"What I Learned from Chuck Marohn about Cities and Companies” (They're More Alike Than You Thought)

Image source: Unsplash

In my home community of Pensacola, Strong Towns president Chuck Marohn is one of our favorite people. He has spoken at CivicCon—our speaker series that brings together some of the nation’s top thinkers and experts to educate people on issues they need to know to lay the groundwork for positive change—on more than one occasion.

He’ll be presenting again at this year’s EntreCon, our virtual business and leadership conference scheduled for Wednesday and Thursday, November 18-19, 2020. Chuck believes, like I do, that encouraging and supporting small businesses can save our communities. His presentation, cleverly titled “Why My City’s Top Draft Pick Is an Entrepreneur, Not an Investor,” centers on this topic. He’ll talk about why communities should make enabling entrepreneurs (not chasing investors) a centerpiece of their growth strategy.

So, in advance of EntreCon, I recently interviewed Chuck for my Busy Leader’s Podcast. (Click here to listen.) He has such an interesting perspective! He shared some insights on how cities can move forward and tackle the challenges created by COVID. Our discussion touched on some of the ways city leaders and business leaders think and behave differently from each other. But it also helped me get clear on all the things these two groups have in common.

Below I explore a few truths that apply to both cities and businesses. Whether you’re an elected official, a business owner, or a leader inside any organization pivotal to community well-being, keeping these “crossover truths” in mind may help you as you navigate the days, months, and years ahead.

CROSSOVER TRUTH #1: In chaos, our natural impulse is to freeze in place. Better to use this time to reorient and refocus.

Many cities are used to functioning as the implementation arm of state and federal policy. When times get tough, it is easy to keep taking cues from those capital flows. Instead, Chuck says this is the perfect opportunity to seize the moment to shift to an entrepreneurial way of thinking. Consider moving from a vertical orientation to a horizontal one where citizens are viewed as customers (or even better, shareholders). This allows you to look at where people are struggling and make decisions based on that.

Businesses, too, need to use times of chaos and uncertainty as an opportunity to retool, reorient, and refocus. It’s those that manage change well that will come out on top.

CROSSOVER TRUTH #2: Playing “small ball” is usually a better strategy than swinging for the fences.

Those who know Chuck know he is a fan of making small bets rather than taking on big, pricey, risky projects. In the podcast, he says once a city refocuses on what citizens need, it will discover an infinite number of small changes that can be made on a shoestring budget. For example, an unsafe road can be made safer with straw bales and cones and paint. It isn’t perfect and it isn’t in its final state, but it is much safer—and it addresses the needs of the people.  

The small, incremental change approach works in business too. What are some small changes you can make right now to improve your company? 

CROSSOVER TRUTH #3: If it’s not working, we need to stop doing it. NOW.

In the podcast, Chuck talks about how the engineering industry is slow to respond to new and better ways of doing things. He shares the story of a tragedy that occurred in a city that knew it had an issue with unsafe roads, yet didn’t make the needed changes. (He will cover the subject of how we need to rethink our road systems in detail in his upcoming book, Confessions of a Recovering Engineer.) 

Businesses can learn from communities in this area. Are you doing something outdated that no longer works? Too many of us just keep doing what we’ve always done, almost on autopilot. Yet it’s those “early adopters” who really pay attention—who see that change is needed and make it a priority—who will come out on top.

CROSSOVER TRUTH #4: A risk-averse culture is the kiss of death (or at least stagnation).

Chuck shares a story about how his hometown of Brainerd, Minnesota, gave 20 creative people $100 each to invest in making their neighborhood a better place. While the money actually came from a foundation, people perceived it as taxpayer funds and there was a lot of pushback. This is the kind of citizen reaction that discourages risk. This is why cities may seek out big expensive projects where no single person can be held accountable, in part because they take a beating if they try something new.

Does your company operate this way? Have you created a culture where people won’t take risks and try new things, because if they fail, they’ll get scolded or be subjected to other negative consequences? What do you need to do to fix this?

Chuck Marohn and Quint Studer. Image source.

CROSSOVER TRUTH #5: The quicker you figure out it’s not working, the quicker you can apply the brakes.

The $100 giveaway Chuck talks about was just Round One. Those who used the money wisely would go on to Rounds 2, 3, and 4. The Round 4 winner would receive a significant amount to use to improve the town. This is actually a smart way of ruling out unworkable ideas—which, in turn, allows cities to put their resources toward the best ones. Knowing what not to do is just as important as knowing what to do.

Businesses, too, need a good low-cost system for testing ideas. This will allow us to stop chasing one idea after another and start getting things done. (I find most businesses need to hit the brakes on innovation and hit the gas on execution.)

CROSSOVER TRUTH #6: Those who stamp out sameness tend to thrive.

Chuck talks about how cities need entrepreneurs to create the kinds of businesses that create character and allow them to stand out. Restaurants are a good example. When cities don’t get focused on protecting their entrepreneurs, they end up with a lot of chains and franchises. (Ironically, big cities do a much better job than small and mid-size markets of creating space for entrepreneurs to be competitive.)

Does your business have a differentiator? If you have the same standard products and services as everyone else, it might be hard to survive long-term. What can you do to stand out—especially now when money is tight and customers are selective in their spending?

CROSSOVER TRUTH #7: A focus on fiscal sustainability in the good times will save you in the hard times.

Chuck talks about how, over time, communities have faced one crisis after another: the collapse of economic ecosystems, housing shortages, food insecurity. These longstanding problems have built up to make our communities fragile, so now the fiscal situation we’re facing is extremely urgent. The point is that when a community is fragile, it takes only a tiny tip to knock you over. Better to make fiscally sound decisions all along so that you’re strong enough to weather storms.

This is also true in business. It’s important not to rely too heavily on debt, to use your assets efficiently, to make sure profit margins are solid. Of course, investing in good leadership training and focusing on strong employee relationships is a key part of the equation also. These things always matter. Get lean and mean and stay focused on the fundamentals when times are good, and you’ll be more likely to survive in the tough times.

I have been fortunate to work in both worlds. Every day I see that community leaders and business leaders are more alike than they are different. We all want to create places (whether they’re cities, towns, companies, institutions, or nonprofits) where people can thrive, places where people want to be. Let’s learn from each other so we can all get better and better.

Chuck Marohn will be a featured speaker at EntreCon, Pensacola’s virtual business and leadership conference, which will be held Wednesday and Thursday, November 18 & 19, 2020. 

To hear Chuck Marohn and many other great business and community experts, please click here to register for EntreCon.

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