Generative Leadership in Economic & Community Development: Using Complexity Theory to analyze how...

Generative Leadership in Economic &

Community Development:

Using Complexity Theory to Analyze how Developers

Lead through Change

Jake Watson

University of Missouri-Kansas City

PA5530: MPA Capstone

May 5th

, 2015

Generative Leadership in Economic & Community Development 1

Abstract

Economic and community developments occur in environments characterized by diversity and

disequilibrium. These dynamics allow for Complexity Theory to be an appropriate lens of

analysis. After a general overview of economic and community development, this research paper

will discuss what Complexity Theory is and why its principles compliment these fields of

development. Next, three case studies will be analyzed to further illustrate these connections.

The first will focus on an economic development coalition in Cleveland, Ohio. The second and

third will focus on community development corporations; one in Kansas City, Missouri and

another in Kansas City, Kansas. Finally, tying everything together, recommendations will be

offered for how project administrators can lead successful economic and community

development initiatives within the context of complex systems.


The creation and implementation of efficacious public development policies is a difficult

task. According to the National Governors Association (NGA), “Any state serious about

competitiveness has to be serious about policies and investments that foster smart people, smart

ideas, and the right environment to promote innovation. This means investing in research and

development (R&D) funds, supporting the educational institutes that produce both cutting-edge

research and a skilled workforce, and investing in commercializing the new discoveries and

technologies that lead to new products and new companies” (Sparks). While no public initiative

can be viewed as a strictly linear process, the objectives and variables associated with

community and economic development are particularly complex. It is the purpose of this

research paper to explore the complexity encompassing these types of developments and how

administrators of these projects lead through environmental and organizational changes.

Economic Development Overview

A staple of economic development is that it is not synonymous to economic growth.

Economic Development is the strategic deployment of economic resources to reach a social goal.

The most fundamental question municipalities and communities have to asked themselves is,

“How do we know what is the right social goal?” Economic Development usually has private

leadership, but public support and buy-in is always required so that projects compliment a

community vision. Generally, economic development projects “come in four flavors,” according

to Gary Sage1, research officer at the Kansas City, Missouri Economic Development Corporation

(EDC).

1 Sage, G. (2015, March 13). Dynamics Involved in Economic Development [Personal interview]. Appendix A


Recruitment style economic development requires the most intense level of support. This

type of project revolves around the creation of a new development spearheaded by a private

developer. Public institutions (e.g. schools, museums) or community oriented retail

establishments are common development examples. Potential employers who do not know the

dynamics of a community usually contact a private developer to initiate these types of projects.

Private developers can help employers find financing or funding opportunities, and assist with

planning in regard to environment and zoning regulations.

The second type is redevelopment. This type of economic development is any new

construction on a site that has pre-existing uses. These projects are inherently more political,

especially in downtown areas. For instance, with a greenfield2 project, developers can install new

sewer and electrical systems. But, with downtown redevelopments, businesses need to be bought

out and there is already aging infrastructure. This was the case with Kansas City, Missouri’s

Power and Light district. Public-private partnerships were critical with this redevelopment.

Kansas City and the EDC aided redevelopers through permitting processes and the acquisition of

property.

Retention and expansion, the third “flavor” of economic development projects, involve

assisting a business in the growth of their organization. Generally, these entities are facing

community based issues, so the intervention is usually much more specific to the issue(s) at

hand. Development leaders support the business through financing and facilitating new

partnerships with other organizations in the community. Finally, the fourth type is

entrepreneurial based economic development. These projects begin by identifying an individual

or organization with a good idea for improving the community. Next, project leaders give

2 The term greenfield was originally used in construction and development to reference land that has never been used (e.g.

green or new), where there was no need to demolish or rebuild any existing structures.


support by providing an incubator space and by accumulating resources for equity capital and

training.

Community Development Overview

Fundamentally, “community development is the creation of wealth” (Cavaye).

Community development involves social and economic interventions that improve the

functionality of a community. There are five different aspects to community development:

physical development, local economic development, community health, community education,

and recreation. Communities can only be improved so much without improving all of these

aspects.

In the mid-1960s the federal government launched the War on Poverty to empower poor

residents to improve their circumstances, requiring “maximum feasible participation” by

community residents in program development and channeling federal dollars directly to

Community Action Programs (Vidal). In recent years community development has become more

sophisticated in an effort to combat issues related to urban sprawl and gentrification. In response

to these complex issues, community development corporations (CDCs) have transitioned from

general antipoverty agencies to economic development institutions that operate at a

neighborhood scale.

