As Detroit nears a crucial point in its restructuring, what lessons does the city’s historic bankruptcy offer troubled municipalities?
Facing issues head-on is difficult, and it’s tempting to put off until tomorrow what should be done today. But it’s unwise. That’s perhaps the No. 1 lesson from Detroit—and one that applies as much to cities and other municipalities as to companies.
Lesson No. 2: With Michigan Gov. Rick Snyder recently signing the “grand bargain” that officially pledges $195 million in state money to aid Detroit’s pensioners, it’s worth keeping in mind that, as with corporate turnarounds, there’s often a big difference between fixing an organization’s balance sheet and actually fixing its underlying operations, which will be the next big step for Detroit. However, it’s encouraging to see what appears to be a new spirit emerging in a grassroots way among Detroiters themselves—reflected, many think, by the election last fall of businessman Mike Duggan, who was a write-in candidate in the primaries, as mayor.