Smart Cities? It Takes More than a Village

Amy C. Edmondson & Susan Salter Reynolds

            You’ve seen the pictures—shining new cities, state-of-the-art, innovative, energy-saving technology, sustainable food production, resilient infrastructure. Mixed use designs. Smart transportation. We’ve got the language, the vision, and the technology.  Not to mention the need.  As many have noted, the combined megatrends of rapid urbanization and concerns about environmental sustainability has been pointing to cities as a crucial target for innovation.

            So why don’t we yet have the cities? To be fair, we’re working on it. As of this writing, in the U.S., the Department of Transportation’s Smart City Challenge has identified seven finalists for their fifty-million-dollar prize (forty million from the federal government, ten million from Microsoft). Denmark’s Copenhagen Connect initiative is revamping the city from the ground up, one small step at a time, from parking meters and lights to transportation and energy efficiency. China’s determination to become a leader in the smart city world has resulted in dozens of smart city applications and plans for dozens of new cities.  Australia, India, Thailand—just about every country in the world is developing partnerships with tech companies to create better, more efficient lives for those who live and work in cities.

            But it is heavy lifting, and not just because these projects are big. Building new cities and retrofitting existing cities requires a level of teamwork across industries and areas of expertise rarely seen on the world stage. In short, it’s a monumental leadership challenge.  Once again, human beings are plodding up the learning curve—learning to work together, learning new languages, and learning to navigate conflicting priorities and expectations. Jagdish Salgaonkar, SVP Major Programs, AECOM, who is managing the development of the new City of Dholera in India, with its projections of two million inhabitants and 800,000 new jobs, summed up the challenge last month: Asked if he’d ever built a city like this before, he said, “No! I don’t think anyone has. Honestly, you stay focused, take it one step at a time and continuously check to make sure you are moving towards the collective vision.”

            The collective vision. What is that, exactly? For the real estate developer, the financier, the engineer, the architect, the tech developer, and the government official—all necessary players in any smart city project—vision means very different things. Indeed, making the vision collective is a core part of the challenge.  Our new book, Building the Future – a deep dive into a particularly ambitious and innovative smart-city project – shows just how challenging it can be.

            Seven years ago, interested in the challenges of audacious innovations like “smart” sustainable cities, Susan Salter Reynolds and I (we also coauthored this post) jumped at the chance to follow a tech start up setting out to build a new city in Portugal. We tracked the company, Living PlanIT, led by ex-Microsoft developer, Steve Lewis, from its founding through its first six years.  Communicating his vision to potential investors and corporate clients, Lewis was a compelling spokesperson for building a better future – on purpose.

            The odds were stacked against the young company that anchors our book.  After all, most startups fail, and one can only imagine that those who set out to build a new city from scratch might land in that group.  But when the Portuguese government offered them a piece of land near Porto, followed by prestigious status that allowed them to jump through permitting hoops, we were intrigued. We watched closely as the company’s ambitions grew and solidified.  

            Over time, one theme came to dominate our research.  We started to call it “Big Teaming” – teaming that must cross, not just disciplinary, but industry boundaries.  To build an innovative, sensor-laden, data-driven smart city from scratch required future-oriented experts from real estate development working with local government, architects, builders, engineers, and all kinds of corporate partners and tenants.  Each of these experts came to the table with his or her own (partly taken-for-granted) values, skills, time-frames, and business models – and that, we discovered, led to palpable culture clash. 

            Some on the team had an anti-corporate bias.  Corporations are blind “to the potential of this work,” one said, “they didn’t see the Internet coming; they didn’t see mobile phones coming…they’re unable to predict the future.” Lewis believed that corporations had to be educated—brought around to his vision of the future.  As for real estate developers and their ability to innovate, he felt that most of them were stuck in the past, without “a bloody clue.”  Some of the real estate developers we spoke with felt the same way about the software company: “With Living PlanIT,” the CFO of London-based Quintain Estates, a company that partnered, for a while, with Living PlanIT, lamented, “we’re dealing with IT-based people, which is a very different world.  You’ve only got to read The Facebook Effect to realize how different a world it is for people like us.  At the end of the day, in the IT world, all they’ve got to do to make their good idea marketable is rent some space, and that’s pretty cheap. What these guys would like to do is go and build some buildings, and that ain’t cheap.”  Comments like this started to show up more and more frequently in our interviews. And, as the magnitude of the challenge clarified, everyone began to point fingers at other groups to find the source of stalled progress.

            The smart city industry was changing, too. Uncertainty in this space made collaboration and shared vision even more important, but also more difficult to create.  In these years, employees came and went. Conflicts arising between areas of expertise made collaboration inside and outside the company difficult. Some blamed the real estate developers for their rigid business models. Others blamed the construction industry for its resistance to change; others claimed that outdated hierarchies in the business world made it difficult for corporate partners to move fast enough to keep up with the start up.  Some blamed Lewis’s leadership. “We need to move from an entrepreneurial culture,” said the chair of the company’s advisory board, “to one of execution.” An executive who left Cisco to work with Living PlanIT summed it up when he told us: “More and more with these complex issues, it will be much more about an ecosystem, bringing people and competencies together from different industries. It will be less about one company doing it all…it’s more about people who can bridge some of these competencies and work across different companies.”

            Over time, the company recalibrated its goals.  Rather than continuing to emphasize building a new city, the company’s attention, to its credit, shifted to its proprietary Urban Operating System—software to process data from buildings and infrastructure to adjust settings automatically based on their environments. Talk of the software and the company’s new identity as a platform developer started to eclipse talk of the new city in Portugal.

            By the end (of our book, not of the company or the realization of its vision), Living PlanIT had not become a household name, not become the next big thing. This may still happen, and it may not, but we had to make sense of what we had observed and move on. Future building, as we explain in the book, has little to do with solitary ideas and inventions. It’s about creating new systems—and these require leadership and collaboration.

            Like our subjects, we too were focused on big vision. Were we disappointed that Living PlanIT had not changed the world by the time our book went to press? You bet.  Did we learn something about big teaming for audacious innovation along the way?

            Absolutely.