An Invitation To Build A Wise Economy Rucker Doi
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Slides from keynote session given at Downtown Colorado Inc. Annual Conference, September 2011.
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An Invitation To Build A Wise Economy Rucker Doi
- 1. An invitation to build a Wise Economy Della G. Rucker, AICP, CEcD The Wise Economy Workshop
- 2. Who’s This?
- 4. The Other Big Question
- 5. How has the world changed? Competition
- 6. How has the world changed? Segmentation
- 7. How has the world changed? Interdependence
- 8. So what we need is… Flexibility Focus Wisdom
- 9. What’s with the Wise thing?
- 12. So what does it really mean to be wise?
- 13. Thinking ahead
- 15. Work together – for real
- 16. So?
- 18. What makes you unique makes you valuable
- 19. Grow your native species
- 20. Beware the magic pill
- 21. Instead…
- 22. Think like a….
- 26. Don’t be a Zax
- 27. OK. Have I got you feeling like this guy yet?
- 28. Use the best tools
- 29. Use real facts and honest projections
- 31. Make decisions.
- 33. Thank you! Della G. Rucker, AICP, CEcD The Wise Economy Workshop www.wiseeconomy.com Della.rucker@wiseeconomy.com @dellarucker Della Rucker aicp cecd Della Rucker
Notas do Editor
- I am very much a product of the Rust Belt. I grew up in a small town outside of Cleveland, where my father and grandfather ran a small paint factory. As a result of being where I was when I was, I got to have a front row seat for the first convulsions of the collapse of the traditional manufacturing economy. By the time I was in middle school, the market for a jack-of-all-trades paint manufacturer had collapsed, and my father was out of work for most of three years. Thankfully, I had good teaching and encouragement and went to a good college. Since then I have had three or four careers, depending on how you want to count. I started out as an English teacher, which gave me a skill set for managing and guiding groups of people to find answers and meaning for themselves, then I did historic preservation, which morphed into community planning, which morphed into economic development planning.
- The reason for my evolution from historic preservation to planning to economic development planning probably stems from wanting to find answers to the Big Questions that my growing up experiences raised:Why do some communities or places thrive for the long term? Why do some places thrive for a while and then fail? Why do some never seem to get it together?
- And here’s the other side of those questions: Can one protect a community from at least the worst of crashes? Can you make a community more resilient? Can you make a community better able to be sustained for the long run? So, from a local perspective, perhaps the deeper Big Question is a little different: How can we overcome the burns we have received? How can we avoid getting burned again?Over the years, I have had an opportunity to work with a pretty broad array of American communities. I have worked with some of the largest and some of the smallest, the very affluent and the dirt poor, in many states and many economic environments. And in that process I have had a chance to see and learn a few of the potential answers to those Big Questions. I call the set of strategies that seem to provide answers the building blocks of a Wise Economy. No one is doing all of them, and none alone is a magic solution, but together they represent what I think is the new model of community management that we must pursue if we are going to make this transition and avoid repeating the mistakes of the past.
- This is not news to any of you. We all compete more and more – we compete with other businesses for sales, we compete with other towns for businesses, we compete for residents, especially the ones that have the potential to drive a strong local economy. We all have choices – and in many respect we have a lot more choices than did our parents or grandparents’ generations, not just for what to buy, but where to live and what to do with our lives. And because we have those choices, and because our economic vitality to a great extent depends on a small subset of the people who have the capacity to do what our economies need right now (and those are the same people who typically have the most choices), our communities are in increasingly intense competition for the businesses and the people who can contribute the most.
- Those of you in retail know this as “segmentation” or “niche.” It’s the narrow slice of the larger population that you are best suited to serve. If you have a quilt shop, it doesn’t make any sense to try to attract my husband, who barely knows how to sew on a button. If you make electrical harnesses for car manufacturers, it makes no sense to try to sell to plumbers. As the world of peoples’ interests and the world of technical expertise grows more and more complex, most businesses find that they are best off if they focus on the products and people that they can serve best. Our communities have to increasingly understand themselves as niche products as well. Because of our history, our geography, the rich mix of a hundred factors that make our place what it is, every community has an inherent set of strength and assets. Even big cities – Carol Colletta quote. We can’t be everything to everyone – from an economic perspective, trying to chase everything, or be all things to all companies or customers, is a waste of money. Just like with our businesses, we have to understand what our community’s niches are. And a vibrant healthy downtown creates niche opportunities that a place without that will never have.
