City Doctors model (Bernardez, Kaufman, Krivasty & Arias)

(Click on the graphic to enlarge)

Just like their dwellers, cities can get sick.

When that happens, each citizen experiences multiple and dramatic symptoms affecting daily life: crime and insecurity, pollution, traffic jams, sanitary and waste management problems, air, water, damage and loss of property, property value, broken schools, ailing infrastructure, high taxes for poor quality services and quality of life in a seemingly endless sequence of calamities.

Treating symptoms, however, can be treacherous. Self-medication and turning to emergency rooms can end in even more dangerous treatment-borne complications, making the recovery more difficult and relapses more likely[1].

Adopting partial “solutions” that maximize a specific subsystem –being it tourism, housing, security or commerce- can create new, more complex and challenging problems[2].

Fighting crime without considering its causes and context –such as the reciprocal interactions between unemployment, poor education and inadequate housing and transportation- can end clogging courts and filling jails with increasing number of inmates that return to the city more violent and organized, spiraling up the cycle of violence –as the cases of Colombian[3] and Mexican[4] cities dramatically show-.

Experience shows that building public housing without addressing unemployment, crime and security issues often ends with squatters living in “vertical slums” such as Chicago’s Cabrini-Green. A prosperous, money-making logistic hub can turn into a “container town” that blue and white collar employees flee for safer suburbs before darkness falls.

A careful review of the history of “magic bullets” for sick cities, such as public housing, employment subsidies, “zero tolerance” or ambitious urban or touristic “revival” initiatives shows a discouraging rate of failure, unintended consequences and conflict between different groups of interest pressing to speed up for a new, and equally specific solution. Policies get mixed up with politics and vice versa, creating regulatory mazes that become a quagmire for reformers[5].

And then, people get sick of the city and leaves.

Property values drop, unwanted settlers like squatters and criminals get in and business and investment gets out at ever more alarming rates[6].

By then, the sick city has become also a “third rail” that every new administration tries to avoid, postponing solutions for cosmetic quick fixes.

It is usually a big event –such as Olympic Games, or land getting cheap enough to attract real estate speculation or a major social upheaval- that brings the sick city back to the spotlight.

By then, everybody is painfully aware that partial solutions and quick fixes will not do.

They have to find a doctor for the city that can unravel the maze of conflicting partial solutions and unlock the forces for change, aligning them towards a shared vision of the future all stakeholders want not for them, but for their children and grandchildren. This is the way every great city started in the first place.

In discussing the case of Colon City, Panama, and the approach we propose as a team of “city doctors”, we will show how a systemic, multi disciplinary and strategic plan can be developed and applied by a private-public consortium, the tools required and the lessons learned from what happened to Colon and the experience in other cities’ turnarounds.

In order to achieve progress in closing the gaps in all strategic indicators, avoiding the fate of previous projects that focused on improving specific areas, the consulting team developed a systemic framework and tools to coordinate all the efforts and actions required for a successful recovery and transformation, shown in Figure 1.

Figure 1: Framework for Colon’s transformation

(Click on the graphic to enlarge)

This model helped visualize Colon City as a system whose specific functions and subsystems –such as security, housing, health or tourism- only can produce successful and stable results if they are focused and aligned to a shared vision and common indicators.

The key to successful recovery of Colon City historical center –and the entire Manzanillo island area- was to align actions in the seven areas following a shared vision and a integrated plan –shown in Table 2-.

Table 2: Integrated actions for Colon City’s transformation

Area	Approach & actions	Synergies with
Community development	·         Coordinate and align efforts: turn from “relocation” into transformation of Colon and new host communities through private & public action ·         Creating social and economic conditions for successful new communities	·         Jobs ·         Transportation
Security	·         “Broken windows” approach ·         Turning gangs around ·         Creating local jobs ·         Attracting, developing and retaining human capital to Colon City ·         Increase critical manpower and resources for: police, justice, education and health services ·         Improve critical infrastructure ·         Health	·         Community development (construction) ·         Waste management (jobs) ·         Health & quality of life ·         Education & training
Tourism destination	·         Cultural shows ·         Historic buildings and places (“Stranger’s Club”) ·         Tourism circuits ·         Tourism package project coordination ·         Employing local workforce for hospitality, tourist guides ·         Coordinate and organize value chain (from the port / airport on and back) ·         Organize services around shared client experience	·         Education & training ·         Community development
Waste management and infrastructure	·         Involving local workforce in cleaning , infrastructure building, sanitation and health campaigns ·         Block teams of residents to keep the city clean and provide quick feedback for improvement, problems ·         Local recycling and waste management micro enterprises, teams generating extra revenue, self-sufficiency, local jobs ·         Education as prevention agents	·         Health and quality of life ·         Security (de-slumification[1])
Health & quality of life	·         Campaign for clean water and air ·         Remodeling local hospital, health centers for prevention ·         Campaigns for respiratory, gastrointestinal diseases ·         Improving food supply and preservation chains ·         Health and cleaning habits education ·         Transportation (commuting, connecting parts of the city)	·         Security ·         Community development ·         Waste management jobs
Education & training	·         Focus on SKA required for Colon City’s transformation jobs, employability ·         Graduating not only individuals, but small companies able to provide services to Colon City and create sustainable jobs ·         Kindergarten to University approach, job market-oriented education, vertically aligned ·         Run by a public-private consortium integrated by government, business and universities	·         Community development ·         Employment and workforce development
Employment and workforce development	·         Provide alternatives to gangs and subsidies ·         Increase local workforce’s employability ·         Put Colon’s resident to work in Colon’s transformation ·         New model of contract for community building linking housing to jobs and performance standards	·         Security ·         Education and training ·         Tourism ·         Waste management

