West Michigan-based technology executives increasingly view the industry as an up-and-coming star of the region’s economy.
These days, they say, the blurring of the lines between traditional industries and the technology sector has started to reshape the West Michigan business community. As proof, they point to the area’s cohort of manufacturing companies that increasingly have embraced automation technology to compete.
But as that transformation takes hold and technology proliferates the region’s economy, executives say they need to be more intentional about attracting a diverse workforce into their tech companies.
Those were among the topics of a recent technology executive roundtable MiBiz hosted in downtown Grand Rapids. Participating in the discussion were:
- Larry Andrus, CEO of Trivalent Group Inc., a Grandville-based I.T. firm
- Angel Barreto-Cruz, vice president of community engagement at Loop Coding Center, a Grand Rapids-based coding bootcamp focused on young minorities
- Matt Benson, director of strategy at Faurecia Ventures, the investment arm of Faurecia SA, a global automotive supplier with its North American headquarters in Auburn Hills and offices in Holland and Grand Rapids
- Peter Brandinger, vice president at Configura Inc., a Swedish developer of virtual reality software for the office furniture industry with offices in Grand Rapids
- Meredith Bronk, CEO of Open Systems Technologies Inc. (OST), a Grand Rapids-based tech consulting firm
- Shawn Crowley, managing partner and vice president of Atomic Object LLC, a Grand Rapids-based software developer
- Jennifer Jurgens, president of SalesPad LLC, a Grand Rapids-based workplace software development firm
- Daniel Morrison, founder of Collective Idea Inc., a Holland-based software development firm
- John Rumery, Grand Rapids campus director of Grand Circus Detroit LLC, a Detroit-based coding academy with an office in Grand Rapids
- Jim TenBrink, vice president of Encoris Corp., a Holland-based medical device company
Here are some highlights of the discussion.
What do you see as the West Michigan technology sector’s value proposition?
TenBrink: The reason why we even started our company back in 2008 –– and this was done in the Great Recession –– was a lot of the companies that supported the Big Three out in Detroit were somewhat idle. With our knowledge of med devices and so forth, and our client base screaming for more innovative products, we tied into the resources they supplied like injection molding (and)… all that high tech (capacity) that otherwise went to the automotive industry. So, it was just a great fit for our company. I think there’s a tremendous amount of technology in this area, no doubt, and it just seems to get better and better and better.
Jurgens: Having worked on both coasts, I’ve come back to appreciate some of the work ethic and the humility that we find here in Michigan, which I think is a great reason why a lot of our clients who are all over North America choose us to handle their operations. So, it’s sort of a humility, a work ethic, a desire to help get things done that makes this area compared to other places I’ve worked in stand out, in addition to having some really talented people.
Benson: Evidenced by some of the people around the table, there’s really great resources to get work done — consultancies and freelancers and people that know how to develop products both physical and software. And then, also at Faurecia, we collaborate with a lot of the big corporates that are local here as well. So there’s, I think, an opportunity to work on things in collaborative groups here in West Michigan that is really, really powerful and we’ve seen that work over and over again in our world.
Crowley: As we look to open an additional office in the Ann Arbor market, and I had started to look at what my experiences were out on the coast, I really liked the work ethic. One of our value mantras at Atomic is to think long term. In the other talent markets on the coasts, there is a lot of ‘shiny object syndrome.’ There’s a constant froth of people moving between a lot of companies. People outside of the region look at me with amazement when I talk to them about people with 10-plus-year tenure at the company. … We make long-term investments and do professional development of our people and I think culturally people here are used to that and they’re seeing the previous generations with a manufacturing backbone and an agriculture backbone. These are long-term plays. People have histories of longer term employment.
Does that type of philosophy help with talent attraction?
Crowley: You build the institutional knowledge more. The people who have developed product five, eight, 10 years ago … are cracking that software open. Then (clients) even really come to appreciate all our quality practices with test automation and so forth because we can open that software back up, dust it off, (and) upgrade it. … The team who was there (originally), there’s people who are likely on that (new) project that can lead that work.
Jurgens: We have a lot of the original employees from 13, 14 years ago who are still with the organization. That kind of knowledge — almost tribal knowledge — jumps into new projects and they pick it up so fast.
Bronk: I think there’s an interesting balance between that longevity and loyalty and the entrepreneurial spirit that’s also alive in West Michigan. Whether it’s cooperation or a sense of community or whatever it is that also makes it OK to try things out, to work with other people, to start something of your own and expect to get the support of others — there’s a nice healthy balance in West Michigan for that.
Brandinger: Configura being a Swedish company, we didn’t know all the things that West Michigan had to offer when we chose this area to start off our … operation. We looked at other cities in other places, but it was mainly the Midwest. But when you go into a place like Chicago with more transitional employees, people leave. There is much more competition, and we needed to have that longevity — that was important for us. I think we discovered, also, that it was a very good fit for moving people from Sweden. They almost felt like home here.
