By Allan Maurer

Dr. James Goodnight, a founder and CEO of Cary-based SAS, will deliver the luncheon keynote address to NCCBI’s 63rd Annual Meeting March 16 following on the heels of SAS announcing record sales of $1.5 billion last year.

Superlatives fit both Goodnight’s company, which regularly wins a top ten spot among Fortune Magazine’s best places to work lists and is the largest privately held software company in the world, and NCCBI’s annual meeting, which former Gov. Jim Hunt calls “the most important in North Carolina each year.”

NCCBI President Phil Kirk notes, “Very few, if any other groups can attract a head table lineup like NCCBI. We traditionally have the Governor, Lt. Governor, Speaker of the House, Senate President Pro Tem, and the Chief Justice of the Supreme Court.”

The meeting is expected to draw 1,000 of the state’s top business and government leaders and 60 exhibitors to the Raleigh Convention and Conference Center for the Wednesday sessions. This is the last year NCCBI’s members convene in the center, which is being demolished to make room for the new Raleigh Civic Center. The 64th Annual NCCBI meeting will be held at the Durham Marriott at the Civic Center on March 12, 2006.

Incoming Chair, Steve Miller, executive vice president of the Biltmore Co., says, “NCCBI’s annual meetings provide the best opportunity to see and hear from North Carolina’s top business and government leaders in one place, and to hear about our state’s major issues from the people who have the most impact on those issues.  The annual meetings represent tremendous learning and networking opportunities.

Kirk adds, “We are very fortunate to have Jim Goodnight, a native North Carolinian who has been a huge success in business as our speaker. He does not accept many speaking engagements.” Graham Denton, Bank of America executive and second vice-chair of NCCBI, will introduce Goodnight.

Goodnight plans to talk about a topic of continuing interest to NCCBI and its members: education.  He says, “We’re sixth in the nation in the number of people who go on to college. But one of our biggest problems is that about 40 percent of our kids drop out of school before they’re ready to go to college. We have to get kids to stay in school and get them more interested in math and sciences or we’ll be in sad shape in a few years.”

U.S. Sen. Elizabeth Dole chats with NCCBI President Phil Kirk at last year's Annual Meeting

Goodnight often talks about the creative talent needed to keep thinking fresh and products selling at SAS. He likens writing computer code to “solving a crossword or jigsaw puzzle. If you’re in the knowledge business, everything you do comes out of the brains of the people here, not by the sweat of their brows. It’s all mental,” he says.

 Starting SAS near the Research Triangle with its three major universities helped provide a talent pool early on, Goodnight says, although the company recruits internationally now for its 273 offices in 53 countries. The company gets about 200 applications for every job open, he notes.

SAS software helps executives, companies, universities, and banks understand and use vast quantities of data across many different computer platforms. The company still pours a larger portion of its budget than most companies into research and development — 26 percent last year. Today, financial services products account for a third of the company’s sales, including software to help detect and prevent money-laundering by terrorists or others.

SAS provides its 4,500 Cary campus workers many perks. They include an aesthetically rich environment that includes a great deal of art indoors and out, a 35-hour workweek, doctors on site and a workout facility, a gourmet cafeteria, and an endless supply of free M&Ms, coffee, and other beverages. Most SAS employees work in individual offices rather than the tiny cubicles common in many technology companies. But all the perks are aimed at keeping those creative workers happy and stimulated, says Goodnight. “My challenge has always been how to create an environment to get the maximum creativity from employees and keep them coming back. The environment you live in is important.”

The results have been successful at helping SAS keep its turnover rate at under 5 percent in an industry where the average is near 20 percent. The company estimates that saves about $75 million a year in retraining costs.

Education Needs Tech

But unless the state and the nation meet challenging educational needs,” Goodnight says, we may not have enough top notch knowledge workers in the future.

“If you talk about the Research Triangle continuing to be a great research hub, my concern is that we’re not producing enough graduates to meet future needs and businesses may have to go elsewhere,” he says.

Fixing the problem requires a bit of work on the school environment, Goodnight suggests.

He says that reducing class sizes and introducing more technology into schools would help. But it’s not mere speculation. Goodnight and his wife Ann co-founded Cary Academy just off the 200-acre SAS campus, where class sizes are kept to 18, as opposed to 25 or 30 in public schools, and technology plays a major role.

“We have seen dramatic improvement in Cary Academy through the use of technology,” Goodnight says. Both the teachers and the students make daily use of the Internet and email to take tests, do research, and report grades where parents as well as students can see them. So far, 100 percent of Cary Academy graduates go on to higher education.

