Stepping Outside the (Urban) Batter’s Box

Friday, March 12th, 2010

Few American cities have been thrown as many curveballs as Detroit. The city that was once the symbol of America’s economic prosperity has been suffering from a long, sometimes gradual, sometimes precipitous decline. What began as white flight from a still economically vibrant but racially troubled metropolis, turned into an across the board economic meltdown that coincided with the collapse of the American automobile industry in 2008 and 2009.

Now, a city of nearly 2 million in the 1950s has declined to less than half that number. On some blocks, only one or two occupied houses remain, surrounded by trash-strewn lots and vacant, burned-out homes. Scavengers have stripped anything of value from empty buildings. According to one recent estimate, Detroit has 33,500 empty houses and 91,000 vacant residential lots.

—Associated Press, Detroit Wants to Save Itself by Shrinking

Recently elected mayor Dave Bing, a successful businessman and former professional basketball player, and the rest of the city’s officials, were confronted with a $300 million budget deficit, a small and shrinking tax base, and increasing demands for police, fire and other municipal services. Then the recession of 2008 struck, making things even worse. Detroit seems on its way to plunging into unprecedented depths for a modern American metropolis (save New Orleans). If ever
there is a time to think outside the box, this is it.

“Things that were unthinkable are now becoming thinkable,” said James W. Hughes, dean of the School of Planning and Public Policy at Rutgers University, who is among the urban experts watching the experiment with interest. “There is now a realization that past glories are never going to be recaptured. Some people probably don’t accept that, but that is the reality.”

—Associated Press, Detroit Wants to Save Itself by Shrinking

What is Detroit’s plan? To shrink the city. Blighted areas will be entirely demolished. Residents in those areas will be relocated to healthier parts of the city. And how will the demolished areas be redeveloped? They won’t be. The idea is to let them become semi rural and revert to agricultural and other uses that require very little municipal support. The concept has been used by other cities before, but never on the scale Detroit is proposing.

No one can yet say whether this “undevelopment” of Detroit will work. But what no one can deny is that, faced with a series of unprecedented curveballs the city’s new leadership is showing a willingness to step outside the batter’s box. You have to admire the effort.

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How Will Amazon Respond to the iCurveball?

Friday, March 5th, 2010

Amazon certainly knew that Apple would release a tablet computer that would likely compete directly with its own Kindle electronic book reader. But apparently, Apple’s coming out with plans to offer a version of the product for as low as $499 was a curveball, not just to Amazon, but to most industry observers. It seems that the ability to come in at a lower than expected price is a result of Apple using its own chips rather buying them from another manufacturer.

How will Amazon respond? Will it continue to position the Kindle as a dedicated eBook reader different than the iPad’s multi-role positioning? Or will it try to make the next generation of Kindles more like the iPad?

There are many hints Amazon will choose the latter option. Some bloggers are even predicting an Amazon/Microsoft alliance.

Imagine a Windows 7 Phone Series device scaled up to a 10.1 inch screen, with Wireless-N networking, Microsoft’s Zune/Amazon MP3 music service, Kindle’s e-book store and Microsoft’s developer base behind it. A synthesis of the world’s largest Internet retailer, ebook reseller and the world’s largest software company.

—Tech Broiler, ZDNet.com, Does Amazon’s Tablet Future Lie With Microsoft?

I don’t know if that’s the path Amazon will take. But following how various players in this business respond to the curveballs they’re thrown by each of their competitors will make for fascinating reading on whatever device you use.

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A Big Swing and a Miss…

Friday, February 26th, 2010

There’s no other way to characterize Toyota’s response to the curveball it was thrown regarding its massive automotive recall issues. Toyota failed to step up to the plate by initially ignoring the problem, apparently hoping it would all go away. Then the company failed to step outside the batter’s box and look at the situation from a fresh perspective. Those are just two problems that instantly come to mind. As time goes on, I’m sure we will all be able to come up with more. What’s already clear, however, is that this event in Toyota’s corporate history is truly an epic international whiff.

In business schools, Johnson & Johnson is the golden standard for crisis management and brand protection. In years ahead, Toyota is likely to become the standard for brand damage.

—The Sydney Morning Herald, Oh, What a Failing

But it could be that there’s more to this strike out than just bad management.

[It] is obvious that crisis management does not seem to be Toyota’s strong suit. This is as much a cultural issue as anything, notes Kingston, director of Asian Studies at Temple University Japan. His book Contemporary Japan: History, Politics and Social Change is due out in September.

“Over the past two decades, I cannot think of one instance where a Japanese company has done a good job managing a crisis. The pattern is all too familiar, typically involving slow initial response, minimizing the problem, foot dragging on the product recall, poor communication with the public about the problem and too little compassion and concern for consumers adversely affected by the product,” he notes.

Japanese companies in Japan don’t pay much of a price for negligence and that’s part of the problem, he adds. In Japan, compensation for product liability claims is mostly derisory or non-existent. In a nutshell, “producer interests trump consumer safety,” in Japan, he says.

—The Globe and Mail, Crisis Management Not Toyota’s Strong Suit

I didn’t address cultural factors in the book, but there seems to be something to this notion that they may impact how companies and people deal with curveballs.

What do you think?

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