Why Kansas City? Let us count the ways…
From small start-ups to global corporations, the advantages of doing business in the Kansas City area are clearly evident, executives say.
When it comes to business operations in the Kansas City region, it seems, there are two kinds of executives: Those who love what the region has to offer—and those who’ve never been here.
Whether they’re natives or recent imports, executives from widely varying business sectors find common ground in their assessments of the Kansas City region’s strengths as a place to do business: Unparalleled centrality, low operating costs, sharply lower property-acquisition costs, transportation infrastructure, skilled work force, quality of life—the list of positive factors is a long one.
For this story, Ingram’s interviewed several executives from varied business sectors: banking, health-care information technology, manufacturing, materials-handling products, water infrastructure, engineering and even quarry ownership and broadcasting, with organizations based on either side of the state line. While they have different ideas about the ways the region could improve its business climate, they have a shared experience with the factors that contribute to a solid foundation.
TJG Enterprises
After 15 years in the National Football League, Trent Green closed the book on his playing days following the 2008 season and started laying the foundation for success in other venues. And he decided that Kansas City, where he had played quarterback for six of those seasons, provided the requisite home-field advantage.
Today, in addition to his broadcasting duties organized under TJG Enterprises, Green is involved in various Kansas City-based partnerships that include stone-quarrying operations in Indiana, Union Broadcasting (WHB-810, the sports AM station, is one property) and residential land development in Johnson County. His entrepreneurial ventures at this point make him a team of one, but Green looks ahead to the days when his ventures grow large enough to require hiring others.
“I hope so,” he says. “As far as growing the businesses, right now I feel like we’re in a good place” with three children in K–12 schools. “If we were to grow and expand right now, that would take away from the things we want to do with them, but certainly I see that as we get closer to being empty-nesters.”
Like executives from larger companies, Green sees things here that don’t show up on a balance sheet. “I grew up in St. Louis, and my wife is from Indiana, and we met in college there, so we both have Midwestern values and an appreciation for the Midwest, the way people are here,” he said. He and Julie came here in 2001 with a pair of preschool-age boys, and their daughter was born here. “So this is really what they know,” he said, and that was a factor in the decision to stay here, even after being traded to Miami and St. Louis to close out his football career.
Beyond that, the partners at Union, he said, “are all Kansas City guys,” and the centrality can’t be beat with cross-country trips for color commentary in football broadcasts. The lone drawback? A dearth of direct-connection flights from Kansas City International Airport.
More than offsetting that, though, are quality-of-life considerations. “I was with the NFL Network in Los Angeles for a couple of years, and people out there would be like, ‘Why are you living in Kansas City?’ and I’d tell them, ‘You just stay here with your traffic, your crowds, your high prices and your schools, and we’ll keep our life in Kansas City.’ We feel like we’re not missing out on anything.”
TVH
Many tangible success factors make KC’s an appealing base for business operations. Here’s a powerful one: The shared sense of entrepreneurship. Given Els Thermote’s background, that’s not just parochial boasting. When the Belgian business founded by her father in 1969 acquired Systems Material Handling in Olathe in 2003, she drew the assignment to run U.S. operations, and 5000 miles from home, she found something familiar.
“I was surprised to find that the Kansas City area is home to so many successful companies that had their start with just the idea and commitment of an entrepreneur,” Thermote said, citing the similarities with her own company’s roots. “With the innovations and diversity that these companies contribute, the whole fabric of the business climate here is strengthened and enhanced.”
Fast forward 10½ years. SMH is rebranded, flying the corporate parent’s TVH flag, and Thermote, as CEO of U.S. operations, has leveraged Kansas City’s assets to build the company from 200 employees to 450 in Olathe. “The often-referenced ‘hard-working Midwestern work ethic’ appears true to me,” she says. “We have been successful in recruiting and retaining great employees who have, in turn, helped to continue to make TVH grow.”
That means drawing on a work force to add engineers, operations managers, accountants and IT professionals, sales associates and purchasing agents—most of those positions filled from right here, she says. “We are exposed to several universities within a two-hour drive (KU, K-State, Pittsburg State, Baker University to name a few) with terrific students for internships and excellent graduates for our business needs,” she says.
City, county and state offices provided needed business support, Thermote says—“Although I am not sure I can say the same about the federal government”—and the company continues to expand into Central and South America.
KC can chalk this one up to being the right place at the right time. “When my family acquired the business,” says Thermote, “we quickly found out that it is a great location to grow our business. For us, as a distributor with a nationwide business model, we certainly enjoy the fact that Kansas City is in the center of the country and is a good distribution hub for our company. The area is a great place to live and raise a family and that adds stability to our work force and our company. Additionally, the cost of living in the area allows TVH to operate at a lower overall cost. As we continue to expand our business, we are always looking to recruit quality people.
“It was a big step for me and it took a while to adjust, but I can say that Kansas has become my home,” Thermote says.
