VC investment in proptech can yield profits and change lives

In 2020, nearly $24 billion in venture capital poured into companies creating new technology products or innovative business models for the real estate market.

While things like smart home apps and digital mortgage financing services make life easier for upmarket renters and homeowners, none of these technologies help improve the day-to-day struggles of the vast majority of low-income families.

Many of these emergent technologies could be adapted to become “housing tech” solutions — focused on financial resilience, fresh food access, healthcare access and workforce development — which have the potential to transform the lives of our most at-risk populations.

Consider this: Nearly eight million Americans have slipped into poverty since May, according to a study released by Columbia University. Before the COVID-19 crisis hit, approximately half of all American households struggled to pay rent; a problem that is growing larger by the day as pandemic job losses continue to mount.

About 23.5 million people — half of whom are low income — live in food deserts where access to affordable, healthy food is limited or nonexistent. And good health care is almost impossible to access, let alone pay for, if you are poor.

As the global crisis continues to lay bare the deep inequities in our society, it’s clear that we need new ways of thinking to address these systemic issues. Investment in technology innovation in the affordable housing area could help solve these problems.

Local governments and nonprofits are doing what they can. In 2015, New York launched Urbantech NYC to uncover new technology solutions to urbanization problems faced by government, businesses and urban residents, tackling issues related to food, water, medicine, waste management and other problems.

In 2019, Enterprise Community Partners, a national nonprofit, partnered with MetaProp, a leading proptech venture capital firm, to invest in housing tech companies that are developing technology innovations to help families find an affordable place to live.

These efforts are commendable, but it is not enough. The housing tech movement needs more champions.

First, we need a more patient venture capital source, with a better understanding of underserved communities. Most venture capital firms fund what they know, and unfortunately few understand the affordable housing community, which is largely minority with female heads of household. But pay attention: There are lucrative opportunities here.

Affordable housing property managers tend to invest far more in social services for their tenant population than market rate property managers considering the coolest new piece of technology. You can make money while serving the public good.

Second, housing tech is in desperate need of an accelerator. The tech is out there, but most entrepreneurs don’t know how to “sell” to this specific customer base, which they must do if they want to create viable businesses that will attract venture capital. There are numerous existing technologies ready for an accelerator to take to the next level. These are a few of our favorites:

  • Financial Resilience. Low-income people who live in affordable housing are often burdened with confiscatory payday loans and check-cashing services. Many don’t have banking relationships and pay rent in cash. The Lifesaver app helps households, especially those without banking relationships, navigate financial services and become more financially resilient. Earnin allows people to access their pay, with no fees, as soon as they work the hours without waiting for the payday to arrive. Research shows that people who take these short-term loans from nonpredatory lenders actually find themselves more financially stable in following months.
  • Fresh Food AccessCheetah, a wholesale grocery delivery app, has placed community fridges as fresh-food pantries. Via, a transit-on-demand provider, partnered with LA Metro and First 5 LA to subsidize food delivery during the pandemic, especially to women-led households with little children.
  • Healthcare AccessRoundtrip provides booking for affordable nonemergency hailed rides, wheelchair vans and other specialized medical transports. Healthify offers a database of vetted and curated community resources, as well as information about the social determinants of health. Emerging software apps that facilitate telemedicine could also expand access to necessary health care.
  • Workforce DevelopmentSkilling America is a new workforce platform from Goodwill that improves placement, retention and promotion rates, and most people using the platform are doing so on their smartphones.

An accelerator could also connect housing tech to affordable housing owners and property managers looking for ways to magnify the impact of the social services available on site. The top 50 owners of affordable housing developments have the reach to connect tech developers with almost a million households.

These owners and property managers could act as leadership ambassadors of collaborative efforts among tech developers, venture capital investors and potential housing tech users.

We work every day with the inspiring stakeholders in the affordable housing community, as well as local governments and tech entrepreneurs looking to bridge this digital divide. This isn’t a pie- in-the-sky vision. The future is here and the call to action is now.

Originally published in Techcrunch:

Co-author: D. Hara Perkins, Partner at Goulston & Storrs, PC.

The Power of Culture: Four Steps to Delivering Success During Government Transition

If you want to change what happens in your state, change the culture of your state

EACH YEAR IN AMERICA, at least one of the 50 states elects a new governor. Then the governor-elect has just a few weeks to prepare to run the state for the next four years.

Prior to election, while on the campaign trail, gubernatorial candidates tend to talk about policies and their vision, not the inner workings of government. Their campaign teams, and the policy director in particular, are oriented on policy recommendations for education, infrastructure, families, and so on. These are the issues that resonate with voters, and crafting compelling policy positions is critical to getting elected.

Yet once elected, governors-elect can be surprised to learn the operational side of government is just as important as the policy side. Even a detailed policy proposal is of limited use, if it falters on an unrealistic understanding of implementation.

When it comes to delivering for citizens, people and processes matter just as much as policies and priorities. There’s no shortage of transformative ideas, but most government transformations actually fail to achieve their goals – in fact 80% do not succeed.

Successful transformation depends on the “infrastructure” of the transformation – leadership, communication, and capabilities.

Underlying these elements is culture. Transformative policies can be impossible to deliver without a transformational culture.

While the transition period is relatively short – from the day after the election through inauguration and into the first 100 days – transition teams have a huge opportunity if they focus on shaping culture from the start.

Civic Consulting USA, a nonpartisan nonprofit, has seen this opportunity firsthand. For the past several US election cycles, we have advised six Governors-elect and Mayors-elect across parties and regions. From serving these transition teams, we gained a nuanced understanding of the levers that governors-elect actually use to enact change, both within their administration and across their state – and we saw how a focus on how culture gives new leaders an advantage.

