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Year: 2012

City development under the constraints of and urban governance: A case study on the application of modelling and ‘syntegration’ to the city of Fürth

Mieg, Harald A ; Grafe, Fritz-Julius

Abstract: This paper presents insights from the so-called ‘syntegration’ process, which helped the German city of Fürth to overcome severe financial deficit. The approach comprises both systems modelling, in order to grasp the developmental prospects of a city, and an accelerated process of consensus-building within the city, which is closely connected to implementation. Syntegration is viewed within the context of urban governance. The findings suggest that leadership is indispensable in initiating and controlling such an urban change process. ‘Syntegration’ and ‘Malik Syntegration’ are registered trade marks owned by Malik.

Posted at the Zurich Open Repository and Archive, University of Zurich ZORA URL: https://doi.org/10.5167/uzh-201126 Journal Article Accepted Version

Originally published at: Mieg, Harald A; Grafe, Fritz-Julius (2012). City development under the constraints of complexity and urban governance: A case study on the application of systems modelling and ‘syntegration’ to the city of Fürth. Journal of Urban Regeneration and Renewal, 6(1):91-100. Mieg:JSC page.qxd 05/10/2012 11:50 Page 91

City development under the constraints of complexity and urban governance: A case study on the application of systems modelling and ‘syntegration’ to the city of Fürth Received: 20th July, 2012

Harald A. Mieg and Fritz-Julius Grafe are geographers and urban researchers at the Georg-Simmel Center for Metropolitan Studies of the Humboldt-Universität zu Berlin (www.gsz.hu-berlin.de). The Georg-Simmel Center is an interdisciplinary platform for the coordination of research and teaching, directed by Harald A. Mieg 2005–2011. Harald A. Mieg is particularly concerned with sustainable urban development, Fritz Grafe with urban analysis.

ABSTRACT This paper presents insights from the so-called ‘syntegration’ process, which helped the German city of Fürth to overcome severe financial deficit. The approach comprises both systems modelling, in order to grasp the developmental prospects of a city, and an accelerated process of consensus-building within the city, which is closely connected to implementation. Syntegration is viewed within the context of urban governance. The findings suggest that leadership is indispensable in initiating and controlling such an urban change process. ‘Syntegration’ and ‘Malik Syntegration’ are registered trade marks owned by Malik.

Keywords: systems modelling, syntegration, consensus building, urban governance, leadership, cross-sectoral communications

INTRODUCTION or demographic change) to understand Economic change with uncertain prospects, and steer urban development. This presents demographic change and empty public two fundamental questions: First, what are coffers describe a situation typical of many the impact factors? Secondly, how do they mid-sized German towns and cities interact? Demographic change, either (between 10,000 and 100,000 inhabitants). through ageing of a city’s population or These are just some of the facets that define increased migration, also influences the urban development, not only in , economic base of the city, particularly but in many cities around the world. The local consumption patterns. Factors for Harald A. Mieg and Fritz-Julius Grafe question arises: How can urban urban development go by many Georg-Simmel Center for development be managed effectively within descriptions within the literature. For Metropolitan Studies, Humboldt-Universität zu the context of a multitude of external and instance, at the highest level of abstraction, Berlin, Berlin, Germany. internal pressures? Pacione1 and Stratmann2 defined a set of E-mail: [email protected], In practice, it is necessary to identify ‘global trigger factors’ describing changes [email protected] relevant factors (such as economic growth in urban development: demographic,

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Political Change? Cultural Change Demographics

