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. The business owners loved their work and managed their businesses reasonably well (the plumber had put several kids through college), but they might typically keep their receipts in shoeboxes or let their phones go unanswered. They were highly vulnerable to competition from more organized retailers with citywide or national brand names.
Congressman Rangel’s office and the various local business alliances helped the other Initiative participants understand the fabric of the community and the value of these small businesses as both employers and vendors. The MBA students and volunteer accountants and management consultants taught business methods and marketing approaches. “We went in and created income statements and balance sheets from handwritten receipts that went back 10 years,” said one participant. “Then we analyzed the customers, and how they had changed over time, and whether [the stores] would benefit by hiring more staff.”
The result was wildly successful. Though 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. As one entrepreneur said, “These kids are dedicating all this time. They’re not getting any money for it. How dare I not get excited about moving my business ahead when they’re so excited?”
In an earlier era, the Harlem Small Business Initiative might have ended up managed by one of the three sectors: a redevelopment agency, a neighborhood organization, or perhaps a business-funded partnership with a public- or civil-sector organization. It would not have been comprehensive; it would not have brought people together across all three sectors; and, most likely, the results would have been limited by the skills and experience of the few participating organizations. By contrast, the megacommunity approach brought dozens of organizations together on a single issue. There were moments when leaders from each of the three sectors balked, typically because they felt they would be committed to an investment or a promise over which they didn’t have exclusive control. But they all continued with the project, in part because they saw the others continuing as well. In May 2004, a second phase started, with similar programs launched in Brooklyn, the Bronx, and eventually Los Angeles. The Harlem Small Business Initiative has been renamed the Urban Enterprise Initiative.
Although no one possesses the title or power of “CEO of the megacommunity,” the quality of leadership within any megacommunity — from a neighborhood’s business community to a global undertaking — is the key factor in turning concern and aspiration into results. Since leaders can no longer solve problems by telling people what to do within the walls of their own enterprises, their success depends on their ability to convene and influence others outside their domains. Megacommunities thrive when leaders have a mind-set of “optimization,” as our colleague Chris Kelly terms it.