3 things cities can teach businesses

By 2030, an unprecedented 60 percent of the world’s population, or 5 billion people, will be living in cities.

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McKinsey & Company’s new report, “How to make a great city,” notes that urban areas around the world are at a crossroads, with their leaders needing to make strategic decisions that will impact their city’s and people’s long-term well being.

City leaders who 1) achieve smart growth, 2) do more with less and 3) win support for change put their cities in a position to improve and become great. So what can the heads of the more than 27.9 million small businesses in the US learn from city leaders in order to build great businesses?

Achieve smart growth: Smart growth identifies and nurtures the very best opportunities for growth.”

Part of a business’ SWOT analysis looks at opportunities that a firm can capitalize on. While the opportunities include variables beyond a firm’s control, creating the right environment within an organization to take advantage of a break when it’s at hand can be the difference between jumping ahead of the game (even creating the game), or playing catch up. Google’s 20% time encourages staff to follow up on ideas that don’t fall under a person’s typical scope of work. Leaders that create an environment that values people looking into maverick ideas as part of their day-to-day workload, position the company to better see new chances for growth and adding value to customers.

Several years ago Roni and Ken Di Lullo noticed their dog squint during a visit to a park which led them to wonder whether they could do something about it. The result: “Doggles” – the first of its kind company that makes goggles for dogs. From starting out by modifying sports goggles for her dog, to reaching out to eyeware manufactures to build prototypes for dogs, to quitting her job to focus 100% on the business, the Di Lullo’s have made the most out of their idea. By creating and delivering a product that pet-owners appreciate, they’ve carved out a niche for themselves, reaching $3 million in revenue in 2012.

Do more with less: “Great cities secure all revenues due.”

Cities that don’t effective collect taxes leave revenue on the table and run the risk of not being able to meet the needs of their citizens. Similarly, businesses that don’t manage customer/client relationships effectively run the risk of over-delivering and not getting paid for it.

Since all clients have limited resources, they want to make their dollars stretch and that often means that they will ask their service providers (advertising agencies, PR firms, consultants, etc.) to go above and beyond the original scope of the agreed upon plan. In many cases, this is fine if both parties are on the same page. However, business leaders must identify projects and customers that will be a good fit for the company, ensuring on the B2B side that there’s limited project scope creep with clients. Otherwise, the service provider can suffer from people being stretched to thin, other clients feeling neglected and team morale sinking.

Win support for change: Successful city leaders build a high-performing team of civil servants, create a working environment where all employees are accountable for their actions.”

Like all great cities, a company’s strength stems from its people. Business leaders need to identify and put the right people in the right places so that they can thrive, and in turn, build and sustain a healthy company.

Start with culture. Shawn Parr, the Guvner & CEO of innovation and design consultancy Bulldog Drummond, explains in the Fast Company article Culture eats strategy for lunch, that culture is the “balanced blend of human psychology, attitudes, actions, and beliefs that combined create either pleasure or pain, serious momentum or miserable stagnation.” Look first for the people who will fit the culture of the organization and avoiding the “expert” just because s/he is the expert. By finding people who fit the culture of the company, there’s likely a better chance to build a high performing collaborative team focused on the same objectives.

Businesses that can learn from great cities will be on their way to smart and sustainable growth, and potentially, greatness too.

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