Bacon's Rebellion

James A. Bacon


 

From Competence to Creativity

 

Leading Richmond companies need a lot more than technical competence these days. They’re looking for employees who can thrive in high-performance, high-creativity work environments.


 

If you want to see Brian Frank engage in his most productive work, just hang around the parking outside the Tridium, Inc., office building in suburban Richmond. There’s nothing special about the place – just cars and asphalt and some shrubbery – but there’s plenty of room for the programming engineer to pace back and forth. Walking outside on a beautiful day helps him think creatively about complex issues.

 

Frank prides himself on his ability to design “elegant” solutions that are easy to build yet reconcile competing customer needs. That’s no mundane task, even for a lead programmer at one of Richmond’s premier software companies. Tridium’s products, designed to automate energy, building and industrial controls, are so esoteric that it’s difficult for non-techies to comprehend what they do. Frank tries to explain it this way: “Instead of building a tool, we build a tool for building tools.”

 

Tridium CEO John Petze describes Frank as “a brilliant mind” well suited to his work. The 32-year-old programming superstar fell in love with software as a kid in middle school. He taught himself the Basic and “C” programming languages for kicks, then majored in computer engineering at Virginia Tech. He still teaches himself a couple of new programs a year – “I pick up a book and dive in,” he says – just to keep his skills sharp.

 

But Frank does more than crunch code. “As a general rule, your software is only as good as your people,” he says. His job also requires hiring good people, making them happy and getting them to work together toward common goals. “I know a lot more now than I did in my 20s.”

 

If all Tridium needed was code jockeys, says Petze, there are thousands of Indians in Bangalore who can fill the need. But to maintain its edge in the marketplace, Tridium relies on employees like Frank who can understand and solve customers’ problems. That’s why literally four-fifths of the company’s 69 employees have engineering degrees, why even its salesmen are engineers. If a task can be well defined, says Petze, it can be outsourced. Tridium focuses on what can’t be defined. “Our role is to figure things out.”

 

There aren’t many companies in Richmond as knowledge-intensive as Tridium -- yet. But Tridium is the prototypical company for the region’s emerging New Economy, and Frank is the prototypical employee. They reflect not so much what Richmond is today as what it is becoming.

 

Traditional business strategies no longer suffice in an international economy in which capital and technology move freely around a globe in which 1.3 billion Chinese, one billion Indians, and another billion Russians, Eastern Europeans, Southeastern Asians and others are vying for contracts and investment capital. American companies – and workers – can no longer compete on the basis of traditional metrics like the cost of labor. They must compete on the basis of creativity and productivity.

 

In the manufacturing sector, profitability requires flatter hierarchies and delegation of responsibility to workers on the factory floor, even while implementing sophisticated, lean-manufacturing and quality-control techniques. In the service sector, competitive advantage means devising creative solutions to problems of ever-increasing complexity -- and turning around projects faster, on budget and without loose ends.

 

As companies change their business models, they are re-thinking what they expect from their employees. Increasingly, in the Richmond region at least, leading companies are hiring employees with higher levels of education and more advanced technical, communications and thinking skills. As a consequence, the Richmond regional workforce is undergoing a metamorphosis – perhaps the most dramatic transformation since the late 19th century when farmers began abandoning their fields by the thousands to work in the factory.

 

The makeover is taking place at every level of society – in the schools, in the universities, in the workplace and even in the homes. Not surprisingly, established educational institutions are leading the way. Henrico County, for instance, is putting a laptop in the hands of every high-school student in its school system – and upgrading its curriculum to teach more independent and critical thinking. The Community College Workforce Alliance is customizing programs to teach once-esoteric topics such as ISO certifications and lean manufacturing techniques. Virginia Commonwealth University, the fastest-growing public university in the state, is reorganizing its curricula to emphasize interdisciplinary studies. VCU’s proposed Monroe Campus will house the business and engineering schools next door to each other with the goal of turning out business-savvy engineers and tech-savvy MBAs.

 

But Richmonders aren’t relying upon traditional educational institutions to do it all. The thirst for skills permeates the entire society. The Boys and Girls Club of Richmond, for example, teaches computer literacy to inner city kids. The Project Management Institute, a professional association, provides a variety of programs to teach project-management skills on nights and weekends. And no one should under-estimate the number of individuals who, like Brian Frank, simply pick up a book and teach themselves at home.

 

When the top brass at DuPont decided to expand production of ZytelHTN, a nylon polymer used in products ranging from electrical connectors to motorcycle engine covers, the choice boiled down to two locations: the Spruance plant in Richmond, or … (play the theme from “Jaws” here) … China. DuPont had been manufacturing a similar resin for years in Richmond, and the non-union facility had won a reputation for high productivity. Even so, says Alan Gulash, currently a hiring-training coordinator, “We didn’t think we could compete with China’s low payroll per person.”