- We have, of course, a mental image of ourselves, as Americans, as being kin to cowboys – independent, self-reliant, unaffected by others, out on the open range. And if you live here, that might be the case. But instead, we live here – this is an aerial map of Piqua. Doesn’t quite look like the open range to me. More than ever, the fact that we live in cities and metro areas like Greater Dayton means that we are more impacted by, and have more potential to impact others, than ever before. We depend on our neighbors to maintain their homes, and if they don’t, that has an impact on our property taxes. We rely on local governments to provide basic services (no cowboy ever needed garbage disposal or police), and if they can’t, then we have to either pay for it ourselves or do without. Cultural institutions, walking trail systems, cleaning up environmental contamination, getting reliable local news – these are things that the cowboys didn’t concern themselves with…and that’s fine, because a lone person would never be able to solve these issues. Regardless of whether we want to be cowboys or not, we are dependent on each other to maintain the decidedly non-cowboy life that we have become accustomed to. And downtowns are the places where we are most learning to live as interdependent people, which is part of why people find downtowns so darn fun. Side effect: need for tools. Outstripped our ability to figure this out by the seat of the pants. There are powerful and useful tools in business, organizational studies, information technology etc. that allow us to do this – that’s how the Forture 500 businesses are able to operate. We need to start using these to manage the most complex situations that we know of as humans – human society, economies and downtowns.
- A question I get a lot: why “wise?” Does that mean you have to have…Funky Hair?
- Wrinkles?
- Ralph Macchio (or Jaden Smith, if you’re more up to date in your movie viewing than I am)?
- The people I just showed (well, except maybe the lady in the yellow dress), represent parts of our popular picture of what it mean to be wise. We associate wisdom in people with certain characteristics, certain core actions. Since communities are collections of people with shared characteristics, the more we can build the characteristics of wisdom into our community’s organizations, institutions, governance, and the basic ways that we work together, the more our communities will exhibit wisdom. The “Economy” part of the Wise Economy idea comes from the
- A wise person thinks ahead about the full range of potential outcomes of a decision. I have a nine year old son, and every weekday morning he goes to school. To go to school, he has to put on his shoes. How often during a week do you think he does that without my telling to find his shoes before he misses the bus? How often do you think he says to himself, “OK, bus time in five minutes, I’d better go get my shoes.” The answer is: not often. He’s not thinking ahead, and if he waits until the last second and can’t find his shoes, he has a problem. If he thought ahead past the second he is living in, he would save himself (and Mom) a lot of aggravation. But he’s a kid. He doesn’t often think ahead, although I am trying to teach him (yes, wisdom can be taught!). We often fail to think ahead about the choices we make as communities. If we build that new subdivision, or road, or allow that neighborhood to deteriorate, how confident are we, really, that we understand all the potential impacts that decision will have? How does that decision change the world around it, and how will those changes to the world around it force other decisions in the future? If we did that, we would have probably anticipated many of the issues that we face in our communities and local economies today. And maybe we could have made better choices.When I talk about thinking ahead, I don’t mean the ipso-facto type of confidence we often get from engineers – “it fits the standards, therefore it will do X because the manual says it does.” We know from our experience that things seldom actually turn out as planned, or they generate other impacts (more on that in a minute). Instead of thinking of the future as a straight line that takes our current trends and projects them growing predictably into the future, we have to start thinking about multiple potential futures. We need to evaluate what happens if the projections come in much lower, or much higher, than current trends would indicate. If a simple straight-line prediction of items such as population growth, market demand, or traffic generation ever made any sense, they don’t anymore. We live in a more complex and interdependent world than ever before, and if we miss the mark too broadly, we may not have the resources to deal with the impacts of our mistakes. For my son, considering the possibility that his shoes might not be where he thinks they are would (I hope) change his behavior – he would leave himself a little bit more time to find them in case they are in his room instead of by the door. That doesn’t mean that he accounts for every remotely conceivable possibility (the chance that an alligator breaks into our house in Ohio and eats one of them is about .0001%, so it wouldn’t make sense to build an alligator trap in the hydrangeas so that he can get his shoes on) It does mean, however, that he thinks about a few possible issues that could get in the way of his goal of getting on the bus on time, and allocates some of his resources (in his case, his time) to making sure that he has the bases covered.
