Interview with Chris Kelly and Mark Gerencser on Megacommunities

Chris and I thank you for the opportunity – this is a new experience for us, and we are looking forward to exchanging our views. I must warn you though, I can’t guarantee my typing(although Chris' should be good)… but I would like to think that our content will be solid and of interest....

David, thanks for inviting us. This is a great way to get the word out on our book, and a great way for us to better undestand what folks are thinking about our ideas.

Following September 11th, I had the opportunity to conduct two war games—one around a bioterrorism event and the other around port security. In both instances, we engaged the Government, commercial industry, and NGOs and remarkable things happened. Problems were solved, working together had far better results than working alone, and as new problems emerged, new solutions followed. After the games concluded, I noticed that all the good that was achieved was finite and even perishable. It worked but did not sustain. New solutions were needed to address the new problems, and the game was over and there was not a mechanism to learn, grow, and sustain. It became clear to me that we needed something more than a transaction--something that would sustain over the long term. For me, the concept of Megacommunities was born.

Well David, during my career, I have been working on different types of problems but the ones I really enjoyed seemed to have a common thread --- that was working with Gov't, industry and civil society to drive to results. I did this first back in the early 90s on issues surrounding wire-tap issues and then latter in the early 2002 on HIV-AIDS in India. Clearly two very different topics. These experiences led my to think about what was going on and why and was there something similiar that should be shared.

Of course, there were 4 of us working on this and each of us had different motivations. In the end, we all came to the same conclusion that we needed to figure out what was working and why.

As we point out in the book, this is a situation where practice is leading theory, so megacommunity activity has been around quite a while. The challenge has been finding it all coming together in an effective manner. So while we found many, identifying the oldest is pretty tough.
We found one around a Coffee growing megacommunity involving fair trade. The fair trade concept, which originated among European importers in the 1970’s is straightforward: Rather than using their better bargaining position to drive prices as low as possible, coffee buyers from wealthy countries establish trading relationships with suppliers in developing countries that advance the needs of both. Fair traders recognize that there is something wrong with pitting poor Third World farmers against one another – growers in Vietnam vs. Guatemala, just to save a few pennies on a pound of coffee. The black-and-white fair trade icon symbolizes a global community – and means that the farmer was paid a premium above world commodity prices, it was grown and exported by a democratically-run cooperative of small family farmers, and that direct financing was available to the farmers.

The Y2K response in the United States is another good example of a megacommunity – a really big megacommunity!

One of the first ones we used as a model in writing the book is the Harlem Small Business Initiative. In late 2001, a series of large chain retailers announced plans to open stores in New York neighborhoods. A number of Harlem small business owners, fearing the impact of this kind of competition on their long-standing customer base, approached President Clinton, who suggested that they make the existing Harlem businesses more competitive and capable. To foster this, he suggested that the owners should create a new kind of partnership with not-for-profit status, calling on a wide range of organizations to help. The Clinton Foundation and the store owners themselves were smart enough to recognize the limits on unilateral action.

The new Harlem Small Business Initiative pulled in a large number of groups, including the office of Harlem’s U.S. Congressman, Charles Rangel; the Greater Harlem Chamber of Commerce; the Harlem Business Alliance; the Harlem Friends (a group of small businesses and citizens); the National Black MBA Association; New York University’s Stern School of Business; and our own management consulting firm, Booz Allen Hamilton. These were not figurehead groups or silent sponsors; each invested a great deal of time, effort, and creativity in the project. But none were “in charge,” nor did the groups take orders from the Harlem Small Business Initiative. Instead, they worked out a way to participate together, defining mutual goals and then playing their parts individually. A 22-month program was launched in mid-2002, focusing on 10 local businesses, including a plumber’s storefront, a women’s hat shop, a florist, a dentist’s office, and a yoga center. Although some large chain retailers, including Starbucks, Disney, and Old Navy, have entered Harlem, the Initiative is credited with helping to keep the original neighborhood vibrant. An impressive number of the small businesses served by the Initiative doubled revenues and increased profitability within less than two years. Jobs were created, the tax base was enhanced, and the services to customers improved.