This paper outlines:

  • Why culture matters in government – particularly during transition
  • Practical steps to shape culture and promote effective governing practices, beginning with transition.

While this paper focuses on gubernatorial transitions, we believe these principles apply equally as well to transitions of other elected officials, including mayoral transitions and those of other executives.

What is culture anyway?

Citizens and public officials alike can observe organizational culture in how government workers behave, interact, and make daily decisions.

To define it simply: culture comprises the values and norms, often implicit, that define how work gets done.

Culture is deeply rooted within all facets of government: Culture empowers people to behave in certain ways when they perform their jobs and influences their overall performance.

Culture change in government is not just a challenge; culture is an important operational tool for an elected official, whether governor, mayor, or other executive.

Setting the right culture can focus every worker with the administration’s mission, make people go the extra mile – and inspire the workforce to strive towards excellence, innovate, increase adaptability, and drive the overall results in government performance.

A time for change: Transition offers crucial opportunities for shaping culture

Leadership change presents the opportunity for culture change, as the new leaders change processes and hire new executives.

But compared to the private sector, government transitions offer an even greater opportunity for culture change. Unlike a carefully planned CEO succession at a public company, a gubernatorial transition is more like the private turnaround of a distressed company:

  • Almost complete turnover in senior leadership, as the governor-elect plans to replace the cabinet and most agency heads in a matter of weeks
  • Mandate for change, with widespread perception that “business as usual” will no longer be accepted
  • Forward-looking opportunity window, with other elected officials and organizations seeking to advance ideas or positions that did not progress previously.

These features make the transition a uniquely powerful time to set the tone for the upcoming years of the administration. At the same time, the risks of not getting culture right are significant:

  • Weak or negative cultures make it harder to attract top talent, which is one of the key focuses of most transitions
  • Misalignment between policy goals and organizational culture can doom new initiatives before they even get started, especially for programs designed to reform government itself
  • When a crisis arises, as inevitably they do, teams without a strong culture rarely respond as cohesively or as well, increasing the likelihood of public stumbles and disappointed expectations.

Despite these risks, most of what’s written about government transformation describes culture as a barrier to change: complex goals, an emphasis of process compliance, lifetime tenure of employees, and departmental silos are oft-cited obstacles. (for example)

Rather than a challenge, our perspective is that culture is an opportunity for accelerating change.

We live in a time when there’s great interest in paradigm-shifting structural changes. By considering the cultural elements of ubiquitous technology or customer service, to name two paradigm shifts, government officials are more likely to see their policies succeed – and endure for future administrations.

Setting the stage for success: How leaders can build strong cultures during transition

When entering office, newly elected officials should have a clear vision on the values they want their cabinet to operate under and how these values will translate into norms. When it comes to how you manage, whom you hire, and how you communicate, an attractive culture can be one of your strongest competitive advantages.

When thought through and put in place intentionally, the framework of culture and culture change can power a leadership team to undertake tremendous transformations – and cascade into the rest of the organization to shape how the government’s work will get done for years or even decades to come.

Since the transition period is short, the main opportunity for building culture lies with building the leadership team’s own culture.

A unified, even if small, leadership team, guided by shared values and behavioral norms, can effectively and successfully bring transformational change to an entire organization.

The key to unleashing this power is a shared culture well matched to the vision and aspirations of the newly elected leader.

After inauguration, a stronger, more unified culture at the leadership level will enable faster, more effective changes throughout government.

The unique nature of each state and administration will determine the most effective combination of actions to build a strong culture – and even what cultural features will best contribute to a successful term in office.

Following the November 2018 US elections, Civic Consulting USA served six Governors-elect who were transitioning into office. They asked us to help in:

  • Creating an effective structure for the transition itself
  • Developing a framework for personnel and appointments
  • Providing best practices and strategic options on high-value policy areas
  • Supporting development of a 100-day plan.

Some of the states we worked with consciously (re)shaped culture during the transition period; they successfully executed their transition plans and built strong foundations for governing effectively from Day One. Success from these early days provided the baseline to continue momentum even after the first 100 days and to enact their goals.

Through our engagements during the 2018 election cycle, we saw that leaders who prioritized culture were ultimately rejuvenated from reflecting on, and promoting, values within their government.

From this varied experience, we are able to draw a few overarching lessons for how transitions can leverage the power of culture change:

Four takeaways

  1. Set your values early
  2. Embed culture into every process
  3. Model the culture personally
  4. Keep at it: continuously evaluate and improve

To help new administrations apply these takeaways to more effective governance, we share specific examples and general techniques that relate to each of these four takeaways.

We hope that by sharing these insights we generate feedback, comment, and even a public dialogue about how best to support our elected leaders as they embark on their journeys of public service.

Takeaway #1: Set your values early

The groundwork for an effective transition starts early. Immediately after election, incoming officials should intentionally select and articulate their values as guideposts for their administration.

Candidates often implicitly incorporate core values into their campaigns. The period immediately after the election presents an opportunity to reflect on the campaign, the values that were communicated, the feedback received from citizens, and one’s vision for how the administration will operate.

As important as spending time on self-reflection, a newly elected executive talk personally with top advisors about the values that matter to them. By agreeing on a few key values, the leadership team overall will work more cohesively to carry out the governor’s expectations even when she or he is not in attendance.

The transition director or chief of staff could be tasked with facilitating an exercise in an early meeting to discuss values-oriented questions, such as:

  • What should success look like at the end of the term?
  • What will be different compared to past administrations?
  • How do we want our constituents to feel about us?
  • How do we want our team to operate? How do you want our team to perceive each other?
  • What do we want our relationship with stakeholders to be? How do we want them to perceive us?