The actions in each area must be coordinated and sequenced with others to avoid conflicts and unwanted consequences –such as, for example, relocating squatters in places where they cannot find jobs- and “connecting the dots” finding synergies between different areas that save time and resources – such as, for example, employing former and recovering gang members in cleaning streets, recycling and managing waste and building their new houses and remodeling the old historic district-

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[1] In her 1961 book The death and life of great American cities Jane Jacobs coined the term “de-slumification” to describe how slum dwellers can turn around and revert the decay by taking ownership and finding reasons to stay (Jacobs, 1993)

References:

• Bernardez, M., Kaufman, R., Krivatsy & Arias, C. (2009) City Doctors. Performance Improvement Review
• City Doctors Program, Performance Improvement Institute
• City Doctors Barcelona Global Forum 2018

Nanoeconomics (Bernardez & Perelrozen)

 A “nanoeconomics” approach and tools such as those we are going to present in this article can potentially unlock economic growth in two ways: 

(a)  improving the performance (cost/benefit) of informal economic activities in terms of the net benefit for the households and community and 

(b)  enabling and promoting upward mobility and formalization and consequent stability and growth of households’ net worth and social capital.

We are not advocating for growing the informal economy, but actually the opposite.

Using a gradual approach based on understanding the “micro-motives” behind the macroeconomic behavior (Schelling, 1978) it is possible to actually increase and accelerate the transition to formality of informal settlements. 

Only by actually understanding the micro-motives and mechanisms that drive people into the informal economy it is possible to “nudge[1]” them into the legal and economic integration. (Thaler, 2008)

Adopting a nano-economic framework, we created a reporting and measuring system that shows the economic activity of each household across multiple “lanes” of informal and formal economy. More importantly, looking at the economic activities from the household perspective it is possible to identify key points and create “nudges” or choices to drive them into better formal options. Those “nudges” operate as “ladders” between informal and formal lanes of economic activity and income levels.

This nano-economic, household-focused approach helps to understand the real economy of the low-income neighborhood and therefore, monitor and manage upward mobility and transitioning from informal to formal economic systems.

Nano-economic approaches like this may also help households and neighbors to gain control over their own economic destiny and manage more effectively a mix of entrepreneurial, informal and formal employment.

Although this level of analytic information is not readily available to informal settlement’s households, it provides a better picture of their actual economic situation and the type of factors that “humans” -unlike “econs”, the rational “homo economicus” used by classic economics- take into consideration in their economic decisions. (Thaler, 2008)

“Eyes on the street” data

Gathering this kind of data -often under or unreported- can be challenging, mostly for the fears of penalizing consequences those in the informal economy are used to experience. Creating trust by working closely with households under a clear agreement of cooperation and confidentiality is critical for obtaining valid data on a regular basis. (Fukuyama, 1995)

Using the kind of nano economic scoreboard exemplified in Table 5 may help improving the quality of economic decisions households make and thus, their chances for moving upward between economic lanes as well as in terms of survival and prosperity. (Christensen, Ojomo, & Dillon, 2019)

Even in the case Table 5-type information is not available or reliable, identifying the nano-economic variables can be critical for

(a)    understanding and predicting households’ behavior and reactions (individual and aggregated) to economic development and commercial integration proposals,

(b)    identifying factors that can help “nudge” households towards better and more desirable economic choices -what Thaler calls “choice architecture”- instead of blindly “pushing” through regulation that usually generates unintended and adverse consequences, and

(c)      helping households make better economic and business decisions plans avoiding the “survival trap” most such entrepreneurs at this level get caught in.