- A wise person doesn’t only think ahead, he or she also anticipates and prepares to deal proactively with the unintended consequences of a decision. That sounds like an oxymoron – how do you anticipate your unintended consequences? This is why thinking ahead becomes so important -- if we think rigorously and systematically about the things we decide to do, we can see that there are possible consequences to our decisions that we didn’t intend.The easiest unintended consequences to figure out are those that will impact me directly – the ones that will come back to bite me in the butt. Since I will have to deal directly and immediately with those unintended consequences, they are part of my system – so they’ll be relatively easy to see, if I am honest with myself about what all might happen.The hardest, and potentially most troubling, types of unintended consequences fall into a group that traditional invisible-hand economics call “externalities.” These are the impacts of a decision that accrue to someone or something else -- the impacts are external to the person or organization that made the economic decision. Traditional economic theory placed externalities outside of the economy – the externality was experienced by someone other than the economic actors, so it was not part of the economic activity. Terming something an “externality” is a way to exclude it from the equasion. Of course, it’s not that simple. I mentioned earlier than my father and grandfather ran a small paint company in the 1960s and 1970s. In those days, there were few rules regulating hazardous materials, and most of the compounds in paint hadn’t been recognized as hazardous anyways. Like most paint factories, they had garbage – batches of paint that didn’t come out right, test pots, empty containers, etc. The company was located on the edge of a steep gorge that ran through town, and standard operating procedure was to toss the cans, pots and other garbage over the hillside. This wasn’t uncommon – people used to use the gorge to discard a lot of types of refuse. As I mentioned earlier, the company closed in the early 1980s, and as far as I know all of the officers and major stockholders are dead. But the old paint cans on the side of the gorge are probably still leaking paint – my brothers, who still live in the area, have heard friends talk about seeing paint scum on the creek downstream from the site. When the day comes when that site gets cleaned up, it won’t be my dad’s company doing it. Instead, it will probably be the state EPA. Which means that, even though I didn’t do the polluting, as a taxpayer, I and all of my neighbors across the state will pick up the tab. The problem with externalities, from a strictly community economy point of view, is that they aren’t really external to us at all. One way or another, they end up impacting us as individuals, and us as a community. Most of the time it falls to a public agency, like the EPA, to go on the front line of dealing with externalities, whether it’s environmental cleanup or sheltering people who cannot survive in the modern economy on their own. And if no one deals with the externality, it will create its own set of consequences and impacts to us or to others, who will in turn impact us. At the end of the day, it means that the externality isn’t external to us as a community at all. A Wise Community systematically identifies the potential unintended consequences of decisions to the best of its power, uses its tools to prevent or manage them, and keeps a close eye out for new unanticipated consequences that need to be addressed.
- A wise person has the self-assurance to engage and draw in others in a compassionate matter that guides and helps them make decisions that are in everyone’s best interest. There is a lot of evidence on this in the business and organizational management world. Look up the Harvard Business Review or Bnet and put in the keyword “leadership,” and you will get a picture of the best thinking available on the topic – and it’s not command and control, or majority rules. Effective leaders in any sector aren’t just giving orders – they are creating an environment in which a rich body of the best ideas can come to light.
- That’s a little abstract. Sowhat can a community do or develop the capacity to do in order to build a Wise Economy? And what does Downtown Piqua have to do with it?
