Talking with Barry Balmat: Outgoing director of local Rand office says city needs a better attitude
When Barry Balmat, director of Rand Corp.'s Pittsburgh office, returns to the think tank's home office in California, he'll give up the view of St. Paul Cathedral in Oakland.
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When Rand Corp., the prestigious, California-based research institution decided to launch another office in the eastern United States, Barry Balmat played a key role in selecting Pittsburgh as the place Rand would locate. He became director of the Pittsburgh office in 2001 and departs Wednesday, having grown the local operations from 30 to 180 employees and overseen major projects, including a method of measuring the performance of the Pittsburgh Public Schools and a study on the significance of the city's economy to the region's overall prosperity. Mr. Balmat is returning to Rand's Santa Monica, Calif., headquarters as director of foundation relations.
- Job: Outgoing director, Rand Corp.'s Pittsburgh office
- Age: 65
- Hometown: Elgin, Ill.; resides in Shadyside
- Education: Bachelor of science, civil engineering, University of Illinois at Urbana-Champaign, 1966; master of business administration, Stanford University, 1969.
- Career: 1966-67: engineer, Lockheed Aircraft; 1969-72: operations researcher and executive assistant, federal Office of Management and Budget; 1972-79: executive assistant to the president, chief financial officer, Rand Corp.; 1979-84: partner, Durkee, Sharlit Associates; 1984-92: co-owner and chief executive, Coast Wire Tech; 1994-2001: rejoined Rand as consultant and deputy executive director of development; 2001-Oct. 1, 2008: director, Rand's Pittsburgh office.
Q: Are you going back to California satisfied you have accomplished Rand's mission of establishing a thriving presence in Pittsburgh?
A: I have mixed views. We've enjoyed Pittsburgh. I wouldn't have chosen to leave other than the family situation. I remarried about five years ago and my wife and stepchildren are in Southern California so we've had kind of a bicoastal existence. My stepdaughter started high school this month, so it was time for all of us to be in one place. And I have three grown children of my own in Northern California.
Q: How did Pittsburgh appear on Rand's radar screen? Was there a strong suggestion to come here because Paul O'Neill (the former Alcoa chairman) was chairman of Rand's board when it was scouting for sites?
A: He was careful not to play any decision-making role in where we located the office, but he alerted us to the opportunity that might exist in terms of opening an office in Pittsburgh. Although Rand had been thinking about another office, he was the one who said, "If you are, you ought to be thinking about Pittsburgh." At that time, [former] Mayor Tom Murphy approached us. That launched us into looking at Pittsburgh as well as other cities.
Q: Which places was Pittsburgh up against, and how did it land the office?
A: There were four criteria: The starting point was a significantly lower cost of living than Santa Monica or Washington, D.C., where we have another large office. Over the years we'd either lost some people we were trying to recruit or lost staff members who said, "I love Rand but I just can't afford a house anywhere near the office."
Second, we had key clients in Washington, D.C., so we wanted to be able to get in and out of Washington easily ... good air service so that in a 12-hour day we could get to Washington, conduct some business and get home that night.
Third, we wanted a major research university in the area that we could hopefully collaborate with. And we also looked at the philanthropic community and large corporate headquarters.
So that narrowed it down to eight cities: St. Louis, Minneapolis-St. Paul, Atlanta, Miami, Cleveland, Cincinnati, Pittsburgh and Raleigh-Durham, N.C. We thought an office a little more in the center of the country would expand our recruiting base and we've done that. We've recruited from Carnegie Mellon University, the University of Pittsburgh, Penn State and Ohio State. But we've also recruited from all over the country. We have people here from coast to coast as well as overseas. That's the key measure of success: We have attracted good people.
Q: What kind of jobs do these people have?
A: There's a mix. Well over half are research staff. Then there's a group that supports the research staff: editors, computer programmers, administrative staff, administrative assistants. We also transferred some administrative activities that serve Rand corporatewide. For example, the Web team is based in Pittsburgh. All of our information technology/help desk people are based in Pittsburgh and service all of Rand. And there are a few human resources, finance and publications people. We've had steady growth over the last seven years and our space [in an Oakland office building] will accommodate roughly 200.
Q: What do you consider to be the most significant work Rand has done here to date?
A: I think the two that are of most importance to the region are clearly those that impact economic development. That's the Holy Grail for Pittsburgh: more jobs, more people. So the early work where we demonstrated or evaluated the economic impact of the city on the county further demonstrated that the city really was the economic engine for the county.