Economy

Technologies

Figure 1: Trigger factors of urban development

societal (eg vertical and horizontal Horizonte, Brazil; and Werl, Germany. The mobility within a city), technological, following section provides an introduction economic, cultural (eg changing values to the city of Fürth and its greatest and lifestyles), political and, finally, development problem — spiralling deficit. environmental. Figure 1 shows possible The paper then turns to the urban change interrelations between these impact process through which the city has factors. For instance, economic change attempted to address this deficit problem. seems to be closely tied to several others The third section introduces the method factors, such as technological change or applied: syntegration, a consensus-building changing social structures, whereas tool related to systems modelling. The demographics constitutes a more final section summarises the results and independent factor. The role of politics or highlights the issue of leadership. even political change cannot be clearly portrayed in this way. Not every combination of factors is THE CITY OF FÜRTH relevant at all times or for every example; Fürth’s best-known son is the diplomat however, the complexity increases and Nobel Peace Laureate Henry exponentially with the number of factors Kissinger, who remains a firm supporter of taken into account; here, systems Fürth’s football club, Spielvereinigung modelling comes into play. Systems Greuther Fürth. Historically, Fürth was modelling allows simultaneous evaluation first documented in 1007, and therefore of the interactions between a great has a typical early-medieval city number of factors, and thus identification foundation. Today, it is located in the of the most active factors within a system. Bavarian administrative district of Middle In this context, a research project was Franconia; together with Nürnberg and initiated on the current use and prospects Erlangen, it creates a dense city triangle of systems modelling-based tools in cities. that forms the centre of the Middle The following presents a case study3 on Franconian agglomeration. This the German city of Fürth, which is highly agglomeration is also the heart of the indebted, and sought to innovate a European Metropolitan Region solution via professional consultancy and a Nürnberg, with a total of 3.5 million fundamental systemic analysis of the city’s inhabitants. As with most European cities, options. Other cities under examination Fürth experienced its most rapid growth are: St. Veit, Austria; Si Ping, China; Belo during industrialisation, and today has

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115,000 inhabitants and is considered a administration, including all major city. heads-of-department, those in charge of Economically, the brewery sector and finances, as well as the Mayor himself. the games industry are of great historical Politicians from the city parliament were and contemporary significance in the not included. The workshop was guided region. Until recently, Fürth was host to by the question: ‘From today on, how can the headquarters of Europe’s largest mail we develop the operability of the city of order company, Quelle GmbH; however, Fürth in all areas, in order to permanently the company is currently in liquidation, and effectively remove the structural greatly affecting local business tax deficit of e30 million by 2013?’. The revenues. Fürth also considers itself an target for the syntegration workshop was emerging research centre, with to identify savings of e13 million; dependence on the Fraunhofer Institute as following the syntegration workshop, well as several solar and material science potential sustainable savings approaching companies. e21 million were identified (Ammon, S., Fürth was traditionally regarded as a personal communication, June 2012). workers’ city and continues to struggle The syntegration workshop was with low educational attainment, lack of accompanied by a systemic analysis of skilled workers and a large out-commuter Fürth. The modelling exercise was based quota of the proportion that are highly on the sensitivity model approach of skilled. Combined with enduring Frederic Vester,4 which encompasses economic change, all of this results in a impact factors within a system and defines massive household deficit that has their interrelations. Sensitivity modelling paralysed the city in recent years. A series has its roots in the pioneering works of Jay of failed attempts were previously made to Wright Forrester of MIT, who, as early as consolidate the city budget, which were 1969, tried to apply systems thinking to initiated internally, and also through the cities.5,6 It is used for studies of land-use use of external consultancies. The decision planning: for instance, by the ETH to try the systemic approach was a (Zürich) or the Graduate Institute of ‘last-ditch effort’ in an attempt to avoid a Urban Planning (National Chung-Hsing ‘lawnmower’ policy, under which the University, Taipei).7 In Fürth, two models spending of all departments would have to were developed: one for the city as whole, be reduced by 10 per cent, irrespective of and another to model internal process of how these cuts would affect the city’s the city administration. ability to act. A series of 21 impact factors were identified, which are ranked in Figure 2 according to their importance and role for THE URBAN CHANGE PROCESS: the city of Fürth. The top-left area shows 2010–PRESENT factors that are the strongest within the The core process for adjusting urban system and which, if changed development strategies — facing Fürth’s appropriately, have the greatest potential to enormous deficit — was a re-stabilise the system after changes occur. three-and-a-half-day-long workshop The bottom-right represents reactive convened during summer 2010, based on factors, which are generally inactive and a networked communication model called have little impact on the system, but ‘syntegration’, which will be introduced in which are themselves heavily dependent more detail in the following section. The on the system. The bottom-left represents participants were key members of the city buffering factors; these stabilise the system,

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Figure 2: Importance and role of impact factors for the city of Fürth.

and react only slightly to external change, (in the city). These are external variables, even though they are densely networked; however, and the city administration is not however, they might become crucial once able to influence them directly, if at all. their tipping point is reached. The The model allows the construction of top-right represents critical factors; heavily scenarios, for instance for the case of networked, they affect the system greatly if changing taxation levels. they change. These are therefore useful for The findings of the systems modelling initiating change in the system. helped to evaluate and interlink the Figure 3 shows a wire diagram for the measures that were developed during the system model of Fürth, where the boxes syntegration process. The measures are represent the different impact factors, the classified by 12 core issues, ranked in Table solid lines show confirming connections 1 by their financial impact. The systems between these, and the dotted lines show modelling aided the process of sorting opposing connections. The most active through the measures and identifying variables are ‘effective services’, ‘tax level’, those that would be the easiest to ‘strategic investments of the city implement, those that had the biggest administration’ and the ‘efficiency of the effect on the city system, as well as those city administration’. These have the that could prove ineffective in the long greatest potential to influence other run, or which might even destabilise the variables, and thus represent potential city system. adjustment levers. Other active factors to The three biggest financial impacts all take note of are ‘paralysing regulations’ (by relate to either income improvements or the state) and ‘political unity over strategy’ cutbacks, but these measures should be