CDCs utilize a comprehensive approach to development that can sustain a flexible

strategy. While some CDCs may rely heavily on community volunteers, most projects require

full-time professional staffs with technical skills in lending, real estate, workforce development

and community organizing. Competence must be high among staff members in order to develop


businesses and housing in distressed communities avoided by the private sector (Blakely, p337).

In-house planning capacity is also needed to deal with land-use and zoning issues.

CDCs select projects in response to community priorities, but they do so within the

constraints of market feasibility. To work around these constraints, CDCs often seek private,

public, and institutional partnerships. Joint ventures with entrepreneurs, housing development

syndications, and bank credit lines have become commonplace for CDCs. Municipalities can aid

CDCs through their powers of eminent domain and through their bonding authority to attract

private capital for development (Blakely, p338). Educational institutions may also partner with

CDCs to create employment training programs. A local community college may design a

curriculum in accordance with private sector needs, while a CDC identifies and screens possible

trainees, and then places them with employers after the training is finished (Blakely, p338).

Applying Complexity Theory to Economic & Community Development

Complexity Science is a new and exciting way to analyze human organizations and

interactions. Traditional management theories have viewed organizations as linear systems,

where fixed inputs that travel into a system produce fixed outputs. However, human

organizations are complex and cannot be examined through linear paradigms. Complexity

Science is based in heterogeneity. This concept finds that diversity and differences in

communication are the sources of innovative ways to adapt to changing environments and to

combat emerging issues.

Complexity Theory finds that leadership should be viewed as event, rather than a person.

The typical focus on heroic and charismatic leaders creates linear responses to complex issues.

Leadership, in the context of complexity, is an, “influence process that arises through


interactions.” Leaders should tune into patterns of interaction instead of “one-time-moves”

(Goldstein, p6). Interactions, or, the “spaces between people,” are what drive organizations.

Generative leaders should focus on the quality and the quantity of interactions in their

organizations so that their constituency can share information effectively, adapt to change, and

have a keen awareness of their impact on organizational objectives.

The principles of complexity based leadership are illustrated in an applicable and

meaningful way in the book, Complexity and the Nexus of Leadership: Leveraging nonlinear

science to create ecologies of innovation. The following is a list of those principles: 1)

organizations are ecologies which have interacting subsystems; 2) organizational change is

preceded by transitional periods,3 characterized by both crisis and opportunity; 3) new processes

in organizational change occur through a four phase progression of emergence; 4) generative

leadership enables an organization to experiment in order to respond to emerging issues; 5) the

ultimate objective of organizational experimentation is positive deviation from outdated

processes; and 6) smart networks enable a organization to adapt to changing environments. The

following sections will explore how these principles relate to economic and community

development

Ecologies of Innovation

Complexity Theory finds that organizations can be viewed as an ecology of interacting

subsystems. Economic and community development projects occur in complex arenas. The

communities where these projects take place can be considered to be their ecologies. Its

subsystems include project leaders, developers, public agencies, private businesses, nonprofit

organizations, neighborhood groups, and residents of the bounded area.

3 i.e. Criticalization


It is important that leaders of economic and community development projects understand

the features of an ecology so that they can picture how a project should function. First, ecologies

are systems of difference, and diversity is the source of adaptability. Differences in information

and in interpretation create arenas of communication where new ways to address challenges can

emerge. This is the manner in which systems evolve. Second, ecosystems require interaction

resonance. Interaction resonance refers to communication that is meaningful, accurate and vivid.

Third, the subsystems in an ecology must coevolve through collaborative strategies. When one

member of project seeks to get ahead of another, group objectives are doomed to fail. Finally,

ecosystems thrive in a world of disequilibrium.

The Cusp of Change - Periods of Criticalization

In a period of instability, criticalization is the moment where a critical mass has

accumulated to the point that an ecology is ready to embrace change. When disadvantaged

communities are faced with issues, such as blight or unemployment, but have gained the

attention of an economic developer or a CDC, they are experiencing what is known as

opportunity tension. This term is used to describe the friction resulting from instability and the

opportunity for generative change.

