212. Big Cities, Big Struggles. Plan Flexibly

Big-City, Pandemic Problems:

Conference Board Survey (8/26/20): “only 27% of workplaces in the top 20 US cities will be reopened by the end of September”.

  1. Density stats: 3% of US counties have 50% of the population generating 61% of the GDP. (NYC metro-plex is almost 11% of the total)
  2. Complexity Challenges: the bigger the city, the bigger the – public unions and their under-funded pensions; political bureaucracy machines; and socio-economic challenges.
  3. Top 20-city, hub airports feed into: convention business ecosystems; mass transit options to center-city elite offerings for: legal, financial, education, research, medical, theater, fashion, media, pro sports, concerts, museums, tourist attractions, etc.
  4. This rich stew is enabled by swarms of small businesses that are now dropping like flies along with many jobs that will not return.
  5. Big city tax revenues are dropping, because: a) enough people fear – flying, mass transit usage and big-crowd events; and b) big-income citizens (who can zoom remotely) are moving out.
  6. Solutions? a) Raise taxes to accelerate the declines. B) Get bailed out by the federal government with the debt burden shared out to all kids and grandkids across the US. Or: c) Go bankrupt.
  7. Regardless: all city assets and labor must be re-priced downward.

When and How Will Cities Recover?

Who knows? Cities will reach a bottoming-out, equilibrium post vaccinations. But, recoveries will be diminished. The debt/pension/bureaucracy problems will remain. And, both Zoomification and booming – bandwidth; eCommerce; and Amazon fulfillment capacity – will all have permanent, downsizing, shifting effects.

We now know from experience that: business – travel, meetings, conventions, buying-selling, skyboxes for sporting events, etc. – activities will be permanently reduced and re-balanced. And, eCommerce will continue to bankrupt retailers and encroach into B2B distribution channels.

Your Big-City Location Plans?

Metro-centric businesses – like distributor locations – must have 3 sets of plans (best, likely and worst cases) for simultaneously: Downsizing cost structure while Upgrading Value innovation by Refocusing on the Profit Core customers and Reinventing digitally enabled – selling, business and channel – models (DURR).

Few will choose the DURR path to win. Most will: cut costs across the board; hope for the old ways to come back; and fade.

For how to DURR? Check out my 12-webinar curriculum and  “Core Renewal Roadmap”.

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