Will Media Coverage of Positive Automotive Industry Results Impede Detroit From Creating a True Renaissance?

Ed Burghard“Change is the law of life and those who look only to the past or present are certain to miss the future.” — John F. Kennedy

In my last post about Detroit’s decision to file for bankruptcy, I shared the thought that the city leadership needed to let go of the past in order to create the future.  I got a number of good comments from readers.  Some agreed and some chastised me for suggesting Detroit may not be ready to make the hard decisions required to drive an economic turnaround.  All contributed positively to the dialogue and are greatly appreciated.

One reader shared a link to Detroit’s strategic plan.  This is a must read for anybody interested in better understand how Detroit’s leaders envision engineering a turn around.

After reviewing The Framework, I still remain concerned.  I like the fact that the strategic plan is holistic in scope.  I like that the plan acknowledges the importance of place branding as an enabler of success.  I am concerned the plan is way too complex for successful execution.  This concern comes from the recognition that the plan will need to guide the decisions and agendas of several Mayors before the positive impact on the ability of Detroit residents to achieve their American Dream will be realized.  And, I know I may be overly and unfairly pessimistic when I question whether public sector leadership can successfully lead a complex change initiative as is proposed.

HELPING RESIDENTS BREAK WITH THE PAST IS A REAL LEADERSHIP CHALLENGE

According to the Transitions Model, Detroit will need to create an ending before it can begin to envision a new beginning.  Simply put, that means Detroit’s leadership needs to envision a future that is not tied so directly to the fortunes of the big 3 domestic auto manufacturers.  It needs to accept the new reality that the automotive industry is no longer centered in Michigan (or even the Midwest).  And, leadership needs to envision what industry clusters are capable of helping create a balanced economic portfolio that can help support residents achievement of the American Dream.

Transition Model copy

Conceptually, this sounds easy.  Practically though it is very challenging.  Letting go is not simply a matter of rational thought.  It is fraught with emotion.  People have a hard time letting go of the “good old days” and enthusiastically embracing an uncertain future.  My experience in the private sector taught me that even small changes are magnified when looked at through the lens of people involved.  I can remember when my team had to move offices from the third floor to the second floor in the company’s building.  This should have been a “no brainer”, but members of my team struggled with how the move would impact their daily routine, there was resistance and a lot of complaining that reduced productivity.  It actually took a few months for some members to get adjusted after the move.  I can only imagine the challenges of shifting the paradigm of a city population.  Moving a department from one floor to another is a whole lot easier than moving a city from a glorious past to an uncertain future.  But, that will be what is required of Detroit’s leadership to create a sustainable renaissance for the city.

THE MEDIA MAY BE MAKING THE CHALLENGE EVEN HARDER

I tried to put myself in the shoes of Detroit’s leadership when I read some recent media coverage about the city.  Here are some quotes and my reaction.

USA TODAY –

“Profits are up, hiring shingles are out, customers are lined up at dealerships and even frequent critics are hailing the quality of some shiny models.  And it’s a bright spot for a city that desperately needs one, coming as it does against an otherwise dreary backdrop, the bankruptcy filing of the Detroit city government.”

“The domestic auto industry is in full renaissance. … Now, with an absolute focus on product excellence you will never see another marginally good car.”

“The Detroit Three’s good fortunes stand in stark contrast to developments in the city itself, which a week ago became the largest city to file for bankruptcy protection in U.S. history.”

“The domestic auto industry’s success is due to smart leaders, the best CEOs since the halcyon days of Henry Ford.”

“They are investing for the long term in better cars, better factories and more efficient labor use.”

If I lived in Detroit and read the USA TODAY coverage, I would be feeling like the city’s star should be hitched even tighter to the auto industry.  Clearly, the industry has solved its problems and is poised for explosive growth.  Why wouldn’t you want your future tied to the success of the smartest leaders since Henry Ford?  Why wouldn’t you want to double down on an industry that has engineered an economic turn around of its own?  In my opinion, this type of media coverage makes it even harder for city leaders to convince residents that a break with the past is required to embrace a new and uncertain future.  Don’t get me wrong; I have no issue with the story or the fact that success in the domestic auto industry is being acknowledged by the media.  My point is simply that it makes leading the transition process even more challenging.

