The ‘wallflower effect’ in crafting smart city partnerships

Having spent the past two years researching the hype curve of smart and resilient city innovation, I’ve learned of the financial obstacles of getting these projects through municipal procurement watchdogs. Even in the most well-endowed cities, they can rarely go it alone when it comes to smart infrastructure projects.

In the private sector we would typically regard projects between a customer and vendor as a basic financial transaction using POs and invoices. However as a rookie in the public sector, I’ve learned that such civic transactions have hundreds of nuances ranging from traditional cash deals to incredibly complex P3s, or what those in government know as public private partnerships.

Given the sad state of finances in many cities, very creative P3s are becoming increasingly popular. In addition to the financial advantages, these partnerships serve as a form of innovation outsourcing since many cities cannot afford the overhead of creative disruption incubators in the city hall budget.

Despite the necessity for P3s for these major projects, the mating ritual required to get them started can be very awkward.

The best analogy came from a seasoned public sector vendor. “It’s like boys and girls lined up on opposite walls of the gym during the middle school formal. Everyone waiting for the first brave couple to pair up on the dance floor. When it happens it’s typically a slow dance with arms outstretched!”

I call this extreme fear and extreme desire to do the P3 dance “The Wallflower Effect.”

Both parties know that someone must take the lead. Vendors need to assure their management that concessions don’t get in the way of margins and profits. Government officials need to be sure they get reappointed or re-elected based on a tangible return on taxpayer’s dollars.

I realized I was in a different world during a speech about the P3 deployment of a new bus rapid transit (BRT) system by a major city’s transportation director. After detailing an impressive rollout of Phase 1 and Phase 2 of the project, the moderator asked the official to foreshadow Phase 3. The answer was short and painfully honest, “Phase 3 is to get my Mayor re-elected so we can complete the project.”

Granted, private enterprises want management continuity to assure the completion of their own internal technology and process initiatives. But the implications of the need for municipal political continuity for the completion of P3 projects are profound.

The thing a wallflower fears the most is having to continuously find a new dance partner during the formal. P3 vendors feel the same way about the longer term risk of weak mayors; and strong technocratic mayors feel the same way about unstable vendors. Most important vendors and city officials both share a fear of taxpayers shaking pitchforks at city hall.

So what do public and private sector officials do to shorten the Wallflower Effect and to raise the safety net on public private partnerships?

Survivability

The road is littered with partners who wanted to do P3s but never had the political capital within the government to pull it off. It behooves private sector officials to vet even the most enthusiastic P3 point person in city government. Needless to say, city officials must do the same.

It is easy to get a sugar rush from vendors proposing projects that purportedly will increase citizen engagement and satisfaction. Given the relatively short history of sophisticated smart city projects, the ability to provide use-cases or proof-points can be rare.

Complexity

At the risk of being trite, the devil in P3s is very much in the details. The number of moving pieces related to finance, legal, state and federal government sign-off, politics, citizen involvement, and the economy are staggering. Add to that the fact that many P3s are driven by department directors who have had little experience with the collaborative demands required to bring the projects to a successful conclusion. 

Content & Training

Private sector executives tend to totally underestimate the amount of coaching and training required to get technology-challenged public sector officials up to speed on the intricacies of the project. The demands for creating sales and support content for the wide variety of municipal influencers involved in these projects is not for the faint at heart. This is coupled with municipal officials who might nit be sophisticated with the technologies to ask the right questions.

Future-proofing

Procurement can be the natural enemy of P3 innovation. I’ve interviewed chief innovation officers for many cities who tell me the procurement cycle for untested technologies can approach 400 days. In some fast paced industries that’s a product life cycle. P3 partners need to be future-proof the deployments to assure that when the initiative is launched to the public, it’s not the equivalent to “day-old sushi”

Citizen Engagement

 Finally and most important is the fact that no 21st century P3 can be successful without some direct and meaningful citizen involvement. `Many of the most publicized P3 failures because of underestimation, or worse, complete lack of involvement of the populous. As a resident of the Boston area I’ll never forget how many taxpayers were totally unaware that an Olympic venue was proposed in their neighborhood until they saw it in the Olympic organizing committee promotional materials. Boston taxpayers also found out after the fact that they could be on the hook for cost over-runs. The bid was unceremoniously withdrawn and Los Angeles is now the U.S. city selected as the venue.

So what do public and private sector officials do to shorten the Wallflower Effect and to raise the safety net on public private partnerships?

RELATED LINKS

How big is the Smart City?

Talking innovation with smart city pioneers

Why cocktail-napkin deals inspire agility

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