Transportation, Housing, Education, and Energy ” Focus on The Silicon Valley Manufacturers Group Silicon Valley was never envisioned as a major industrial center, and its transportation infrastructure was not developed to handle the level of traffic that now commonly chokes the region. Unlike urban centers such as New York, Chicago, London, and Paris, Silicon Valley does not have a well-established metro and bus system to transport its hundreds of thousands of workers around each day. Public rail (Cal Trans and Light Rail) and bus transportation (SamTrans and VTA) transport about 85 million riders a year. This represents only 4% of total commuters. Only 15% car pool, while 78% of people drive alone to work. Most of these people use the two highways that form the twin spines of transportation through the Valley. This causes massive congestion and is a limiting factor to how many people can actually physically work in Silicon Valley. There is a chronic housing shortage for the professionals who work in Silicon Valley. While a large number of permits were issued for commercial building space during the 1990s Internet boom, little residential housing was built to accommodate the massive influx of highly skilled workers. This was exacerbated by the fact that there is very low density in California housing; Californians love their single detached homes . So, many people commute long distances because home ownership is hard to come by. Perhaps the great lesson here is that the creation of jobs should be accompanied by the creation of housing and transportation. Between 1992 and 2000, Silicon Valley produced 329,000 new jobs but only 60,500 new housing units (1 home for every 5.5 jobs). One reason why housing was not increased relative to commercial space is because commercial real estate produced large tax revenues for the municipalities, while residential housing produced far less revenue for the same amount of space. This, coupled with restrictive environmental regulations, has made the housing shortage in Silicon Valley a major crisis. So, many people live and commute farther away from their work, which further exacerbates the transportation problem. Business Associations in Partnership with Government Attempt to Address Regional Issues Strong, highly effective business associations and linking organizations can provide business communities access to work in partnership with government on a regional basis. We illustrate this through our focus on the association of the Silicon Valley Manufacturers Group (SVMG) and the following interview with its president, Carl Guardino. SVMG was founded on the belief that local employers should be actively involved in working with their governments to find innovative solutions to issues such as transportation, housing, education, and energy resources consistent with a positive environmental balance. It believes the best way to address these challenges is to unite the broader community, government officials, and business leaders . This model came to life in 1977 thanks to David Packard, co-founder of Hewlett-Packard. SVMG represents 190 of Silicon Valley's employers, who provide nearly 275,000 local jobs. Membership is open to high-tech firms and supporting industries such as software, systems, manufacturing, finance, accounting, transportation, healthcare, defense, communications, education, and utilities. Carl Guardino is the president and CEO of SVMG. He discusses how this association is so successful in making a difference in the Silicon Valley region. Mr. Guardino identifies success factors such as the fundamental philosophy upon which the association was built; the organizational structure of the group; the communication between, focus on, and influence of its member companies; and its mutually respectful relationship with the media. This is a truly unique and effective organization, harnessing the power of business to work cooperatively on crucial regional infrastructure issues such as transportation, housing, education, and energy resources for industry. SVMG continues with David Packard's vision to nurture and create a positive environment that is conducive to the region's continued economic success. Carl Guardino The core purpose of SVMG is for Silicon Valley executives to problem solve proactively. We can engage top executives because our operating philosophy is minimum time, maximum impact. Our founder, David Packard, co-founder of Hewlett-Packard, established the model. As with many things he did, he was quite visionary . His idea in forming this association was to engage senior executives directly working with each other and working with the broader community as private sector leaders to proactively solve the region's challenges. Structurally, he made that successful in several ways. David Packard's four principles for a successful business association First, the organization needs positive peer-to-peer pressure by electing a board of directors solely consisting of CEOs and top executives who drive each other as well as their organizations. This keeps the companies focused at different managerial and executive levels because their CEOs are involved. That is why it is important to have a board of CEOs and principal officers that are truly engaged and not just a letterhead board. Second, make sure their time is well used. That is our mantra: minimum time, maximum impact. We have only a set number of board meetings per year that they are required to attend . So when we have them, we have them fully engaged. We are able to do that by having a tremendous message strength in terms of managers and directors and issue leads from their companies and our other member companies who comprise committees and task forces. With that we have probably 500 member company volunteers from our 185 member companies. Third, SVMG always has a very small budget, because that forces us to have a very small staff. David Packard's position was to keep the staff small, so it could not dominate the organization. This forces it to be owned and driven by its members . Our budget is less than $1 million a year with a staff of less than 10 people because we have the strength of those 500 volunteers doing so much work. Fourth, we have a series of executive champions for our different issues. So on the 1999 Measure A Transportation initiative (increase local taxes for increased transportation expenditures), for instance, there were literally thousands of hours of work leading up to and then running a voter initiative campaign. We will have a champion from our board, who plays a key role and who is very visible, and we can maximize her or his time. Carefully select initiatives for broad executive support One of our region's most serious problems is a shortage of affordable rental and first-time home-buyer housing. So SVMG joined with other community organizations to help create a housing trust, which serves as a revolving loan fund for first-time home purchases, affordable rentals, and outright grants for homeless shelters. The fund leverages dollars on a ten-to-one ratio by combining with other housing funding sources, so the fund provides the deal-making dollars. This is an innovative way to begin to address the housing crisis here in Silicon Valley. There are about 150 housing trust funds in different communities in the United States, and our $20 million raised in 2001 is the biggest initial housing trust fund effort in the country and the largest nonprofit fund raising campaign we've ever done in the Valley. Good public relations are essential People have the right to know what we're doing. Even though we are a private organization of private citizens , we want to help our community, so we think we have the responsibility to inform the public. We know the press can disseminate information that helps us advance our core issues, and so it becomes a strategic part of our game plan to have them understand what we are doing. The main way you work well with the media, besides reaching out, being accessible, and being honest with them at all times, is to actually have a story to tell ” that you're accomplishing something. So I think to whatever extent we have success in working with the media is hopefully because we are doing things that are media worthy ” like quantifiable successes and return on investment. Even journalists who, by profession or by experience, are occasionally cynical are often surprised at the very proactive, positive work that our members do through this organization. They have acknowledged and treated us well through that. We try to stay very sensitive to their deadlines and what they are trying to accomplish. When we can't help them we, at least, refer them elsewhere. So we try to provide a resource even when we're not the direct resource for a particular piece. Over time that serves us, and therefore our issues, members, and the Valley, well. Proactive voices on regional issues The concern David Packard had in forming the group was that business could not be effective speaking with separate voices on important regional issues. In the summer of 1977, he sent a lunch invitation to about 35 of the top CEOs in the Valley because he didn't feel they had a united, proactive, positive voice in the issues that were impacting the economic health of the region and their individual companies. Equally critically important to Mr. Packard was the quality of life of their employees . So he wanted to form a group that brought together those top employers to address again, not only issues that impacted the economic health, but the quality of life of the region ” and the Manufacturing Group was born. So would they have that voice united without the Manufacturing Group? Well, hopefully someone else would have created it, but I think it took someone as well respected within the industry and around the community as David Packard to create this type of model. The model, which we hope can be emulated in other regions , is simple, but difficult: -
Find someone who is a well-respected business voice to pull together other business leaders. -
Make sure that person is also respected across the entire community, beyond business circles, for credibility's sake. -
Ensure that the agenda engages CEOs, so that there really is a reason to come together. -
Ensure that the projects selected have quantifiable outcomes and are driven by successes, rather than just studies. We have a three-year rolling business plan that our members update annually with quantifiable accomplishments to reach each year so that we know at the end of the year whether they received the return on investments that they expected through their dues and their participation. | |
