Virtually all CEOs are grappling with how to attract the best and brightest to give their companies a competitive advantage. But when you’re in an industry as complex as energy and your signature product is “basically a jet engine that, instead of flying on a wing of an airplane, is on the ground being used to produce electricity,” as Paul Browning, CEO of Mitsubishi Hitachi Power Systems Americas, describes the company’s sophisticated gas turbines, the challenge of maintaining a skilled workforce becomes that much greater. “Even for our sales team, we tend to hire engineers or people with an engineering degree because even the sales process is very, very technical,” Browning explains.
It helps to be in a city that is growing nearly as fast as you are and that offers a steady stream of high-tech graduates to fill your pipeline. Given MHPS’s plans to collaborate with customers on artificial intelligence and low carbon technologies that will take the cost and carbon out of the electric power value chain, proximity to the country’s largest utility companies is a critical asset. In the five years since MHPS (formed as a joint venture of Mitsubishi Heavy Industries and Hitachi) settled in Lake Mary, Florida, Orlando has attracted dozens of established and startup tech companies, creating a thriving business community for greater growth in the near term. As Paul Browning explains in the following interview, when your strategic goals include competing with other industry giants like GE and Siemens, every competitive weapon counts.
Much has been made of the skilled talent shortage in manufacturing. As unemployment levels have reached new lows, how is MHPS tackling this?
We do have a very high technology product that requires a lot of people with strong technical skills, so one of our highest priorities is having access to great technical talent. We’ve been really pleased with both the quality and quantity of people available to us from local universities. We have a really strong relationship with University of Central Florida, for example. We have a large intern program, where students have an opportunity, while still in school, to work with us and get to know us and vice versa. We hire a lot of engineers from UCF.
One of the great things about Orlando is that we recruit people from all over the country and internationally as well and it is not difficult to convince people that a move to Orlando is a good thing. So that helps us attract talent, in addition to the great local resources. The other thing is, language skills are important for us, particularly Spanish and Portuguese, because we do a lot of business in Mexico, Central and South America, and the Caribbean islands so having people with language and cultural skills is important and the Orlando area is a good resource in that way, as well.
Do you think manufacturing has an image problem among younger workers who see it as 20th century industry rather than 21st century tech?
There are some forms of manufacturing where it’s getting more difficult to attract the top talent, but I don’t think we’re one of those. Our product is very high tech. I tell people all the time that we do the kind of manufacturing that you can’t afford not to do in a place like the U.S. or Japan. We have the type of manufacturing that interests people. We also recruit heavily from the military and we have a lot of U.S. veterans on our workforce—in fact, we have a factory in Georgia where over 20 percent of our folks are U.S. veterans—and we have a high veteran population here in Florida.
Looking to expand your business to Orlando?
If growth is in your plans, you’ve come to the right place.
We do the kinds of things that people are really excited about doing, so we have not had a lot of difficulty attracting top talent. For one example, artificial intelligence is a huge part of the products we’re rolling out these days.
How are AI and IoT impacting your industry and your products?
We started doing Internet of Things before it was cool, so about 18 years ago, we started remotely monitoring all of our gas turbines around the world. A gas turbine is a special product that is running under very high temperature and pressure conditions and it requires a lot of maintenance activities to keep it running the way it needs to. These are also expensive products so the maintenance is actually pretty high dollar and for that reason we were some of the first to get into remote monitoring and diagnostics. Our devices are connected to a central remote monitoring center, which is in Orlando, and from there, we monitor everything in South America. That’s a really critical part of how we give our customers reliable operation and more affordable maintenance activities. With AI, the biggest thing is that we’re taking all that data we collect and automating some of the monitoring activity. That way, we can forecast little problems before they become big problems.
So these machines can tell you, “Hey, I’m about to have a problem”?
