The Anchor Mission: Lessons Learned from Cleveland’s University Hospitals

Posted by Tracey Ross on
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Over the last 50 years, the businesses and factories that helped America’s cities flourish have increasingly moved to the suburbs and even abroad, greatly impacting the growth of the urban core. However, there remains a set of institutions with a strong connection to the places where they are located, and are some of the largest employers in U.S. cities. They are higher education, health, and cultural institutions - often referred to collectively as anchors. They participate in local, national and even international markets, employ hundreds and even thousands of workers, and purchase goods and services from other businesses.

At Living Cities, we believe that anchor institutions have an important role to play in the success of cities and their residents, and have seen first-hand through The Integration Initiative sites – particularly Baltimore, Cleveland, and Detroit – the roles anchor institutions can play in transforming the cities where they are located. The most recent evidence of this comes out of Cleveland with the recent release of a case study on the University Hospitals Vision 2010 Program. The paper describes University Hospitals’ (UH) path breaking strategy to generate local wealth, economic opportunity, and jobs for residents.

UH is a multi-billion dollar nonprofit medical institution whose main campus is surrounded by neighborhoods in which the median household income is below $18,500. In 2005, UH announced The UH Difference: Vision 2010, a $1.2 billion expansion effort; At its core was a five-year construction program to build a new cancer hospital, a neonatal intensive care unit, a center for emergency medicine, and a 144-bed community facility. Instead of hiring a large contractor, as is typical for large institutions, UH saw this as an opportunity to foster economic growth, and made three core commitments that shaped the implementation of the initiative:

• Including as many local minority- and female-owned businesses as possible;
• Achieving an economic multiplier effect by directing as much spending as possible toward businesses based in the City of Cleveland and the greater Northeast Ohio region; and
• Producing lasting change in Northeast Ohio by pioneering a “new normal” for how business should be conducted by the region’s large institutions.

To fulfill its commitments, Vision 2010 established concrete goals pertaining to diversity, procurement, and hiring local residents. Successful strategies included the use of an innovative Project Labor Agreement negotiated with the building trade unions, and the use of a third-party firm to monitor progress toward diversity goals. Once the project was completed, approximately 110 minority and female-owned businesses had received contracts; three of the four goals pertaining to inclusion were met; and more than 5,000 jobs in construction and related fields were created.

Further, through this effort, a number of lessons emerged that are useful for other cities considering how to harness the power of anchors. These include:

1. Clearly articulate your institution’s anchor mission - University Hospitals acknowledged its “anchor institution mission;” That it would consciously apply its place-based economic power, in combination with its human and intellectual resources, to improve the long-term welfare of the community in which it resides.
2. Provide bold, visionary leadership - The bold, committed leadership from senior executives of University Hospitals and from Mayor Jackson and his administration was crucial to producing results.
3. Change your corporate culture - Diversity, inclusion, and regionalization had to be pursued by changing a range of internal systems, from unbundling bids to sending executives into the community to listen and learn.
4. Make commitments public - By making its commitments public and visible, UH was able to create community buy-in and enthusiasm.
5. Engage stakeholders early on - Elected officials and the trade unions were key partners in Vision 2010. Their early engagement, participation, and buy-in enabled them to help shape strategy and implementation.
6. Monitor implementation, practice transparency, and report findings - Hiring an independent monitoring firm demonstrated that Vision 2010 was not simply a public relations exercise; UH was willing to hold itself to a verifiable standard of accountability.
7. Establish a culture of learning - Vision 2010 was embraced by executives as a learning endeavor to better understand how the construction process could move beyond traditional procurement models to benefit the larger community.
8. Think beyond the immediate project to long-term, systemic change - As Vision 2010 moved forward, leaders began to sense that they had a true opportunity to change the way business is conducted in Cleveland and to create new norms for corporate behavior. That change is evident in Cleveland through the proposed Community Benefits Agreement and other processes.

At Living Cities, we believe it is particularly important to focus on the systems change that can occur through working with anchor institutions. In addition to the gains achieved by the Vision 2010 effort, several innovative policies and practices that evolved under the project have subsequently been implemented beyond construction efforts and throughout the UH supply chain. For example, all purchases over $20,000 now require at least one bid from a local, minority-owned firm. Anchors can provide a powerful entry point to systems change, tremendous intellectual resources, and meaningful leadership for rethinking systems that are central to the success of cities and their low-income residents. But they cannot and should not be asked to do it on their own. It is important for all leaders to determine the best ways to work with anchors, and ensure they can be harnessed as a community asset.