Sometimes creative exercises create memorable moments for transition teams to understand both the emotional and logical elements of their intended culture. For example, in an early meeting following election day, one team was asked to envision the ideal headline and corresponding newspaper article that they would like to see at the end of the administration. This activity brought up both the goals they hoped to achieve and also how they wanted to be perceived overall.

After identifying potential values, effective teams prioritize and select three to five values to guide the transition. Example answers to the above questions and resulting values include:

  • The last administration was insular and often engaged just with “the usual suspects.” We believe the community is important. We will bring new and diverse viewpoints into our administration, reflecting our value of inclusion.
  • Our state is lagging on many dimensions. We campaigned on a promise to modernize our government. Given the turnout, we have a strong mandate to pursue it and to embody our value of accelerating innovation.

Selecting your values is just the start. Until values are communicated and inculcated, they are mere words.

Practical steps to developing culture during transition include begins with explicitly writing out the values, in clear and memorable language. Consider creating visual tools to keep values top-of-mind, for example, posters in the transition headquarters or printing values on everyone’s access badges.

Memorable events and activities greatly help to instill values, for example, meeting at a special venue to discuss the culture and values in depth. This could take the form of a “go and see” visiting a local company that is a leader in one of your values or represents an aspirational culture.

Creative activities tap both sides of the brain, reflecting the emotional and logical aspects of culture. For example, if the value is innovation, have groups build towers out of straws and paper clips and give the tallest a gold star.

It is worth noting that articulating values is not a once-and-done activity confined to the early days of transition.

In several states we worked with, a conversation around values was held again after all main cabinet members had been hired. This allowed for the inclusion of new staff members’ opinions, while allowing for the broader team to reflect upon how the transition period may have changed their view on values of focus.

Takeaway #2: Embed culture into every process

Elected officials can and should integrate core values into almost every process of government. The consistent and comprehensive a culture change effort is, the more likely it is to succeed.

Too often in government, leaders undercut their own culture change efforts by posting their values and not looking at how key units actually operate. This approach risks painting the effort as mere words. After all, most government workforces are characterized by the long tenure of their employees, who can adopt a wait-and-see attitude to transformational changes.

To make culture real, the incoming leadership team should embed values into every aspect of the transition, from hiring to managing to communicating. The following sections offer practical steps and examples for the transition team to put these recommendations to work.

Hiring and culture

Building strong values starts before any potential hires are interviewed.

Elected officials often have leeway to shape values by determining the set of positions within the Governor’s Office or Mayor’s Office.

Newly created roles can affirm office values. For example:

  • Create a new Chief Performance Officer role focused on evaluating and improving performance of the executive branch could signal the value of accountability.
  • Creating a Chief Innovation Officer (CIO) can signal an innovation-focused administration.
  • Creating a Chief Operating Officer (COO) who has delivered on similar efforts for another government or in private sector can communicate a culture of operational excellence.

Values can also be embedded in existing roles by altering the job description. A team heavily focused on improving citizen experience may alter the job description for leaders of citizen-facing agencies so that the role involves significantly more on frontline operations and feedback from citizens.

After outlining roles, teams need to identify the talent pools from which they will search for potential hires. These talent pools can reflect team values; for example, in selecting an Education Commissioner, teams would promote different values by interviewing traditional public schools leaders vs. charter school leaders vs. business executives.

When interviewing candidates, teams should evaluate individuals based on their alignment with core values.

Teams can assess potential candidates fit with core values in the interview process.

One of the states we worked with created a culture-focused interview guide as a supplement to role-specific interview guides. This additional guide included questions that elucidated each candidate’s values, while also signaling to potential hires the new administration’s own values. Candidates were scored on their responses, just as they were on other more technical aspects of their career history.

After selecting candidates, teams should offer onboarding materials that encourage leaders to adopt processes that align with team values.

We observed one state doing this particularly well: the transition team created a packet for each new agency lead with a values-based checklist. To reflect their valuing a decision-making process oriented around stakeholders. the onboarding guide asked new leaders to take steps such as: mapping out all potential stakeholders, creating a plan to meet with the most relevant ones, and prioritizing stakeholders for ongoing engagement.

The benefit of this approach is two-fold. One, the cabinet-onboarding guide translated a cultural value (inclusivity in decision-making) into concrete actions (stakeholder mapping). Two, the checklist made it easier for the Governor and Chief-of-Staff to check-in and see how the values were being reflected in the departmental processes.

Managing and culture

As both elected official and the team are new to their roles, transition teams are often expected to bring a fresh perspective to managing key processes.

During this “honeymoon” period, teams can translate the culture into action by defining how key office activities or decisions should reflect their values.

One state we worked with created a simple one-pager that served as a policy decision-making workflow covering governance and decision rights, including:

  • Who runs point on key policy questions?
  • What information will be shared with the broader team?
  • How will input be gathered across multiple teams?
  • What needs to be prepared prior to meeting the Governor for a decision?
  • What are the key elements of the execution process?

The list of which processes to codify will vary by jurisdiction and administration.

Two important and common areas of focus are the budgeting process and crisis response planning.

Budget process

The budget process is an inherently challenging and complex task. And it is even harder for new teams – who often lack experience in the nuances of the legislative budgeting process and yet are expected to make key strategic changes based on campaign promises. Moreover, budget choices powerfully signal how the new Governor is planning to govern.

The budget process can reflect the new culture in different ways. A team focused on transparency may emphasize opportunities to include individuals across departments, stakeholder organizations, and the public in developing budget priorities and allocations. In contrast, a team focused on efficiency might require cost reductions, more administrative data, and a more tightly controlled process.