 

Richmond Zytel had perfected a high-performance work system that made it one of the most productive chemical manufacturing facilities in DuPont. Labor productivity at the Spruance site was literally triple that of similar nylon operations, and the parent company had dispatched Richmond employees to help set up manufacturing operations at a new facility in South Carolina. Indeed, the renown of the Richmond Zytel operation has spread so far that the business unit has plans to generate a secondary revenue stream by farming out workers to its customers and other companies to teach its high-performance system.

 

The secret: Eliminate middle management. Says Gulash: “We have upper management – and we have the rest of the organization.” What makes the system work, he explains, is that employees cross-train extensively in 20 core skills – even working stints in the office to learn functions like planning and scheduling. Workers perform their own machine maintenance, and they can fill in for one another when needed. Because they know how the business works, they can make intelligent decisions on the spot. “Our guys know what kind of judgment calls to make,” Gulash says. “Every polymer specialist on the floor has the ability to shut down the process any time they want. They’re in charge.”

 

The key to making the system work is to focus with laser intensity on hiring the right people. Zytel puts prospective employees through a battery of interviews and behavioral tests to see how well they work in teams and how creatively they contribute to problem solving. Says Gulash: “We look for professionally minded, teamwork-type people who are flexible and adaptable. Our philosophy is [that] if we hire the people with the right behaviors, we can teach them the skills.”

 

When the DuPont team from H.Q. in Wilmington came down to tour the Richmond Zytel plant, the visitors couldn’t believe what they saw, says Gulash. “They really liked what we were doing.” And they decided to invest in expanding the Zytel operation in Richmond rather than build a new facility in China. “Score one for us!” he grins.

 

Richmond has a significantly higher rate of labor productivity – roughly 11 percent, adjusted for wage differences -- than major competitors like Charlotte, N.C., Jacksonville, Fla., and Nashville, Tenn, according to “Competitive Analysis of the Greater Richmond Area,” a study undertaken by Market Street Services for the Greater Richmond Partnership. While part of the differential can be attributed to the number of capital-intensive manufacturers in the Richmond region, Market Street noted that the region has a higher “innovation” index than its competitors, suggesting that other factors are at work.

 

Richmond’s manufacturing sector is dominated by high-performance companies like DuPont, Philip Morris, Honeywell, Infineon and many others which, by virtue of their competition in global markets, make a fetish of productivity and quality. As these global giants implement more advanced manufacturing methods, they demand more from their employees.

 

Four years ago, Philip Morris discovered in dramatic fashion what a difference a few years makes when it undertook to hire some 200 to 300 workers. Because turnover had been so low, the cigarette manufacturing plant in south Richmond hadn’t hired any production employees for 20 years. Recognizing that the plant had implemented new technologies and processes since the last time it had expanded its workforce, the hiring team started from scratch in detailing its recruitment criteria. “This was a chance to completely redesign the hiring process,” says spokesman Bill Phelps. “They started with a clean slate.”

 

At the end of the exercise, Philip Morris concluded that the skills it valued most were analytical ability, problem-solving skills and the ability to work in teams. “If people have these things,” says Phelps, “we can train them on other parts of the job.” And even that training is more intense than it once was. Machine operators must complete an 8- to 10-week program, while machine “fixers” must finish a two-year program at John Tyler Community College that earns them 20 college credits.

 

It can take a year or more of higher education to get an entry-level job in Richmond’s leading manufacturing companies. At DuPont’s Spruance plant, for instance, minimum requirements are two years of college, three years of industrial work experience or a stint in the military. Even when employees are assigned to manual jobs, their work must be informed by an understanding of scientific and business processes. “They must come in with a demonstrated capacity to learn and apply their knowledge and skills in the workplace,” says Linda Derr, human resources manager at Spruance.

 

Employees typically need an understanding of math for statistical process control, some chemistry and some physics, confirms Ron Laux, vice president of workforce development for the Community College Workforce Alliance. Communications skills are a must. “Production workers must be able to communicate with engineers and customers. … When customers call about an order in progress, the person with the answer often is on the factory floor.”

 

Hierarchical organizations that employ “supervisors” who do nothing but manage people are disappearing, says Paul Bolesta, a project manager for Virginia’s Philpott Manufacturing Extension Partnership. The shift to flatter organizations doesn’t take place overnight, he says, but it is inevitable. Businesses that fail to make the transformation won’t survive for long.

 

“Building a ‘lean’ corporate culture is not an event, it’s a journey. It takes time,” says Bolesta. “But more and more companies [in the Richmond region] are beginning that journey.” And as they do, their workforces walk the same path.