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Figure 3: Importance and role of the impact factors for the city of Fürth

viewed in connection with a class of SYNTEGRATION IN THE CONTEXT OF measures called ‘critical task review’, URBAN GOVERNANCE which respond to both ‘effective services’ This section introduces the core method and ‘efficiency of administration’ factors. applied in Fürth’s change process, and will The critical task review aims to identify discuss its use in the context of urban the core tasks of the city administration governance. Syntegration refers to a and to chart them as being: (1) obligatory cybernetic workshop format, a neologism by law, with a set definition of how tasks combining the concepts of synergy and are to be carried out; (2) obligatory by integration. The core concept is to law, but implementation definable by the connect and network the knowledge of city; (3) discretionary but important, eg for decision makers of an organisation — or a the city‘s identity; and (4) further city — to achieve an explicitly defined ‘nice-to-haves’. This helped in so far as it strategic goal. This workshop (lasting three was easier to identify areas with the to three-and-a-half days) usually results in greatest potential for additional savings, a multitude of immediate projects and and those areas classified as crucial measures for solving the leading question, operational infrastructure that would have which are subsequently implemented. The to be retained. As a side effect to this methodology was introduced by Stafford process, duplicate structures were also Beer,8 and is in use for organisational identified and rationalised, while efficiency development.9 The most common also benefited from defining core tasks and application of syntegration was developed clarifying jurisdictions. by Fredmund Malik, who integrated

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Table 1: Classes of measures resulting from the 2010 syntegration of the city of Fürth

Financial Class of measures Content impact

Improvement of income Measures that increase the city’s income (taxes, fees, returns 1 from semi-public companies) Contraction of social Savings achieved by cuts in social services 2 services Sustainable reduction Measures that reduce the city’s spending (restructuring the 3 of costs city balance) Critical task review Review of all the city’s tasks, maintaining only legally binding 4 tasks and those that are essential for the city’s identity Strengthening of the Improvements to city image, public real estate management, 5 economic sector tourism Improvement of internal Increasing flexibility and changing legal status of job descriptions 6 human resource allocation Inter-communal cooperation Use of synergy effects and elimination of duplicate structures 7 Organisational development Central accounting, improved event management 8 (of municipal administration) Public information and E-government, commercial revenues 9 participation Legally binding vs. practically Reducing standards in construction and public infrastructure 10 needed to legal minimum Strategy, politics, and Strategic control 11 administration Improvement of internal Increase commitment, activation of unused resources and 12 leadership employ performance incentives

syntegration with systems modelling.10 vertices), which represents the way in Figure 4 depicts the current form of a which the networking of all existing syntegration process, as developed by knowledge is established through 12 Malik and applied in the case of Fürth. sub-topics. This core process is After ensuring the general objectives, the supplemented with various audit tools that starting point is the concise definition of a aim to optimise the results and their leading question, which encompasses the subsequent implementation. At this point, aim of the entire process. The initiators, the implementation of measures is set in together with external experts, identify motion by establishing a controlling key stakeholders to address the given mechanism that ensures long-term question, and invite them to participate in viability.12 the following process. The methodology Syntegration as a tool for urban change allows for a minimum of 20 participants has two operational forms with different and a maximum of 42, which, according foci: a workshop for (1) organisational to , is the upper limit for development of the city administration — efficiently networking and pooling the as in the Fürth case — or (2) knowledge of all participants.11 These consensus-building of the city — as in the participants then define the 12 most case of the German city of Werl.13,14 In important sub-topics for answering the any case, the selection of participants aims leading question, and discuss these within to involve all key decision makers relevant smaller taskforces comprising three to the leading question, in order to iterations during the three-and-a-half days maximise the chances of successful of the workshop. These discussions form implementation of the proposed measures. the core of the syntegration process, and Syntegration should be seen in the are represented by the icosahedron in context of urban governance. Governance Figure 4 (a regular polyhedron with 12 refers to a shift in governmental agency,

