Cross-posted in Brewed Fresh Daily [1]
The evidence is accumulating that Cleveland's economic development strategy does not work very well.
(Here, we are talking about the 5 county Cleveland metro region: Cuyahoga, Lake, Geauga, Medina and Lorain counties: population about 2.1 million.)
Last week, the Atlanta Chamber of Commerce released its own strategy assessment developed by Bain & Co. As part of that assessment, they compared employment growth in the largest 25 metro regions across the country.
Cleveland and Detroit were the only metro areas among this group to show negative employment growth from 1998-2007.
To my mind, the reason for this weak performance is not hard to find: In Cleveland, economic development leaders (and the professionals they hire) are not very good at practical skills of collaboration. (There may be a new trajectory for NorTech, however, with some new leadership [2].)
In Cleveland, leaders easily confuse real estate development and economic development. Although linked, the two are different in fundamental ways.
This obsession with real estate leads to economic development driven by transactions, not strategy. (Mix in some crony capitalism, and you get wierd deals, like the AmTrust tower [3].)
Why hasn't the Fund for Our Economic Future begun to move the needle? Well, it may have, but slowly. The Fund's efforts are concentrated on a handful of organizations: Bio-E, NorTech, JumpStart. By investing in these organizations, the Fund is trying to get to scale. Oddly, though, these organizations create a large "civic overhead" that is expensive to maintain. (A team of PD reporters did some research on these highly paid staff a few years ago, but the article has dropped out of sight.)
Regional transformations take extensive, lean and agile collaborations. Not a handful, but dozens all aligned toward clear strategic outcomes. In our region in Indiana, we have four strategic outcomes, over fifty initiatives underway (each with their own metrics) and one administrator (at less than $100,000).
Here is an example of one of these initiatives-- the Purdue Summer Guitar Camp [4] -- that is now being scaled across the state. There are others: a green collar certification for manufacturing that is being scaled nationally, the highest concentration of Project Lead the Way [5] pre-engineering high schools in the country, and our workshops in regional leadership and strategic doing that are spreading nationally [6].
Regional economies transform through "link and leverage" strategies and open, intentional networks. (The newly launched Milwaukee 7 Water Council [7], a dynamic cluster involving over 80 companies, follows this framework.)
Developing a sensible strategy for the Cleveland metro will require shifting mental models about how regional economies work.
In a network, accountability is rooted in transparency. Metrics are not so much a measure of control as a mechanism for learning. Strategies are neither "top down" or "bottom-up", since there are no tops or bottoms to networks. Network-based strategies (like the models underlying open innovation [8]) balance open participation with leadership direction. Strategic doing -- which is fast, iterative and cheap -- replaces strategic planning -- which is slow, linear and expensive.
Regions that learn the practical skills of how to form these networks will be more competitive. They will learn faster. They will spot opportunities faster. And they will act faster.
At the same time, it is not easy to develop these new patterns of behavior in older industrial communities where the civic mindset is still focused on a narrow band of leaders and a hierarchical orientation toward "command and control" behaviors.
Networks are fundamentally different, and they require different perspectives, leadership skills, and values to guide them.
At the same time, we are learning the power of intentional open networks. They are capable of completing remarkably complex initiatives quickly (like the design of a new computer operating system, Linux).
Holly Harlan and Kirk Neiswander are the economic development professionals in Northeast Ohio who most clearly understand the new direction of economic development. Holly manages Entrepreneurs for Sustainability [9]. Kirk focuses with his organization, Entrepreneurs Edge [10], on Second Stage growth companies.
Work by the Edward Lowe Foundation [11] underscores that employment growth is taking place and regional economies through the expansion of these second stage growth oriented companies. (See http://www.youreconomy.org [12] Indeed, the weakness of the Northeast Ohio economy can be traced to the weaknesses in this segment.) The Lowe Foundation, which focuses on entrepreneurship, partners with both I-Open [13] and the Purdue Center for Regional Development [14] in supporting the development of these new approaches.
Strategy in Cleveland is slow, uncertain, and disconnected from both metrics and a clearly understood set of strategic outcomes. Cleveland will eventually make the shift to these new network strategies when enough people in Cleveland come to the conclusion that they need to try something new.
And why not? After all, you can't fall off the floor.