Goodnight admits that keeping class sizes smaller might be even more expensive than introducing technology because you need twice as many teachers. But he believes the combination “would really get the students interested in studying, in technology and in going to school.

“I’ve often suggested that one of the best ways the state could introduce more technology into the schools would be to split all English classes from the 9th grade on into two and introduce computers, one for each student. They would learn to use word processing to write their papers, learn to use PowerPoint for show and tell types of things, take tests and view results and grades online.

“The use of technology makes school a lot more interesting,” he adds. “I never liked English a lot in school. Most students aren’t that turned on by English classes. If you find a way to engage students with computers, English could become the most fun course there.”

Goodnight points out that most students today have computer or electronic games at home. “Contrast that interactivity the kid has at home with the lack of it in a normal classroom,” he suggests. “Schools are competing against games on the home front. Let’s get in line with that and provide computers in the classroom.”

They would be useful in many other courses, he adds. “Think of the research you could do for the social sciences, for history. There’s a lot of multi-media available online. Universities around the world have archives that can be searched.”

SAS itself engages in what Goodnight calls a “philanthropic effort,” with SASinschool. “We’ve spent a lot of money developing educational software, especially in the area of Web-based course materials,” he says. “We never made any money with it and don’t know that we will.” The SASinschool software is used in several hundred school districts around the country he says.

 Education issues are far from being just a state problem, however, Goodnight says. “The federal government wants to reduce the number of foreign students allowed in the country by 20 percent,” he notes. “This country attracts the best and brightest students in the world and quite a few stay on here.” But that’s not the only reason Goodnight thinks restricting how many foreign students can study here matters.

“One unintended consequence of slowing down the VISA process is that it devastates our graduate schools. Enrollment drops, which means schools don’t have the funds to develop programs, so we’re actually seeing graduate programs decline. Yet we let people pour in from the south with no education. It’s a real problem.”

Goodnight believes “We need to encourage foreign students to come here and go to graduate school or future innovation is likely to come out of India and China. I went to India, and they want a lot more than they have and they’re ready to educate people to get it. So the U.S. has challenges to meet in developing future knowledge workers.”

 Goodnight’s appearance was arranged by Barry Eveland, IBM’s state executive, who steps down as NCCBI chair after an eventful year. “He’s a tough act to follow,” says Miller.

Eveland Sets Record

During his year as chair, Eveland says, “The core of our focus has been our three priorities: economic development, reduction in corporate and personal state income taxes and efficiency in government, and I’ve emphasized them at every opportunity. We’re facing a real test in this current general assembly, especially on taxes. I knew this session would be key, but I also knew results wouldn’t be known until well into Steve Miller’s term.”

Internally, Eveland notes that NCCBI significantly improved its financial position, “which is key to our survival.” Other internal changes included leadership training for the senior management team, a collaboration meeting with the South Carolina Chamber, and final cutover to a new computer data management system.

For his part, Miller says that he intends to continue to follow NCCBI’s major agenda as Eveland outlined it, but adds that another major business and social issue he hopes to address is the problem of escalating healthcare costs. The annual meeting will include a panel on the topic.

“Barry has been an outstanding leader for NCCBI,” Miller says.  “I have been impressed with his commitment of time, energy, and vision, not only for NCCBI and our members, but also for the economic and social well being of our entire state. He has done a particularly fine job of keeping NCCBI focused on our most important priorities and in deepening our relationships with key government leaders.  I have learned a lot from Barry and hope to live up to the high standard he has set during my term as chair of NCCBI.

“I have always viewed NCCBI as the best forum to examine, discuss, and debate North Carolina’s key business issues, always with an eye towards developing and promoting sound public policy to address those issues.  It is also true that NCCBI views issues and develops policy through a lens that is much broader than business alone,” Miller says.

He continues, “NCCBI is committed to the well being of all the citizens of our state and recognizes the important role that business plays in developing and maintaining an economy that creates the resources necessary to ensure the highest quality of life possible for North Carolina’s people. NCCBI recognizes that business does not exist in a vacuum — that it is part of the larger social fabric of our culture and society.  If a policy is not good for the people of our state, then it is not good for business.”

“During my term as chair,” Miller says, “we will continue to pursue our long-term goals of reducing the corporate and personal income tax rates, encouraging innovative economic development policies and programs, improving the efficiency of state government and reporting on results, and building NCCBI’s membership and improving internal operations.

“In addition, we will begin to focus on health care as a key business and social issue.  The cost of healthcare and medical insurance continues to grow at a rapid pace and is stretching the ability of our member businesses to pay for those increased costs.  At the same time, healthcare has become one of the major drivers of economic growth in our state.  Many of our members feel that our system for consuming and paying for healthcare is unsustainable and I agree.