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Figure 4: Syntegration process, with the icosahedron representing the networked communication process organised in 12 sub-topics. © Malik Management, St. Gallen

away from a centralised city government EFFECTS: TOWARDS MANAGEMENT towards ‘self-organising networks’;15 it OF URBAN CHANGE implies a ‘blurring of boundaries and Any consultancy project, whether in an responsibilities for tackling social and organisation or city, faces similar initial economic issues’.16 Practically, urban responses, such as being considered ‘only governance results in the involvement of one more workshop’ in a series of several different stakeholders in processes of urban consultancy initiatives, or being planning and decision making. Common considered as a Human Resources forms of participation include urban development project that is an interesting consensus conferences17 or roundtables experience but more or less ineffective in with representatives of stakeholder groups. practice, particularly with respect to the Consensus-building in such panels can inherent inertia of administrations, become a time-consuming process with whether public or private. Common very fragile results, facing uncertain reactions to new measures very often implementation. In contrast, syntegration range from ‘not developed here’ (and attempts to speed up consensus building therefore not relevant), through ‘we and to connect consensus with already tested this measure years ago — it implementation by involving the key didn‘t work’, to unspoken worries about decision makers who will also be one’s own capabilities to cope with responsible for implementing the agreed change, or potential risks to one’s job by measures. The most important outcomes the redefinition of tasks. Any consultancy of syntegration are synergies, achieved by project must develop its own responses to enabling cross-sectoral communication,18 these initial misgivings. Syntegration is which better coordinate decision making designed, first, to be fast: the results must within a city. These effects are discussed in be presented after three-and-a-half days more detail in the next section. (consensus, measures and systems

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models); and, second, to connect • Synergy and integration: Syntegration consensus building with implementation derives from ‘synergy’ and ‘integration’. by involving all relevant decision makers One of the unexpected effects of in the consensus building. The three core syntegration was to identify the many effects of the city syntegration process duplicated structures within the city are: administration. As a consequence, Fürth is developing an integrated • Cross-sectoral communication: The event-management structure. administration of a city of 100,000 or Identifying synergies and redundant more people is divided into several structures should naturally be seen departments, such as finance, social within the context of increasing affairs and city infrastructures. This efficiency; however, it also has a separation is useful for day-to-day strategic aspect: synergy and integration operations; however, it can become are the basis for rethinking the city’s impedimental in solving more complex profile. What is the particular story of problems or when organisational this city? In consequence, what are the changes seem necessary. As mentioned, city’s ‘effective services’ as defined in the syntegration fosters trans-functional systems model (see Figures 2 and 3)? communication and leads to For example, Fürth is about to change cross-sectoral networks. From the from a worker’s city to a ‘young city’, perspective of the Fürth city hosting students and young families as administration, this has been the part of the European Metropolitan primary trigger for any change. Region of Nürnberg, with universities Cross-sectoral communication creates and new creative industries. not only transparency with regard to current tasks and projects, but with These effects or triggers have to be regard to how effective responsibilities embedded in an urban change are fulfilled by the various positions in management project. This implies two the city administrations. conditions: first, leadership and, second, • Re-evaluation and bundling: Many of the control over the process of implementing measures defined in the syntegration measures. Process control, that is, the process are not new, but the coordination and control of the resulting syntegration helps to re-evaluate and projects, is required in both forms of bundle existing projects, measures or syntegration, focusing either on the city ideas. A core new measure in this administration or on consensus building respect is the critical task review. Fürth in the city. In both cases, it remains with has to rethink its portfolio of public the city administration to steer the services — some are legally binding, implementation, even though many of some are specifically important for the projects might be directed by Fürth, while others are nice to have. external groups or key individuals, such Here, systems modelling or systems as firms or voluntary organisations. The thinking helps to frame and process should be controlled via a clear, differentiate the mandatory from the high-level mandate with responsibility aspirational. Local politics and public within the city administration. In Fürth, debates will come into play in any case the process is managed by Dr Stefanie — for instance, in proposals to Ammon, the city councillor with rationalise or close city-financed portfolio for finance, internal cultural institutions. organisation and human resources, who