Crisis management

Crisis management is a second key activity in which to embed values.

Crises are inevitable, and these situations are often when values are most tested. Crises requite rapid response, often from multiple leaders within an administration. As result, leaders have little time to refer to written guidelines, and the speed of decisions can overwhelm a central point. A team with shared values is more likely to respond in a unified way.

The best prepared transition teams take time before a crisis hits to identify potential issues, e.g., snow storm, shooting. They then identify key elements of the response that reflect their values. For example, responding to a public health outbreak, a team valuing data and transparency might emphasize frequent, widespread data sharing, holding daily press updates, and opening certain meetings to the public.

A crisis can reveal an administration’s true culture, and the crisis response mode can come to affect other more routine decisions:

  • Who actually is involved in your decision-making process and to what extent?
  • How actually do you communicate with your cabinet, key stakeholders, and the public?
  • What actual changes do you make, whether in personnel, executive order, appointment a commission, etc.?

Strong values can ensure that teams weather these crises successfully by deploying the right set of resources, keeping staff engaged, and building trust with the public.

Communicating and culture

Frequent, consistent communication is one of the “must-pull” levers of culture change. In the absence of information, stakeholders will make up their own explanations of the changes they see happening. Therefore, it is crucial to control the narrative not just of what is changing, but why – in short, your vision and values.

An easy way to communicate “the why” is to include one sentence on the value being demonstrated in each press release or speech event. This is of even greater importance for communications firsts: the first press conference, the first cabinet meeting, the first “State of the State” address, the first department addresses, the first meeting with a key stakeholders group, and the first government-wide email.

By including the communications leads in early discussions around culture and culture change, the transition team can help ensure that the new culture and values are properly reflected in all communications.

Over time, communications leads may consider creating a small toolkit that includes a list of images, mantras, and stories that can promote values in internal and external communications. Teams should integrate this toolkit into various touchpoints, including social media posts, Q&A sessions, and lunch-and-learn events, among others.

To help spread culture-based messaging throughout the organization, the elected official can require cabinet members to participate in communication training. Transition teams can also consider implementing a “values check” on press releases across departments in which leads are asked to indicate how the release communicates key values.

Takeaway #3: Model the culture personally

It is not enough to require others to live the culture. Leaders must also model the culture – formally and informally – for it to be credible and for the transition to embody it.

In addition to internalizing the values, there are practical ways to encourage leaders to model the new culture:

  • Set expectations that all leaders model the culture
  • Elevate change champions
  • Celebrate values leaders.

Set expectations of leaders

As senior leaders begin their new roles, instill the expectation that they set the example of living the values in their day-to-day actions and interactions with staff. How government executives behave, even in informal settings, has ripple effects throughout the department.

One transition team we worked with valued business-like accountability. This meant that the team used tracking documents and regular status meetings – two strategies that are common in the business world for steering complex processes. Senior leaders attended these meetings and engaged with tracking documents, signaling to other employees that senior leaders truly valued accountability. The paperwork, in this case, was a symbol of the value.

Longer term, this expectation that leaders model culture can be reinforced by including it as part of performance evaluations.

Elevate change champions

Opinion-shapers and influencers among staff can serve as formal champions of the new culture. Whether or not they have a senior-level title, these individuals command strong levels of respect from their peers.

Change champions can model the culture at all levels of the organization and provide feedback on how the new administration is doing in promoting the culture.

Establishing a cohort of change champions begins with identifying a few common things the change champions will do. You might ask them to hold weekly or monthly brown bag lunches with colleagues to discuss the values. In other cases, change champions might ask key questions to advance values in regular department or team meetings. Or they might discussion or brainstorming sessions to infuse values into operations.

Often change champions effectively nominate themselves by volunteering for a new role or giving particularly insightful feedback to an email, townhall, or survey. Change champions can also be identified by managers or even through an open process.

By convening the change champions together, a new executive can get the “pulse on the ground” regarding the culture of the organization, culture change, ongoing challenges, and ways to improve.

Celebrate values leaders

While the public sector may be less able than the private sector to offer monetary rewards for exceptional performance, there are often more options for recognizing employees.

Being invited to a press conference with the Governor, getting a preferred parking spot, being called out by name in a public meeting – these are all low-cost ways to celebrate those who are modeling the culture in practice.

When celebrating these value leaders, it is critical to show how the individual is modeling the new culture. This explicit connection between the Governor’s agenda and the individual’s performance is what makes that person a “values leader.”

Takeaway #4: Keep at it: continuously evaluate and improve

Sustainable cultural change does not end with the 100 days; that’s just the beginning. In fact, changing a culture takes years of effort, most if not all of a four-year term, and beyond.

There are many opportunities to embed the administration’s values and ethos. The most successful efforts begin with disciplined prioritization:

  • What values and behaviors have we inherited
  • How ready and willing are people to change?
  • What elements of the current culture are the most important to change when it comes to setting a new state of culture?

Once in office, there are several practical ways to assess and shape culture, both formal tools managed by staff and informal techniques done personally by the Governor and other senior executives.

Some of the most frequent informal techniques involve simply spending time where their employees work. By observing their behavior and chatting, the Governor or Chief of Staff can gauge how well the workforce is actually living the new culture. “Management by walking around” or “leadership rounding,” as this is often called, is most effective when there is meaningful follow up.

Formal tools can be managed by staff, including department town halls, surveys, new performance evaluations, and targeted training programs.

One increasingly prevalent tool is the employee engagement survey. But too often these turn into very long, very unused data compilation exercises.

