology, developments in the business world and changes in society that may create new business opportunities,” he said,
These efforts go hand-in-hand with The Chickasaw’s goals to provide education and other opportunities for citizens. In fact, the nation has grown from four tribal businesses in 1987 to more than 100.
“Strategic planning and effective implementation have been very important to the success of our business diversification efforts,” Anoatubby said. “Our leadership team is continuously searching for opportunities to develop new businesses and expand existing operations. They have been extremely successful in those efforts.”
HAVE A MISSION
For Oklahoma’s Chickasaw Nation, expanding opportunities and services to its citizens is the goal of every business and every effort. Smaller businesses should also have a reason to expand and diversify that goes beyond making a buck.
“Our economic development and business diversification efforts are an important part of our core mission to enhance the overall quality of life of the Chickasaw people,” Anoatubby said.
“We put the Chickasaw people first in everything we do. When we evaluate a new business, we ask how it may affect the Chickasaw people. We only move forward if we get a satisfactory response to that question. We have placed a high priority on economic development and business diversification efforts in order to further our goals of increasing our level of self-governance and self-determination.”
The Chickasaw Nation also aims to strengthen the overall economy of the state it calls home, and tourism has become the a major economic engine for the tribe.
“We opened the Chickasaw Cultural Center in July, 2010. Since that time, attendance has exceeded projections. We have welcomed more than 500,000 guests from across the United States, Germany, France, Australia, South Africa and other places around the world,” Anoatubby said, adding that he number of visitors has increased each year.
In August 2013, The Chickasaw Nation also opened the Artesian Hotel Casino and Spa in Sulphur and in 2015, it introduced the Adventure Road initiative. Designed to bring more tourism to Oklahoma, the Adventure Road campaign generated more than 385,000 new trips to the area last year, bringing in approximately $647 million in spending from March to September. “There is every reason to believe our investment in tourism will benefit the tribal, local and state economy far into the future,” Anoatubby said. “We are making a significant investment in the tourism industry in Oklahoma because we believe tourism will continue to be a major economic engine driving growth in Oklahoma for years to come.”