US Bank
It really is true: A contented banker is one who thrives on what’s called “boring banking.” Because in banking terms, excitement usually means somebody has opened a big can of headache. So maybe it’s a personality fit with KC and Minneapolis-based US Bank: “Kansas City has a well-earned reputation as a steady performer—nothing flashy, but solid,” said Mark Jorgenson, regional president.
His three decades here, he said, and his travels around the nation have given him certain insights into the characteristics of various markets. Take the labor force in this region, which he considers superior to those in other cities. “That is the number one reason we have invested over a quarter-billion dollars in the KC area since the start of the recession, and why our staff levels have tripled from 600 to 1,700 during that time.” Because of that work-force quality, the bank’s turnover and productivity metrics here beat those in other parts of the country, he said.
A big chunk of the bank’s investment in this region came when corporate execs chose to put a 130,000-square-foot data center in Olathe, at a cost of $200 million. They were onto something, because Bank of America also saw KC as the ideal site for a data center, dropping $90 million into that facility near KCI.
Like other transplants, Jorgenson has seen the region’s appeal first-hand. “The quality of life here is very good, and causes people to stay—some of whom may have been initially reluctant to move here—once they become familiar with all the region has to offer,” he says. “Our cultural amenities are astonishing for the size of our population, and the level of philanthropy is nearly unmatched by other metro areas on a per-capita basis.”
As for banking, KC is well-known as a hotbed of competition, at or near the top in bank charters per-capita, he noted. “This creates a competitive situation for top talent,” he said. The upside? Financial institutions must up their game to maintain market share, and customers benefit, he said.
For US Bank, even a recession and a flat-line recovery have been no impediment to growth here. “We have experienced double-digit growth in many key areas of the bank in recent years,” despite those hurdles, Jorgenson said. “This is a result of our ability to attract the kind of associates who are dedicated to elevating the customer experience to lofty heights.” While product offerings and technological advances have proven important, “in the end, it’s the level of talent that makes a difference.”
U.S. Department of Energy/Honeywell
The oft-repeated refrain that Kansas City will get its hooks into a newcomer and make it tough to leave is not limited to individuals. It works on an organizational level, too. Case in point: The U.S. Department of Energy’s National Nuclear Security Administration. When it was clear that the aging Bannister Federal Complex was no longer suitable for its work supporting the national security mission, representatives began pondering new locations for the $687 million replacement plant.
They found a perfect site—less than 10 miles away. Kansas City’s work force attributes had something to do with that. But history did, too, because any competing venue was going up against a known commodity. Advantage KC, says Rick Lavelock. As senior director of program management for Honeywell, which has the contract to operate the campus, Lavelock was in on the site-assessment process.
For Kansas City, he said, “the biggest factor was the level of technical expertise of the employee base.” An independent study said that, from a logistics standpoint in the supply chain, it made logical sense to relocate in Albuquerque or Amarillo. “But if you look at the skills sets needed—engineering, math, science, hourly craftsmen, machinists, assemblers—taking all of those skills and trying to transfer 1,000 miles or more away was going to be very expensive” for the NNSA, Lavelock said.
Relocation analysis suggested about 15 percent of individuals would travel to a new site, “so a customer would have to stand up new skills sets in that new location for the other 85 percent,” he said. “From a training and education standpoint, it’s also time consuming: You would lose two to five years rebuilding that skill set in a new location.” And that would translate into a loss of 300 million tax dollars—nearly half the cost of the new facility itself.
Then there’s the cost of living. Lavelock says he’s known professionals who moved in from the San Francisco area, took the equity from sales of their modest homes there and bought “mansions in Leawood.” The pay differential is more than offset by other factors, he said, allowing employees to enjoy a high level of artistic, cultural and entertainment options—quality-of-life factors that contribute to employee job satisfaction.
Netsmart
Netsmart, which specializes in behavioral health-care information technology, knew what it was getting when it named Mike Valentine chief executive officer in 2011. And Valentine, a 13-year veteran of Cerner Corp., knew where he wanted to take the Long Island-based company—literally and figuratively.
“At a macro level, Netsmart needed to retool in several areas,” Valentine says. “We needed to build out some senior talent to drive the company in new directions, and we needed to build a work force that could take on more of our clients’ responsibilities.” His time at Cerner, he said, had underscored the strategic advantage of siting a health-care IT company here. “Within 200 miles are seven college campuses that generate a lot of technology talent.”
That was the genesis for relocating Netsmart, which recently moved into an updated 110,000-square foot building in Overland Park. Centrality, Valentine notes, was a big cost factor: “We have offices on either coast, but the cost to do there what we have done in Kansas City would be two or three ‘X’ the costs here. When you factor that for someone like us, going through a rapid phase of growth—we’ve doubled revenue in the last two years—it would have been difficult to do this on either coast.”