But obviously the work we did for the school district has had quite a bit of impact, been well received and gotten a lot of attention. One of the reasons that is so important is that schools are a key element in the economic growth of the city. The city needs to expand its tax base through more people and more jobs, and the schools are key to attracting companies and people.
Q: Do you think the city schools can improve enough to have employers consider moving to Pittsburgh?
A: There is clearly progress. Rand is a good example. Well over half of those 180 employees we have moved here from outside the area. You might have expected them to do what I did: move right into the city. I live a mile from the office. When we opened this site [at Fifth Avenue and Craig Street] I looked at where people were living because we considered other sites, and I didn't want to disrupt commuter patterns. Lo and behold, two-thirds of the people live outside the city in the South Hills or North Hills, and it was all driven by schools.
The demographic of this office is young, young families. Typically when you come here and if you have children, the real estate agent says, "Let's head to the North Hills or the South Hills. That's where the good schools are." There's clearly a perception that schools are better in the suburbs; we don't know that for a fact. I'm not sure in some cases they are. I think it would be interesting to see a comparison of city schools versus suburban schools. ... Who is doing the better job of improving education? It would be good to just have the data rather than relying on the real estate agents' perception of things.
Q: Besides schools, what do the city and region have to address to attract companies and population?
A: First, we have to recognize that Pittsburgh has a lot of assets in its favor. We all know what they are: the universities, the health-care system, the cultural attractions. We also have to recognize there are not a lot of cities that could have taken the body blow that Pittsburgh did when the steel mills shut down in the 1980s and be as prosperous as Pittsburgh is. On the other hand, everybody's frustrated that we can't change that slope of economic growth. ...
There are a couple of things that have progressed but could continue to progress a little more rapidly. One is a general attitude -- self-image toward Pittsburgh by Pittsburghers. When Rand came here, rather than saying, "Well of course Rand would consider Pittsburgh. What took you so long?" the attitude was, "Well, gee, why are you here?" If we'd gone to Austin, Texas, it would have been, "Of course you came to Austin. What took you so long?"
Pittsburgh is schizophrenic. To some degree Pittsburghers are very proud of Pittsburgh but yet there's kind of an insecurity.
Also, technology and the knowledge-based economy are going to be key to the growth of Pittsburgh and competing with other cities around the country and overseas. Pittsburgh's still adapting to that kind of industry compared to the old, industrial firms where it was big management from the top down as opposed to the technology world where it's a very nimble, open, collaborative, flexible approach to business.
When you experience Pittsburgh versus a place like Silicon Valley, [Pittsburgh] people hold their cards close to the vest. They're not quick to say, "Let's partner and do this together."
Q: What former industrial cities do you think have been successful in making the jump to a new economy?
A: Boston. It's been based on the technology of university communities. Clearly the universities are going to continue to be key to Pittsburgh's success. [In Boston] it didn't happen overnight. And Boston didn't suffer the kind of collapse that Pittsburgh did.
One aspect of Boston versus Pittsburgh is the issue of diversity. Boston continues to attract immigrants. Pittsburgh hasn't done that. There's starting to be recognition that an immigrant population -- particularly professionals and the ability to retain graduates of Pitt and CMU -- can in fact be important to economic growth. I know Westinghouse Electric went through a rapid growth period and they're focusing on the immigrant populations as a target to satisfy their needs.
Q: Can a city and region like Pittsburgh really respond well to change?
A: People in the region should appreciate the change that has taken place and the progress the region and the city have made. It needs to continue to be open to change.
There are a number of key people in town who are bringing change and I think the population needs to be supportive of that. One is [Pittsburgh Public Schools Superintendent] Mark Roosevelt. It's not just outsiders like him. There are other people who have been here for a long time and have been working to change the area like one of our trustees, [PNC Financial Services Group Chairman ] Jim Rohr. I don't want to get into naming names because I don't know everybody in town. There's a mix of people who have been here for quite a while as well as some fresh blood.
I think it will be interesting to see what happens on the city-county consolidation issue. That's important not just for the specific impacts it might have in terms of saving some money ... but it just signals the region is willing to make that kind of a change. It can get the attention of people outside of the region.
Q: What will you miss about Pittsburgh?
A: It's a very appealing community. I used to tease my colleagues in Los Angeles that you have access here to almost anything you have in Los Angeles in terms of sports and culture and I can actually get to it without driving for an hour. And then, I can even also get tickets without paying an arm and a leg through a broker. From a personal standpoint, I've enjoyed it.
From a professional standpoint, it's been a great opportunity to participate in the growth and development of Rand and I appreciate Rand has been accepted and made some contribution to the progress of the city and the region. I'll go back a big booster of Pittsburgh.
First Published September 28, 2008 12:00 am