A more actionable approach is to focus on only a very few questions:

  • Overall employee satisfaction, e.g., “How likely are you to recommend this organization to a friend?”
  • Current performance on core values
  • Organizational readiness for change.

To make such a survey truly useful, leaders should do a readout with employees to show survey results and indicate how the administration plans to improve on the previous administration.

Failing to show employees how you are working to improve on the findings of the survey can lead to demoralization among staff and counter the overarching goals of the exercise. Often the simple things, e.g., setting printers to double-side to reflect environmental concerns, can be cost-effective ways to reinforce the administration’s values. Surveys can also surface longer term opportunities to shape the culture, e.g., creating a leadership development program to demonstrate commitment to the workforce.

Conclusion: Putting culture to work

The transition is a busy, stressful time. Especially as the Governor-elect is vetting finalists for key positions, the demands of the upcoming job can overwhelm a small team. In some ways it’s a crash course in radical pragmatism, and values and culture might seem like an idealistic luxury.

Yet there are quite practical ways to unleash the benefits of culture change from the moment the election results are announced:

  1. Set your values early, to align your entire team around the “whys” of your administration
  2. Embed culture into every process, ensuring that each new hire reflects the culture of the administration and communicating values in each key press event and stakeholder meeting
  3. Model the culture, from senior leaders to frontline change champions
  4. Keep at it, continuously evaluating and improving

We have focused throughout on Governors. These approaches apply equally to other newly elected officials. In fact, we’ve applied them quite successfully during transitions of new Mayors, and in organizational transformations with prosecutors and other offices.

The election and transition is also a time of promise and expectation. Enacting policies without shaping the underlying culture to reinforce them will often lead to flash-in-the-pan results, enough for a press release but not enough for enduring results. By improving culture, a new Governor can bequeath a true legacy for successors.

This paper is intended to help transition directors succeed in their special roles by taking the first steps on cultural transformation. Share this article with the Governor-elect and the broader team and build culture directly into the scope of your transition.

About the Authors

Alexander Shermansong is the founder of Civic Consulting USA, a nonpartisan nonprofit committed to public-purpose innovation. He serves on the faculty of NYU Wagner Graduate School of Public Service.

Norah van der Meer is a sociologist and business designer. At Civic Consulting USA, Norah works with governments on strategic transformations and is passionate about collaborating with others to bridge gaps in society by translating complex questions into innovative solutions.

This paper was originally published by NYU Wagner Innovation Labs.

The Culture Gap: Solving the talent crisis in the public sector

In the last 20 years, the private sector has invested heavily in the culture of the workplace, but the public sector has failed to keep up. As a result, governments face a growing “culture gap” which will imperil their ability to replenish their talent.

Organizational culture is sometimes misconstrued as merely the perks a company offers, reducing the complex concept to what makes a company “cool.” It goes far beyond that. Organizational culture is the set of beliefs, values, and ideas that are learned and shared. Though often unspoken and implicit, culture determines how things get done. (For more in depth on organizational culture, pick up Corporate Culture and Performance by John Kotter and James Heskitt.)

This article was originally published by Meeting of the Minds and co-written with Shagorika Ghosh.

Click here to continue reading.


Make Tech Work for All

Originally published by the Bennett Institute for Public Policy

It seems a long time ago that Uber fought back against city regulations by offering the “de Blasio option”. This snarky, only-in-NYC option mocked the mayor for running notoriously late. Uber was trying to mobilise public opinion against regulation, but it ultimately failed.

While there are still startups that prefer to sue than collaborate, many tech companies are coming to realise that maybe working with, not despite, city hall is the way forward.

  • Spin looks to roll out scooters with the city
  • WeWork created a new unit to partner with local groups to address urban challenges
  • Google launched a Learning Center to offer free digital skills training

A new paradigm: Equity and sustainability

New York City has been at the forefront of shaping this new paradigm. In 2017, the City launched NYCx to engage the tech industry to solve real-world problems. They assembled a leadership group that includes senior executives from Microsoft, LinkedIn, Union Square Ventures.

With a focus on equity and sustainability, NYCx brings new voices to tech R&D.

  • Co-Lab Challenges invite startups and entrepreneurs to work directly with community residents to solve neighborhood challenges. The Co-Labs aim to ground solutions in the lived experience of diverse New Yorkers, especially lower income communities.
  • Moonshot Challenges encourage global entrepreneurs to think big about cities’ most pressing problems. Built from the work experience of public sector practitioners, the Moonshots propose bold solutions and groundbreaking business models to transform lives of city dwellers globally.

Testing technology in real urban spaces

NYCx opens urban spaces as test beds for new technologies. In each case, technology, public policy, and test space were carefully selected to promote equitable, inclusive innovation.

For example, the Connectivity Challenge demonstrates new, less expensive modes of broadband deployment on Governors Island — and ultimately deployed the winning concept. The Climate Action Challenge invited electric vehicle charging innovators to show how they would serve diverse New Yorkers. In particular, innovators were asked to show how they serve people with disabilities. And the best ideas were invited to similar demonstration opportunities in Paris.

In more residential neighborhoods, the Co-Lab Zero Waste Challenge drew on the experience of public housing residents to select and test technologies to reduce waste in public space. The Co-Lab Night Safety Challenge invited solutions to be tested in Osborn Plaza in Brownsville. At the time, no businesses were open after dark in the neighborhood — an economic inequity the challenge sought to remediate.

A low-cost, easy-to-replicate model

The NYCx team has codified their approach into a “launch pad” to help other cities replicate their approach. In essence, the NYCx approach can be summarised in several steps.