Again, opportunity tension reflects a moment of crisis and opportunity. During periods of

criticalization it is necessary to transition to an attractor that exploits change. Attractors are,

“stable configuration(s) that relate to the particular constraints placed on the organization by its

ecology” (Goldstein, p56). This is the basis for default choices in organizations. In a community

experiencing gentrification, lower income residents may be forced to rent and live in neglected

and crime-ridden apartment complexes. This would be the attractor of housing for lower income

residents in a gentrified community. One way economic developers can help the community


transition to a new attractor is by obtaining Low-Income Housing Tax Credits (LIHTCs) through

municipal and state partnerships. Financed by the federal government, LIHTCs subsidize the

acquisition, construction, and/or rehabilitation of rental property by private developers.

Emergence

In Complexity Theory, emergence is the transition to new structures, practices, and

processes that add greater functionality and adaptability in a turbulent environment. To exhibit

emergence, a complex system must have a healthy flow of information/resources, and it must be

contained enough to provide a degree of closure. The right combination of inflow and outflow of

resources within a constrained system is what enables novel structures to emerge. This happens

through both bottom up and top-down influences. Emergence occurs through a four phase

process. The previous LIHTC example will be used to this occurrence within the context of

economic and community development.

Phase one is disequilibrium, and a community characterized by gentrification is unstable.

From the perspective of an economic developer, social equity reflects equilibrium. Phase two is

amplifying actions. As the system moves deeper into disequilibrium, experiments in novelty are

likely to increase in order to complete tasks. Diversity can trigger criticalization, so leaders must

highlight, analyze, and create an environment where departures from the norm are encouraged.

The introduction of new LIHTCs in a community is an experiment and a departure from the

norm. A developer will typically propose a project to a state agency, seek and win a competitive

allocation of tax credits, complete the project, certify its cost, and “rent-up” the project to low

income tenants.


The third phase is recombinations, which are reaggregations that increase the capacity of

the system to operate adaptively. Nuanced challenges can be defeated by leveraging resources

and ideas that already exist, and by drawing on the innate connections between the organization

and its environment. Recombinations are more effective when organizing is done within ecology.

The planning process and the leveraging of LIHTCs must be done within the community. An

investor within a community will be found to make a capital contribution to the partnership.

CDCs may also coordinate with developers to help identify residents in need of low income

housing.

Stabilization (and feedback) is the final phase. In emergence, the nonlinear processes that

became amplified help institutionalize change throughout a system. A system of feedback loops

must be incorporated to further improve the system through evaluation. Stabilization begins to

occur in a community when low income residents are able to obtain improved housing options.

Also, LIHTC projects are required to meet low income requirements for a 15-year initial

compliance period and a subsequent 15-year extended use period. The credits are subject to

recapture if the project fails to comply with tax requirements during the 15-year compliance

period. Therefore, an evaluation process must be implemented so that developments meet federal

regulations.

Experiments in Novelty: Five Factors for Generative Leadership

The Ecologies of Innovation text rejects the idea of creating a linear structure for

implementing new processes (e.g. specific protocols and efficiency standards). This can be

confusing for leaders who are accustomed to using best practice solutions. The text provides five

factors for leaders to consider in order to “break the mold” of linear thinking.


First, leaders must embrace diversity and end groupthink. Cohesive groups can lead to

shared worldviews that reinforce group assumptions. Groupthink can lead to cyclical responses

to evolving issues. Furthermore, economic developers must obtain community engagement and

buy-in so that projects reflect a cohesive vision.

The second factor of generative leadership is understanding power laws. Linear models

cannot analyze complex relations. The normal distribution accurately reflects events that occur

independently and randomly. Conversely, power laws find that the more an experiment is

correlated with similar fluctuations, the more likely it will have an important impact on the

ecology. CDCs must consider this when evaluating community engagement strategies. Initiatives

that are well perceived by a community members should be amplified and supported

Understanding the power of a weak tie connection is the third factor. A weak tie, “is more

likely to be a source of new information because a weak tie communicates about different things

and may have different mind sets” (Goldstein, p114). Utilizing intercohesive groups is the fourth

factor of generative leadership. Intercohesion links the power of weak tie networks to the

effectiveness of strong tie networks. This is reflected in CDC board member composition. The

Boards of Directors for CDCs are usually structured, “to ensure that low-income community

residents retain a majority of the voting seats” (Giles, p43).

The fifth factor of generative leadership is to increase the frequency of experimentation.

This will simultaneously increase the likelihood of positive deviations from old system

structures. Successful CDCs use a comprehensive approach in community development. These

organizations aim, “to demonstrate that poor and low-income people can operate their own

programs” (Giles, p42). This type of program structure allows CDCs with limited resources to


empower communities. These initiatives are generally service based (e.g. community gardens,

afterschool programs, etc.).

