Thursday, December 17th, 2009

Replay: Invert the World

[ This post originally ran on October 12, 2008 ]

“When I am weak, then I am strong” – II Corinthians 12:10

I’ve always struggled with SWOT analysis (strength, weaknesses, opportunities, and threats). It seems to me that most situations can be viewed in multiple dimensions. Or, as the well known philosophical proposition puts its, everything implies its opposite.

Consider the case of Eli Lilly in Indianapolis. It’s obviously a huge strength of the city to to have a major life sciences company headquartered there. Lilly money literally built the city. But Lilly is also, in a sense, a weakness. An anchor company like that provides stability and a base to build on, but as we know, an anchor holds you in place. Absent Lilly and other “legacy” employers in life sciences, what would the picture really look like for Indiana in that sector? Would the state be hungrier to build its life sciences industry if these jobs didn’t show up in the surveys, inflating the region’s true performance? Lilly is an opportunity as well. As the company pursues a Boeing-like “systems integrator” strategy where it no longer wants to be a traditional vertically integrated concern, there are big opportunities for Lilly spinoffs to turn into something, and for local services firms to start doing more business with Lilly. The Greenfield laboratory sale to Covance is a case in point. And of course, there are also threats around Lilly. Pharma is a maturing and consolidating sector. While Lilly has made smaller, opportunistic purchases, it has shunned the mega-deals that others have done. Lilly’s board clearly understands that most of these deals are not good for shareholders, and have decided to be wise stewards of their shareholders’ money. That doesn’t mean that they wouldn’t let some other dumb board of directors waste their shareholders’ money. If Lilly were acquired, it would certainly send shockwaves through the region, and I don’t think the city has a contingency or action plan for it.

So in many respects, things are what you make of them. Applying this to the Midwest, I always hear people whining and complaining about how we don’t have oceans, we don’t have mountains, the climate is terrible, it’s flat and boring, etc. Well, this might all be true. But is it a bad thing? Does it mean you can’t compete?

Try this thought experiement. Pick a smaller Midwestern city and exchange its population with that of San Francisco. What do you think the reactions would be. Here’s my bet on what the Midwesterners would say about San Francisco:

  • This place is terrible. It’s an earthquake zone for crying out loud. It costs twice as much to built things here because of that. It isn’t fair.
  • I hate it here. The terrain is so rugged. People today want pedestrian and bike friendly neighborhoods. We could never have that with all these hills.
  • Why did we have get stuck on the tip of this crappy peninsula? We’re isloated, there’s no room to expand, we’ve got all these bridge choke points, etc. This is killing our competitiveness.
  • The weather sucks here. It’s foggy all the time, it never gets warm, you need a jacket in August, etc.
  • Just our rotten luck, we’ve got the ocean, but it’s cold and there’s no good beaches. The winter is yucky and rainy.
  • Woe is us, we don’t have any water since the whole West is nothing but a gigantic semi-desert. Those jerks in the Midwest have the Great Lakes, plus they get plenty of rain too. I can’t believe their luck.

Get the picture?

Try the experiment the other way. What would our friends from San Francisco think of the Midwest? What would they do to build social and built environments to take advantage of what the Midwest has to offer. Consider: the Netherlands is flatter than a pancake, but they managed to turn that into an advantage by creating the most bicycle friendly country in the world. And lest you think the Midwest climate prevents that, I’ll tell you that the Netherlands is famously rainy and not very warm to boot. I think our friends from out west might have a very different view of the Midwest from its current residents.

Yes, there are good hands of cards and bad hands of cards. But often it is just how you play them. The person who has the best hand doesn’t always win. Heck, a lot of time the person with the best hand folds and isn’t even in the game. That’s too many Midwestern places. They’ve already all but folded.

Yes, all things equal, I’d like sunny weather all the time too. Climate has definitely played a role in the migration from the north to the south and west. And beyond the physical environment the Midwest suffers from a host of legacy problems that are legitimate challenges. Nevertheless, I don’t think any of that is a reason the Midwest can’t compete.

We’ve got to invert the world. Stop looking at things from the traditional negative perspective. Start looking at them in a whole new way. Stand the problem on its head. How can we turn our perceived weaknesses into strengths? Why can’t we use flatness and open spaces to our advantage? Why not exploit centrality? Not in a superficial “60% of the US population is within an X hour drive” way but in a deeper, more structural way. Why can’t an agricultural legacy be a strength, particularly with the trends in local, organic, and environmentally friendly food production? There is no possible way to have environmentally friendly farming in California when the state’s entire agricultural complex is dependent on dams and irrigation. Similarly, what’s there in the manufacturing heritage? What about the people and culture? Start figuring out the way to make these things into assets.

I’m not going to offer the prescriptions here, but I do believe that much of changing the game for the Midwest is around changing the mindset. And looking at the region in a new and fresh way is a big part of that.

