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Tough choices – Who to save…GM or Detroit?

May 28, 2009
architecture, Design strategy, Detroit, Strategy design, urban, workplace design
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As GM prepares for a bankruptcy filing later this week, and as the region’s business and political leaders gather at the anachoristic Grand Hotel on Mackinac Island for the annual regional Policy Conference, the subject of where the company’s headquarters might be is high on the buzz list.

Moving its headquarters out of Detroit as part of the compression of its operations and realignment of its corporate real estate portfolio was out of the question until Fritz Henderson, the company’s new CEO, said he’d look at all options as the company struggled for survival. The “all options” in this case referred to the concept, raised by the mayor of the suburban community where GM has its Technology Center, that GM should leave Detroit and consolidate in excess space in Warren.

The proposal clarifies that the options “are presented not to move jobs from Detroit to Warren, but to reduce GM’s costs as a first important step to profitability and efficiency.”

“I present this to you not as a choice between Detroit and Warren, but as a matter of GM moving forward and surviving,” Fouts’ letter states.

The concept produced a firestorm of criticism. But is it really a bad idea? If the focus is on the survival of GM, an essential economic engine in the region and the country, why is the welfare of the city of Detroit the defining agenda? Is the focus on the city as the primary determinant something that could affect the success of GM’s reorganization and reorientation?

Ever since Mayor Coleman Young at the beginning of his administration in 1974 told the criminals in Detroit to “hit the other side of Eight Mile,” there have been tensions and rivalries between the city and its suburbs. Mayor Fouts, of Warren, is only the latest in a long line of suburban municipal and county leaders who have, as some would say, cannibalized the city of Detroit by offering invitations and incentives for companies to relocate from the city.

The city itself seems to have been suicidal over the last generation, not only exclusionary to development interests, but also corrupt, antagonistic, and lately, disfunctional and absurd in its behaviors. Making the choice to come to the city is harder and harder to do and, I expect, the case to stay in Detroit for many companies and institutions is less rational than philanthropic.

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GM’s headquarters location, however, seems to be consistently linked to the life and health of the city. Its first, iconic, headquarters was built in the early 1920′s in an area of Detroit eventually called the New Center. Grand Boulevard, a ring road that when constructed represented the outer limits of the city, became the location for the next wave in the progressive outward expansion of the city brought byu the success of the auto industry. GM became the catalysts for development of retail, entertainment, business, cultural and residential occupancies in the area.

Economic and social issues with seeds in earlier decades eventually grew into the 1960′s. The New Center struggled to keep business occupancies, the surrounding neighborhoods began to decline, and the 1967 Detroit riots pretty much defined the end of the New Center. GM continued to support some aspects of renovation and redevelopment in the area, but it was clear that the location had lost its cache and GM’s interest.

GM eventually moved to the Renaissance Center, along the riverfront and near the historic, “old center” of the city. Renaissance Center was a concept of Henry Ford II as Ford Motor Company’s contribution to rejuvenate the flagging economic health of the city. The development was considered faulted from its beginning because it pulled the life from the streets and buildings in the center of the city, and surrounded itself with high concrete walls interpreted as a defensive perimeter from the citizens of a city not yet recovering from the impacts of the riots.

I was part of a team of planning and design consultants hired by GM in the early 1990′s to realign the company’s real estate and facilities portfolio with the cyclical reorganization and consolidation of the business beginning to take place. A central concept was to reduce GM’s holdings and leases to a small number of “thematic” locations. The Technology Center in Warren, the Proving Grounds in Milford and the Truck Products Center in Pontiac, were among those locations, and GM Headquarters was, of course, another.

The GM Building was beginning to show its age, and its narrow fingers were not supportive to the emerging structure and operations of the company. It was expensive to maintain, and difficult to renovate while occupied. Concurrently, the Renaissance Center became available and, after an assessment of the appropriateness for its reorganized operations, GM purchased the complex in 1996 and began its renovation, including making the complex more open, better managed, easier to comprehend, and more engaged with the surrounding developments on the riverfront. GM was again celebrated for its role in the rejuvenation of the economic life of the city.