Positive Deviance

Complexity theory finds that positive deviation from old system structure can lead to

innovative ways to combat emerging issues. Efficiency is not always the most appropriate

metric, so generative leaders must embrace risk and uncertainty to combat complex issues.

Leaders must toe the line between proven solutions and untested processes. The Ecologies of

Innovation text provides flexible guidelines for identifying positive deviation. In order to

develop new service based programs, leaders of CDCs must define what the problem is they

want to address in their community. Next, desired outcomes must be determined. The processes

that led to these outcomes must be discerned and social interventions must be implemented so

that the majority of the organization has access to these new processes. Finally, the successful

processes must be disseminated on a wide scale, so that service based initiatives are able to

recreate desired results for the community. For instance, if the turnout for a previous after school

program was dependent on communication with specific individuals at a local school, it is

imperative that this information is given to all program managers throughout the CDC.

Creating Smart Networks

Smart networks enable rapid adaption to a relentlessly changing environment. Smart

networks combine the strong-tie relations of a cohesive subsystem to the weak links on a

network’s periphery. This type of network structure connects peripheral nodes with strong

linkages to subsystems throughout an organization; all of which are connected to a central hub

that facilitates meaningful connections between its subsystems. A smart network amplifies weak

signal carried across weak ties in an organization by expanding the conduit through which


information flows. In other words, it increases the relevance, accuracy and timeliness of

information that is communicated between subsystems. The Greater University Circle Initiative

(GUCI) that took place in Cleveland, Ohio was a definitive example of an economic

development coalition that incorporated the structures of a smart network. The next section will

analyze how the multiple institutions involved in GUCI banned together and embraced the

principles of complexity based leadership to improve the social, economic, and physical

environment of their community.

The Greater University Circle Initiative

The Greater University Circle (GUC) is a large and diverse neighborhood in Cleveland,

Ohio. The area is home to a concentration of arts and cultural institutions that are the largest

group of employers in Ohio. However, the social and economic indicators of the seven

residential neighborhoods surrounding these institutions were very poor. In 2005 there was 24%

unemployment among the residents of the GUC neighborhood (Gladville). Some neighborhoods

even qualified as food desserts. The root of this neglect and deteriorating infrastructure can be

linked to the “white flight” movement that occurred after WWII

It was widely agreed, among the cultural institutions of University Circle, that they could

not survive while the surrounding community deteriorated. But, their individual actions were not

producing positive impacts for the community. The environment was too complex for the linear

efforts of the institutions to improve social and economic conditions. This time reflected both a

crisis and the potential for opportunity. From this tension the Greater University Circle Initiative

was born.


The subsystems of GUCI’s ecology included The City of Cleveland, the Cleveland

Clinic, the Case Western Reserve University, the University Hospital, The Museum of Natural

History, The Museum of Art, private developers, the residents of the Greater University Circle

(GUC) neighborhood, and the Cleveland Foundation. When GUCI was formed, the Cleveland

Foundation had just hired a new CEO, Ronald Richard, who was a generative leader that the

project needed. He saw the Cleveland Foundation as a, “neutral convener, a responsive funder,

and an active partner in identifying and helping implement projects” (Gladville). As one of the

primary figureheads in this project, Richard and the Cleveland Foundation directed resources and

energy across boundaries and through constraints to enact the ecology of the GUC neighborhood.

The leaders of GUCI enacted their ecosystem in four distinct ways. First, they understood

that they were in a state of disequilibrium. The institutions’ ability to function and grow was

hindered by the economic health of the neighborhoods that surrounded them. Second, GUCI

pursued “coevolution” where the development of one entity in the community was intimately

tied to the development of others. Another constraint GUCI placed on itself in this pursuit of

coevolution was that their focus would not be strictly limited to physical development, “which

often limits or causes indirect negative social impacts” (Gladville). A new objective was born

from this new realization: A comprehensive approach will create a critical mass of development

that will encourage normal market forces and private developers to return to the area.

The third way GUCI enacted their ecosystem was by amplifying the differences in their

community in an effort to circumvent the symptoms of groupthink. GUCI’s strategy was to have

anchor institutions buy local, hire local, create incentives for employees to live local, and engage

the residents through community building strategies. The Live Local strategy created several

lending programs for housing that were based in inclusivity, flexibility and consistency. An


incentive package was created for institutional employees to live in the GUC. This package

included a home purchase loan, which provided $20,000 to eligible employees, and a working

family supplemental loan, which provided $10,000 (Gladville). These rates were designed to

adjust in response to changing needs, tastes and fluctuations in the housing market. Assistance

was also provided to current residents to make some home repairs through an exterior

improvement fund. Finally, a rental assistance program was created which provided one month’s

rent to eligible residents or employees who moved into the area.