How else does that long-term commitment to employees help your companies?
Crowley: Companies have institutional, long-term knowledge on how to get work done and ship product. I think that longevity in our area allows us to put teams together to ship products successfully.
Benson: At Faurecia, we go and scout for the best, most interesting startup technologies all over the world. We’ve brought companies from Israel and from the West Coast of the U.S. and from Europe … to collaborate with us here in Michigan, and they’re super impressed with the resources we have, with the connection to multiple companies. A few of them have actually put an effort into being here on an ongoing basis. It’s not just us who are here that are recognizing that, but it’s something that we see in talking with other people. They notice that there’s something valuable here and a resource that’s here. It’s impressive.
Andrus: I’m selling my business (to accounting firm) Rehmann. (Trivalent) started here in 1999. We have a great legacy, had six people retire out of an 80-person company in the last two years. That speaks to longevity, right? Part of my decision process that I started three years ago was I wanted it to stay and leave our headquarters here in this community. … We had lots of opportunities to sell our business to different companies in the country, and the one last summer wanted me to be gone in six months –– which would have not been good for my team –– and to transfer all of the reporting and responsibility and leadership to Dallas. They would have downsized us. We purposefully decided to stay here for all the reasons you guys just said.
Despite the growth in West Michigan tech companies, what is holding them back? Does West Michigan have any stigma compared to the more mature tech hubs like Silicon Valley and Boston?
Morrison: I would say no, but we’re not good at talking about ourselves and we’re not good at talking about the resources that are here. You bring companies in and they see the good things that are happening, but a lot of people have no idea what’s going on here. A lot of people here don’t know all of the tech companies that are around and available, and I think it goes into the good parts of being Midwestern where we are humble, but we need to be a little less humble sometimes and tell the rest of the world what’s going on here. I think that brings in more talent, that brings in more customers.
Crowley: I think in some ways, Daniel, I challenge what you said and I think when I look at Atomic’s perspective and even when I look at what OST does, there are in-house hires focused on marketing. We have several full-time positions in our company focused on marketing and we actively promote our case-studies. We’re speaking at a national level.
Are organizations in West Michigan helping to bolster the sector?
Crowley: We have economic development entities like The Right Place and (technology is) on their 2017-2019 strategic plan, so they’re helping promote our resources to site selectors as well as businesses who want to stay here. … It’s a tough nut to crack. I think the broader question then is who really owns the responsibility and who’s committing the focus and the attention to represent the region. We can all take our independent efforts but what are we looking to do at the national and international level to put a lens on this.
Morrison: I think that’s been a constant conversation over the last maybe five to six years. We got closer but haven’t figured it out. It’d be different if we had some billion dollar tech startup that appeared and got national press, but that’s not really … what we do here. We build more sustainable startups. We’re going to build high-growth companies, but they aren’t going to be probably the next Facebook. They’re going to be very interesting, but not have the national presence in the same way. … I’ve joked about this before but I think it’s true that the beer culture of Grand Rapids has done more to attract talent than probably all of us combined.
Is West Michigan drawing people from other parts of the Midwest or from around the country?
Brandinger: What we are noticing is that we’re starting to actually employ people from other parts of the country. We can’t find people locally. Of course, you try to expand and it seems to me that there is an interest, and I don’t know if they have some heritage with Michigan, but there seems to be an interest for people to either move back to Michigan or they’re curious and they hear a lot good things about Michigan.
TenBrink: We see a lot of that. People wanting to buy a house and move their family. And I think the cost of living here is a huge part of that.
Crowley: A case that you’ve all seen with these highly talent-scarce microcosms: the Bay Area, East Coast are starting to hire into the Midwest and build remote teams and I think it’s really, really interesting. These companies will look at, ‘I could go pay my local market premium for talent or I could pay a consultancy or I can find the sweet spot, which is paying someone way above a market wage in Midwest and look to hire a remote team of five to eight people.’ (They) totally start to skew local market wages, but still make out and pay less maybe than they would to go with a consultancy. But I’ve started to pick up over the last couple years more and more anecdotes of these.
Morrison: I see a lot of (situations where) one person is working for some big tech company and you’d never know they were there down the street from you. I think that it’s interesting because we’re able to attract a lot more people than we know are here. Those people sometimes will get connected with local companies and jump ship and lot of times they’re sleepers.
How are we doing in terms of growing our own tech talent? What kind of results are the various boot camps and educational programs producing?
Rumery: In Grand Rapids, we had four boot camps in 2017. About 40 job-seeking people went through there, about 85 percent are employed. We’ve been able to get funding for all-women boot camps. We got some scholarships. We’re working with tech systems and some other companies. Women’s Resource Center and The Source provide that. We’re filling our boot camps, and we’re about the same rate as Detroit: About 85 percent are getting placed in these entry-level positions. But I think it pulls back almost to (another) question we talked about. We have about 35 of 40 placed (with employers). There’s about 27 different companies and I’ve probably never heard of 20 of them.
