Brewed Fresh Daily

8 Responses to “Ya think?”

1. John Polk Says:
   January 29th, 2010 at 11:01 pm

   I wonder if you have any opinions regarding whether we might be seeing a political version of the Heisenberg Uncertainty Principle, in which the act of observing what has been a closed system may be changing the system. Among the hallmarks of the corporate oligarchs, and certainly of the PD, has been a willingness to avert their eyes in the face of our elected officials’…peccadillos…as long as one hand washes the other.

   The old adage among the political and civic classes used to be “Don’t say or do anything that might show up on the front page of the Plain Dealer.” For the better part of the past 20 years, the increasingly egregious behavior of our public officials (and the private interests which have enabled them) have essentially skated from the consequences of that commandment.

   Perhaps enough people will be embarrassed often enough that we might see a little less brazenness among our emerging class of elected officials.

   Then again, perhaps the highly-touted “reform” of County government (including a County Prosecutor) is just the political equivalent of turning the County Administration Building upside down and shaking it, confusing the situation enough to enable the special interest a little time and sufficient obscurity to re-establish the traditional patterns of behavior.

2. Ed Morrison Says:
   January 30th, 2010 at 5:01 pm

   The Observer Effect may, indeed, be at work here.

   As Sean Safford has pointed out, closed leadership systems reduce the capacity of metro economies to adapt. (See his book, Why the Garden Club Could Not Save Youngstown.)

   Here’s what I see taking place.

   Leaders are slowly repositioning in response to the dire position of the Cleveland economy. (My guess is that aging of Sam and Albert at Forest City, two of the stalwarts of the ancien regime, is also at work.)

   The fact is that Cleveland’s growth record over the past fifteen years has been dismal. The current generation of business leaders have produced an embarrassingly poor record. (Compare, for example, Pittsburgh.)

   Now we have newer leadership of the PD who must confront the challenges a falling readership tied to a shrinking city. In some sense, they are the canary in the mineshaft for changes taking place.

   Machaskee’s old formula — working as a mouthpiece for the city’s insular business leadership (remember the PD’s laughable Forest City blog?) — weakened the PD’s credibility. Now the new leaders at the PD are trying to rebuild their editorial integrity with some very good investigative work.

   Another indicator that the pressure on the old arrangements is building: the pullout of the Cleveland Foundation from the Future Fund. Unusually, all this played out in the newspaper.

   I’ve been critical of the Fund’s investments, but the Cleveland Foundation’s pull-out was a serious mistake. A far better course would have been to restructure the Fund’s investments to be more innovative and less geographically concentrated.

   Will these changes result in any significant improvement in Cleveland’s economic development performance?

   It’s doubtful.

3. John Polk Says:
   January 30th, 2010 at 11:51 pm

   Perhaps the PD will soon expand its efforts from nailing corrupt and incompetent public officials (which is, admittedly, like shooting fish in a barrel) and turn its institutional attention to whether the many private and quasi-public entities in our economic development firmament are living up to their missions and producing any measurable results.

   The fiasco at the Port Authority is merely the latest case study in how a few self-interested developers, abetted by ambitious self-interested staff and enabled by somnolent governance, have run amok among our institutions. Until THAT dynamic changes, all the shuffling of the political leadership will merely lead back to business as usual…

4. Ed Morrison Says:
   January 31st, 2010 at 10:18 am

   John:

   Your suggestion is a good one.

   One of the remarkable aspects of the regional economic strategy is the confused set of metrics that are proposed, then largely ignored. As the result, there is very little accountability. But, worse still, the average citizen is left confused. No new narrative emerges about where the region is heading.

   Metrics need to be tied to outcomes, and when you are very fuzzy about where you are heading, then you see efforts to obfuscate. Metrics turn into an embarrassment, rather than an instrument for learning what works.

   The PD last did a review of the region’s economic development apparatus in July 2006. I got the sense that the investigation — by Becky Gaylord, Henry Gomez and others — got “deep-sixed” quickly.

   (I’ve posted some of the articles over on Map the Mess. I think the PD has taken them down.)

   If you look at the Greater Cleveland Partnership’s 2004 strategy Cleveland on the Edge, the outcomes range from the micro (150 students in the Max Hayes career academy in advanced manufacturing) to the vague (determining “appropriate” partners for a higher education compact).

   (An obvious line of inquiry: five years after the GCP issued its strategy, how well did they do?)

   In regional economic development, coherence is more important than vision. Thusfar, with so much money thrown at regional economic development in the past five years or so (in the neighborhood of $25 million a year between the foundations, the public workforce system, and the chamber), I’m not sure anyone can articulate where Cleveland is heading.

   The irony, of course, is that the overhead committed to regional economic development professionals in this region is among the highest I have ever seen.

   A Purdue, we are following a leaner, networked approach.

   In our recently concluded $15 million grant ($5 million a year), we produced remarkable results. We operated with four strategic focus areas. We launched over fifty initiatives in these four areas.