The Buy Local initiative created the Evergreen Cooperatives, which were green, for-

profit businesses with the objective of employing 500 GUC residents by 2017. The ultimate goal

of the Evergreen Cooperatives was to attract the GUC anchors in spending in the local

neighborhoods to build community wealth, and to reduce carbon emissions from freight

shipping. These businesses were to be viewed as competitive suppliers rather than charity cases.

Some of the Evergreen businesses include the Evergreen Cooperative Laundromat, Evergreen,

Energy Solutions (a clean energy and weatherization company), and Green City Growers (a year

round large-scale hydroponic greenhouse) (Gladville).

The Hire Local initiative created after school youth programs and adult workforce

training programs. The programs took place at the newly developed NewBridge Center for Arts

and Technology, located across from a rapid public transit line. The Center opened in 2010 with

investments from GUC anchors. The youth programs admitted students based on risk and classes

were held immediately after school. The adult programs had two educational tracks, phlebotomy

and pharmacy technology, because GUC anchors named those fields as having a large number of

positions in the local labor market. The workforce training programs had admissions that closely


tracked the anchor institutions’ requirements for employment. The classes mixed instruction with

field experience. Soft skill training was also a fundamental element of the programs.

Intercohesion links the power of weak tie networks to the effectiveness of strong tie

networks. The community engagement strategies were based in the idea that revitalization only

works in the long-term when, “the people who are most directly affected are actively involved in

the change process from the beginning and have a clear stake in the outcomes.” Embedding the

ideas and aspirations of residents into GUCI programs can create intercohesion and foster a new

sense of community.

The fourth way GUCI enacted their ecosystem was by giving the nexus of interaction in

their community resonance by using a smart network for their organizational structure. GUCI

convenes representatives to promote dialogue about the future of the surrounding neighborhoods

through a leadership group. The leadership group provides a framework for discussion and a

forum for problem solving. This dialogue is facilitated by the Cleveland Foundation, which

serves as an overseer4 that acts as an honest broker.

GUCI’s transit oriented developments also reflect the elements of a smart network. The

anchor champions of these developments are the Greater Cleveland Regional Transit Authority

(RTA) and the City of Cleveland. RTA’s willingness to incorporate broad neighborhood goals in

what could have been an isolated transit project helped the Cedar Hill Transit Station win $18.5

million in federal transportation funding. An early emphasis on design set a high standard for

how the projects could most effectively connect institutions and neighborhoods.

The network building programs and the creation of a community newspaper fostered

weak tie connections in GUCI’s smart network. The network building programs created

innovation teams within the community that met eight times during a three month period to

4 i.e. a central hub


discuss “how to build on existing neighborhood assets and promote these ideas after the formal

meeting” (Gladville). Neighborhood tours were held with the goal of, “building relationships and

a “sense of place” across race, class, and organizational affiliation” (Gladville). Finally, a

community paper was established to create a sense of involvement among residents and workers

who often feel left out of traditional neighborhood planning and decision-making processes. The

paper’s articles were arranged by subject, rather than by neighborhood, to reinforce

neighborhood intercohesion.

It has been almost ten years since implementation and, long story short, GUCI has been a

tremendous success. Institutional partnerships have been strengthened. The $86 million Uptown

development added 102 market rate apartments and 56,000 square feet of fully leased retail

space (Gladville). Two Rapid Transit stations received nearly $30 million in federal

transportation funding (Gladville). And, Cleveland’s’ MLK/E. 105th

Traffic Circle won $11

million in state transportation funding to improve navigability for both motorists and pedestrians

to create new green space.

All of these accomplishments are impressive especially considering the comprehensive

nature of GUCI’s strategies. The amount of resources the initiative had its disposal was also

impressive. In 2005, the institutions had accumulated over $3 billion dollars for development.