Barreto-Cruz: Ours is more about introducing the minorities to code, so our targets are middle schools, high schools. They’re not paying much. We don’t expect them to be ready to take on a job. Our goal is to just introduce them to coding. The company began because my buddy, the co-founder, when he was in middle school, he was in (coding) classes and he was the only Latino in the class, and he felt intimidated and he stopped. When he got to college, he tried again and he’s doing it now, but it’s a lot harder now because he didn’t have that extra background experience from what other kids get in different schools.
How are schools doing with teaching skills relevant to the tech sector?
Barreto-Cruz: Schools in Grand Rapids don’t have a lot of funding. The students are not learning technology. That’s why we came in to try to focus on those groups. We just finished a boot camp at Union High School. A lot of those kids couldn’t even Google something. They could barely check their emails. … But a lot of kids — little kids — know how to do that, and the fact that these middle schoolers, high schoolers are not learning that stuff, that’s why we started our company to target those students and teach them more programming.
Rumery: What we’re trying to do is build relationships with the local employers, and I can give you an example of one that very early was starting to work at Spectrum Health. … They created an internship for one of the graduates that came out of that program. That person –– after graduating from the boot camp –– basically had a 14-week internship that they put him through, which is really an extended onboarding experience, additional training. We think those types of relationships are really doable in this area. It’s on us to keep doing a better job with our training.
West Michigan’s technology sector has gone through a handful of evolutions over the last couple decades. What do you see as the next area of focus or growth?
Crowley: What I’m seeing is all the other traditional manufacturers and consumer product companies realizing they’re building a technology company, that they’re building their own teams. I get knocks on my door from companies and markets that seem like really boring, commodity markets. They’re realizing how supply chain automation, customer portals … and leveraging Amazon as a retail channel for replenishment of (supplies) … gives them better insight into ordering and getting more short-end supply chains … and cutting other players out of the supply chains.
Bronk: Getting the COO to think technology, technology, technology. I think it’s a huge disruption, so you get little teams who can spin up because if you put them inside of the bigger organization, they’ll get beat and slowed down. We have a large client in the transportation industry in Chicago, and he jokes that he put this team on the fifth floor and nobody from the C-suite is allowed to go on the fifth floor. The CEO can’t go up there because they’ll want to see flow charts. (The teams) want the sticky notes and whiteboards and it’s a totally different behavioral piece and it’s thriving because we’re stripping it out and learning from that.
How are your companies going about hiring a diverse workforce?
Crowley: Diversity is a huge arena to play in and I’m glad that there’s so many people focused on the different facets. We’re not doing everything right, but we made a choice to focus on gender diversity and we wanted to improve our ratio of women in our workforce. We just said, ‘Well, let’s look at that channel where we’re hiring through and let’s make sure we’re actively recruiting women through that channel.’ If we can start looking at 50 percent women-to-men ratios in that channel or better, then that’s what the future will look like. It’s one way we’ve been able to say, ‘Yeah, let’s still keep high standards. Let’s still hire computer science grads, but then let’s be really focused on our recruiting efforts to make sure there’s stronger equal representation in those cohorts.’
Bronk: I think we need more diversity. Going back to the change that’s happening — that technology is driving our ability to be creative: Studies show more diverse teams are more creative teams and they’re more innovative. If we get that, our ability to continue to innovate and change and transform is fundamental to what we’re trying to do as a region. Our ability to continue to bring diverse voices to that table is critical. Investing in those initiatives is a key part of driving that, and I think we have to be open as employers to changing how we think about our training and the conversations and whatever needs to change.
Benson: Often, when we think about diversity, it’s creating opportunities for people who don’t normally have them … and that’s great and true, but I think … diverse teams are more creative. There’s a business rationale. It’s not something we’re doing because we’re just good people and want to create opportunity. In fact, it’s actually better for business to have diversity. I mean, I’ve seen that throughout my career — the more diverse the teams, the better they perform.
Bronk: And I’m going to just say from my perspective, diversity just means you have to have a varying voice at the table. By age, by gender, by all sorts of things. So I just want to be real clear: There’s a lot of ways to bring (perspective).
What impact has the presence of Switch in southern Kent County had on the industry over the last couple of years?
Andrus: I was one of the founding members of the Michigan Data Center Alliance, (which lobbied the state legislature) for fair tax treatment. … We were successful, but the biggest obstacle there was educating our legislature in Michigan. They had no idea what we were talking about. I was for (Switch coming here), but if they’re going to get tax breaks when we’re already paying taxes — we’re already here — give us fair tax treatment. Really, the spin off was it was really good for about nine or 10 companies with cloud business like us, I guess, because we pay less in taxes. That wasn’t our intent.
Has it had other impacts?
Andrus: I think it’s raised our I.T. intelligence level here, and I believe that as they hire mostly entry-level people with some of their folks, and then they brought people in to staff for their companies … that we’re all going to have more people to hire. That’s what I think the spin off is and the immediate return for some of us.