Cities are being disrupted… who will win?

5 April 2016
4 min read

More than ever before, cities need to draw on contemporary lessons from the business community to help them navigate an increasingly complex future.

Companies that grow over time often suffer from a deep embedded conservatism. They do things “Because that’s the way we’ve always done them around here…” Consequently, the business world is littered with failures. But there are also examples of stellar success. The question for our cities is: “Which do you want to be?”

In so many ways, cities can be seen in the same light as companies. Like companies, they face enormous challenges (and opportunities) brought about by a digital future. Fast forward 20 years, and all of us will want to live in what’s being termed ‘smart cities’.

Getting to this future, however, is proving to be a challenge. City leadership will need to learn lessons from businesses that have dramatically failed if they have any hope of creating a better future…

A famous example of crippling conservatism in the business market was Kodak. Ironically, it was Kodak who invented the digital camera, yet tragically they were declared bankrupt and forced to close their doors. What were they missing?

As the phenomenon of collecting memories in real-time grew, and alongside this the ability to edit and share these memories, so did the plethora of companies who were clever enough to focus on meaning, and not technology, for breakthrough success. Kodak hired teams of industry analysts who all told them that digital photography was the future – but they fired them, and others to follow.

‘Disruptors’ such as the digital camera have been with us since the beginning of time. The horse and carriage was replaced by the motor vehicle; the mainframe computer by the PC; and Blockbuster by Netflix. What is new is the pace of change we’re encountering today.

CitiesSmart businesses are realising that this ‘disruption’ poses a risk to their success; and they’re continually renewing their response and resilience on an on-going basis.

Smart cities should be doing the same! Our cities today are too often a myriad of small councils who can rarely agree; or one large council who has its focus fixed on the here and now.

Do they have the right strategic or visionary mind-set to make the big decisions that are needed to achieve a smart city state? How can a multiplicity of councils truly plan for autonomous vehicles or smart power networks or artificial intelligence in everything?

In business, a proven methodology for success involves a deep understanding of the three risk horizons: identifiable risks; strategic risk; and emergent risk. City fathers should ignore this at their peril.

Most organisations are cognisant of identifiable, or immediate, risks and address these as part of a ‘business-as-usual’ approach. More evolved organisations develop strategies for overcoming risks that might impact them in the future; thereby creating competitive advantage over a longer period of time.

Most organisations, however, fail to consider emergent risks. These are the obliques – the exponential technologies and things that are outside of their range of contemplation. Like Kodak, they fail to see the new disruptive influence and they fail to let go of the old in order to let in the new.

Climatic zones are shifting and if they do; will entire farmlands need to be relocated? Would city planners ever let go of their current location in favour of reconstructing elsewhere in a new, better location? Ocean levels are changing and different rain patterns are evolving and if they do, how will this influence the manner in which cities grow? More importantly, what are the consequences of ignoring these risks?

Strategic planning at a city level will create an advantage whereby one city ‘succeeds’ by comparison to others. The first city to truly adopt digital will become a magnet for industries and, as a result, a magnet for prosperity and liveability.

Cities should not be run in the here and now. They should be run as elite business entities and follow a blueprint for success. Unless they are actively identifying emergent risks and strategising for long term growth by seeking to create competitive advantage – they are, possibly, heading for a Kodak moment.

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Matt Coetzee
Written by
Matt Coetzee

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