Getting it badly wrong! The curious case of Ordos, Inner Mongolia.
China is home to the world’s biggest ghost town.
China’s economic boom has left a trail of ghost towns. Designed to be homes for millions of people, these state-of-the-art cities lie empty. Ordos in Inner Mongolia rises out of the deserts of northern China and was meant to house 1.5 million people but is now the world’s largest ghost town. When work began on Kangbashi district just outside Ordos in 2004 the city seemed set to become the futuristic jewel in China’s crown. Eerduosi Airport, complete with its modern sculptured terminal building decked out with fountains and sub-lit escalators, is proof of the grand plans for the city. But only a few people have ever stepped inside.
They just did not come. Now the city is home to a lonely population of 20,000 and only two per cent of the buildings in the Kangbashi district have been finished. The property developers left before completing many buildings and the purchase prices for the accommodation available, of which there is a wide range of styles and levels remain excessively high. The rest have been left to decay, abandoned mid-construction.
Failure on such a monumental scale is hard to really take in but it illustrates some key management concepts and principles that we can take and apply in our own working lives.
- The view of the customer has been ignored and replaced by sheer determination to make something happen. The underlying feeling amongst the construction specialists and local inhabitants is that people will still arrive and the city will become a success. We can all be busy fools chasing a customer segment that we will never satisfy.
- Where was the full analysis of likely demand for the City in the first place? Having a positive vision is commendable but only if it is based on scientific, critical need analysis in the first place.
- Why over-complicate the product? There is a huge array of accommodation, office space, public space and cultural facilities at Ordos that are not needed, will never be needed and are effectively a huge “White Elephant”. Tailor service provision to customers who are buying the product or vision, not to imaginary customers who do not exist.
- Review progress at all stages. Why was construction not scaled back when residents did not appear? Why was there still a die-hard commitment and will to make the project succeed when it was evident that it would not?
- Where was any analysis on income over expenditure? Who thought it was a good idea to keep spending when revenues were not forthcoming? Analyse everything to see what returns you are getting on your inputs and efforts. If it looks grim financially it is grim in every sense!
- Where was the corporate learning amid the failure? Ordos is not the only China Ghost Town and mistakes have systematically been made time and time again. Get out, draw a line under the experience and move on.