The nano-economic approach sets “eyes on the street” -as Jane Jacobs recommended (Jacobs, 1993) (Kanigel, 2017)- and provides a realistic perspective of the realities informal settlers engaged in diverse forms of “survival entrepreneurship” (Neuwirth, 2011) and informal economics face and operate daily. (Dalglish & Tonelli, 2016)

A “nano-economics” approach not only helps understand the objective realities that households in informal settlements face daily: it also helps identify the subjective, cultural mindset that informs economic decisions (Davis, 2007) (Bastia, 1985) (Bazan, 2018) (Ossona, 2014) (Harrison, 1985). 

For those who grew up in the informal economy taking jobs in the formal economy can be challenging and also counter-intuitive. Why pay taxes or into social security, healthcare, set up credit card payments, open a bank account when the cash-based, off-the-books economy seems to save all those costs and hazards?

Convincing answers to such kind of questions are critical to engage households in informal settlements into economic development programs that give them access to the gates of upward mobility.

Instead of using artificial statistical aggregates as a construct to explain “macro behavior”, nano economic analysis provides a real vision of a population’s actual economic behavior and the real “micro motives” that drive it. (Schelling, 1978)

References

• Bernardez, M. & Perelrozen, M. (2019) Nanoeconomics in Barrio 31, Buenos Aires. Performance Improvement Journal, ISPI

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[1] “A nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives.” (Thaler, 2008)

Thinking Outside the Box

"I think this is the most extraordinary collection of talent, of human knowledge, that has ever been gathered together at the White House, with the possible exception of when Thomas Jefferson dined alone." John F. Kennedy, “Remarks at a Dinner Honoring Nobel Prize Winners of the Western Hemisphere,” 29 Apr. 1962. 

High performance requires us to break with conformity, conventional wisdom and the safe, predictable boundaries of pre-existing knowledge, "best practices" and experience. As the speaker in the TED talk explains, about 3 percent of people thinks that way.

Routine, habit, best practices and methodologies, tried and proven models provide "boxes" and rails to facilitate what Nobel Prize Daniel Kahneman calls "system one-thinking" or "thinking fast"

High-level, "system two" -type of "slow" thinking requires also to "think outside the box", in other words, to step outside the boundaries of habit, experience and received, accepted wisdom. 

Models such as Kahneman's and "decoupling" can serve as examples of "thinking out of the box", in other words, escaping existing models.

Think of:

1. Reversing cause and effect ("what if...")
2. Step back (and back again) until you see the whole, the larger framework
3. Ask, listen, set your eyes on the street without a previous purpose
4. Identify steps in the value chain that add value and try to separate them from those who don't. Is there a better way?
5. Think as an end user, try it on, walk it, drive it.
6. Look at analogies, metaphors

Look at this image and tell yourself how many squares you can see here:

There is a fast answer. Write that one down. Try to find more. All those possible. The difference between the fast answer and the last answer is the difference between fast thinking and deep thinking, between thinking inside and outside the box, between standard performance (16?) and high performance (34?).  Majorities tend to fall into "group thinking" and conformity, unless you invite them to think "out of the box". Maybe asking them questions, looking at other people's ideas or points of view, arguing, asking them to show or explain what they see or thinks differently. These are some proven techniques.

In 1895, dramatist Henryck Ibsen wrote a play about this problem "An Enemy of the People" where the main character explains why "the majority is always wrong":

Ibsen's dilemma shows that "thinking outside the box" poses social conflicts: (a) between those who stay with the majority and the standard and those who look beyond and (b) between social conformity and acceptance / encouragement of dissent.

Well before Ibsen, Plato explained this problem with the allegory of the cave, which exposes the process of knowledge as the conflict between thinking inside and outside the "box":

 "Plato has Socrates describe a group of people who have lived chained to the wall of a cave all of their lives, facing a blank wall. The people watch shadows projected on the wall from objects passing in front of a fire behind them, and give names to these shadows. The shadows are the prisoners' reality. Socrates explains how the philosopher is like a prisoner who is freed from the cave and comes to understand that the shadows on the wall are not reality at all, for he can perceive the true form of reality rather than the manufactured reality that is the shadows seen by the prisoners. The inmates of this place do not even desire to leave their prison, for they know no better life. The prisoners manage to break their bonds one day, and discover that their reality was not what they thought it was. They discovered the sun, which Plato uses as an analogy for the fire that man cannot see behind. Like the fire that cast light on the walls of the cave, the human condition is forever bound to the impressions that are received through the senses. "

Kahneman's formulation helps focus on forms of thinking that we can (and often have to) use alternatively in order to address different kind of situations.