Wednesday, June 14, 2006

How CEOs Can Improve Cities

Business Week reports this week on a new innovations workshops to help cities and they will involve Memphis:

Detroit, reeling from decades of auto-industry layoffs and a dwindling population, has a new plan for stimulating growth. Along with three other ailing urban areas—Memphis, Pittsburgh, and Columbus (Ohio)—Detroit is looking to take a cue not from the economic policies of the nation's healthiest cities, but from the business world.

In July, Detroit, Memphis, Pittsburgh, and Columbus will start a series of ongoing workshops with Chicago's Doblin Group, a top innovation-strategy firm whose client list includes leading corporations such as Clorox (CLX), McDonald's (MCD), Target (TGT), and Xerox (XRX).

Introducing cities to profit-geared creative-thinking exercises is the brainchild of Carol Coletta, chief executive of the Chicago-based non-profit organization CEOs for Cities, a national and bi-partisan alliance of mayors, executives, foundation administrators, and academics. The idea is to bring together mayors and local executives from these four urban areas to engage in workshops that will encourage them to chuck tired approaches like redesigning their tourist brochures or building a new convention center.


The workshops will start with a diagnosis of each city's capacity for innovation, based on an analysis of how creative its local government has been in the past. Then, Doblin will teach innovation methods, such as learning to pinpoint patterns of successful creative thinking, that have worked with other cities with lively economies.

Success, in this context, meaning strategies that lured new businesses and citizens. This step serves as a way to understand what kind of solutions—a new museum that highlights unique, local heritage, promotion of an existing, profitable industry that hasn't gotten a lot of press?—might work and should be prioritized. Finally, Doblin will help each city develop a realistic, yet mold-breaking, game plan.

"Cities need to come up with new ways of overcoming or at least coping with boom-and-bust cycles—just like businesses," says Coletta. "If innovation works for companies as a solution, why can't it work for cities?"


But what about the city-specific issue of political constituencies, a factor that the business world doesn't need to contend with?

"Companies have to deal with and persuade boards and shareholders to adopt innovation. It's not dissimilar," Coletta says, referring to the diplomatic skills required to push a radical new-or at least truly inventive-product or project in the corporate world.

Mayor AC Wharton of Shelby County, Tenn. (who governs the city of Memphis) says he wanted to participate because he seeks to improve what Memphis has to offer businesses beyond low rents. "Cities don't need to just get cheaper but better. Smaller towns can do things cheaper. I will never be able to out-cheapen towns in Mississippi and Arkansas. But we can become better," he says, referring to quality-of-life amenities like public parks or an accessible public transportation system that can be improved and promoted.


The four cities selected by CEOs for Cities clearly need help. For one, none are located in the nation's hotspots for growth-the Western U.S.; according to a Mar. 16, 2006 report from the U.S. Census Bureau, counties in the Western states added the most population between July 1, 2004 and July 1, 2005.

Meanwhile, the city of Detroit's total population was down to 840,000 in 2004 (the latest statistics available from the U.S. Census Bureau) from 951,270 in 2000. Pittsburgh's was down to 296,634 in 2004 from 334,563 in 2000. Memphis saw figures drop to 627,802 in 2004 from 650,100 in 2000. And Columbus (Ohio)'s population fell to 700,874 in 2004 from 711,470 in 2000.

All four also suffer from high poverty rates-suggesting a dearth of jobs. In 2004, 25% of Memphis's population suffered from poverty. In Columbus the number was 17%; Pittsburgh, 19%; and in Detroit, 34%.


Each city was given a homework assignment in preparation for the July workshops, which are the first of three meetings. As of this writing, the team of government officials, local philanthropic foundation administrators, and business executives from Detroit was tossing around the possibility of building a music museum.

The idea: to create a Rock-and-Roll Hall of Fame-style destination that would capitalize on the city's Motown legacy. The groups from Columbus and Memphis were both looking toward fostering biomedical and biotech businesses. And Pittsburgh's consortium was brainstorming ways to lure companies specializing in robotics and senior-citizen-geared tech.

Each city hopes to attract entrepreneurs. But they're also looking to cultivate small businesses that will cater to larger ones, by supplying critical parts or manufacturing or by offering services such as grocery stores and restaurants to serve a growing population of employees.


Doblin co-founder Larry Keeley thinks that bringing together mayors, foundation officials, and local businesspeople in an innovation-focused consortium will benefit the brainstorming process.

Keeley says such a mix of opinions and ideas reflect recent case studies of cities like Bilbao, Spain, a formerly sleepy town suffering from a loss of revenues in the area's shipbuilding industry which succeeded in pulling off an imaginative, high-profile makeover.

Bilbao's large-scale facelift included-among other investments in public transit and other civic projects— "starchitect" Frank Gehry's undulating Guggenheim Museum. The striking structure, considered the jewel in the crown of the remade Bilbao, was funded by the Basque government and run by the American Guggenheim Museum.


It was an unusual alliance that Keeley believes could serve as a model for other odd-couple partnerships. Keeley also cites Chicago's upgrade of Millennium Park as a U.S. example of giving a city a makeover with a similar combo of government funds and private support.

"What's been characteristic of city innovation is that it's almost always a public-private partnership," Keeley says. "Politicians are working with tax dollars, so they don't want to be reckless. But then private citizens foment and support revolutionary thought."

Mayor Wharton of Shelby County, Tenn. says he already looks to corporations for inspiration although he's aware of the limitations of being in government.


"I've heard presidents of companies like UPS say change and innovation is part of the company's DNA. Governments are averse to change, because our systems of law are all about preserving order," says Wharton, who wants to "get innovation into the DNA of Memphis."

Keeley predicts that although the city teams are enthusiastic and excited to engage in creative-thinking exercises, most likely they'll wind up discovering that their initial ideas might not be so earth-shattering after all. Or even if they are, they might not be feasible economically.

"In my experience, when you ask people to innovate, they have the wrong ideas initially," says Keeley. "But the goal [of asking them to come up with early concepts] is to get people thinking and to be comfortable with developing big, bold ideas."


Suzanne Walsh, a program officer for the Heinz (HNZ ) Endowments' Innovation Economy initiative and a member of the Pittsburgh team, saw a Doblin presentation on innovation strategies at a CEOs for Cities event in December 2005, and immediately wanted Pittsburgh officials to join.

"Working with national cohorts in brainstorming workshops can accelerate our innovation process," says Walsh when asked why. "Maybe we'll figure out that Pittsburgh wants to do something else. But that's good. It's a good starting off point."

The exercise promises an intriguing take-away for businesses big and small that are skeptical of innovation methods taught by firms such as Doblin. As an as an example for both corporations and local governments alike, the CEOs for Cities workshops could serve as proof that innovation techniques can be applied in a variety of industries and contexts, beyond predictable arenas such as product development.


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Anonymous said...

I did not know that AC Wharton governed the City of Memphis. Did we consolidate Memphis and Shelby County governments when we changed the plans for the FedEx Forum parking garage?

Anonymous said...

Dat's becauze the rite honrble mayer of memfis don't read this hear blog.

its for de lil' peoples.
and aint no boxing scores to lok at neither.