   Before launch, each initiative passed through a stage gate to determine that the initiative had the probability of being replicable, scalable, and sustainable.

   Each of these initiatives operated with metrics that were reviewed monthly. Now that our grant is over, about 80% of our initiatives will be sustained with other funding. These initiatives include the first national certification in “green collar” manufacturing.

   We had one full time professional overseeing these activities. Rather than build new organizations and trying to get them to scale by making these regional organizations bigger, we reached scale by linking and leveraging resources and understanding the power of networks. Our community colleges and universities in the region became the key nodes in these networks.

   Now, regions around the country are adapting to this more flexible, network-based approach.

   Cleveland has chosen a different path. It makes sense for the PD to explore the differences.

5. John Polk Says:
   January 31st, 2010 at 1:47 pm

   And as if on cue, congratulations to the PD for an insightful article focused on the tension between the Cleveland Foundation and the Fund For Our Economic Future. From this outsider’s perspective, The Fund’s activities have hardly been radical or revolutionary, and some of their investments may be of questionable value, but all that hardly explains the Foundation’s decision to cut its support of The Fund by 90%.

   It’s far more likely an apt analog for the struggle taking place between a diminishing circle of oligarchs, to whom asking questions is mistaken as assault (and generally punished as such; witness David Goldberg’s huffy resignation from the Mount Sinai Foundation), and an emerging leadership movement whose focus is on collaboration.

   In my experience, no matter how many resources an organization commands, it can only do three or four things very well. Instead, GCP chooses to publish a laundry list of “works in progress,” as if positioning itself to take credit for any progress on any of its 100 priorities, while using the profusion of white noise to fog up any focus on how well it’s doing at pursuing its core mission.

   Being in constant motion is not the same as making progress, and being busy is not the same as being successful. As long as the foremost economic development organization in the community is permitted to take cover behind civic doubletalk and labyrinthine process, and excused for its lack of results because its staff is so busy, the community is short-changed. Not only is it profligate in its use of resources, but the opportunity cost…things that aren’t getting done because the big dinosaur is eating all the grass…stifles innovation.

6. Ed Morrison Says:
   January 31st, 2010 at 4:32 pm

   Well, what’s happening here seems to be a continuation of the pattern of pie fights that erupted over the Med Mart and convention center.

   It’s symptom of a deeper pathology in the leadership elite of Cleveland. There’s very little capacity among these folks to work together to get complex projects done quickly.

   Both sides to the Future Fund controversy should take a step back.

   Here’s some thoughts (but admittedly, I have no real idea what’s going on):

   1. The Future Fund, while a potentially valuable collaboration, ended up making very conventional investments. Most of their money has gone to a handful of Cleveland-centric “regional” organizations that have been around for years. The innovation of the Fund was not really much of an innovation “where the rubber hits the road.” That’s one way of interpreting the Cleveland Foundation’s move. If all the Fund is going to do is finance existing Cleveland-based efforts, the Cleveland Foundation has a good point. Why do we need the Fund?

   2. These organizations, in turn, offer a disconnected view of the future which is difficult to piece together. The Foundation may want more discipline and focus (viewed as “control” over these Cleveland-centric organizations to some, or “better alignment” to others.)

   3. These organizations are loaded with high priced talent. If you added up all the professional positions in Team NEO, BioE, JumpStart, Magnet and NorTech, my guess is that you’d end up with well over thirty positions paying over $100,000 per year. (Sam Miller complained about this overhead in his memorable “countyism” rant on Channel 3.)

   Some folks might begin questioning these investments in a regional overhead. Again, we might interpret the Cleveland Foundation’s move as an effort to impose greater discipline on the investment process beyond what the Fund has been able to impose.

   4. It may have come down simply to personalities: a contest of wills between two camps. Clearly, there’s an inability to collaborate.

   The Foundation has blown a hole in the Fund’s claim to being a national model of philanthropic collaboration. It’s also blown a hole in the GCP’s strategy of using the Fund to finance these Cleveland-centric entities. To the extent that you interpret the Fund as a financing arm of the GCP (as some do), the Cleveland Foundation has pulled the plug.

   Now the retaliation has begun, as the PD points out.

   Outside the city, Cleveland’s leadership has a reputation for being self-absorbed, insular and arrogant. It’s not surprising that things turn nasty when things fall apart.

   It’s time for everyone to take a deep breath. A little humility is in order on all sides.

   (The sad part about foundations taking such a direct role in economic development is that they compromise their role as neutral conveners when they start going after each other.)

   Building regional economies is a tough, complex, messy game. Sensible, simple strategies do not come easily. They are shaped over time through continuous, focused, purposeful conversation and “strategic doing”.

   Everyone in this conversation seems to be missing the major competitive strength of this region. It’s not about Cleveland.

   Unlike most regional economies, Northeast Ohio has multiple complex metro economies, each with competitive strengths. Most regional economies are built around one anchor economy. Northeast Ohio has Canton-Massillon, Akron, Lorain, Youngstown, Cleveland, and (arguably) Mansfield.

