Companies & Industries

Facing the Wreckage Head-on


In Detroit, Mayor Dave Bing governs via tough-love management principles that would have made Peter Drucker proud

Detroit has declined immeasurably since Peter Drucker described it, more than a half-century ago, as "the industrial city per se." But even by today's diminished expectations, the past few weeks have been especially tough. Former Mayor Kwame Kilpatrick, already in prison for probation violations, was arraigned in federal court on 19 counts of felony fraud and tax charges. The president of the local school board resigned and was hit with criminal charges after he allegedly fondled himself during a meeting with a colleague. And newly released Census figures show that Detroit continues to lose residents. Yet despite all the setbacks, the Motor City may well have begun the very earliest stages of a turnaround. This is largely due to a trait that current Detroit Mayor Dave Bing displays and that every manager, especially during this uncertain age, should emulate: the resolve to look at the worst problems square in the face. "A time of turbulence is a dangerous time," Drucker wrote, "but its greatest danger is a temptation to deny reality." Prevalence of Denial

Indeed, many fall straight into this trap, often unconsciously. The inability to deal with unpleasant circumstances "is what Sigmund Freud described as the combination of 'knowing with not knowing.' It is, in George Orwell's blunt formulation, 'protective stupidity,'" Harvard Business School's Richard Tedlow explains in Denial: Why Business Leaders Fail to Look Facts in the Face—and What to Do About It (Portfolio, 2010). "From the young child who insists that his parents haven't separated even though his father has moved out, to the alcoholic who swears he is just a social drinker, to the president who declares 'mission accomplished' when it isn't," Tedlow adds, "denial permeates every facet of life. Business is no exception. In fact, denial may be the biggest and potentially most ruinous problem that businesses face, from startups to mature, powerful corporations." The 66-year-old Bing, who enjoyed a Hall of Fame basketball career and success as the owner of several manufacturing companies before moving into politics, is anything but in denial. His leadership style first caught my eye when I read a profile of him earlier this year in Sports Illustrated (TWX). Bing, writer Michael Rosenberg said, "seems almost to take pleasure in telling people what they don't want to hear." Smaller and Leaner

A month or so later, he made headlines for doing just that. Rather than trying to juice Detroit's Census count, so as to puff up the city's pride and maximize federal funding—a tactic used by many municipalities—the mayor spoke openly about the need to embrace a city that is much smaller and leaner. "Transformational issues have to be talked about," Bing told me recently, citing the steady hemorrhaging of high-paying blue-collar work that Detroit has witnessed for many years. "It's hard for people to grapple with the fact that those jobs are gone and they're not coming back. We have to prepare ourselves for something very different." This, of course, is the real trick: not only to have the courage to contend with the most daunting challenges but also to possess the vision and skill to then turn the situation into something positive. As Drucker asserted, "A time of turbulence is also one of great opportunity for those who can understand, accept, and exploit the new realities." In Detroit's case, this means slimming things down before building them back up. Bing, who inherited a $300 million-plus deficit when he came into office in May 2009, reached agreement with the City Council last month on a $3 billion budget that includes more than $100 million in cuts. Dwindling Tax Base

Getting pinched like that is always painful. But with a tax base supported by only about 900,000 people—not even half of what Detroit had at its height—there's simply "a whole litany of things we can't afford to do anymore," says Bing, as he rattles off reductions in "street paving … grass cutting, snow removal," and other services. "Nobody likes to hear that. But if we fight it, we're going to keep spiraling down." In a similar vein, the mayor has targeted 3,000 blighted homes for demolition this year. Yet Bing also believes that amid all the rubble a little light can shine: The scaling back will allow the city to focus on revitalizing a select number of core neighborhoods. The mayor notes that a number of new construction projects are now under way, and he also sees a chance to develop Detroit's international riverfront. In the end, though, Bing recognizes that ideas, not edifices, are what must save the city. Detroit, he points out, has a rich tradition of engineering excellence and entrepreneurship. The question is: How can the city rekindle that spirit and translate it into jobs? Repairing the Schools

"How do we identify the next Berry Gordy?" Bing asks, referring to the founder of Motown Records. "How do we identify the next Henry Ford?" The process must begin, he suggests, by accepting "that we have a broken, failing school system." Some are urging mayoral control of the city's schools in the hope of improving accountability, but it isn't entirely clear that Bing is eager to play that role. In any event, such plans are presently stalled. Detroit has a long way to go before it is healthy again. And Bing isn't immune to criticism. The Detroit Free Press, for instance, has rapped him for "mincing words about what the city's educational future should look like." Still, all in all, Bing appears to be slowly making progress by confronting many of Detroit's harshest realities head-on while not overpromising what he can deliver. If the city rises as a result, the man who collected more than 3,400 caroms during his time in the NBA will have claimed his biggest rebound by far.


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