This next section will discuss and analyze how smaller institutions manage community

development projects in complex environments. To gain this insight, interviews were conducted

with Cliff Pouppirt5, Director of Planning and Development at Blue Hills Community Services

(BHCS) in Kansas City, Missouri, and Heidi Holiday6, the Director of Rosedale Development

Association (RDA) in Kansas City, Kansas. While these CDCs are both located within the

5 Pouppirt, C. (2015, April 21). Managing Community Development in Complex Environments (Personal Interview). Appendix B

6 Holiday, H. (2015, April 22). Managing Community Development in Complex Environments (Personal interview). Appendix B


Greater Kansas City Metropolitan Area, the neighborhoods they serve, and their approach to

community development, have striking differences.

Blue Hills Community Services

BHCS views itself as a catalyst for supporting development, educational programs, and

community services in the Blue Hills neighborhood of Kansas City, Missouri. Founded in 1974,

BHCS uses a block by block strategy to for building healthy, thriving communities. The

organization manages expensive home development and redevelopment projects that include

home repair, single-family home construction and renovation, and multiple family LIHTC

construction. BHCS also offers softer services including community organizing and educational

program management. While these soft services are less profitable, the more a CDC can offer,

the more it can market a neighborhood. Recall, that in Complexity Theory, increasing the

number of experiments in an ecology also increases the likelihood of developing new processes

to circumvent emerging issues.

Cliff Pouppirt has been with BHCS since 2006. As Director of Planning and

Development, he manages all projects related to construction, but he also serves as the

organization’s in-house real estate agent. BHCS has a fulltime eight person staff, and according

to Pouppirt, they have a “tight relationship.” Pouppirt described the organizational structure to be

relatively flat, and that managers are very receptive of subordinate and community needs.

Cohesive teams often lead to groupthink, and Pouppirt admits that this is an obstacle they are

aware of. Strategic planning is done with external partners and neighborhood associations. There

is some turnover within these groups and the structures of their Boards. That is one way that

diversity is amplified in the organization.


In 2001, BHCS experienced an extreme period of disequilibrium. The organization was

financially dependent on a Title 1 education grant that covered most of their overhead and

administrative expenses. They administered the grant contract for entire the state of Missouri

until 2001, when they lost the program to a different contractor. BHCS went from a staff of fifty

employees to six within one year. The organization was facing a moment of criticalization where

programs had to be redesigned. The organization had to drop its previous attractor, which was a

“shotgun rehab approach” to acquisition and renovation. In a strategic planning process, BHCS

decided to go back to being completely neighborhood based.

Through project experimentation, BHCS created a successful home repairment program.

The organization sought new partnerships to develop this program and was able to

simultaneously gain new trust from the community. BHCS diversified their revenue sources by

managing more properties and seeking funding opportunities from more than one donor or

contact. After obtaining a new federal contract, BHCS bought a new building in the center of the

Blue Hills neighborhood, so that staff members were working in the heart of their target area.

Through these recombinations of resources and by shortening linkages between itself and the

community, BHCS embraced the structures of a smart network. The organization exploited

opportunity tension, and was able to completely “reinvent themselves.” Pouppirt claimed, “This

is the reason we are still around after 2007, and many other CDCs in Kansas City are not.”

The Rosedale Development Association

RDA (est. 1978) is located in the Rosedale neighborhood of Kansas City, Kansas. The

four square mile neighborhood is home to 13,000 people, 6,000 households, and 400 businesses.

The neighborhood is a majority-minority district with 35-37% Hispanic population and a 20-30%


African American population. Thirteen different languages are spoken in the area schools, with

Spanish being a predominant language spoken among residents.

RDA uses a hybrid model for community development. While RDA does some minor

home repair, unlike BHCS, most of their services are related to organizing and planning. The

organization advocates on behalf of the neighborhood and partnerships have been created with

various community groups and small business associations. Currently, they are trying to help

start up more corridor business associations.

RDA primarily enacts its vision through master planning and urban planning. They are

currently updating the Neighborhood Comprehensive Plan with the City. The Rosedale

neighborhood is economically, ethnically and geographically diverse, so the community’s voice

is never cohesive. RDA tries to exploit this diversity to the benefit of the Comprehensive Plan.

6,600 community surveys have been sent out to increase the resonance of weak ties voices in the

neighborhood and to gauge their needs. Within three weeks of being mailed out, more than half

of the surveys have been completed and returned.

Director, Heidi Holiday, describes the office culture as “close-knit,” and that

communication is strong between the staff of nine employees. Holiday claimed that at least half

of the Board of Directors live in Rosedale. Their close link to community makes them a very

functional board. In this regard, their organizational structure reflects a smart network, but

Holiday says that groupthink can often be an issue: “We are progressive – social justice types.