   In other words, the region has multiple anchors on which to build its future. Further, although the university research base is relatively weak compared to the rest of the state, it has a nimble player in the University of Akron, an outstanding community college in Lorain, an emerging model of successful collaboration in Youngstown, and an extensive Kent State campus system. All of these factors can be leveraged. (Interestingly, outside Cleveland all these players are working pretty well together.)

   Cleveland leaders look at the region through a straw. They see one center to the region: Cleveland. (Exhibit A: the Cleveland+ campaign promoted as a regional brand.)

   The Fund promoted the idea of a broader region, but then put most of its money in the same old Cleveland-centric organizations.

   (The Fund took a good step in opening its government reform efforts to the region. Yet, this initiative was not transformative. It involved only a commitment of $300,000, hardly enough money to transform anything. And the Fund probably spent that much promoting its efforts.)

   Now is a good time to recalibrate the Fund’s activities to make them more open, innovative and regional. With the responsibility for funding the overheads of the Big 5 Cleveland-centric organizations moving back to the Cleveland Foundation, the Fund is free to chart a more innovative and regional path.

   In some sense, the Fund is ending up where it began years ago. Its leaders have a rare opportunity for a do-over. They will have to exercise some discipline, though, to move beyond the current controversy. The best advice: Move on.

   At the same time, John to your point, my guess is that the GCP will become increasingly irrelevant to the mix for the reasons you cite. It’s network of “partnerships” are now largely controlled by the Cleveland Foundation.

   That can’t be a comfortable feeling.

7. John Polk Says:
   January 31st, 2010 at 10:38 pm

   Back in the mid-90’s, in working with a leadership group of economic development executives, I had an interesting perspective on the changes in community leadership organizations. And it made me quite uneasy that, just as it seemed that other communities were beginning to reach out to the world, Cleveland’s political and civic leadership began to turn inward, and back to a focus on maximizing the benefits of their limited span of control.

   This was during the second White Administration.

   It should be cautionary to note how many of the individuals who came of age during that period are still in positions of great influence over our civic and political institutions.

   I have no objection whatsoever to superstar salaries. But it DOES seem that, once a non-profit executive begins to earn a salary which rivals that of the President of the U.S., there ought to be some genuine accountability for achieving measurable results.

   Individuals and organizations whose decisions and actions have an impact on critical issues facing our region are acting with not a lot of accountability, not a lot of oversight, and very little public or private scrutiny.

   And if these people don’t do a good job, we don’t even get to vote them out of their positions.

   For the rest, your counsel is excellent. The players need to get over themselves and be reminded about what’s important. I seem to recall that, when it was launched, the Fund’s leaders envisioned a day when the Fund would become obsolete.

8. Ed Morrison Says:
   February 1st, 2010 at 7:16 am

   Accountability for foundation funding of economic development operates in two dimensions. On the one hand, as you suggest, we can think of accountability in the narrow sense. In the strictest sense, accountability is tied to a fiduciary obligation, legally enforced by parties at interest in the foundation. We can assume that the foundations are meeting their fiduciary obligations in their economic development investments, but the foundation’s fiduciary standards impose relatively few constraints.

   The question you are raising is different. Are the foundations’ economic development investments yielding significant results?

   As we have seen, foundations can waste an enormous amount of money and simply move on.There’s not much the public could or should do to enforce higher standards on foundation investments. If the foundations want to build a hockey rink at Burke Lakefront airport and call it regional economic development, they could probably do it without violating their fiduciary obligations. These obligations are no defense against ineffectiveness, ignorance or stupidity.

   (The case in point: Voices and Choices. The foundations like to trumpet the fact that they engage 20,000 people in this exercise. They do not mention that they invested $3 million in this one time effort. That works out to $150 per participant. The foundations could have invited each participant to a steak dinner with a bottle of wine and come off better.)

   In regional economic development, accountability takes on a deeper, more consequential meaning. No foundation — no group of foundations — has sufficient resources to transform the regional economy. The only way that this transformation can take place is when public and private actors align, link and leverage their resources toward a handful of focused, clear strategic outcomes. (It turns out this is the hardest part of developing a regional strategy. An emerging example of a focused outcome: Regions that are focusing on the Ceos for Cities Talent Dividend initiative to boost college attainment by 1% in their region.)

   Foundations can play a key role, because they have a ready source of “soft” money with which to fund the early experiments. In order for these experiments to be successful, the foundation must trigger follow-on investments by others: local, state and federal governments, but, most important, the private sector. In other words, to be transformative foundation investments must be tightly targeted to initiatives that are replicable, scalable and sustainable. They must create and demonstrate tangible, practical value quickly.

   To be effective, foundations need to be credible in their investment strategy. That requires coherence, consistency and, increasingly, speed. If foundations truly want to transform the regional economy, they must meet these self-imposed standards of accountability. Their failure to do so carries only one consequence: futility.