In addition to the "oldest" Megacommunity, I can provide a personal perspective. In 1999, I unwittingly initiated a small MC in the area of National Security....we connected private industry, the government and a 501C3 organization (the I FUND of Maryland) to create a scholarship program to attract new talent into the National Security field....the scholarship program formed and has been growing stronger each year...my personal involvement ceased three years ago, but the MC lives on....

A very interesting aspect of Megacommunities is the idea that it exists as a result of an issue. If you are affected with an interest in that issue, you are part of its Megacommunity. We call this default association as a result of the issue a "latent" megacommunity.

An active megacommunity, which is where real activity takes place, exists as a result of an initiator (or initiators) taking on the responsibility to bring some portion of the latent megacommunity to life. Hence, participation in a megacommunity – that is, active participation – is an elective activity. So the folks who are included in an active megacommunity are those participating by engaging in a deliberate and connected manner with others from within their own sector, and from other sectors who are also affected by the issue, to address some overlapping vital interest.

The megacommunity concept is founded on network principles – and in a network you can have central control, but only if the system is simple enough to be able to accommodate the ‘frictional cost’ of having all decision run through a central entity (the collective action body John was referring to). And our systems at the international level are many things, but simple is not one of them!

For these complex systems, a distributed management scheme seems to work best. In a distributed management scheme, protocols and standards are used to guide, constrain and empower decision making as appropriate.
So, a mega-megacommunity is an interesting idea – but not so much as a balancing entity. In our opinion, it has much more value as a way to look at families of related activities. For example, the Harlem Small Business Initiative resulted in a megacommunity that was active in that part of NY. Other efforts across the country were started, modeled after there success. So arguably, each of these efforts resulted in a megacommunity – if you connect the players within the Harlem Small Business Initiative with players from a similar effort in Chicago, and Houston and LA, would that have be a mega-megacommunity? What value would it be to do so? Not sure we have an answer to that, but it is an interesting point to consider

Good question but let me try and clarify these two different notions in today's world.

First, I think of a mega-city as a recognized metropolitan area with a total population in excess of 10 million people. Some definitions also set a minimum level for population density (at least 2,000 persons/square km). A mega-city can be a single metropolitan area or two or more metropolitan areas that converge upon one another. The term metroplex is also applied to the latter. The terms megapolis and megalopolis are sometimes used synonymously with mega-city. In 1950, New York was the only area with a population of over 10 million. But today, there are 25 or so and growing.

Megacommunity is an issue based concept and not a physical place...a concern that participants from the three sectors ban together to take collective action. Now clearly, the actors in the sectors may live in a megacity, and in fact, the concern my be important in the context of a megacity - like the Harlem Business Initiative - but a Megacity and Megacommunity are different.

Here again, a key point to bear in mind is that a member of a megacommunity is a member because they are affected with an interest in the issue. As long as they are affected with that interest they will be a member of at least the latent megacommunity. If one decides to participate actively in the megacommunity then they are expected to contribute to the overall goal of addressing the issue – recall that the decision to actively participate in the megacommunity is made largely because you want to see the issue addressed, and you have something to contribute to the effort. If your efforts turn out to be disruptive, the rest of the megacommunity will likely let you know that your actions are not consistent with the agreed to goals, and ask you to direct your energies more effectively toward the overlapping vital interest. If that doesn’t work the offending party will be disconnected from the active megacommunity – that is, those working together to address the OVI. But the offending party is still part of the latent megacommunity. There is no way to be thrown out of that, as long as the issue affects you.

This in many ways mirrors the way a real-life community works. The grouchy neighbor who complains about everything and does not help in any way is not asked to sell his house and move, but is ignored and not really granted venues to grouse by those who are actively working on issue to improve the neighborhood.

The three power sectors - private industry, government, and civil society - essentially cover everyone.