- First, we need to change how we think about communities, organizations and governments. We need to understand that a community is not a set of separate, unrelated systems, but an ecosystem. What development we permit, what happens to our downtowns and our entrance corridors, where we spend our economic development money, doesn’t just affect that one thing – it affects everything. We create a lot of those unintended consequences for our communities simply by not thinking beyond our own department walls.Economic development, for example, isn’t really about just increasing the number of businesses – the point of economic development efforts is to make sure that the local economy is doing what it needs to be doing to support the health of the overall system. Not every job and every employer necessarily does that, and if we throw our resources at jobs and employers that don’t support the overall health of the economic system, the value of what we are doing is hard to prove. We know that in our guts. But we forget that in practice – especially those of us who have responsibility for a specific part of the system. We forget how easy it is for the choices that we make for our part of the machine to throw the rest of it out of whack. We need to pick up our eyes and think in terms of impacts on the whole system, not just on our department’s metrics or our nonprofit’s favorite project. Two key tools to do this: scenario development and relationship mapping – critical ways to unravel these interdependencies. Need to do it consciously
- How many of you know what these things are? Tare Bakugon – they are little toys that are very big among the 9-year-old-boy set these days. They’re kind of like Transformers, but they fold up into a little ball and spring open when you touch a little magnetic spot with a piece of metal. There’s more than 100 of these things, and some of them are pretty elaborate. If I just want any old Bakugon –maybe my kid is young and just starting to get into the things -- I can go to pretty much any toy store and get one of some type. Doesn’t much matter where – any Bakugon will do. But what happens when my kid becomes a collector, and the only thing he wants for Christmas is this one? And this is the special edition that isn’t at Target. Now what do I do? (For the sake of argument, let’s assume that I am a much more sympathetic and caring mom than my kids would probably say at this point)…. I will go looking for it, right? I will go to more specialized stores than the general retailer. And when I find it, I will probably be willing to pay more than if I were just grabbing any old plastic ball thing off the shelf.We need to deeply understand our communities and what they have to offer – that’s a prerequisite to making good decisions. There are going to be businesses and people who want what your community has to offer. That won’t be everybody, but you didn’t really want everybody anyways. You have to understand what you have to offer first, then you may need to take the initiative in communicating those opportunities. And you might have to have the strength to say no to the wrong opportunity. Note Fort Piqua story – not just that building is cool, but what it says about the community. That’s more valuable than being within 600 miles of 75% of the US population.
- Who can identify this flower? (Carnation) What’s special about that flower to you all in this room? (Ohio state flower)What’s this second flower? (Hibiscus) Anyone know what state flower it is? (Hawaii)How many of you have ever grown a hibiscus in Ohio Michigan? To grow an apple tree in Michigan takes very little effort. To grow a hibiscus in Michigan takes a huge amount of effort. If your goal is to produce a flower, growing an apple tree is going to be a more efficient way to meet that goal in Michigan than growing a hibiscus. They don’t look the same, and the one that isn’t from here is always going to look more exotic and enticing. But they are both flowers, and one’s a lot easier to grow here than the other. Conventional approaches to economic development put a huge amount of emphasis on trying to grow exotics in places where they do not naturally grow. We send economic development professionals on trade missions all over the world, we bleed ourselves to be able to announce that we have the lowest tax rates, and we pour millions of dollars into incentives to recruit businesses – or retain them after they are here. But unless a business needs what we uniquely have to offer, we will never have confidence that they won’t just pull up and move to the next cheaper place when this load of tax incentives run out. There are two truths of economic development that not everyone wants you to know: (1) very, very, very few businesses relocate in a year, and fewer now than in the past. All of the chasing after site selectors that economic developers often do, all of the money and effort and travel spent trying to land that big businesses, is going after such long odds that Las Vegas should be taking bets on it. Most of that money will see little, if any, return. To a great extent, business recruitment is a bet on the jackpot. The other truth of the matter is that businesses do not primarily choose a location on the basis of tax incentives. When they do go in search of a new location, they choose a location based on their business needs – regional location, workforce skills, access to transportation, ability to recruit key talent, etc. They will ask for tax incentives because that’s part of the dance, and they will threaten to go somewhere else that has better tax breaks because it’s in their best interest to get a little more if they can. But in most cases, you don’t win business you would not otherwise get through tax breaks. That game has been over for a long time. What’s so great about your local businesses? This topic gets a lot of play lately, with debates over which types of small businesses are creating the most jobs and how to enable more entrepreneurs. All important , but let me give you a different perspective. Once upon a time, in the 1820s, a couple of men started making candles in a little shop in Cincinnati (places with lots of pigs being good places to get cheap candle-making equipment, so this was a business that needed this location) The company later added soap (also made from pork by-products), and gradually, gradually expanded production – employing more people, building bigger buildings, and adding additional products. Today, that company is one of the largest in the world, and their products include Tide, Crest, Pampers and Swiffer. And despite the fact that Procter & Gamble does not have factories in Cincinnati anymore, they are one of the largest employers, a major local taxpayer and a key funder of everything from youth summer programs to the United Way and the Cincinnati Symphony Orchestra. P&G started because of what Cincinnati uniquely had to offer at the time, and it stayed as it grew because of the business and personal connections. Today it is helping create a new economy in the region – Greater Cincinnati was recently named a center of Consumer Marketing expertise, which includes disciplines ranging from package design to surveying and social media. Very few corporate headquarters relocated out of their home region (unless they merge or get bought by someone else). If you want to create an stable long-term economy, you need to be growing your P&G today.
