Vanguard CEO McNabb touts the region's 'intangible values'
The head of the nation's biggest mutual-fund firm told a roomful of businesspeople why Vanguard has stayed and grown here over the last 35 years.
When the President gives the State of the Union address, there is an expectation of inspiration.
When chambers of commerce offer up a State of the Region program, my expectation is for a heavy dose of marketing, especially when the economy has been challenging.
Sure enough, the gloss was high at Tuesday's event orchestrated by the Greater Philadelphia Chamber of Commerce and its counterparts from Southern New Jersey and New Castle County, Del.
Select Greater Philadelphia, a business-attraction group, touted the achievements of the last year, including its role in wooing a planned $500 million solar-panel manufacturing plant to the Philadelphia Navy Yard.
Thomas G. Morr, president and CEO of Select Greater Philadelphia, also unveiled what may be the first TV commercial touting the Philadelphia region as a good place to do business. The 30-second spot, which Comcast Corp. has agreed to run for free in major media markets in 39 states and Washington, D.C., flies by looking like a promo for a SyFy Channel original series.
(Mercifully, the creative types at Al Paul Lefton Co. and Aurora Imaging Co. did not ape the tourism campaigns with "Philly's More Fun When You Work There!" You can see the TV spot on Select Greater Philadelphia's website.)
More down to earth was the event's keynote speaker, F. William McNabb III, chairman and CEO of Vanguard Group, who offered the perspective of a company that started small here and grew to become the largest in the mutual-fund industry.
May 1 marked the 35th anniversary of Vanguard's founding in an office building on Drummers Lane in Valley Forge, which McNabb said was about a "five-iron away" from the Radisson Hotel where he was speaking.
Founded by John C. Bogle, the mutual-fund firm began with 40 people, managing $2 billion. Today, Vanguard employs 12,000 and manages about $1.5 trillion. About 9,000 of those employees work in this region.
What struck me about the story McNabb told is that there's no particular reason why Vanguard has to be in this area. Such a business could go anywhere it's able to plug in a phone bank and lots of computers.
So why in Ben Franklin's name is it still here?
"We like it here," said McNabb, who became Vanguard's third CEO in 2008. "There is no place quite like this region."
He means all of it - the culture, housing, health care and education. To make his point, McNabb described how Vanguard competes for new accounts administering 401(k) plans for employers, which amount to about 25 percent of its business.
He estimated that 200 companies visit Vanguard in Malvern each year. If they can convince a company to tour its "bucolic" campus, McNabb said, Vanguard generally wins the business 50 percent of the time. Of those that don't visit, the conversion rate is just one out of five or six, he said.
"We see the intangible values of this region when people visit," he said.
To remain attractive for business, McNabb said the region must continue to emphasize education, reinvest in infrastructure, and one other thing.
"We need forums like this to share ideas, data and stories so we can figure out the way forward," he said.
In his view, any State of the Region event should be more about perspiration than inspiration.