MEREDITH Strategy + Design

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Filtering by Tag: economy

Go or grow – developing a "next economy" for the Midwest

Detroit, and the subject of its shrinkage, is in global discussion these days.  Here are two of those points of analysis and recommendation that showed up over the past day or two that I think are both representative of the conversation as well as illustrative of its "go-or-grow" nature.

Shrinking Detroit Back to Greatness | Economix | NYT

Ed Glaeser addresses the matter of the shrinking of Detroit in the Economix blog of the New York Times. I remain deeply skeptical of this strategy, believing that abandoning a city and relocating its residents is irresponsible. So many other cities in the Midwest and other places have, after significant decline, found ways of attracting people, building jobs, and providing opportunity, and so improving their physical, social and economic quality of life and growing.

Glaeser offers strategic clues in his analysis. These include proven concepts like –

  • Developing a city of small entrepreneurs, realizing that some may evolve into major global players
  • Support a city of abundant small companies for faster growth than big companies provide
  • Focus on educational opportunity and quality, since skilled cities grow faster
  • Support and grow industrial diversity, since it is more conducive to growth than industrial monocultures

I wish he and others would further develop and promote this "back to greatness" guidebook. This could shift the focus of the conversation from the concept of "urban farming" which is essentially an excuse for a void of civic imagination, dedication and energy.

The Next Economy | Metro Matters podcast | Next American City

As an example of a dialogue I like better, and showing greater imagination about Detroit, there is this podcast from the Next American City. Bruce Katz from the Brookings Institute addresses the issues of perception in the Midwest and the resistance to investment there as a result.

He suggests a reality of its being a "Brain Bet" rather than a "Rust Belt" and argues for investment around this idea. A key concept for him is building a different narrative about the economy in places like Detroit, and he suggests that "Brain Belt" is a phrase that communicates not only the economic reality of the place but also its potential.

Arguing that places like Detroit have to focus on their assets, he also points to the importance of place in achieving successful transformations. He notes that ours is a visual culture, and points to cities like Leipzig, Bilbao and Torino as examples where initiatives around the quality of the physical environment have been significant factors for successful growth after declaration of death.

Faulting both industrial and governmental leaders, Katz suggests that a great future can be found in the Midwest through the commercialization and industrialization of innovations in export-oriented, low-carbon, innovation-fueled products whose development can nurture an opportunity-rich regional growth.

Acknowledging the facts of shrinkage, Katz says there is a "smart way to shrink," and I did not hear farming or agriculture in his proposals.

3. From MPG to ?

The primary measure of the efficiency of the car, and a significant factor in its design and engineering, is miles per gallon. In the physical world, however, there are many other costs associated with the design of the automobile – widths of streets, breadths of intersections, sizes of parking lots and parking spaces, miles of highways, acres of interchanges, rights of way, sizes of storm sewers, etc. If we consider the costs of maintaining and operating all of this, including its environmental costs, how would the cost/mile of driving a car – more complete Total Cost of Ownership (TCO)metrics – be perceived?

We now legislate fuel efficiency, and the growing awareness of that measure in pocketbook and environmental costs causes a response in buying patterns from consumers and a response from car manufacturers in the engineering and design of their product. Similarly, food labeling, including not just ingredients but also nutritional information and, in some places, distance from origin information, is affecting consumer decisions and moving back up the supply chain to influence even how farms are managed.

How much else might change in the design of the car if all of these other infrastructural and environmental costs were a matter of commonly understood and shared information? For example, what would the infrastructure look like and what would it cost if cars had collision-avoidance/self-guidance systems, for example? Which is more expensive in TCO – technology or land?

What if the labeling on a car had all of its other cost “ingredients” listed? What if I understood that, on this car, the turning radius, parking requirements, and other physical impacts had a 20% higher infrastructural cost than another model?

Shop class and individual agency – disaffection and motivation

photo by Marvin Shaouni I was in Detroit last night and had the opportunity to go to Matt Crawford's lecture at the College for Creative Studies. Matt is the author of Shop Class as Soulcraft: An Inquiry into the Value of Work which has received a lot of recent attention.