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was the initiator of the syntegration roles of the mayor and the city process. administration are central. Facing the Lastly, urban change triggered by systemic complexity of cities and the syntegration requires leadership. This implied managerial challenge, urban particularly refers to the role of the mayor governance cannot dispense with or chief executive. It is the mayor who leadership. Leadership today should be could— and should — initiate such a ‘effective’ —motivating the people change process and mobilise the necessary involved;20 in the case of Fürth, Mayor means. The mayor’s main function, Thomas Jung stated, ‘The syntegration has however, is legitimisation. The mayor, triggered the powers of self-healing being the focus of attention for members (Selbstheilungskräfte) of our city.’ of the city administration and many of the citizens, defines the values and possible Notes and References impact of the change process. The worst 1. Pacione, M. (2009) ‘Urban Geography: A Global case occurs when a mayor follows a Perspective’, 3rd edn, Routledge, New York. more-or-less hidden agenda that 2. Stratmann, B. (1999) ‘Stadtentwicklung in globalen Zeiten: Lokale Strategien, städtische Lebensqualität counteracts the change process. Leadership und Globalisierung’, Birkhäuser, Basel. therefore requires some kind of personal 3. The study included document analysis and integrity.19 Needless to say, besides the multiple expert interviews, the latter ranging from journalists, civil servants within the city legitimisation function, the mayor also has administration and members of the local Chamber to steer the process by allocation of of Commerce to local politicians. resources and responsibilities. In the 4. Vester, F. (2007) ‘The Art of Interconnected present case, the Mayor of Fürth, Thomas Thinking: Tools and Concepts for a New Approach to Tackling Complexity’, MCB, Berlin. Jung, took over the initiative of a change 5. Forrester, J. W. and Collins, J. F. (1969) ‘Urban process and formed it into the political dynamics’, MIT Press, Cambridge, MA. will and core project of the city of Fürth. 6. Forrester, J. W. (1976) ‘Principles of Systems’, Wright-Allen Press, Cambridge, MA. 7. frederic-vester.de. (2012) ‘The Sensitivity Model Prof. Vester’, available at: CONCLUSION http://www.frederic-vester.de/eng/sensitivity -model/licensees-and-users/ (accessed 5th March, The conclusions can be synthesised in 2012). three points. 8. Beer, S. (1994) ‘Beyond Dispute: The Invention of Team Syntegrity’, Wiley, New York. • A city’s system model helps to integrate 9. Ríos, J. P. (2011) ‘Design and Diagnosis for Sustainable Organizations: The Viable System the planning variables of a city, and thus Method’, Springer, Berlin. to evaluate measures, projects and 10. Malik, F. (forthcoming) ‘Strategy: Navigating the strategies. Complexity of the New World’, Campus, • Frankfurt. It can be useful to accelerate 11. Beer, ref. 8 above cross-sectoral consensus building in the 12. Malik Management (2011) ‘The Malik context of urban governance in order Syntegration for the Development of Cities and Regions’ [Folder], Malik Management, St. Gallen. to realise implementation. 13. Werl. (2012) ‘Werl gewinnt die Zukunft— • Leadership is indispensable in making Syntegration 2010 plus’. Available at both tools (systems modelling and http://www.werl.de/syntegration.php (accessed syntegration) effective with respect to 14th March, 2012). 14. Grossmann, M. and Bogdahn, I. (2007). long-term urban change. ‘Nacheinander Akteur, Kritiker, Beobachter: Um gemeinsam mit Bürgern und Bürgerinnen It seems clear that the coordination and Leitlinien der Stadtentwicklung zu erarbeiten, hat die Stadt Werl das in St. Gallen entwickelte control of policy measures requires a clear Verfahren der Syntegration angewandt’, Städte- und leadership structure. In this respect, the Gemeinderat, No. 3, pp. 28–30.

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15. Rhodes, R. A. W. (1996) ‘The New Governance: überwinden: Die Stadt Fürth hat ihre Governing without Government’, Political Studies, Haushaltslage mit Hilfe eines Vol. 44, No. 4, pp. 652–667. Syntegrations-Workshops verbessert’ [Overcoming 16. Stoker, G. (1998) ‘Governance as Theory: Five departmental thinking: The City of Fürth Propositions’, International Social Science Journal, improved its budgetary position with help of a Vol. 50, No. 155, pp. 17–28. syntegration workshop], Der Neue Kämmerer, 17. Susskind, L., McKearnan, S. and Thomas-Larmer, J. Vol. 1, p. 6. (1999) ‘The Consensus Building Handbook: A 19. Malik, F. (2009) ‘Managing Performing Living: Comprehensive Guide to Reaching Agreement’, Effective Management for a New Era’, Campus, Sage, London. Frankfurt. 18. Ammon, S. (2011) ‘Das Ressortdenken 20. Ibid.

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