Ottawa is not known as a hub for global air traffic, but that hasn’t stopped a south-end aerospace firm from becoming a household name in the aircraft industry.
MDS Aero Support designs and builds facilities that test aircraft engines, and it counts the world’s major manufacturers such as Rolls-Royce, Pratt & Whitney, General Electric and Siemens among its biggest clients.
Its other customers include Air France and Royal Air Morac, the national airline of Morocco. The company’s cutting-edge testing centres can be found in more than 20 countries, but it does no business here in the capital and little in Canada.
So why Ottawa? It’s a question MDS chief executive John Jastremski has heard more than once.
“People often look at us and say, ‘Gee, a world-class company working for so many prominent (engine manufacturers), none of them based here in Ottawa,’” he says. “‘What could MDS possibly be doing in a location like this?’”
The answer, he says, comes down to a number of factors.
As the nation’s capital, the city is home to institutions such as the National Research Council that have helped the firm develop world-class technologies. In addition, Ottawa offers the company easy access to Global Affairs Canada’s international trade experts, staff from 130 embassies and organizations such as Export Development Canada and the Canadian Commercial Corporation, a crown corporation that helps exporters such as MDS land foreign government procurement contracts.
“Ottawa really is an incredible location for a company that is focused on exports,” Mr. Jastremski says. “If you’re going to export, these organizations for us certainly play an integral part of the equation. In our space in particular, with the NRC literally … just down the road, we’ve got access to, I think, one of the absolute best research institutes in our industry here in Ottawa.”
Many of MDS’s 250 employees cut their engineering teeth just a few kilometres to the west at Carleton University. Mr. Jastremski praises the school’s co-op program that allows engineering students to work for terms of up to 18 months, giving them time to learn the on-the-job skills necessary to be productive hires once they graduate.
“We see tremendous advantages in that program,” he says. “We do a lot of training. We always hire for attitude and values first and then we look at skills.”
But Ottawa’s status as a second-tier airline hub does present a few hurdles for a global company that prides itself on sitting down with customers face-to-face. With direct flights from the city to only two European centres, London and Frankfurt, international travel requires a bit of planning.
“If you were in Montreal or Toronto, you’d have an easier travel schedule, but it would never even cross my mind to move to one of those cities simply to make travel a little easier,” Mr. Jastremski says. “There’s just far too much (good about being headquartered) in Ottawa to even consider something like that.”
Founded in 1985 as an offshoot of a Montreal construction firm, MDS has revenues of $80 million a year, a number that is growing at a double-digit clip. About 30 of its employees work outside Ottawa at offices in the United States, Great Britain and Russia, and the firm is opening another outpost in Shanghai before the end of the year to serve the rapidly growing Chinese market.
The facilities its workers build are major feats of engineering designed to replicate the same environmental strains and stresses aircraft engines face in the real world, from gale-force winds to temperatures that can plummet below minus-50 C at high altitude. Often stretching the length of a football field and soaring more than five stories high, they take years to build at a typical cost of between $50 million and $100 million.
"You lose a lot when you’re not physically sitting face to face and looking at people’s expressions and demonstrating your genuine interest
Staying a step ahead of the competition is a constant worry, Mr. Jastremski concedes. One of the firm’s newest innovations is a system that uses turbines to convert a jet engine’s powerful exhaust stream into electricity. The technology is now being tested to see if it is marketable.
“We believe this is going to be a game-changer in our industry,” the CEO says. “All of the facilities to date basically just let (an engine’s exhaust) go up as hot air. It’s a necessary evil, but to be able to harness that energy would make many of these facilities reduce their carbon footprint.”
The biggest lesson he’s learned about doing business on the global stage? Teleconferencing tools such as Skype are no match for good, old-fashioned face time with clients.
“I imagine it’s equally important even for a domestic business, but I think it just gets amplified when you’re dealing with different languages and cultures,” says Mr. Jastremski. “I see many (companies) that learn the hard way by trying to use tools. I’m not saying there’s no place for tools – there certainly is. But you have to appreciate that you do lose a lot when you’re not physically sitting face to face and looking at people’s expressions and demonstrating your genuine interest by taking the time and energy to sit with them. If I get on a plane and I travel for 20 hours to spend two days with somebody, it could take years to accomplish the same with special tools.”
John Jastremski’s tips for going global:
Trust is the foundation of any successful relationship: “We spend a lot of time helping our staff appreciate how in their particular space they could go about building trust.”
Build a team of like-minded people who share the same core values: “A really big focus for us is people – the right person in the right role behaving the right way.”
Invest quality time to understand your market and customers: “For us, that really means travel. I think that just pays dividends that are hard to put numbers against.”
Ensure alignment among staff regarding your vision and priorities: “You can have an amazing team, but if half of your staff are rowing in one direction and they’re great rowers, and the other half is rowing in the other direction, there’s a net gain of zero.”
Include your supply chain and community as business stakeholders: “With every decision we make, we’re really looking for a win-win for all stakeholders.”
It takes hard work to be successful: “Work ethic is a big part of what we look for in our staff. Anything worthwhile takes effort, and we surround ourselves with those that are ready to put in the effort. We know if we put in the effort and we do all those other things above well, good things will happen.”