By the time he was halfway into his theme, I was feeling a certain unease. His talk felt out of place, perhaps unsympathetic, and maybe even destructive on a campus of creative artistic and craft endeavor and in a community with a collapse of labor.

Although aware of Crawford and his thesis, I went expecting a connection between his appreciation of hand work and the craft basis for the local industry, the evolution of CCS's mission, and the interests of its students.  Matt, however, made no such connection. He presented, in effect, a restatement of his New York Times essay and, although denying he was the voice of a "movement," he nonetheless repeated his uncomfortable segmentation of the white collar world and critical contempt for the paradigms of modern managerial practice. His presentation of the apparent nobility of "individual agency" and its qualities opposed to the experiences of mindlessness in corporations seems very much like a manifesto, and very faulted in the selective comparison.

Matt, although clearly capable of invention (he has a PhD in political science from the University of Chicago and holds a position as a fellow in the Institute for Advanced Studies in Culture at the University of Virginia), seems to instead feel more comfortable in the domain of the disaffected. His first job after graduating was on K Street, in effect rephrasing the works and authorship of others and accepting rather than changing an inappropriate production-minded management at a think tank. Now, of course, he revels in his motorcycle repair shop, again withdrawn from a position of influence in innovation and engineering, and exploiting the fruits of others' invention and cloaking it in apparent humble nobility.

The reason this felt so odd was, of course, his lack of recognition of the role that entitlement and opposition has played in the economy of the region where he spoke, and in its stark contrast with the transformational work of efforts such as the New Economy Initiative for Southeastern Michigan. Funded by the Kauffman Foundation, the initiative seeks to start-up more than 400 new businesses in the next three years and, in the process, transform the local capabilities and capacity from the diminished scope of the auto industry into innovations in newer industries such as aerospace, defense and alternative energies.

The goal of the initiative is to “accelerate the transition of metro Detroit to an innovation-based economy that expands opportunity for all.”

The initiative will sponsor and support activities in three strategic areas: talent, innovation and culture change.  Working with other partners in the region and in the state, the initiative will work to: 1.  Prepare, attract and retain skilled workers in southeast Michigan (Talent) 2.  Encourage innovation and entrepreneurship in new and existing enterprises in the region (Innovation) 3.  Change the region’s culture to embrace learning, work and innovation (Culture Change)

While Matt celebrates the nobility of working with your hands, the initiative seems a more effective voice and tool for converting that talent to the greater benefit  of others. I have the expectation that the people engaged in these emerging enterprises will be the authors, as well, of a new way of working, engaging the talent they employ and amplifying the achievements and benefits of their work.

© Jim Meredith

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4 places for transformation – not recovery – of the architectural profession

The demand for corporate real estate is down dramatically and the vacancy being counted and reported now does not yet represent the depth of the problem. Corporations are either not willing to take losses in disposition of real estate, or are holding property and leases for an imagined future and are yet to confront the real scale of recovery. Landlords, believing that vacancies harm them especially when leases to some companies represent property status, are not yet reporting the actual scale of occupancies. Historically, rising employment and a traditionally aligned increase in real estate demand lags the trajectory of recovery by months. And credit supply, certainly, has a different relationship to real estate demand now.

Business recovery, no matter how robust, will never absorb the current building supply.

Many architectural firms whose fortune and fame were built on corporate space are still in denial. Past indices of architectural revenues had a relatively direct relationship between white collar employment and services demand, so most firms are wishing and waiting for "recovery." I think that the wait for new architectural commissions is going to be very long.

The growth of real estate demand and the resultant rewards to the profession over the early portions of the past decade had foundations that were both real and virtual. Actual business growth was part of the mix, as was a need for smart infrastructure to support the momentum of technology implementation in the workplace. Lagging commitments to corporate standards, including a surprisingly tenacious hold on the office as perk, also fueled a demand for space that was larger than the effective working need. And the attractiveness of debt – that is, the availability of cheap credit – was, as we all now know, a driver of global construction without a real market supporting it.