 

Creativity, not surprisingly, is the driving force of the Martin Agency, the largest advertising agency based in the Southeastern U.S. If you watch cable TV, you’ve seen examples of Martin’s brand-building capabilities in the Geico gecko and UPS’s “Brown” campaign. Martin has been lauded as one of the “ten most creative agencies in the world,” but that’s not good enough for John Adams. The Martin CEO wants to imbue creativity in every pore and fiber of the firm.

 

He’s heard from client after client that they’ve squeezed out all the costs there are to squeeze, says Adams. Growing revenue is the only way to improve earnings now. But how do they do that? “There’s no such thing as a bad car anymore. It’s difficult to win on the basis of manufacturing expertise. The challenge is to invent new ways of serving customers, whether it’s to create new products or add new service components. … American business is screaming for creativity and innovation.”

 

Most CEOs assume that creativity can’t be taught – either you have it or you don’t. But Adams disagrees. He views creativity as a set of “habits of the mind” that depart from the sequential system of thinking that has characterized Western Civilization since the time of the Greeks. The agency is exploring pedagogical and training techniques capable of unlocking creativity by stimulating those non-linear patterns of thinking.

 

His goal, says Adams, is to put a program into place at the Martin Agency by the second half of the year. “We’re on a hunt for the best. We’ll bring the concepts in and customize them for our organization. … And then refine them as we go.”

 

Adams may be stretching his expectations of his employees more than most Richmond CEOs, but he’s an indicator of where the marketplace is moving. The service sector is the core of Richmond’s economy. The region is blessed by an unusually rich mix of lawyers, investment bankers, engineers, insurance brokers, marketing and advertising firms, many of whom serve national, even international, clients. The competitive advantage of these providers resides increasingly in their creativity and innovation.

 

In an era when radiologists in India can read medical x-rays and computer programmers can pump out code, services are no longer exempt from foreign competition. Indeed, some services may even more vulnerable than manufacturing, observes Robert R. Trumble, director of the Virginia Labor Studies Center at Virginia Commonwealth University. When manufacturers build a plant overseas, they put millions of dollars in capital at risk. By contrast, it takes relatively little capital to out-source back-office functions overseas. Even high-level functions like R&D can be shipped abroad, he says. Bottom line: “White-collar jobs are even more at risk than blue-collar jobs.”

 

Not all service jobs are equally vulnerable, however. American firms are gravitating towards business models based on mastery of specialized bodies of knowledge, the ability to solve complex problems and personal relationships built on trust. Gerald L. Baliles, a partner at Hunton & Williams, has built a practice in aviation law that takes him far beyond Richmond and Virginia. The former Virginia governor has negotiated agreements between airlines and airports, helped set up strategic alliance agreements between carriers, and led a nationwide aviation coalition seeking an air service agreement between the United States and Japan. Try outsourcing that!

 

Drawing upon some of the best law schools in the country nearby – the University of Virginia, William & Mary, Washington & Lee, the University of Richmond Richmond has built a legal profession far larger than the size of the city’s population and business community seemingly would warrant. Forget the lawyer jokes: These pros aren’t busy suing each other. Based out of Richmond, they are serving a global business clientele.

 

The region is blessed by an abundance of other excellent professional schools. The Financial Times of London ranked the UVa and W&M business schools among the top 100 in the world, while local business programs at UR and VCU have noted centers of excellence such as VCU’s department of systems information. VCU’s Medical Center conducts world-class scientific research, while its highly regarded School of the Arts and its Ad Center feed both creative and business talent into the local advertising-marketing profession. Several years ago, VCU filled a major educational void when it opened a School of Engineering. This unique institution aspires to mold “renaissance engineers” adept at communications and business concepts as well as technical skills.

 

But colleges and universities are not the final destination in professional development. To Steve Toler, the principal in Mosbygrey, the concept of “lifelong learning” is more than a buzz word. Toler specializes in geodemographic segmentation analysis: developing highly targeted direct mail campaigns for clients by cherry-picking households with optimal demographic and lifestyle profiles. Although the main value Toler brings to a job is his experience and creativity in high-level marketing strategy, he refuses to dish off the technology to a subordinate.

 

“When I first started [two decades ago], my first PC was an Osborne,” Toler says. “Now, I’m operating on a Sony Vaio with 500-plus RAM, 30 gigabits, memory sticks, CD burners and flash drives. “I’ve had to stay on the learning curve. I can’t deliver the kind of service and product and thinking to peers and clients without understanding the tools and resources.”

 

Continuing education is imperative not only for members of the virtual economy like Toler but for recognized professions such as law, accounting and commercial real estate, and even emerging fields like project management.

 

There are 735 members of the Central Virginia chapter of the Project Management Institute, says President Robert Berlin. The chapter has seen explosive growth since its 1996 founding, as leading businesses like Capital One, Anthem and GE Financial Assurance have stepped up to support it. The driving force is the increased complexity of doing business. Says Berlin: “Global competition forces us to work a lot smarter as well as harder.”