The approach begins with the mayor’s vision. Each challenge is rooted in a specific goal of the City’s long-range plan OneNYC. From that, we seek to identify a probleminhibiting success of the vision. The NYCx team works with an agency to understand the difficulties they are facing with specific OneNYC goals. Alternatively, they may work with a community that’s facing re-zoning or other significant changes on a Co-Lab effort. Workshops with agencies and technologies help flesh out the problem and the potential impact. Often provocateurs like Cornell Tech or CUSP are invited to participate.

The team then turns to research. Targeted research uncovers industry trends, through interviews with the leadership council or with key informants like the Urban Tech Hubor New Lab. Complementary research uncovers agency practice or community expectations. These are done through interviews, workshops, and surveys. The NYCx Co-Labs organize community-learning events to address the disparities of awareness of new technology.

At the heart of the planning process is finding the “aperture” that combines tech innovation and policy opportunity. This aperture is then mapped to an agency’s upcoming decision, planning effort, or procurement to ensure the challenge is actionable. The result is the challenge statement. NYCx seeks global partners for each challenge to help winning solutions scale rapidly. The Cybersecurity Challenge, for example, includes London, Singapore, Korea, and several other jurisdictions as well as an Israeli venture capital firm.

The first round of each challenge makes it very easy to participate. Often an entrepreneur needs merely answer a few short questions about her or his idea, how it’s innovative, and who else is on the team. The key here is to get very broad participation. The second round invites compelling ideas to share more information. Sometimes participants are asked to team up with each other, if they’re ideas are overlapping or complementary. Again, the goal is to get participation, so the legal hurdles are few, with low barriers to entry, and many applicants are invited to provide more detail.

The final round is more targeted, asking a few participants to give demonstrations of their solutions. Often they receive “micro procurements” to support the cost of the demonstration. Finalists may be invited to negotiate a contract with the city or enter due diligence with an investor. It has been effective to offer relatively small monetary awardsbut extensive feedback from potential customers and broad exposure for winning ideas.

The result: Tech that works for people

By starting the needs of real people, NYCx takes a human-centered design approach. But unlike the typical tech startup, NYCx begins with the needs of policy makers or residents of lower income communities.

Cities and communities get potentially breakthrough solutions, often to the very problems that have been exacerbated by the rise of technology. Often the problems of one city are closely echoed by many other cities around the world.

Participating companies get feedback from potential customers. Those that make it to the finals get validation and often significant PR opportunities. Winning entries get help meeting global customers and investors.

As Miguel Gamiño said, the NYC CTO who launched the program, “we’re really trying to make sure technology is working for people and not the reverse.”

Civic Consulting Netherlands

Guest column reprinted from The Raad van Organisatie Adviesbureaus

A motivated group of pioneers

The mission: Pro bono innovation and impact on social issues.

PBLQ Director Henk de Jong, with the directors of BMC, JBR, Lysias, and Mitopics, invited Civic Consulting USA in order to launch the first such partnership outside the US.

The City of Rotterdam joined the private sector to develop an action plan for Civic Consulting Netherlands. The leaders include experts in workforce, resilience, and inclusion.

“Despite all our busy schedules, I want to give something good back to our core business the society.”

Mitopics Director Reinold van Bruggen
A motivated group of pioneers

Win-win projects

The Civic Consulting model has been active in the US for 35 years. Expert consultants work pro bono to create social impact for local communities. In this way, more than $20 million in pro bono projects are delivered each year.

These projects are different from typical assignments, because they require innovation beyond the resources of local government or NGOs.

Alexander Shermansong from Civic Consulting USA shared inspiring examples:

  • The City of Chicago struggled with difficult processes for procuring social services from nonprofits. One-year contracts could take a year to negotiate! In just six weeks consultants redesigned the process to cut the time down dramatically.
  • In New York State, large companies such as Toyota and Xerox loaned Lean experts to train State employees. As a result, cycle time for processes across departments have been shortened 30% – 80%.

“Consultants not only bring positive change through this work; they also change themselves, refreshed by working with peers from other organizations on innovative solutions.”

Alexander Shermansong, Civic Consulting USA

Our ambition is not small

The Dutch context is different, in particular because governments generally have established budgets for external advisors.

But there are opportunities. As Alexander said, “The Netherlands has a rich tradition in volunteering, and there are social projects that require innovation and new partnerships here too.”

The group identified a practical path forward

To replicate the success of Civic Consulting in the Netherlands, the group identified a practical path forward:

  1. Choose a socially relevant and non-controversial topic
  2. Start small, and then build on successes toward larger, system-wide impact
  3. Add value for consulting firms, doing something good for employees and building enthusiasm, while making a difference.

“We must ensure projects are fun to join, where consultants can be proud of their work and energized. Within each firm, participants should be competing to get on the project. The involvement of the business community in a city like Rotterdam is big, but it is about converting willingness to do something into concrete actions with social impact – and that is not easy.”

Ronald van Rijn, Managing Partner of JBR

A potential first case

Marlin Huygens, Rotterdam’s Director of Work, described the City’s goals. For one, they aim to reduce the number of long-term unemployed people on social assistance benefits. In the context of a changing labor market, this is no easy feat – and thus the need for large-scale innovative and creative solutions.

Local NGOs can play a critical role in achieving this goal, but lack the staff and budget to live up to their potential. Therefore Civic Consulting Netherlands will likely focus on supporting local NGO initiatives. And their impact will be multiplied by aligning with social initiatives identified by the City.

Civic Consulting Netherlands will apply this proven method to work with the City of Rotterdam to scope and launch the first project. The next milestone is a pitch during the international Urban Resilience Summit July 2019 in Rotterdam.