- Ah, the magic pill. What are some of the magic pills we get told will solve all our community’s problems?So, what’s the problem with magic pills?They often don’t live up to their promises.They cost a lot (again, that risk-reward issue)They cause big side effects (unanticipated consequences)They reduce resilience by making us dependent on one strategy (a non-diversified portfolio)
- Instead, build on that ecosystem, interdependent understanding to realize that all of the factors that impact the community will impact your economic development. And instead of thinking that one big win, or one big improvement, or one big whatever will make the critical difference, address all of the different elements that make a community lively. That’s harder than the magic pill, and it’s going to require rigorous thought.Give your residents a reason to love the place, capitalize on what you uniquely have to offer, and the investments that those people make will be what drives your local economy.Don’t just build things – make sure you know how you will use them and maintain them. Or they will be a liability and something that pushes people away in the future. Downtown is a critical place to both do this and to learn how to do it for the rest of the City.
- Everyone know what this is? Why on earth do I want you to think like a cockroach? I am not even sure the things can think….By that I mean, look for and be ready to thrive on new opportunities. Cockroaches have survived for millions of years because they adapt easily to changes in their environment. Giant meteor strike? Ice age? Built an apartment building on top of the field where they used to live? No problem! We’ll figure out what works in this setting and make it happen. The cockroach metaphor also works for your best internal source of community adaptation – your entrepreneurs. I actually got the cockroach metaphor from a friend of mine who works with urban neighborhoods in Cincinnati. She said, “what we need to do to grow entrepreneurs is to give them rich food – and then get out of their way.” The body of people in your community who have the ability to be entrepreneurs are a critical part of your community adaptation system. They can see market opportunities that the big players, looking at site selection websites, will never uncover. They are the ones who have the flexibility, the relatively low costs, the relatively low risks, to enable them to step into new market opportunities. Big businesses won’t do that – they might buy the little start-up after it proves that the idea works, or they might follow the little guy’s lead after the little guy has proven that the location can draw customers, but big businesses are seldom where the truly innovative, truly powerful and truly crazy ideas get their start. In a world where new ideas, new markets, and new thinking determine who succeeds and who gets left behind, those flexible, quick – moving entrepreneurs are more important in every market than ever.
- “Crowdsource” is in many industries one of the most powerful concepts of the last decade. Crowdsourcing uses internet tools to recruit at least ideas, and in many cases actual designs and products, from a pool of dozens or thousands of people who care about it. Wikipedia is one of the best known examples, but there are lots. Another good example is Threadless, where anyone can submit a T-shirt design and the company pays the independent designer on the basis of how many people buy that T shirt. You would think that in the local community context, we would have this issue wrapped up. After all, everyone involved with planning and local government and community development has been doing “public participation” since anyone can remember. But our “public participation” is often little more than lip service or sponsored whine sessions – hardly effective, and nowhere near the power that Wikipedia and Threadless would indicate are within our grasp. Instead of doing “public participation” that means something, that benefits our plans and our projects, we relegate people to commenting on a couple of predetermined alternatives. Or we recruit “public participation” through a public forum – open mike meeting, where the only people who speak are those who love to hear their voices reverberate or have an axe to grind. Your sweet grandmother says nothing because she is deathly afraid of public speaking, and your smart aunt who always has good ideas stays away because she doesn’t want to waste her time listening to the crackpots ramble. No wonder we have trouble getting people to show up for meetings.