 

Pressure is relentless for service companies to bring in projects -- construction jobs, IT awards, new product launches – on time and on budget while meeting the customer’s quality expectations. The Project Management Institute, an international organization, has developed an elaborate method known as the “project management body of knowledge” that distills principles and best practices into a single volume. Those who master that corpus, including some 300 professionals in the Central Virginia chapter, are awarded Project Management Professional certifications.

 

The chapter runs a series of 10 dinner programs, where speakers focus on topics like time management or risk management, puts on two three four-hour Saturday seminars every year, and conducts two 22-hour workshops that prepare people for the professional exam. “If you’re going to provide a custom service or make a custom product,” says Berlin, who works for Capital One, “you’re going to have to understand this methodology. It forces you to use resources more efficiently.”

 

Peter Kirkpatrick organizes the French Film Festival, the largest showing of French movies and gathering of French directors, producers and movie actors in the world outside of France. During the festival this spring, the French ambassador to the United States bestowed upon him the Honor of Arts and Letters, the highest cultural recognition that the French have to bestow. Later, after the festival, the VCU language professor found himself giving an interview to the largest talk radio show in France.

 

The film festival is a big deal – to the French, at least – and is catching on in the United States, too. Film aficionados from around the country have begun making the annual trek to Richmond to watch the foreign-language flicks in the old Byrd Theater and to hear actors and directors discourse on their art. The festival, says Kirkpatrick matter-of-factly, is one of the things that make Richmond such a wonderful place to live.

 

“On the weekend of the festival, for the last three years running, people have come up to me and said they had moved back to Richmond because of the festival,” says Kirkpatrick. In each case, their employers had moved them to Richmond and they fell in love with the town. When their careers made them move again, each one found a way to return.

 

There’s a lot of truth to the Richmond slogan, “easy to love.” The region is large enough to enjoy a rich arts and cultural scene, yet small enough that its diverse offerings of festivals, museums, concerts and other events is easily accessible. The city has history, classical architecture, diverse neighborhoods and what Carnegie-Mellon University Professor Richard Florida calls “authenticity” – a strong sense of tradition and place.

 

Although Richmond is not as ethnically and culturally diverse as some of the metropolitan areas that Florida cites as magnets for the so-called “creative class” – the artistically, scientifically and entrepreneurially creative people who contribute disproportionately to economic growth – many “creative” people still find the region alluring.

 

We continually hear from people who didn’t know much about Richmond when they came here but fell in love with the town,” says Greg Wingfield, president of the Greater Richmond Partnership. “The quality and affordability of Richmond lifestyles are a major asset for any company that has to recruit managerial and technical talent to their operations here.”

 

The movers and shakers of the Richmond area have long recognized that human capital represents the region’s greatest economic asset. Under the auspices of the Chamber of Commerce-sponsored Workforce One program, business leaders in the manufacturing, healthcare, construction and technology sectors have convened to identify the skills that young people will need to pursue careers in their industries. The input allows educators to design curricula emphasizing the appropriate skills. Workforce One also has helped rationalize local labor markets through its Web-accessible database, Workforce Wizard, which combines recruitment, training and labor market information for businesses, educators, trainers and job seekers in a single location.

 

Meanwhile, civic leaders are re-thinking what “economic development” means in the Knowledge Economy. Supplementing its traditional charge of recruiting outside business to the region, the Greater Richmond Partnership is taking a leadership role in creating the kind of community where creative geniuses like Brian Frank want to live.

 

“If businesses are going to be successful, they have to be able to recruit top talent to the Richmond region – and keep it here,” says Gregory H. Wingfield, president of the Partnership. “In the past couple of years, there has been a revolution in thinking among political and civic leaders. Not only does Richmond have to maintain a positive business climate, the region has to create a positive people climate.”

 

Quality-of-life issues have moved to the front burner as government, philanthropists and public-private partnerships ponder where to invest community resources. At the top of the list right now are traditional civic projects like a performing arts center and a new baseball stadium. The region also is grappling with mainstay family issues like transportation mobility and the cost of housing. Other initiatives are focusing on making the region more attractive to recent college grads.

 

“Our motto has been, ‘Richmond is easy to love,’” says Wingfield. “As we seek to broaden our appeal, we may have to segment our message. What a lot of young people want to hear today is, ‘Richmond rocks.’”

 

-- July 12, 2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: The Greater Richmond Partnership published a version of this story in WORK Magazine: Career Life in the Greater Richmond Region, and granted me permission to republish it here.

 

This article gave me a chance to write about the global economic forces driving changes in the workforce -- a core issue that that I should be addressing more consistently in Bacon's Rebellion. Although this story has a Richmond focus, the trends described here can be seen, to a greater or lesser degree, in all Virginia communities.

 

-- Jim Bacon