The future of justice

Justice is not simply punishing people who commit crimes — it’s also about promoting safer communities.

With the the vision of keeping Brooklyn safe and strengthening community trust in the justice system, District Attorney Eric Gonzalez convened Justice 2020 to give him guidance on how to achieve that goal.

Civic Consulting USA was tasked with designing and managing an inclusive planning process centered on listening to the people of Brooklyn: youth and seniors, victims and system-involved individuals, those with multi-generational roots and those newly arrived.

With the help of more than 70 community members, criminal justice reform advocates and experts, faith leaders, formerly incarcerated people, and police officers, we scoured the nation for new ideas and best practices, analyzed hundreds of ideas, and prioritized a handful into an action plan. (Download Justice 2020 Action Plan)

Civic Consulting was further tasked with designing and launching an implementation program. To date, 194 lawyers and professional staff have been actively involved, and many initiatives are already showing results:

  • 12% fewer homicides in 2018
  • 70% of cases in young adult court resolved with no criminal record
  • 58% reduction in people held on bail pre-trial

As The Wall Street Journal reported, the plan will “make Brooklyn a national model.”

“Evidence tells us there is a very small number of individuals who are responsible for the vast majority of violent crimes,” said DA Gonzalez. “This is where our focus should be.”

Achieving higher ROI through inclusive innovation

Recent evidence shows that inclusive startups and investors perform better:

  • Companies with a female founder performed 63% better than those with all male teams, according to one portfolio — diverse founders, often underestimated by mainstream finance, deliver a higher ROI and unlock new market opportunities
  • Strong social / environmental practices boost returns 1%-2% annually, among large public companies, in part due to how such practices de-risk a portfolio
  • African American buying power tops $1 trillion, demonstrating the potential of reaching underserved markets
  • Latino are starting businesses 17% faster than the rest of the population, demonstrating the entrepreneurial potential of an inclusive ecosystem

Yet only 11% of venture capital partners are women, and only 17% of VC deals include women on the founding team.

A recent study points to some gender-specific challenges that contribute to these disappointing levels of equity, including increased pressures to seek traditional jobs: Women, minority, and foreign-born entrepreneurs more often need to provide for siblings or children than their white male counterparts. As a result, they may face a shorter runway to profitability, a lower threshold for failure, and simply no option to “fail fast and fail often.”

The number of gender- and race-specific efforts to close the entrepreneur gap is rapidly proliferating, with 48 gender-lens funds according to a recent study. Efforts span the startup lifecycle, from idea-stage educational efforts to seed-stage incubators to investment vehicles. They each promote different interventions, without commonly reported measures of success.

In-depth reports on diversity in VC each use different criteria (investments in female founders, female partners, VC raised by female-founded companies) making any industry-wide or longitudinal benchmarking difficult — and thus stymieing concerted change efforts. While there are efforts to track gender participation, racial inclusion is not as commonly tracked.  And there is no consensus about how to measure progress, e.g,. founder / management diversity, racial equity in investments / valuations, etc.

The value of consistent disclosures can be seen in public markets. Shared frameworks for Environmental, Social, Governance (ESG) measurement and commitment to annual disclosures have enabled 2,000 major investors to incorporate such factors into their strategies. However, there has not yet been as much progress in venture capital or high-growth-potential startups.

Lean startups are simply not equipped for the intensive reporting suitable to large companies.

We need new ecosystem measures. For example, disclosing accelerator admissions rates could help diagnose unconscious biases in applications and admissions.

By defining consistent, voluntary measures of inclusion across startups, entrepreneur supports, and investors, we could allow the  market to measure — and overcome — the gender and race barriers to entrepreneurial success.

Bold ideas to create jobs and solve real city challenges

NYCx will open urban spaces as test beds for new technologies.

Through NYCx, the City of New York engages the tech industry to solve real-world problems and call on the tech vanguard to make NYC the most fair, equitable, and sustainable city in the world.

  • Co-Lab Challenges invite startups and entrepreneurs to work directly with community residents to solve neighborhood challenges while aiming to scale solutions for common issues for all New Yorkers.
  • Moonshot Challenges encourage global entrepreneurs to think big about NYC’s most ambitious problems, propose bold solutions, and deliver groundbreaking business models that transform and improve the lives of city dwellers globally.

Thanks to a partnership with The Boston Consulting Group, Bain & Company, and a team of skilled volunteers, Civic Consulting USA is a key part of of this new program.

A diverse group of technology and community luminaries are guiding NYCx, including:

“NYCx will transform the relationship between city government, community and the tech industry to be more collaborative and inclusive,” says Miguel Gamiño, Jr., New York City Chief Technology Officer.  “If we can test and solve critical challenges together in NYC and achieve our City’s goals, we can offer these solutions for other cities facing similar issues.”

Delivering on the bottom line ASAP

Can private equity be a driver of positive change for the environment, social justice and healthy institutions?

Civic Consulting USA says “Yes!”

In the investment community, environmental and social impact considerations are often abbreviated as “ESG,” which is short for “Environmental, Social, and Governance” factors.

There’s an increasing body of practice and research demonstrating that social impact considerations can drive bottom line returns for large, publicly-traded companies.

In fact, it is now common for pension funds and institutional investors to say that ESG considerations are important for long-term returns in the public markets. As Swiss Re Chief Investment Officer Guido Fuerer said, “Equities and fixed income products from companies and sectors with high ESG ratings have better risk-return ratios.”

However, in contrast to pension funds and endowments, which think decades ahead, private equity firms typically seek to deliver transformational value from the companies they control within just a few years. To date, the shorter-term focus of private equity firms has precluded most ESG or social impact considerations, particularly in the lower and middle market.