It’s even better than that. These days, the machine calls us and says, “I found a problem and I fixed it and I just wanted to let you know.” The other thing is, we’re right on the cusp of coming out with the autonomous power plant, which will not only be able to self-heal in some ways but also be able to plan its own inventory. It will have access to the customer’s ERP system and when it needs to schedule maintenance, it will also order the materials you’re going to need for that maintenance activity. So it knows what its needs are and how to get the resources it needs to solve problems. These power plants are becoming very, very intelligent.
Does that mean they’ll need fewer people?
A natural gas power plant has about 35 folks working in it and we are really not trying to reduce that number. The labor cost is actually a very small percentage of the overall power plant costs. The big numbers are things like unplanned maintenance and unplanned downtime. Those are the ones with a lot of zeroes for our customers.
Have demands changed for the skills you need?
Oh yeah, definitely. I’m an engineer and I was at my university six months ago and I was riding the elevator, looking for a certain department, and I realized that there are whole new departments of engineering that didn’t exist when I was a student. Twenty years ago, AI was not on our recruiting radar nor were other new fields of engineering that are really important to us now, like 3D manufacturing, for example. You need the component to not only look the way you want it to, but also to have the mechanical properties you need it to have. So things like Nano engineering and material science, those are all very important to doing some of the new things like 3D manufacturing correctly and getting the results we need.
What sort of partnership programs have you developed with UCF and others to let engineering students know about the exciting things you’re working on?
We have a number of internship programs. A typical intern would work with us for a semester. Some work with us while they’re going to school but some will take a semester off of school or work with us during the summer as an intern so it’s a real full-time job kind of experience they get. And this is real hands-on engineering work, like designing the piping for a power plant or designing the control system for a customer’s application. They’re very valuable to us in terms of getting critical work done and at the same time, it’s a great learning opportunity for them.
How often you hire them?
It’s at least 50 percent. We tend to like them and they tend to like us.
What are some of the other advantages of being headquartered in Orlando?
First of all, MHI had five employees in 1999 and today we have over 2,000, with about 1,000 of those in the Orlando area. So when you’re in a high-growth mode like we are, living in a part of the country where the population is increasing and people are sort of flocking to this area, that’s a great dynamic for us. While we’re growing, we’re in a dynamic region that’s growing.
Another thing we love about Orlando: my responsibility is North and South America so it’s really well situated to give us easy access to areas in Central and South America. We also think the airport here is fantastic and we have a lot of direct flights to the cities we fly to, so that is a nice benefit as well.
One of the things that is underappreciated is what a business friendly state Florida is. I serve on the board of Enterprise Florida, which is chaired by the governor, so I have direct access not just to the governor, but to a lot of the business leaders in the state. I’m also on the Florida Council of 100, an organization of top leaders in the state. So it’s a really well-connected business community that, when we need help or advice from either government or colleagues in the business community, it’s readily accessible and there are good institutions in place to make that a seamless process. Southeastern United States also just happens to be where a lot of the large utilities are that buy the kinds of products we produce, so Florida Power and Light, Duke Energy, Southern Company, Entergy, a lot of our big customers are here.
How are you feeling about the company’s growth trajectory?
In 2018, for the first time in the history of our industry, we achieved No. 1 market share globally in the heavy duty gas turbine segment. So the big players are us, GE and Siemens and we passed them by last year, so we’re pretty proud of that.
What are your plans for continued growth over this next year?
We’ve started a new business called Power & Energy Solutions, which is getting us more into renewables, energy storage and some new areas for application for our artificial intelligence products and services, so there’s a lot of change happening in the power industry and it’s creating a lot of opportunities for us. We’re really optimistic about the future.
You moved to Florida from Canada when you took the position at MHPS – did you experience any culture shock?
Earlier in my career, I worked in San Diego, so I had some experience in a warm climate and trying new places. I’ve moved my family 14 times so I’ve gotten pretty good at relocating. I can tell you I really didn’t have a challenge in terms of relocating here. For a golfer, this is sort of a paradise.
Originally published in Chief Executive Magazine on May 3, 2019.