- Instead, when we do public participation, we need to give people something worthwhile to do – something that they can see truly matters and produces something of value. We need to get them involved in the actual process of grappling with the same issues we are facing, struggling with the same tradeoff that we know are necessary, and give them the chance to participate in finding real solutions and making concrete recommendations. Since they may not grapple with the full range of the issues everyday, and since they may not know how to do it or where to start, we need to give them a structure in which to work – we need to guide them in the process and take away the barriers, such as fear of public speaking, that keep people from participating. We face complex and challenging issues, and we need the expertise and insight of the full range of people who may have a solution or a beneficial perspective. And we have to do this within a national political environment that tells us to oversimply issues for dramatic impact, to demonize those that don’t agree with us, and to assume that the one who yells loudest wins. Our local communities are where the damage this approach causes shows up first, so we need to rethink and restructure how we engage the community before that failed approach drags us under.
- That puts our communities in the same situation as these guys. Who remembers them?Tell northgoingzax story.Regardless of your ideology or your political leanings, the problem is this: a northgoingzax situation cripples our ability to solve our problems and move on. And in an increasingly competitive economic environment, where the people and businesses we need do have the ability to find the place that fits them best, these kinds of hobbles will leave us in the dust.True leadership understands this – it reads the trends and puts aside the ego, the machismo, the winning-isn’t-everything-it’s-the-only-thing mentality, and it chooses to seek common ground and a way to move forward. The pundits and idealogues will tell you that that’s not possible. That’s nonsense. Any political or community leader can do some research and learn the dozens of negotiating methods and concensus-building techniques that smart people in many disciplines have been developing for more than 30 years. It only takes the willingness to do so and the ability to put aside the ego long enough to try. If we don’t want to end up like these guys, we have to change how we do our political business. Again, it’s an ecosystem – we understand today better than in a long time that fighting to “win” the battles is fighting to rule over the ruins.
- That’s a lot to throw at you while you’re digesting your breakfast. Obviously the things I have talked about today are big picture fundamentals – and walking the walking is always harder than talking the talk. We can talk more about the walking part during the breakout session following this lunch, if you like. But as you think about what all these big ideas mean for your work, and as you grapple with how to make this work in your community’s unique physical, social and economic environment, let me give you a couple of things you can do tomorrow.
- We need to learn to not just look at the information we have about where we are and where we are going, but really analyze it, question it, ask and talk about the implications and the potential future scenarios they presents. Make sure that you understand as much as possible about not just the information, but how different elements of the ecosystem impact each other. Be especially careful of projections – any linear assumption that the future will be the same as the past is intellectually dishonest. Plus they have a tendency to become self-fulfilling prophecies. So demand scenarios- what are the range of things that can happen? Don’t let anyone feed you intellectual baby food in the name of simplifying or tight budgets. Not all information is necessary, but make sure you can get deep into the right information.
- If you make the deep issues clear, and treat public involvement as crowdsourcing instead of Doing What We Have To, it will become increasingly hard for those things to continue. It won’t happen overnight, and you may never find yourself singing Kumbayah (you’re allowed to breathe a sigh of relief at that), but you can and you will change the way issues and decision-making works in your community. There is a quote from the New Testament that says that if you walk in the light, you will not stumble. Pretty good advice all the way around. Be the light.
- Finally make conscious decisions about the big issues. Don’t use this thing. So there’s how to start. As I have told hundreds of clients (and increasingly, my kids) over the years, yes, we have a tough job ahead of us. But if it were easy, you would have done it already. Good luck and do well. And just remember… no matter what you do on your way to building a Wise Economy…
- Chances are, you won’t end up looking like her. Thanks.