Not all members of the community were keen on the bike lanes developed through our public

transportation advocacy.” RDA combats groupthink by staffing through AmeriCorps VISTA.7

7 AmeriCorps VISTA is a national service program designed to fight poverty. VISTA’s legislative purpose is to supplement efforts

to fight poverty in low-income communities by having volunteers serve in communities throughout the U.S. for a year of full-time service.


Holiday explained, “People cycle in and out. Having to explain how and why we do things to

new staff makes us rethink and evaluate. We are always willing to adjust.” RDA tries to create a

culture where employees and residents are not afraid to ask why processes are done in certain

ways.

When Holiday became director of RDA, the organization experienced a major cultural

shift. The previous director had worked for the organization for almost two decades. Holiday

described her as “spontaneous” and a “go-getter,” but unfortunately, she also exhibited some of

the symptoms of founder’s syndrome. RDA was stagnating because the previous director was not

willing to experiment with programs and structures. Holiday changed the ecology of RDA in two

ways. First, she developed and set up internal systems8 to improve system functionality and

professionalize the organization. Second, the manner in which the previous director ran programs

made residents almost too dependent on the CDC. Holiday said, “She did everything for the

community, and never asked residents, ‘What are you going to do when we are gone?’.” Holiday

runs programs with an “if you teach a man to fish, he will eat for a lifetime” mentality. This

approach has created an environment that empowers residents so that positive deviations occur

more frequently in the community.

Gentrification is a significant issue afflicting the Rosedale neighborhood. The KU

Medical Hospital has attracted many upper and upper-middle class employees to the area.

Responding to the changing market conditions, developers have bought and renovated houses in

deteriorated areas of the neighborhood. Consequently, this has improved property values and

low-income families and small businesses have been displaced due to higher property taxes.

Holiday claims that the community is beginning to feel like two separate worlds. One part of the

community is deteriorating and is characterized by extreme poverty. The second part,

8 e.g. orientation for new staff, created a budget, created staff evaluation procedures, etc.


characterized by wealth, is growing in response to the greater availability of luxury apartments.

Complexity Science explains this phenomenon through the theory of power laws; where the rich

get richer and the poor get poorer (Goldstein, p110-111). Holiday explains that there is a duality

in the community where, “The residents who made economic development possible are also the

ones who will be displaced.” Rosedale is in a period of criticalization, and if RDA fails to

navigate through the phases of emergence, the community may fall further into disequilibrium.

Final Thoughts and Recommendations

Economic and community development occur in environments characterized by diversity,

instability and volatile changes in structure. The interdependence of residents, institutions, and

physical and economic conditions in a community does not allow for traditional linear methods

of analysis. Complexity theory creates a lens more complementary to these dynamics. Project

leaders must enact the ecosystem of their developments in order to come up with innovative

ways to work around the constraints of the environment. These constraints may be in regard to

limited resources, a disconnected community, or ambiguous development goals.

In Cleveland, the Greater University Circle Initiative created a smart network among

multiple anchor institutions in the community to revitalize the economic disparity of its seven

neighborhoods. When Blue Hills Community Services lost almost 90% of its staff, the CDC

reinvented itself by conducting experiments in novelty. Through generative leadership, Rosedale

Development Association amplified diversity and systemized a culture of professionalism to

break the cycle of stagnate growth.

An intense level of gentrification is now afflicting the Rosedale community. To navigate

through this critical period, RDA should try and adapt the processes that brought success to

GUCI and BHCS to its own environment. First, RDA must try to form a smart network by


creating and increasing the amount of resonant linkages between itself, residents, and institutions

within the area. Second, by creating more partnerships and intercohesive groups in the

community, RDA will have a greater chance of discovering innovative ways to combat

gentrification. Finally, in their Comprehensive Neighborhood Plan, RDA must establish a

common vision. This not only applies to RDA, but to all economic and community development

initiatives: Growth and improvement can only occur in an ecology when its subsystems ban

together in the pursuit of coevolution.


References

AmeriCorps VISTA. (n.d.). Retrieved May 4, 2015, from:

http://www.nationalservice.gov/programs/americorps/americorps-vista

Blakely, E. (2013). Planning local economic development: Theory and practice. Newbury Park,

Calif.: Sage Publications.

Cavaye, J. (2003, January 1). Issues, Opportunities and Some Ways Forward Based on

Experiences in Rural and Regional Communities. Paper presented to the “Shaping Your

Community Through Smart Practice” Conference. Boonah, Queensland, Australia.