As things began to collapse, we already had an abnormally high ratio of space to real and emerging demand. It's all dynamically correcting now, and the current metrics of the issue are not yet balanced.

So what is the future for architects, and for their clients?

square foot0001

First, a quick review. I believe that the actual emerging demand at the front edge of the recovery (when it happens) will be a small fraction of current supply. If this block represents 100 square feet of pre-collapse space, the crisis could finally reconcile demand at 50% of current supply, if not still significantly less.

The reductions in demand come from –

  • Rightsizing Corporate layoffs now represent not just a temporary alignment with an economic downturn, but will also ultimately reflect a permanent change in the scale of business. This permanency will come from a new conservatism (corporations, like shoppers, realize that bling is dead, and sustainability as a value looks real), a lag of response to demand, and new ways of doing things brought by the operating discipline imposed by the Great Recession.
  • Utilizing As the recession was beginning, we began to deploy new analytical tools and metrics  in workplace planning to more effectively align our design practice with business strategy. We were able to show that the typical workplace was unoccupied for much, if not most, of the workday. It appeared that the (finally) lighter and more ubiquitous technology, and collaborative workstyles generated by the innovation agenda, meant that the fix on individual and assigned workstations was beginning to wane. Corporations were rapidly learning that adherence to traditional and even recently updated standards meant a 40-60% competitive disadvantage when measured in real estate costs.
  • Mobilizing Corporate globalization, technology improvements, wifi infrastructures and new workstyles also contributed to global, local and internal mobility. This mobility not only directly revised the demand on real estate, but the managerial and HR tolerance of work done anywhere meant that home, Starbucks, and the airport replaced the office.
  • Standardizing I actually consider this a bad word, but there is at last a move in corporate facilities departments, and among us as planners, to institutionalize revolutionary new metrics for office and real estate occupancy. Square feet per person and dollars per square foot are not measures of the work that people do. The proportional alignment of space to an individual and not to the mission perpetuated higher costs and barriers to competitive differentiation. In other words, previous methods of forecasting and planning for real estate demand overlooked a concept of real estate as a tool for business performance.

So if corporations, and cities, are already overbuilt (and they are), and the reconciliation of demand and supply will mean that there will be even more vacant space going begging soon, and if the drivers of corporate demand are easing, then what are the opportunities for architects and designers in this New Normal?

As with any transformation program, an examination of the business model is an important discipline. Conventional architectural fees are based on consumption, not performance. Fees are typically expressed as percentages of construction cost, or as dollars per square foot of project size. Bigger and more complex is better. As clients seek to do more with less, however, and if architects can respond effectively, the relationship shifts from the amount and cost of space to the effectiveness of place to deliver positive influences in the achievement of the organizational mission.

square foot0002

I'd suggest that as architects have been embracing sustainability as a key value informing practice, conventional metrics and methods of practice, now reinforced by the New Normal, provide the platform for rich opportunity in at least 4 newly defined areas in the emerging business landscape –

It's about place, not space – Some of our past clients have been occupying space at up to a 30:1 seating ratio. That is, their mobility practices and other workstyles have led to such a reduction in space demand that they need space only for the equivalent of one person where they used to provide individual assigned space for 30. So the role of the office changes from where I do my work to where I connect with my brand, culture and colleagues. The making of a compelling place to be, a place where employees want to go, is the new role of the architect, rather than the design of a standards-driven container of cubes.

Work looks different, now – The new values of work are about innovation, speed, opportunity, service, and differentiation. These require continuous learning, managerial transparency, visual and verbal connectivity, dynamic collaboration, and organizational agility. Architects have a great opportunity to remake the workplace based on a new formal lexicon in support of the enabling workmodes of socialization, learning, and collaboration.

These two concepts may represent the entire domain of practice measured by the level of reoccupation of corporate space in an emerging economic restoration. What happens with the rest of the space? Do we bulldoze the city?

