As a business executive, Indianapolis Mayor Bart Peterson picked up several important lessons. He learned to surround himself with the best people and, just as crucial, keep those people challenged. He also learned the importance of keeping people focused on a common goal.
As president of The Precedent Cos., Peterson’s first task was to combine disparate companies into one. The Precedent group of companies focuses on commercial and residential development, construction and financial services. When Peterson assumed the reins of this group, each operated very differently, with its own management structure.
“A person working for one company wouldn’t know the person leading another,” Peterson says.
His challenge was to reorganize the companies under one leadership umbrella, then get them to work together toward common goals.
As mayor, Peterson’s taken this same approach to unify the departments in his office. He says it is important that members of each department know and understand Peterson’s overall goals. Communication is the key to accomplishing this objective, he says, so he holds a bimonthly cabinet meeting to keep senior leaders on target.
The structure of Peterson’s organization also lends itself to a stronger communication flow. He says his “pyramid communication” structure optimizes the flow of information among him, his staff and key policy makers.
Tying everyone together is the Peterson plan. Much like the business plan of a large company, the Peterson plan defines the mayor’s goals and objectives and outlines how he plans to achieve them. It has also helped Peterson weather what he calls some pretty big waves in the political ocean, such as the city’s $600 million purchase of the Indianapolis Water Co.
“The plan always keeps us anchored,” he says.
Smart Business talked with Peterson about the business of running a city and how he stays focused on his plan.
What are the similarities between running a business and running the city?
Executive leadership is executive leadership, whether you are running a private company, a not-for-profit organization or are a government leader. It is different from being a legislator, but there are a lot of parallels between leading a business and the city.
The reality is that leadership is leadership, and the most important thing is to surround yourself with the best people you can. The team will make or break you and the progress of the organization.
There is a more overt political element to being mayor, but there are also some political elements to leading a business. The best organizations are not ones led by an unquestioned dictator. You need to persuade people, to get them to take ownership of their part of the business and effectively delegate. You keep a close eye on what you delegate.
You build coalitions in government that are not dissimilar to the coalitions made in business. There is no question that my experience in business was a huge advantage to me in taking on the job of mayor five-and-a-half-years ago and continues to be a great benefit to me.
What was the most important lesson you learned during your four years as president of The Precedent Cos.?
Hiring the best people you can find and then ensuring that they are constantly focused and being challenged and fulfilled by their jobs. You need to make sure you have the right people in the right place and that they are enthusiastic and passionate about their jobs.
Sometimes that means moving people around and giving them additional responsibilities. You need to allow people to reach their potential and follow their passions within the goals of the organization. That’s how you make progress — you have strong people.
If you have weak people, you have to make a change or you will suffer. That is probably the most important thing that I brought into the public sector from the private sector.
What was your biggest challenge at The Precedent Cos. and how does it compare to the challenges you face as mayor?
Clearly, the biggest challenge I had in the private sector was to create one company; to bring disparate companies together as one. There were a number of businesses with different ownership and management structures. My challenge was in bringing all that together and creating one holding company, one board and ownership structure, and I was successful in achieving that.
In government, the basic structure is a given. It is set by law, but within that, people need to work together toward the same goals or they could end up almost working against each other.
I need to make sure that people are working toward shared goals. They need to start off on the same page. They could fall off quickly if you don’t focus on the importance of keeping people together. Everyone knows their goals, and they are constantly updated. We function as one office rather than a confederation of departments.
One thing we do have is a cabinet meeting every two weeks where we are all in one room. We talk about what we are doing and what we have coming up, and I provide support and remind them of any overriding messages. This helps keep everyone on the same page.
One technique to keep everyone working together is the structure we have — a loose reporting structure. I have a senior person in each department reporting to me and more deputy mayors responsible for certain issue areas. It is not a rigid hierarchal structure but a pyramid for communication.
There are about 25 to 30 key policymakers. By setting up the pyramid communication structure, I know what’s going on in all the divisions and they know what I’m up to.
How is the Peterson Plan similar to a business plan for a company?
It is similar in many ways, although a business plan typically includes pro forma financial performance information. You typically include profitability information in addition to strategy, goals and objectives.
In this case, the goal is not growth or profit. The Peterson Plan focuses far less on those types of issues but everything else, plans, tactics for implementing and achieving our goals, is included. The difference is we don’t have financial data. If there is additional revenue needed for a particular plan, then that is spelled out, but there isn’t a huge financial component.
What strategies have you used to implement the plan and how has it been received?
The plan has been well-received . The first time it was a huge component of the campaign. My staff is asked to keep the plan out as a reference tool. At any moment someone might ask what next, he or she can look at the plan and see. Based on my own experience, I can say it has helped us accomplish a lot. Being a newly elected person can be like going out in the Atlantic in a small sailboat. You get knocked about by some big waves and bad weather; there are a number of unpredictable things that happen. If you don’t have a plan, when the bad storm is over, you won’t know what way to turn.
It is the same with government. If you don’t have navigational equipment, what you end up after four years accomplishing may be everyone else’s agendas. We have reacted to some pretty big waves but we didn’t lose sight of our goals.
There was a lot we did not see in the plan — both opportunities and challenges. We responded to those but also kept the plan in mind. At the end of the four-year term, we published a report explaining what we accomplished and what we didn’t.
One of the big waves we dealt with was our purchase of the Indianapolis Water Co. It was one of the largest public transactions in state history, using $600 million in bonds. The water company had been privately owned and we were fine with that. But the company was making a huge acquisition which fell under the jurisdiction of the SEC.
The SEC required the company to divest itself of the water company. We were not happy that it would most likely be sold to a company outside the state or even outside the country. We were able to invoke an obscure state low that allowed us to buy bac
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the water company. It was a major undertaking and took a huge commitment of time and resources to accomplish. We now contract the operations of the water company to a private party. But that was not in the Peterson Plan.
Has the Peterson plan been an effective tool toward achieving the city’s goals?
Yes. It provides a road map and navigational tools, and I am able to see and make sure that what I promised, I deliver. Now there are some items in the plan that, at the time ,we thought were important to do, but something in the equation changed and then it didn’t make sense.
There were a few items in the plan that we decided would actually be bad to do, so we chose not to do those and explained why. The vast majority of our goals were accomplished, and some we tried and failed. But yes, it is an effective tool and should be used more often.
What do you consider the city’s biggest strength?
Our biggest strength is clearly our culture. Not in the traditional sense, but the culture we have of commitment to the city above self-interest.
There are private-public partnerships now that didn’t exist when I was born. People are working together to make the city a better place. This culture has developed over the last 30 to 35 years and it is a powerful asset. I’d argue that we have made more progress than any other established city in the last 35 years because of that asset.
What about areas for improvement?
We could do a better job painting a picture of the city. We need to do a better job getting the word out about the remarkable city this has become.
We are working with both private and not-for-profit marketing groups to do this, to better depict the arts and cultural assets that we have. Our goal is to become an arts and cultural destination.
How to reach: Mayor Bart Peterson, (317) 327-3601 or www.indygov.org/eGov/Mayor/home.htm