In recent months, GM has been actively buying out the employment of its white collar workers. The Renaissance Center headquarters of the company, as with other properties, is now only partially occupied. Further reduction in the size of the company and its markets will continue to have an impact on occupancy there.

So, what now?

GM’s continued presence at this location is considered to be essential for the continued life of the city. It provides a real as well as psychological grounding for the economic and social life of the city, and even passively is an important basis for other development initiatives in the city. GM’s commitment can give others considering moves to the city a confidence that there is continuity and strength there. The large numbers of people who would remain with GM or be other tenants in the building provide at least daytime economic life to the limited retail and service businesses in the city. And longer term planning, like the proposed light rail transit system, would depend on GM as an anchor to the system and the basis for the other economic life and transformational development it is intended to catalyze along its route. Without GM occupancy, I do not think the system has any relevance.

So GM is essential to the life of the city, but is the Renaissance Center essential to the life of GM? I am deeply concerned about the city that has been the base for my career and the basis for my lifestyle. But I am fascinated by the question of how place affects performance, and the question of Detroit or Warren is provocative. So here are some speculations and provocations, not positions, as a means to gather further information and sustain further analysis and planning.

The Renaissance Center is a drain on the resources and energies of the company at the most critical time in its history. And it doesn’t really do all that much for the daily life of the city.

GM’s diminished scale – brands, people, plants, market share, resources – cannot justify nor sustain a multi-site empire. It had already effectively abandoned millions of square feet developed in the 1990′s for its Truck Products groups in Pontiac, just north of Detroit. The Milford Proving Grounds, a specialty campus, will certainly be underutilized in the new company. The Technical Center, a diverse campus for research, design and engineering, is underutilized and underdeveloped.

And Renaissance Center, where GM had been pusing other tenants out earlier in the decade, is now a swiss cheese of occupancy for a company not yet scaled or regorganized for its next generation. The complex is the transposition of a multi-tenant mixed use concept from another city and another economy. Peachtree Center in Atlanta was its model, and Portman’s duplication of the concept in Detroit – bad design and bad planning and in the wrong location – may, other than through taxation, have harmed the city more than helped.

A complex of five silos with small floorplates and no interconnectedness except through public spaces and defensive security at its base, separates the functions and staff of the company, reduces its speed and efficiency, and cannot provide the environment for new thinking and new acting demanded by the urgency of the current condition.

And Renaissance Center is a self-contained complex. Despite the best efforts to open the place up in its recent renovations, the people in the complex do not mix with the city. Work, food, services, parking and entertainment are all there, and people who have worked in the complex for years still do not know the names of the streets within blocks of the headquarters. If the complex had been built inboard a few blocks, at Grand Circus Park, the city might have had a diverse and lively downtown; built across a ten lane boulevard from the rest of the downtown, the complex is a symbol of renaissance but not a catalyst for it.

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The Technical Center in Warren focuses the company on its purpose – its products. It is itself a great symbol of leading design and engineering, and can catalyze energy, focus and achievement by linking the administration and management of the company with its product vision and quality.

The GM Technical Center, designed principally in the 60′s by Eero Saarinen remains an iconic and inspiring complex. As a campus of dedicated buildings, it clarifies and articulates the functions and purposes of the company – research, design, engineering, integration, fabrication, supply chain management – and the differentiating components of its products – styling, powertrain and technology. Locating the headquarters here would not only make the company more efficient, but provide a symbolic and physical environment for its renaissance.

Underutilized but recent buildings, originally planned for engineering teams, have light-filled, large, open floorplates that could change the insular culture sustained at the Renaissance Center, creating integrated and efficient teams connected and visible to each other and united around common and shared purpose.

I have worked on a number of studies for renovation, redevelopment and new development at the Technical Center, and know it can sustain the life of a smaller company, but also its expansion in future success.

So, which is more important? To make a probably interim, potentially ineffective, politically-motivated commitment to the Renaissance Center? Or to make a catalytic, transformational, refocused, repurposed company that can contribute in its rebirth to new economic development in the region?

What are your thoughts?

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What do cars, environmental policy and industrial policy have to do with alternative workplace design concepts?