I'd offer a couple of more optimistic suggestions –

New metrics, new typologies - Floorplate size, dimensions, configurations, volume, infrastructure, building image, location and other metrics all have an influence on corporate (people) performance. Previous planning, if aligned, has been a denominator strategy, delivering cost reduction. New approaches, built on our awareness of beneficial associations of place and performance, enable us to evaluate properties for their contribution to numerator strategies – direct relationships of place to performance. Buildings that fit our template have the potential for longer term sustainability. Re-profiling these buildings to gain attention in corporate expansion may be the most beneficial and rewarding planning and design service in the recovery transformation.

New markets (and Squelettes) - If all of the above is achieved, there remains a large portfolio of property that may be considered obsolete for corporate purposes. What about this surplus? In the ongoing, maybe increasing, competition between city and suburb, obsolete urban corporate properties have re-use potential that can yield highly attractive options. This is a very challenging domain, but seems to have a place in conversations even in unlikely places. Wired magazine, for example, has proposed a term form these properties and begun a discussion about what to do about them. A great illustration of spirit, thought and potential is in this example from Brazil in which a group of artists and architects intends to occupy and transform a 20-story tower in Sao Paolo as a cultural and civic laboratory.

Overlaid on all this is sustainable design, of course, which has some momentum moving from using less to occupying less to building less to reusing.

It feels as if we are at one of those historical/cultural/social inflection points and doing things in new ways feels more rewarding and productive than waiting for "recovery."

© Jim Meredith, 2009

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Trying to find momentum

evh98-wire In the meantime...

I remember an early lecture in architecture school about America's "kleenex" culture---the use-once-and-throw-away characteristic of our society. Here's the UN and its membership entry.

Continuing the discussion on what in design is more authentic as the economy changes---democratic ecology, intelligent design, longevity...and the burbs.

So, maybe about 30 years ago, I scribbled some graphic notes in my sketchbook representing sound levels in the city. I was interested in what might give a different topography to the city, and what considerations might generate a different kind of architecture. I was also interested to discover if activity levels correlated with financial speculation. That is, did the architectural topography of place (assumed to be financial) have any relationship with the social (my noise level/graphic equalizer map) topography. Fund to find other explorations.

And I can't remember where this came from, but thanks for the delightful A History of Visual Communications.

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Detroit Wildlife

Florent Tillon has made a video on its way to becoming a movie, about Detroit. He says, "...the vision of Detroit that other people have around the world is more a Mad Max picture than anything else... When I was there this summer, I found something else, really, very far from this reputation : I founded great people, wonderful landscape, and a life rather pleasant, after all..." [vimeo]

more about Detroit Wildlife

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Chair versus chair: Design and its value genetics

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I am so pleased with the debate engaged (not necessarily initially) by Cannell and picked up by Moss (and so many others) about the origins of design and the economy's impact on innovation.

Embedded in the discussion is a sense of authenticity, almost morality, associated with original explorations. In its advancement/resolution, I'd be very interested in a genetic chart---great designs, their origins, their briefs (given or authored), the money that was invested in the path to launch, the size of the particles of the market that supported them, and the relevance and authenticity of design measured by both economic (how many use and benefit from use) and non-economic factors (influence, impact, enrichment, enhancement, etc.), and their ultimate durability, sustainability and value.

We, of course, do not usually make a choice of approaches, but does the Moss patronage trump the Cannell ethic? Is the discipline of modernism a virtue in any economy or a mask for limited opportunity (and privileged position) in a down economy. Is Eames a recession product or a recovery product? Does the economic context provide Moss an opportunity to present process/maquette/model as special/unique/valuable, but the economy demand finish?mosscannell-sub-600

Thoroughly modern

From the Detroit Free Press In an excellent post on his blog, Landscape + Urbanism, Jason King recalls his work with an AIA SDAT recently addressing this recurring theme in these posts on the "Detroit dilemma."

The initial report of the team, continuing themes from the 1994 Mayor's Land Use Task Force, is worth a review. It's available on the AIA web site.