Still, he said, “I had to sell some people on the concept that this was a doable thing”—but it was not a tough sell. “Seeing is believing,” Valentine said, assessing the response within the company’s ranks. “More and more studies show KC in the top 25 in terms of IT talent. For those of us that have lived a couple of generations of it, it’s something we were very confident in. For a few others, it took some selling to get them to put down roots in the middle of the U.S., but we were betting on the come two years ago.” The bet paid off. From no presence in KC, the company has grown and expects to have 300 employees in Overland Park by year’s end, and as many as 500 in a couple years.
The region, he says, now has a critical mass for IT, with companies like Cerner, Perceptive Software (which has formed a strategic partnership with Netsmart), Mediware and others. Because of that, “you get the mixture of talent, access to senior talent that’s been around and access to the college campuses,” Valentine says. “It’s well understood in technology and health care that Kansas City is a bright spot on the map.”
Grundfos Pumps
Dennis Wierzbicki could be a poster boy for U-Haul: Career stops in Michigan, New York, Ohio, Colorado and Minnesota. Ten years ago, he added Kansas City to his career travelogue, not long after Danish pump-maker Grundfos relocated to Olathe from Fresno, Calif.
For all of its commercial advantages, Kansas City has one not often cited—unless you happen to know the lay of the land around the headquarters in Bjerringbro, Denmark. “We come from Danish heritage, and when I tell people this they laugh, but if you go an hour west, you wouldn’t know if you’re in Denmark or Kansas,” says the Grundfos president. “Our culture comes from an agricultural background, and an environment in a flatland community, and a lot of Kansas looks like western Denmark. It matches the company, as well, and Danes feel very comfortable here.”
His assessment of KC isn’t based on anecdotes. Soon after he arrived in 2004, Wierzbicki was tasked with determining whether the company needed to revisit its decision to relocate here in 2001, and he’s been involved with follow-up assessments since. Every time, Kansas City emerges the winner, for multiple reasons.
“One of my favorite topics is talking about doing business in KC,” he says. “The quality of life is great. We look at it as cost of living as well as people in the community. People wave at each other, say ‘hi’ on the park paths, it’s a friendly, clean community. In the metropolitan area, it’s easy to get around.”
His travels across the US, he said, give him a keen appreciation for some of the intangibles that complement what a company has to offer as an employer. “I think our arts, the symphony, the new performing arts center, they all offer great access to that kind of environment that any other major city has,” Wierzbicki said. “And all within a 30-minute drive. If you come into this area as a community leader, as a CEO, you can decide what fits for you between the arts, performing arts, sports—there’s a lot you can get involved with.”
More specific to Grundfos, a central location is key for operating on a nationwide basis. Another plus: “For us, the access to engineers was not only a pleasant surprise, it’s one of the reasons we moved here,” he said. Engineering schools on both side of the state line provide the quality of engineers we hoped would be here.”
Burns & McDonnell
When Clinton Burns and Robert McDonnell teamed up to start a small engineering concern in 1898, Kansas City, Mo., had no metropolitan region to speak of—61 percent of the population in Jackson County and neighboring Wyandotte County lived within the Kansas City borders. Their fledgling company set its sights on helping cities in a four-state region build the infrastructure of sanitary sewers, water systems and electric lighting. So it’s not a stretch to say that this region and Burns & McDonnell really did grow up together.
Today, Burns & McDonnell is an integral part of that regional economy. Nearly 60 percent of its 4,000 worldwide employees are based in south Kansas City, and the firm’s presence with other global, national and regional engineering firms gives this region a reputation for more engineers per capita than any other city in the world. As it grew from regional focus to worldwide in scope, it could have relocated to any city. That it hasn’t is testament to Burns and Mac.
One reason, says CEO Greg Graves: “It’s people. I realize to some, we might not have everything that a New York or an L.A. might have. But this place grows on you … it’s all about people.”
And not just the ones you need to hire as prospective engineers. The broader business community, he says, is oriented toward promoting business growth. “When I became the CEO of Burns & Mac, I called six area CEOs to ask for advice, mentoring really. Every one of them helped. Not most of them, but every one of them.”
As important, Graves said, every one of them had real insights into what worked for them and helped their businesses succeed. “I’ve used their advice over and over. It’s clear that businesses here want each other to succeed … you won’t find that in most big cities.”
Among other strengths of the community he cited was the influence of the University of Missouri-Kansas City. “Chancellor Leo Morton and his team have that place on an absolute rocket ship,” Graves said. “A world-class educational institution is a vital asset to any growing community, and UMKC is rapidly becoming KC’s secret weapon in attracting the talent we need to compete.”
And the area is poised for additional growth, and distinction as a national center of excellence in construction and engineering. “We already have a huge concentration in town and it’s a terrific sector to have leadership,” Graves said. “Health sciences has a terrific future ahead for the whole metro. When you combine Stowers, KU Hospital’s Cancer Center and Cerner with new and upcoming opportunities like the Institute for Translational Medicine … I’d say the sky is the limit.” 