May 20, 2009
Design strategy, Detroit, Strategy design, workplace design
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The photograph accompanying today’s news of the new national fuel economy standards for vehicles was extraordinary. Standing behind the President were the leadership of the American car industry – both management and labor – as well as some representatives of the global industry. Most of them, having fought fuel economy standards for the past decade or more, and having contended that the technology for more fuel efficient vehicles was just not developable for even incremental improvements over a decade, now stood in unified support of a dramatic and catalytic change in both policy and performance. The future is suddenly here.

This of course, has nothing direct to do with the way we design buildings or configure the places where we work. Or does it? I choose to read it as thematic, influential and compelling.

We are currently stuck in an extraordinarily tough recession economy initiated by easy credit and sustained by no credit. Prior to the compression caused by the crisis, we had been on a slow path to realizing the benefits of the technology boom of an earlier decade and the recognition of the unique, agile and mobile aspects of the knowledge economy of the last decade. Work behaviors, workstyles and workmodes were evolving, enabled by the increasing lightness of technology, encouraged by a growing enlightenment in integrated workplace policy, and accelerated by the very high costs of real estate brought by increasing urbanism in most of the world’s leading cities. The credit crisis has temporarily changed the underlying basis as well as the fuel for this movement.

That change was, however, also consistently resisted. The emerging shape of the workplace was, when effective, the physical manifestation of social, corporate, and demographic change, as well. Becoming light and agile – and collaborative and effective, and innovative and productive – meant going with the flow, a stream that included a recognition that work looks different now. Transparency, accessibility, spontaneity, mobility, were all essential factors in the the exchange of information, speed and accuracy of response, and orientation to purpose and innovation that yielded leadership, performance and growth.

But achieving these actions and benefits meant giving up paradigms of place that had become the hallmarks of individual and corporate progress for decades. One of the most telling illustrations of the resistance came in work I was doing for my own organization more than a decade ago. An executive colleague was representative of the company at the time when he said, “I’ve worked all my life to get a wood paneled office along this row, and now you’re taking it away?!?” Well, yes. The change was coming because the object of our work, and the purpose and benefits of our work, needed to be, and to be perceived as, more than that office.

I understand, but am surprised by the resistance to invest at this moment in workplace evolution. I certainly understand and accept the essential need for cost cutting. However, I also believe that testing, developing, and implementing the best practice in workplace change that had been achieved prior to the crisis may be a significant asset in getting out of the crisis, or at least being positioned for growth once things begin to flow again. Without this complementary action, the path to recovery and renewed competitive leadership will be very long.

That’s why I see that photograph as relevant here. Values identified and promoted by a movement for improvement, clearly important and beneficial to the environment and the economy, long resisted strenuously by people in wood-paneled offices, and theoretically derailed by an economy leading to bankruptcy and incapacity, are now enthusiastically embraced as the driving business value for the transformation of an industry and substantial contribution to the restoration of an economy.

I want to believe that this industrial change is the indicator of an essential tipping point for reorientation of business everywhere. It seems the symbol of an acceptance that there is a new reality out there, that a  foundation has been laid for a new way of thinking, acting and developing. Things will not, and should not, return to what existed before September of last year. Putting our energy and investment in the emerging concepts that we saw and accepted only at a promising periphery could now be the engine for growth.

(photo by Doug Mills, The New York Times)

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Happy meals – and how to save American cities by requiring a 2-hour lunch period

May 12, 2009
Strategy design
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Every Spring for the past decade (until this year!), I have had the privilege and delight of traveling with my family and friends to challenging and interesting places on the globe. Last year at this time we were in the Himalayas, in the tiny kingdom of Bhutan. Bhutan had become our selection as a detour from our original objective, Tibet, which the Chinese had at that time closed to foreign tourists. Our Bhutan trek was tough, but delightful – an extraordinary country, culture and people.

That recollection is only to offer a context for my interest in a couple of subjects in the press recently, and a reinforcement of a previously posted concept – saving the city by declaring a 2-hour lunch period.

Last week, the Organization for Economic Cooperation and Development issued statistics on the comparative health and welfare of its member organizations. As published in Floyd Norris’s article in the New York Times and commented on elsewhere, some of the data seems to correlate speed of eating with speed of economic recovery. That is, countries where people spend less than 100 minutes per day in eating and drinking are found to have an apparently higher productivity yielding a more rapid change in gross domestic product.