"We hope for better will arise from the ashes"

My emerging new rules for an emerging economy

dsc_0006Returning home empty-handed from a recent several-hours foray into the local manifestation of the global economy---Christmas shopping at the malls and local downtowns---I found myself yearning for something we have very little of around here: local stores selling the works of local producers. Wandering the malls with the realization that Somerset, and Michigan Avenue, and Fifth Avenue, and so many others sold the same stuff here as there and there and there, I felt the frustration of being unable to be imaginative and thoughtful, and the disappointment of being unable to express my appreciation for others in this season with something original, select, and authentic.

Later that day, I was cruising through my subscriptions. and hit KK*. Kevin Kelly is a Wired magazine founder, has been doing a reprise of his 1998 book, New Rules for the New Economy, on his website.

The key premise of this book is that the principles governing the world of the soft--the world of intangibles, of media, of software, and of services--will soon command the world of the hard--the world of reality, of atoms, of objects, of steel and oil, and the hard work done by the sweat of brows. Iron and lumber will obey the laws of software, automobiles will follow the rules of networks, smokestacks will comply with the decrees of knowledge. If you want to envision where the future of your industry will be, imagine it as a business built entirely around the soft, even if at this point you see it based in the hard.

Kelly argued that "plenitude drives value." He pointed to three key new rules for the new economy---"It is global. It favors intangible things--ideas, information and relationships. And it is intensely interlinked."

However, this is also a week that wraps up a rather incredible year. Bernie Madoff has made off with $50 billion of others' money in an extraordinary graft, the White house has stingily granted $14 billion to preserve auto manufacturing and jobs in the country, Hank Paulson is on his way to spending $700 billion to restore a global financial system that is doing nothing to restore an economy, and Barak Obama's ambitious program to create 3 million jobs now looks feeble as the fallout from the excesses of virtual plenitude is predicted to cost over 4 million jobs.

It is yet early in the new cycle to see what trend there is in reaction to this very dangerous and fragile economy we are now in. But this reaction, combined with the interest in sustainability, and the "practical" rather than :ideological" character of the new administration, might all be pointing to a rewrite of those "new rules."

My suggestions---

  • It is intensely local. The increasing separation from the means of production brought a world in which the virtual representation of the real masked the reality of its ephemera. Arguments about global  flows and their contribution to cost and value collapsed in the face of the power of local conservation. Interest in sustainability brought awareness of the impacts of distance and the increasing value and measure of carbon footprints. Collapsed communities now bring awareness of the importance and real value of supporting local production. Employment, home values, real money, and sustained communities may now be seen as the products of thinking and acting local.
  • It is about the tangible. The products I am interested in these days carry the substantial value of authenticity. Whether "local" from Detroit, or Nepal, or Peru, they are the products of a distinctive, individual and embedded culture and not the marks of global "brands." I touch them and can tell a story about them and the people who made them. They endure in my house and in my appreciation long after the stuff with a label has been tossed out, having lost emotional and well as appreciable value. Most are "natural" in the sense that their materiality has a recognizable, experienced source. I now have more value to show for small investments in local things than can be shown from the waste of the billions in the pursuit of virtual WMD's, or the billions lost by many in the greedy search for more from Madoff's "black box."
  • It is about trust. I certainly believe in and benefit from the network. Much of the value I bring to my clients is enriched by the learning I bring from others' experiences in other places and others' expertise from other places. The value I receive and deliver is first grounded in a relationship, however. I know and have met these people. We exchange stories, challenge assumptions, test concepts, measure results. And the value given to me by my clients is also based on trust--that I am interested in what matters to them and will deliver what I offer to their satisfaction. The year-end roundup of tales of extraordinary fraud, economic collapse and world respect are all explained by a loss of "confidence"---trust---where in so many cases those who were intensely interlinked were not appropriately interrelated.

Kelly subtitled his book, "Radical strategies for a connected world." It will be interesting to see how sustainable these strategies are. Does the loss of plentude cause value to collapse, or does it reveal true value in the local, the tangible, and the social.