“It is my hope that NCCBI can create a forum for healthcare providers, insurers, and employers to work together to develop policies that will move us towards a high-quality, affordable, and sustainable healthcare system that is accessible to all the people of our state.  NCCBI’s membership includes leaders of major organizations in all three categories — providers, payers, and employers — as well as many small businesses, so I am confident that we can examine the highly complex and controversial issue of healthcare from a variety of viewpoints.”

Citations Awarded

In keeping with tradition, NCCBI bestows its highest honors on two people who have made valuable contributions to the state during its annual meeting.

 This year’s Citation for Distinguished Public Service goes to General Henry H. Shelton, a native of Tarboro. Gen. Shelton spent 38 years in a variety of command and staff positions in the U.S., Hawaii and two combat tours in Vietnam. He commanded the 1st Brigade of the 82nd Airborne Division at Fort Bragg, among other assignments prior to his promotion to Lt. Gen. and command of the XVIII Airborne Corps in 1993. In 1996 he attained the rank of General and became Commander in Chief of the U.S. Special Operations Command. Gen. Shelton became the 14th Chairman of the Joint Chiefs of Staff in 1997 and served two two-year terms.

Gen. Shelton won many military and civilian honors, including the Charlotte World Affairs Council World Citizen Award for 2002, the Eisenhower Award from the Business Executives for National Security, and the Congressional Gold Metal. Currently vice-chairman of the board of advisors for M.I.C. Industries Inc., he is a member of many corporate boards, including those of Red Hat, Cisco Systems, and Anheuser-Busch. He is a senior leadership fellow at N.C. State University. N.C. State Chancellor Jim Oblinger will present the award to Shelton.

This year’s Citation for Distinguished Citizenship goes to Edward (Eddie) Smith Jr., chairman and CEO of Grady-White Boats, Inc., Greenville. Active in coastal conservation and education causes, Smith is an executive committee member of the UNC Educational Foundation board, the advisory committee for Carolina Coastal Classrooms, and co-chaired the Kenan Stadium renovation project at UNC-Chapel Hill, among many other civic and professional association roles. Charlotte businessman Erskine Bowles, former President Clinton’s Chief of Staff and two-time U.S. Senate candidate, presents Smith’s award.

“General Hugh Shelton and Eddie Smith are outstanding choices to be honored by the more than 1,000 people expected to be present,” says Kirk.

The schedule of events for the annual meeting includes the new board member orientation from 4:45 to 5:45 p.m. and the NCCBI Chair’s Reception for members of the NCCBI Board of Directors and their spouses, from 6 to 7:30 p.m., both at the N.C. Museum of Art, Tuesday, March 15.

Wednesday, March 16, events at the Raleigh Convention and Conference Center start at 9:45 a.m. with the Board of Directors meeting. The Recruiting Command N.C. Army National Guard presents the colors. Dr. Clarence Newsome, president of Shaw University will give the invocation. Joseph Milazzo II, executive director of the Regional Transportation Alliance and chair of NCCBI’s Young Executives Forum, will lead the Pledge of Allegiance, and Emily Kent of Greensboro will sing the National Anthem.

During the afternoon, two free seminars will be conducted. One will be focused on healthcare with an emphasis on what business and industry can specifically do to lower insurance costs. Panelists from Blue Cross and Blue Shield of North Carolina, Asheboro Elastics, Be Active N.C., and BB&T will discuss the issue.

 The second will be on economic development and will feature updates on the implementation of Amendment One, self-financing bonds; rural economic development; military bases realignment, how to do business with the military and other issues.

Military impact speakers include Leigh McNairy, special assistant to the lieutenant governor on military affairs, who will discuss the military impact and how the business community fits in. Scott Dorney, executive director of the N.C. Military Business Center, will talk about leveraging the presence of the military in the state to promote economic development and quality of life, increase military business for N.C. companies, integrate transitioning military personnel into the workforce, and supporting and recruiting development of defense-related businesses in the state.

Billy Ray Hall of the N.C. Rural Economic Development Center, will discuss rebuilding rural communities and managing the Economic Infrastructure fund. Kel Landis, the governor’s senior advisor for business and economic affairs, will talk about Gov. Easley’s priorities for 2005. Mac Williams, president of the Alamance Area Chamber of Commerce and president of the N.C. Economic Developer’s Association and co-chair of the North Carolinians for Jobs and Progress, will discuss Amendment One utilization.

The Expo trade show runs from 11:00 a.m. until 7 p.m.

The annual meeting luncheon runs from 11:45 a.m. until 1:45 p.m., and the lavish annual meeting reception from 5 until 7 p.m.