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.
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.
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.”
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.”
To replicate the success of Civic Consulting in the
Netherlands, the group identified a practical path forward:
Choose a socially relevant and non-controversial topic
Start small, and then build on successes toward larger, system-wide impact
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.”
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.
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
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
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.
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.
“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.”
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.
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.
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.
Guest writer Asheley Van Ness, Associate Principal, Civic Consulting Alliance, Chicago
For two years, Civic Consulting Alliance and our partners have been helping to address issues in the criminal justice system, including revamping Cook County Central Bond Court.
We have been working with Cook County’s criminal justice stakeholders—the Cook County Board President, Sheriff, Chief Judge, State’s Attorney, Public Defender, Clerk, the Administrative Office of the Illinois Courts, and the Illinois Supreme Court—to reduce the detainment of non-violent individuals.
As a result of this collaboration, 2,400 fewer people are detained every day in Cook County Jail and nearly half of all individuals are released from Bond Court without having to post a money bail, compared to Bond Court proceedings two years ago.
This collaboration has included seven projects and eight pro bono partners since its start. As one example, CannonDesign worked with the stakeholders and former detainees to understand the challenges created by the current physical design of the courtroom. The team identified several factors that prevent judges from receiving the information needed to make well-informed, fair decisions and that limit the public’s understanding of court proceedings. CannonDesign then created designs to address the physical problems and transform the courtroom into an environment that commands dignity and decorum and facilitates better decision-making.
The stakeholders all agreed to the proposed changes, and construction of the new courtroom is scheduled to begin.
By changing the physical courtroom design, we hope to improve trust and mutual respect between everyone in the courtroom, ensure judges receive the information they need to make fair bond decisions, and ultimately improve outcomes for detainees.
“The redesign of the Central Bond Court presented us with a compelling, challenging design problem, which affects many of our fellow citizens on a daily basis,” said Delia Conache, a project architect at CannonDesign. “Our team greatly enjoyed the close partnership with Civic Consulting Alliance over the course of the project, as well as the close collaboration with the stakeholder agencies involved.”
Across America, businesses invest billions in pro bono services. In case after case, however, the civic spirit doesn’t translate into civic results. How can we fix this?
Too often, nonprofit and government executives look at securing pro bono support as an end in itself. We focus on finding a company to loan their staff, but then don’t pay as much attention to how to manage the free resources. As a result, too many projects end up sitting on a shelf. This poor implementation record has led to the common refrain: “You get what you pay for.”
The success rate is particularly dispiriting given the growing interest in pro bono work from the private sector. At conference after conference, skills-based volunteering is emerging as a hot trend. According to surveys, companies are looking for pro bono projects that are rewarding for their staff, provide professional development, and generate impact.
In any project, impact depends on a partner’s ability to deliver and also on the government agency’s skill at management. In many ways, managing pro bono resources is just the same as managing any other resources. It requires time, commitment, and honest feedback, even to the point of firing. In other ways, managing pro bono resources can be different: you need to be open with them before they’re on board, and the work needs to be meaningful.
Whoever your partner is, to translate their civic spirit into civic results, you need to be a good client for them. That means engaging them in the problem you’re trying to solve, not micromanaging their working activities. It means formalizing the relationship, just as you would with a contractor. And it means being open and honest even though it’s free. The following six guidelines spell out how to put these principles into practice.
Paint the big picture
Treat it as a “real” project
If it’s not working, speak up
Don’t get distracted
A transit authority executive noted that pro bono partners are better than paid vendors ― and not because of the price. In a typical procurement, he needs to specify the solution in detail before signing a contract. Sometimes, in the course of the work, he realizes the specifications were wrong, and he ends up paying the vendor to undo the work.
In contrast, with a pro bono partner, you’re not constrained by the public sector procurement process, and you have the chance to get experts to help you with the scope and specs. When the consultant is free, you have the freedom to figure out what you really need.