Topics: Strategic Planning

9 Responses to “Replay: Invert the World”

  1. David says:

    Apropos of your introduction to the broader point, you are absolutely right that the Indianapolis region has no contingency plan for the possibility that Lilly might ever be sold, but it’s not something that hasn’t ever crossed leaders’ minds, and the chance it might one day happen has certainly affected policy. A decade ago I was part of a consulting team working with then-Mayor Goldsmith’s economic-development group to plan what became Central Indiana’s technology initiatives. To motivate the private-sector working groups that the mayor had assembled, we asked them to conduct a thought experiment and envision what Indianapolis’s future might look like the day after Lilly was no longer locally controlled. That was a chilling discussion, and I think it largely worked. Efforts like BioCrossroads and its various programs to build a vibrant community of bioscience companies on a somewhat smaller scale than Lilly are a direct outcome of the process of regional thinking that was partly motivated by concerns exactly like this.

  2. nik says:

    So, are Midwesterners supposed to be bad at grammar? Or is “their’s no good beaches” a typo?

  3. 5chw4r7z says:

    As a transplant to Cincinnati, it amazes me how negative the people are here. Cincinnati has so much to offer its amazing, if P&G left town it would hurt, but there’s 9 other Fortune 500 companies headquartered here.
    Awesome old building stock, scenic overlooks of the city.
    I keep saying that Cincinnati has to stop trying to compete with Portland, Indy or St Louis, figure out its strenghts and be the best Cincinnati it can be.

  4. Alon Levy says:

    On advantage of the Midwest’s flatness: the railroads are all perfectly straight, and have no mountains to cross. This makes it easier to increase speed both incrementally and through high-speed rail, on both passenger and freight lines. It’s much cheaper to fix the Chicago freight rail bottleneck than to build a freight tunnel under New York Harbor or bypass the Tehachapi Loop.

  5. Tyson Meyer says:

    Along the same lines, more midwestern cities should use smart shrinkage to their advantage. Some of the cities I’ve visited with the highest quality of life have been small to mid-size cities, say 40-150K. Instead of bemoaning the loss of residents over the past 50 years and trying to reclaim the glory days, turn yourself into a small city with a higher quality of life, emphasizing all the advantages that come with a smaller population – short commutes, relatively low crime, pollution and taxes. And of course you still have your “big city” cultural institutions left from the good ol’ days.

  6. Pete from Baltimore says:

    MR Renn

    I am not from the midwest .So you know far more about the midwestern way of thinking than i do.From what you describe, it is a very pessemistic mindset.

    Where i am from we have the oppisite problem! Detroit obviously has tremendous problems.And they seem to realise it.Baltimore has many problems as well.We have abandoned houses by the thousands.A high crime rate.And much of the population is unemployed,underemployed or on welfare or disability.

    Yet you would never know it from listening to our city “leaders”.They focus only on the richer neighborhoods.And act like we can survive off Johns Hopkins Hospital.tourism and the fact that we are 40 miles away from DC.These things are tremendous advantages.But instead of using them to our advantage ,our “leaders” act like we can “rest on our laurels ” .

    It’s like a farmer saying “Well i got perfect weather this year.So i guess i dont have to bother looking after my crop”.There seems to be no effort on the part of Baltimore politicians.

    It sounds like you midwesterners could use some of our optimisim and we could use some of your pesimistic realism.

    Personaly i envy you midwesterners for the fact that your leaders admit that there are problems that need to be solved.I have read many of the blogs that this blog links with. Many of them talk about the issues facing the midwest.I can not find any good blogs about Baltimore and how it should or can solve it’s problems.Reading many of the local blogs ,you might think that we have absolutly no poverty.

    i don’t know if our politicians are better at “spinning” than yours are.Or whether yours are more honest.Or if there is less of a disconnect between the upper-middle class and the blue collar middle class and the poor.But your mayors sound a lot more realistic about the problems that they face than ours do.

    OR maybe the grass always seems greener on the other side

  7. John says:

    I can’t think of a better long-term asset than the Great Lakes. People in Arizona and California will come back when the price of water gets high enough.

    …or they’ll figure out a way to make desalinization cheap and continue to enjoy the better weather.

  8. John says:

    I can’t think of a better long-term asset than the Great Lakes. It’s such a unique feature in the world. People in Arizona and California will come back when the price of water gets high enough.

    …or they’ll figure out a way to make desalinization cheap and continue to enjoy the better weather.

  9. Kate says:

    i am an indy resident who travels for a living – in fact for going on three years now i’ve commuted to boston (while this isn’t the greenest thing I can do – I am helping to support the IND airport. people are consistently asking me “what’s so great about indy that i don’t move already?” – and i think you hit the nail on the head with your description of what people say when they visit san francisco – something not mentioned – “the people” – as much as i love people in other locations there’s something i never can quite put my finger on about mid-westerners – perhaps it’s a combination of the “nice” factor, or that we stop and watch the corn grow, or our efforts to preserve our heritage – but there is something to be said for it. There’s something worth cultivating in that.

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