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My own experience has a bit of an opposite correlation. Over the past year, I have spent most of my lunch periods dashing across the street for a carry-out from the sandwich shop and eating at my desk while doing business research in the 20 minutes I gave myself to eat. Later, at home, my wife could barely tolerate her role in preparing a meal that would take me less than half the preparation time to consume before putting my face back in my computer for more work. In all of this past year, despite my best efforts, the fortunes of the company I worked for declined by a third.

When I recall the year before, and reflect on what is happening now, my behaviors and habits were more social, and the performance of my company, and now my own, were significantly higher. Lunch time was a period for meeting with others in other places and trading stories about experiences, perceptions and interests. Dinner times expanded the network and provided both rich relationships as well as valuable information for mutual interest and development. We were optimistic, engaged, connected, supportive and successful.

From our trek last year, we learned that rather than the GNP, Bhutan calculates its GNH – its “gross national happiness” – a numeric indicator of the health of the country along four pillars, nine domains, and 72 indicators. It is an attempt to develop a metric for certain subjective values where we, instead, use consumption as a defining measure. Time spent in different places and pursuits is part of that metric as well.

“You see what a complete dedication to economic development ends up in,” he said, referring to the global economic crisis. “Industrialized societies have decided now that G.N.P. is a broken promise.

…We are even breaking down the time of day: how much time a person spends with family, at work and so on,” Mr. Dorji said. (NYT)

I’ve offered this idea elsewhere, but these reports reinforce my speculation that time spent socially – enhancing a sense of well-being, supporting the development of trust, contributing to the sustainability of shared values – may strongly correlate with the financial health of cities, and probably with corporations. From this place in the industrial heartland, where Taylor’s time metrics and scientific management were hugely influential in defining a spare and time-focused culture, and where bankruptcy now defines what were once the “Big Three,” a bit of speculative experimentation about the best uses of time might be transformational.

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Hope and generosity – two great job loss moves

May 8, 2009
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Every day brings delightful coincidences in the network. Here are two great moves from today’s messages to be celebrated.

Cards of change

Layoffs are ugly. They are uniquely ugly for those who have been laid off who must then reprofile themselves, find new opportunity, make new beginnings.

For a few, it is a time of reinvention, rediscovery, and renewal, and may even include the experience of surprise, delight, and satisfaction that comes from a new place, a new identity, a new capability in roles not imagined before because of the clutter and mess of the daily routine in the old job.

Cards of Change is a great concept – business cards from the old job edited to represent the newer, more exciting, more optimistic move. Let me know if you upload yours, or have a similar story of the pleasure of finding otherwise undiscovered opportunity.

Cardsofchange is a place where the glass is always half-full. A destination where all the bad news of the day takes a back seat to stories of individual success.

Workstage

Layoffs are ugly. They are uniquely ugly for those who care, but have the task of delivering the bad news.

If you’ve ever been in a Workstage building, I expect you’ve had a great experience. Developed by a subsidiary of Steelcase, Workstage provided sustainable design and building integration and development in a very unique, and very nicely designed model.

Even though it was an great example for a new way of financing, developing and building, in a time of financial downturn and real estate oversupply it was not supportable.

Kurt Nahikian (gosh, I hope he doesn’t mind my doing this!) sent out a sad, but truly generous announcement of the closure of the company. I am not familiar with any other more caring layoff gestures like this, are you? And if you can help, do!

It was a great run…

Almost exactly 10 years after its visionary inception, Workstage closed its doors. A very sad and difficult day for the forty-plus families impacted by this change.

This was a truly amazing team delivering first-in-the-world innovation.

If you are interested in what kind of talent is now available in west Michigan – do not hesitate to contact me – I have stories to tell about each and every one of them.

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Linking back, 8 May 2009

May 7, 2009
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A number of self referential links this week –

I reflected on the demolition of a brand new development in California because the bank couldn’t sell the houses and didn’t want to pay for their completion. (I proposed a tool from health care regulation as a proposal to help avoid similar events in the future.) The picture accompanying the article and the videos posted elsewhere on the event certainly did not look like this – “Deconstructing in Cleveland” – was taking place. (via GLUE) Other impacts – safety and health – of financial industry supported excess and interruption also were reported.