STEIN’S LAW – IF SOMETHING CANNOT GO ON FOREVER, IT WILL STOP

Change is the only constant, and when the world shifts in a way that makes your activity network no longer competitive, you have a strategic challenge.  I wrote a post about the book “Playing to Win” which gives insights into effective strategic planning and how to use activity networks as a way to create sustainable structural competitiveness.

Despite recent success of the auto industry, the world has permanently shifted for Detroit.

CINCINNATI ENQUIRER –

“Detroit can no longer go on borrowing, spending, raising taxes and dangerously cutting essential services.”

“The market ultimately forced the car companies into reform, restructuring, the occasional bankruptcy and eventual recovery.  The city of Detroit, however, lacking market constraints, just kept on spending – $100 million annually since 2008.  The city now has about $19 billion in obligations it has no chance of meeting.”

“Detroit has lost more than 60 percent of its population since 1950.”

“You can kick the can down the road, but at some point it disappears over a cliff.”

“The White House has said the city’s insolvency should be resolved by local leaders and creditors.”

This is some of the reality Detroit’s leaders are dealing with.  It is the reason that, despite positive news in the domestic auto industry, Detroit needs to engineer an ending before it can embrace a new beginning.  Undoubtedly the auto industry will continue to play an important, but re-scoped, role in Detroit’s economic portfolio.  The residents of Detroit need to adopt a new vision to enable achievement their American Dream.  The current operational version of that vision is laid out in The Framework created by Detroit’s leadership.

DISCUSSION

Despite the fact that I am concerned about its executional complexity, The Framework is a definite step in that direction.  However, as I shared in my first post on the city’s turn around journey, I would counsel Detroit’s leaders to proactively address the need to ensure residents understand and are comfortable with creating an ending so they can enthusiastically embrace the new beginning that will lead to a sustainable renaissance for the city.  Leading residents through the neutral zone may actually be the toughest challenge city leadership faces.

For perspective, Michigan is ranked #30 in the 2012 American Dream State Ranking Report.  That means based on the sentiment of people living in Michigan, there are 29 states where residents feel it is easier to achieve their American Dream.  Note the case study comparing Michigan and Ohio below.

What are your thoughts?  How challenging is it to lead a city through transition?  What are some of the keys to success?  What lessons can be learned from other cities that faced similar challenges (e.g. Pittsburgh)?  Any helpful thoughts about the Framework designed and adopted by Detroit’s leadership?

Read About My Journey To Learn More About The American Dream

American Dream Case Study Series

Indiana versus Michigan

Florida versus North Carolina

New York versus New Jersey

California versus Texas

Pennsylvania versus New York

North Carolina versus Texas

Ohio versus Michigan

How Easy Is It To Achieve The American Dream In Your State?

To view the complete set of State rankings based on the ADCI and five explanatory sub-indexes, simply click this button

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4 Comments so far

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  2. Eric La Brecque

    August 2, 2013

    You raise an interesting and important issue, Ed. Clearly, there’s conflation on the part of the general public as to what constitutes “Detroit” and the real role the automakers play in the city’s fortunes. Insiders and locals understand the situation well. I’d submit they HAVE reached the end of the narrative line, and are more than ready for the transition you talk about. Over the past five years, the tenor of the conversation on the ground has shifted greatly. The general public—the rest of the country—simply hasn’t caught up. Those, like us, concerned with public perception of the region as it relates to its fortunes, have a lot of work ahead of us.

    The untangling starts here:

    First, the City of Detroit is bankrupt; the region, however, is not. In places, at least, it’s quite affluent. Some of the wealthiest communities of the country are just a few minutes’ drive away from the Detroit city center.

    Second, these days, very little automobile manufacturing happens in the City of Detroit. A great deal still happens in the Detroit metro area—but it happens in cities that, if anything, have worked hard to distance themselves and their fortunes from their ailing big sister. The auto makers aren’t necessarily ducking their responsibilities when it comes to the City of Detroit: They simply aren’t doing business there, and haven’t been for quite some time.

    So, we need to be clear whether we are referring to Detroit the municipality, “Detroit” the metonym for SE Michigan, or “Detroit” the synecdoche for the auto industry.

    Perhaps a perceptual shift can begin—to the benefit of both the City of Detroit and automakers alike—if we dispense with the term “Detroit Three” and simply refer to these companies as “the US automakers”.

  3. Ed Burghard

    August 3, 2013

    Eric – Good comment. To your point, most auto manufacturing actually happens in southern states rather than Michigan.

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    August 28, 2013

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