We also believe that megacommunities can solve a particular class of problems that meet certain conditions. It best addresses those problems that impact and involve all three sectors. (Hence the solutions also need to span all three sectors)

Moreover, in developing the theory, we realized that there had to be some overlapping vital interest whose effects could be felt locally by each sector. Each participant also needs to recognize that it wants to do something about the problem and that they are willing to commit to mutual action.

If these conditions are met, then the megacommunity is one way in which individuals can to begin to push beyond the identification of individual interests, toward the alignment of interests, the articulation of goals, and the implementation of actions.

Given all that, a primary reason to think of problem-solving from this organizational perspective is that, due to the scale of scope of the challenge, no single entity can adequately address is alone. The situation is calling out for an approach that emphasizes mutual leadership (tri-sector and network-based) and integrated capabilities (pooling resources and capabilities to solve problems). The best way to generate mutual leadership and leverage integrated capabilities is to involve all the players with a stake in the issue… the megacommunity.

Great point and yes, we are finding this all the time. As Mark pointed out, he didn't realize he was working Megacommunity with the scholarship program. Since starting to get the ball rolling on this,we are constantly getting email on megacommunities they have started.

Great question. The MC concept doesn't specifically address nor require communications convergence...but we do believe that comms convergence in this regard is indeed happening..we see things like reverse 911 coming more into play, we see military commands establishing Wikis and social networking tools, etc. I personally believe it all will evolve into one utility--one cloud as told by Chris Horn in his book the Big Switch...at any rate, this all supports the functioning of a MC...

Thanks for this question. As we say in the book, we think about the Energy Security question, and others like it, as global dynamic issues. We then ask how can it be addressed/how could it be addressed. The Megacommunity approach can be used as you point out for States in this case to gain a competitive advantage in the market. It will also need to be picked up the Government, and is, as a national security issue. We expect that during the next several years, the US Government will be focused on how to integrate its efforts to address energy consumption in a more diliberate way. This type of Mission Integration takes time, but there is a clear imperative and actions are underway. As we heard at Aspen IdeasFest last year, Thomas Friedman is pushing Green as the next competitive agenda for the US in the global market. It's coming!

There is no doubt in our minds that the internet is a tremendous enabler of megacommunities. But perhaps more indirectly than the question would indicate.

We tried to frame the issue regarding “why now” for megacommunities around the emergence and pervasiveness of globalization in our world today. The key point here is that the current wave of globalization is enabled largely by the internet. As a result of this, we are seeing more and more connection among global players (via the internet) and more opportunity and benefits arise. But, with any situation like this, with these opportunities and benefits come risk and cost. And it is the wide range of risks and costs that are creating increased focus on the large scale, complex, and dynamic issues that megacommunities address.

What we have seen with two in particular has been a realization that they may not have all the necessary stakeholders involved and have not done an exhaustive stakeholder analysis to bring others in...they get comfortable and feel they have it nailed. The other idea we see is this notion of weak links coming to play where a new player adds something very powerful in terms of capabilities that was not first seen. The Great Barrier Reef Foundation is using the book to train their members on ways to work effectively and continue to grow. Other clients are using it to understand what the real Overlapping Vital Interest is and how to draw others into the Megacommunity.

Our message in the book was not that government could not be an initiator, nor was it that we are skeptical of government’s ability to play that role. Actually, we tried to emphasize that all three sectors can play the role of initiator, that is, a specialized node in a network that connects to several other nodes (i.e., it has a high number of linkages into and out of it).

An entity that takes the lead in moving a megacommunity from its latent stage to an active state). What we said was “Initiators may arise from any sector depending on the specific situation, although we suspect that many of them will have business-sector experience. The business sector is in a better position than either government or civil society to absorb the risk largely because it, collectively, has more resources—in terms of funds and people.”

In the initial stages in particular, the network needs some person, group or sector to precipitate alignment and catalyze latent energies. Our experience with government executives is that, while there is a strong desire in many to get things done, the requirements imposed on them call for either a strong track record of success (the ideal state) or a really good theory-of-the-case for action. To date, there has not been a solid theory to work with, so it is challenging for a government leader to take the initiative of creating a megacommunity. We hope to change that with this book, and in some way to empower all participants – government, business and civil society - to act.