Until recently, only the largest publicly-traded private equity firms, such as Blackstone, KKR, or Carlyle, have had access to the financial and social benefits of ESG analysis. Due to their scale and public reporting requirements, such firms have dedicated teams to ESG due diligence and ESG board oversight. For these firms, it began as a risk-management function and good corporate housekeeping. However, it turned into a major source of value creation at their portfolio companies.

Strong ESG programs are driving customer satisfaction, brand equity, operational efficiencies, and happier, more productive employees – with combined EBITDA benefit in the tens of millions. These large firms have also taken millions of metric tonnes of carbon from the air and saved billions of gallons of water.

We believe these “double bottom line” benefits can spread to the middle market.

“We’re now seeing quantifiable examples of ESG initiatives delivering significant EBITDA value,” says ESG Portfolio Partners Principal Ted Knudsen. “Waste diversion, supply chain resilience, employee engagement, and productivity – these are all ways that the large cap PE firms are turning ESG into value for their LPs.”

Why is this important to the rest of us?

For one, US ranked 42 out of 45 OECD countries on the UN’s assessment of sustainable development. That means Americans live with greater inequality and pollution than our peers around the world.

Secondly, the companies owned by private equity grew jobs nearly three times as fast as other companies. In fact, these companies represent the second largest source of private-sector employment in the country. Changing the mindset of private equity investors has tremendous potential to affect millions of Americans in every city and community.

Third, private equity firms typically hold onto their investments for less than six years. New paradigms can take root quickly and yield benefits for American families before kids currently in middle school graduate from high school.

“If private equity firms in America take up ESG as global counterparts have, it will drive far larger and faster improvement in energy efficiency, gender equity, and fair wages than any current government regulatory effort,” says Alexander Shermansong, CEO of Civic Consulting USA. “PE firms have the money and the control over company boards to make world-changing progress on these collective impact issues in just three to seven years.”

Civic Consulting USA is committed to original research, developing toolkits and best practices, and providing custom-tailored guidance for private equity leaders. Our data-based approach will help the industry better quantify their positive societal impact for reporting to all stakeholders: investors, governments and the general public.

From housing to headquarters: Reflections on the state of public housing in NYC

Guest writer:  William White, Civic Fellow.

A lifelong resident of Throggs Neck Housing, a development where problems are met with a plethora of excuses rather than a remedy, I doubted the NYC Housing Authority’s ability or even desire to improve living conditions. However, I was pleasantly surprised when I met the members of the executive staff: I sensed a true compassion and an earnest desire to improve the standard of living for NYCHA residents through the NextGen plan.

This opportunity came when Civic Consulting offered me a fellowship in a project intended to improve NYCHA — and it was quite easy to accept the opportunity! As a political science major I generally have a strong interest in government. As a lifelong resident of public housing, I have a specific interest in the New York City Housing Authority.

The positive culture which I experienced at the NYCHA headquarters reflects the dedication of the Chair Shola Olatoye. I was encouraged when Shola shared that some of her fondest childhood memories were of visiting her grandmother who lived in public housing. Her personal story made it evident that she did not perceive NYCHA as simply a place to store the impoverished, but rather as a place that thousands of New Yorkers call home and raise their families. The Chair also shared several initiatives that NYCHA had undertaken during her tenure, and she candidly assessed their levels of success.

My interaction with the Chair left me with the impression that NYCHA is indeed heading towards desperately needed improvements.

However, it is clear that the Chair’s desire to preserve NYCHA’s infrastructure has not yet reached all of the developments. Indeed, as I type this, I must continually stop to dust away fallen plaster which accumulates on my desk like freshly fallen snow – the ceiling has been in disrepair for nearly five years.

It was during this fellowship that I realized that individual developments have a considerable amount of autonomy in terms of maintenance and repairs. I suspect this may be at the heart of what many believe is a lack of accountability on the part of many developments. And this goes to show that, even after living at Throggs Neck my whole life, I didn’t know how certain parts work.

Undoubtedly, the most exciting and indeed the most enlightening part of my fellowship arose from the two focus groups I led at Brownsville Housing.

The first group consisted exclusively of tenants. Much of what I heard during that conversation was not unlike what I hear from my own neighbors. The residents were primarily concerned with slow repairs, sanitary conditions, and safety. The second group was comprised of NYCHA employees, almost exclusively maintenance workers and groundskeepers.

The employees voiced similar concerns as the tenants. Predictably, both sides had something of a biased slant in their evaluations of the problems, pointing fingers, yet they both expressed a willingness to be more proactive in working towards the promise of NextGen. This was very encouraging.

It would be incredibly productive to have a discussion between the participants of the two groups. This would allow both sides to have an open, honest and constructive dialogue with one another, in which the sides could discuss the best way to meet the goals of NextGen NYCHA together. Moreover, we would be able to assess more accurately where the greatest disagreements lay. Ultimately this could strengthen the relationship between staff and residents.

One of the most salient aspects of the fellowship was the opportunity to see the dynamics and quite frankly the virtues of a public-private partnership. I saw this most prominently during the board meetings held by Civic Consulting. It was interesting to watch a number of highly accomplished experts from diverse professional backgrounds pondered the issues facing NYCHA and offer advice and potential solutions that may be outside of the conventional wisdom of a government agency. I enjoyed learning about the ways in which government can incorporate tools developed by private forces to trigger organizational changes which ultimately help the government agency and its beneficiaries.

What I appreciate most about this type of public-private relationship, particularly as fostered by Civic Consulting, is that it is more concerned with genuine government improvement, rather than the profit motive.