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
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