Retrieved from:

http://www.communitydevelopment.com.au/Documents/Issues,%20Opprotunities%20an

d%20Some%20Ways%20Forward%20Based%20on%20Experiences%20in%20Rural%2

0and%20Regional%20Communities.pdf

Giles, S., & Blakely, E. (2011). Fundamentals of economic development finance (2nd ed.).

Thousand Oaks, Calif.: Sage.

Glanville, J. (2013, January 1). Greater University Circle Initiative: Building a 21st Century City

through Power of Anchor Institution Collaboration. Retrieved from:

file:///C:/Users/Jake/Downloads/Cleveland-Foundation-Greater-University-Circle-

Initiative-Case-Study-2014%20(4).pdf

Goldstein, J., Hazy, J. K., & Lichtenstein, B. B. (2010). Complexity and the nexus of leadership:

Leveraging nonlinear science to create ecologies of innovation. New York: Palgrave

Macmillan.

http://www.nationalservice.gov/programs/americorps/americorps-vista

http://www.communitydevelopment.com.au/Documents/Issues,%20Opprotunities%20and%20Some%20Ways%20Forward%20Based%20on%20Experiences%20in%20Rural%20and%20Regional%20Communities.pdf



file:///C:/Users/Jake/Downloads/Cleveland-Foundation-Greater-University-Circle-Initiative-Case-Study-2014%20(4).pdf

file:///C:/Users/Jake/Downloads/Cleveland-Foundation-Greater-University-Circle-Initiative-Case-Study-2014%20(4).pdf


Sparks, E. (2012, September 12). Redesigning State Economic Development Agencies.

Retrieved from:

file:///C:/Users/Jake/Downloads/1209RedesigningStateEconomicBrief.pdf

Vidal, A., & Keating, W. (n.d.). Community Development: Current Issues and Emerging

Challenges. Journal of Urban Affairs, 125-137.

Tax Incentives for Economic Development: What is the Low-Income Housing Tax Credit? Tax

Policy Center. Retrieved May 2, 2015, from

http://www.taxpolicycenter.org/briefing-book/key-elements/economic-development/low-

income-housing.cfm

file:///C:/Users/Jake/Downloads/1209RedesigningStateEconomicBrief.pdf

http://www.taxpolicycenter.org/briefing-book/key-elements/economic-development/low-income-housing.cfm

http://www.taxpolicycenter.org/briefing-book/key-elements/economic-development/low-income-housing.cfm


Appendix A

Dynamics Involved in Economic Development - Interview Questions

Interviewer: Jake Watson

Interviewee: Gary Sage, Research Officer at the Kansas City Economic Development

Corporation

1. Tell me about yourself, your organization, and how your organization’s values are

reflected its mission?

2. Can you generally discuss the dynamics involved in economic development and how they

reflect economic development here in Kansas City?

3. How is an economic development started? How is it spearheaded?

4. What does a successful economic development coalition look like?

5. How are conflicting objectives among organizations in an economic development project

resolved?

6. Can you discuss the pros and cons in the trend of trying to attract the creative class in

economic development?

7. Can you discuss the pros and cons of the “Back to Downtown” movement in economic

development?


Appendix B

Managing Community Development in Complex Environments - Interview Questions

Interviewer: Jake Watson

Interviewees: Cliff Pouppirt, Director of Planning and Development at Blue Hills Community

Services, and Heidi Holiday, Director of Rosedale Development Association

1. Tell me about yourself, your organization, and how your organization’s values are

reflected its mission?

2. Tell me about the community you serve?

3. Tell me about your organizations programs and how they address community needs

4. Can you discuss how aware employees/departments are of what’s going on in the

organization? Are there strong levels of communication between

employees/departments?

5. How receptive are managers of new information for subordinates and the community?

How about your Board of Directors?

6. Does your organization try to prevent groupthink in the decision making process? How

so/Why not?

7. How much authority are employees given to deviate from standard practices address

emerging issues? Is positive deviance encouraged?

8. Can you discuss how employees work around political, social, and programmatic

constraints?

9. Can you give a general description to how your organization adapts to change?

10. Can you identify a specific issue that has resulted in, relatively, significant change in your

organization?

Was it an internal or external issue?

Was it address proactively or reactively?

11. How was this issue resolved

How did staff react?

Did this stabilize the organization?

12. How was the solution identified?

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