You're right--its not the "Patton" command and control leadership style that makes an MC work.

This is so important that we devote an entire chapter on leadership in the book. This chapter reveals the characteristics of a leader in a megacommunity – note that we say a leader “IN” a megacommunity rather than a leader “OF” a megacommunity.

A subtle difference, but an important one. In a megacommunity, leaders of many organizations have to work together toward common goals, and they have to learn how to do it without any one of them being in control of the whole system.

There are two types of megacommunity leaders. The first category of megacommunity leaders includes those senior leaders of organizations (e.g., CEOs, directors, chairs, ministers) who become engaged in a megacommunity. Their full-hearted participation is crucial, because it ensures that their organizations will be fully participative. A senior leader’s direct involvement will raise the commitment level of any specific node, ensuring that megacommunity attitudes and mechanisms become quickly and deeply embedded in their organization. Most people in organizations know that if a senior leader isn’t visibly committed to an endeavor, it is not really a priority. And if the senior leader does not tangibly endorse a solution, it will not fly, if only because people will feel vulnerable in applying their own time and attention to it.

In tapping into a senior leader’s enthusiasm, one warning applies: If a megacommunity only has the participation of one senior leader from an organization, the megacommunity will probably find itself in a somewhat vulnerable position, much like what happens in a network if it’s too single-hub dependent.

To be sure, each member organization must offer someone who has the authority to commit resources. But senior leaders aren't the only ones with that ability—which brings us to our second category.

This second type of leader includes the person or persons playing the role of formal liaison to the megacommunity. This liaison has the authority to interact with the megacommunity, as well as the responsibility to carry the plans and lessons of megacommunity back to its base organization. This second category may also include people who are informal liaisons—who, by virtue of their role or their predisposition, are recognized for their value in connecting the individual organization to the megacommunity. Regardless of the type of leader, there are some key attributes which we believe are essential to success of an “integrative leader” within a megacommunity:

• A Spirit of Inclusiveness
• Tri-Sector Exposure
• A Non-Imperial Approach
• Navigation Skills (A Light “Touch”)
• Communication Skills
• Technological Savvy
• Adaptability
• The Talent to Foster Talent
• Presence and Passion
• Long-Term Thinking

We elaborate on these points in the book, so we will not dwell on them here, but it is very helpful to think about archetypes for these characteristics. The one that jumps to mind is our current Secretary of the Treasury – Hank Paulson, whom we interviewed for the book. Before taking his current position in the government, he served as CEO of Goldman Sachs, and as chairman of the Board at the Nature Conservancy. His exposure and experience with leadership position in all three sectors is clearly an asset. We believe leaders who have this kind of direct experience in other sectors are better positioned to make decisions that will move their organization to optimized solutions, rather than the short-sighted mindset of maximizing.

Fundamentally, we see that when megacommunities are formed, the focus shifts from maximizing an individuals take from a situation to optimizing everyone’s take from a situation. While this may seem unorthodox in a capitalist society, in fact, we observe that the maximization approach ends in failure so over a longer period of time, the optimization approach provides real returns.

In our interconnected world, megacommunity takes advantage of this property to bring new types of teams together to address our most complex issues.

We have a great web site--megacommunities.com or email us at megacommunities@bah.com -- please visit or write. We are open to any ideas or example that you might have.

Remember, this book is an ideas book...its a book about hope--offering us the hope to solve some complex and vexing problems. We will continue our research on MCs and hope to develop a "how to" guide next.

Well Dave, thanks for the opportunity to participate and we hope the Megacommunity idea resonates with people. I was listening to some of the discussions on Ted.com the other day and hit the link for Harold Reingold. He was talking about new types of competitive advantage and he said cooperation will in fact be a new wave for competitive advantage. He talked about this same thing at Aspen last year. I really believe megacommunities are a source of competitiveness because they fundamentally enable new types of problem solving with a new type of leaders.