Paint the big picture
Companies contribute their time because they hope to make a real difference in the community. In practice, they donate three or four months of effort, which really isn’t enough to fix a sweeping problem. Therefore, it’s important for you to communicate how the project fits into the bigger picture.
In this vein, one city hall executive has secured millions of dollars of pro bono services because she provides full information about the problem and her situation. As she notes, “Once you describe the big picture, companies get really excited. They may end up doing graphic design for a public presentation, or legal analysis for new regulations, or a database of geographical and demographic data, but they understand how their small piece contributes to the big issues they read about in the paper.”
Treat it as a “real” project
Even when top companies are donating their time, the fact that their services are “free” can lead government agencies to believe they can define a project on the fly. Since the most successful projects have a fairly focused scope, officials should resist the temptation to improvise and instead chart a clear course at the outset.
Consider this example, when a budget director was asking an investment banker for help. She explained how they got into the situation (multi-hundred-million budget gap) and some of her big ideas to fix it. In response, the investment banker proposed a six week analysis to test these ideas. They staffed the project together, so that the analysis could be incorporated in real time into the executive budget. It works so well, the bank came back to do a similar project the following year and give another round of analysts the same high-impact experience.
If you wouldn’t pay a company to do work without a scope, why would you want a free company to work aimlessly? This approach will still siphon time from you and your staff―you just won’t know to what end.
If it’s not working, speak up
It’s hard to give good feedback to people giving things for free. (As noted above, these services aren’t really free.) Nonetheless, one of the best ways to develop rapport with a pro bono partner is to give targeted negative feedback when merited. Rather than turning away or shutting down, you will likely see an increased commitment to the project.
For example, here’s a great experience that was actually a horrible situation. The project wasn’t going anywhere. The team had spent two months on the ground without anything to show for it, and the project looked like a colossal waste of time. At that point, the agency head called the company requested a new project manager. Later, the company’s office head recalled, “This call showed a level a trust, a level of commitment – it was a chance to get back on track.”
Remember that ignoring a poorly performing project will guarantee that it produces nothing of value. Since companies do pro bono work for the public good, all parties are losing out.
Don’t get distracted
One of the top complaints of those who do pro bono work (although they rarely complain) is that government agencies aren’t responsive. Maybe they’ve asked for some analysis but don’t make the time to hear the results. Or a problem comes up, but they don’t make a decision. Or the partner sends emails but gets no reply.
In contrast, when professionals describe good work experiences, the responsiveness sounds a lot like the basics: you return calls, you don’t cancel meetings, you read your e-mail. But the basics take time – particularly when many agencies are already overwhelmed with their core responsibilities. Although being responsive can seem like a huge commitment, the benefits are apparent very quickly. As one senior consultant related, “The clients we work with are used to being reactive. Our resources give them the chance to be proactive―that’s what the time is for.”
Even before a project wraps up, it’s critical is to take action. Without your decision and action, their investment will wither on the shelf.
It’s easy to name the obstacles to implementation: your staff might be skeptical, you might not have all the details figured out, or maybe you don’t yet have the funds allocated for new systems. One of the biggest frustrations is when the end result is “shelfware”: detailed reports and recommendations, representing weeks or months of work, that just sit on a shelf.
To ensure that all of the work actually translates into tangible impact, it’s critical to assign staff as early as possible to oversee the implementation. The challenge: many government agencies simply don’t have the capacity. In the era of ever reducing head counts, it can be tough to find qualified staff who are willing and able to take on additional work.
We must be realistic about their capacity: if an initiative isn’t enough of a priority to assign an effective project manager, why should a partner donate its time and resources?
When executives from top companies in the city offer their assistance, it can be incredibly difficult to turn down. Government officials, resist the temptation to accept such help unless you are prepared to match the contributions of a partner with your own strategic vision and organizational resources. When you commit to these six guidelines, you’ll enjoy both long-term relationships – and results that really matter to your constituents.