By Ted Oberwager
Our recent class discussions around greenfield cities like King Abdullah Economic City and Masdar have illustrated the difficulties in executing hugely ambitious development undertakings. However, the issues experienced in each city have also highlighted the opportunities in applying core management concepts to the world of city planning. So what lessons can we draw from the failures experienced in each of these cities? I offer a few ideas:
1) Set clear goals. It is difficult to end up in the right place if you don’t know where you want to go. Whether it is GDP growth, cultural development, or improved living standards, be clear about your overarching goals.
2) Understand your own skills, capabilities, and resources. Every urban developer will have different strengths and resources. In KEAC, for example, the Saudi’s had abundant access to cheap energy. Developing an understanding of the competitive advantage created by these capabilities provides every urban planner with a deeper and more powerful toolkit.
3) Partner to fill in the gaps. No state or organization will have every available resource. Just as the Saudis have an abundance of cheap energy, they may not have the expertise in shipping or port development. It’s the classic theory of comparative advantage, and the earlier planners realize they can’t do it all, the better.
4) Start small. As it was pointed out in class, ‘minimum viable product’ could easily be employed in many urban developments. KEAC seemed to die by the breadth of its ambitions during the downturn. I believe that starting small is necessary in order to limit mistakes and make the most efficient use of limited resources.
5) Learn from mistakes. Mistakes are inevitable, and employing the “kaizen” approach that Henry wrote about in his blog entry must be the path forward. Flawless execution may be a fantasy, but continuous improvement can be a reality.
6) Finance conservatively. Capital is the lifeblood of urban development, and failure is 100% guaranteed when the coffers run dry. Given the importance of the developments in question, I would argue that planners give themselves as much runway as possible by financing conservatively, and maximizing funding when the capital markets are favorable.
…as Professor Macomber pointed out, much of this can be thought of as an extension of the lessons learned in our entrepreneurships classes – and perhaps many of these could be deduced from the familiar graphics above. But just because these principles seem obvious, doesn’t mean that they are employed by all – and they should be. Food for thought.