Then this appeared – “15 Housing Projects from Hell” – apparently a good argument for demolishing a number of major built projects.

Along the vein of making do with what used to be there, and in confirmation of other thoughts and considerations on new moves in shrinking cities, there seemed to be a number of references to the “mistake on the lake” in my recent posts. Now, however, it seems that Cleveland is leading the nation. Fast Company magazine named it on of its “fast cities” recognizing its initiatives in urban agriculture. Separately, Fast Company also expressed a bit of the wonder we all have when thinking about this place we thought of as a joke, celebrating Ohio as the state with the “boldest architecture.” Back home, the Detroit-Berlin connection is developing this very interesting urban agricultural initiative, BEES.

I had expressed a concern earlier about the reduction in density in cities and the impacts on the retail ground floors of buildings. I was worried a bit about temporary and superficial decorative projects and looked for something more permanent and impactful. It looks like England has found the theme provocative as “artists come to high street” in London.

Then there was this rant, and the realization that I am not, apparently, one of those who left thought of “the dumb fist” behind in 1990.

And finally, Allison Areiff returns to an earlier theme – designing through a depression – about design in tough times that I addressed earlier this year.

Image, from the New York Times, is a limited edition print by Matt Jones to benefit Creative Commons (20×200.com).

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Could Certificates of Need solve the mortgage mess?

May 6, 2009
architecture, Detroit, Strategy design, urban
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There were a number of interesting considerations evoked suddenly by the story of a bank in California demolishing a neighborhood of new houses. This bank, the Guaranty Bank of Austin, rather than pay for completion of the houses and the development, which they contended would cost more than the houses could be sold for, demolished new unsold houses in the city of Victorville.

Guaranty Bank of Austin is wrecking the structures to provide a “safe environment” for neighbors of the abandoned housing tract in Victorville, a high-desert city about 85 miles northeast of Los Angeles, a bank spokesman said.

Sustainability principles came first to mind, but then quickly afterwards came the thoughts of bad banks and bad lending principles, considerations on compulsive consumption, taking down trees and putting up parking lots, proof of the need for regional planning policies, neighborhood “broken teeth” coming to suburbs as well as cities, and more.

The concept, however, that a major housing development is ending up as an incomplete, patchworked and probably never successful neighborhood made me wonder why the development was proposed, funded and started when, clearly, there was no real need or demand, no sustaining market, to have justified it. The developer and his bank were not acting in a community interest, but solely using consumption of the landscape as a financial tool, supported by policies and practices now discredited, but yet insufficiently regulated. The community, itself, in an apparent thirst for fees and an expanded tax base, overlooked its own limited attractiveness and supported a development that, in its demolition, harms not only the nascent neighborhood but the entire community.

Most of the focus of response to the mortgage crisis is centered on potentials in financial regulation. It seems, however, that there may be a lack of correlated policies and practices that, in the void, support and set the context for destructive financial incompetence. Community resistance to regional coordination may be at the core of this problem.

There is a control device used by most states to regulate the overdevelopment of health care facilities. Called a “certificate of need,” it acts as permit to allow institutions to build, but only after real basis for new facilities and equipment has been proven. Need is established by reviewing and projecting the demand for health care, assessing the capacity of existing institutions in the area and, if need is established, determining the type and amount of additional health care facilities that are required. With a longer view of demand and utilization, many regulatory agencies also achieve a stabilization of value with this tool by overcoming too rapid a response to fluctuating market forces.

The mortgage crisis is catalyst enough for new tools in planning and development. Our growing interest in “green” building and development can provide additional and substantial support as a platform for broader coordination and planning of both the physical as well as the financial space. And the “certificate of need” may provide both illustration and precedent for an effective device to be used by a concerned and enlightened county, regional or state government to stabilize and sustain the quality and character of its neighborhoods, and the economic well being of its citizens and its communities.

When stories of suburban demolition join the recent flood of stories about major cities using demolition to shrink to fit, it is a good indicator that more coordinated and integrated approaches are in demand.

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