Salt Lake City, Utah

THE INSULAR MORMON CULTURE THAT ONCE BROUGHT ECONOMIC PROSPERITY IS NOW A MAJOR LIABILITY FOR BUSINESS OWNERS.

Tweet

When Doug Snarr began recruiting for his new satellite-communications company, he did something unusual for a Mormon businessman: he purposely sought out non-Mormons for key positions. For financial help he turned to Randy Fields, an investor from California whose wife, Debbi Fields, heads Mrs. Fields Chocolate Chippery. He hired a former Twentieth Century-Fox Film Corp. executive from Hollywood as his vice-president of programming. To serve as chief operating officer, he hired a Catholic New Englander and former executive with New Orleans -- based Popeye's Famous Fried Chicken & Biscuits.

"I realized from day one that I'd have to break out of the small circle of Mormons I'd been accustomed to," says Snarr. "I saw right away that it would hurt us if we were seen as a provincial company."

It would more than hurt. Without reaching outside the Mormon community for capital and expertise, Snarr realized that his company had little chance to succeed. More and more Utah businesses face the same problem. The insular Mormon culture that brought economic growth in years past is now a liability for many 1980s business owners. The outcome of this clash of needs with traditional culture may determine the economic future of this state for the next generation or more.

For a century, the Mormon culture has been an engine of prosperity. With its emphasis on loyalty and hard work, it blessed local businesses with peaceful labor relations and steadily increasing productivity; through the 1970s, personal income remained low (45th in the United States in 1979) for one of the most highly educated (in terms of number of years of schooling) work forces in the country. The Mormon belief that "the Glory of God is intelligence" stimulated Utah to spend more than half of its budget on education, keeping student-achievement scores in the upper half of the nation.

If the rest of the nation sometimes seemed antibusiness, the Mormons celebrated capitalism with a passion. Such figures as hotel magnate J. Willard Marriott Sr. came to symbolize a Mormon Everyman-made-good, a businessman who could rise to the top of the corporate world while remaining deeply loyal to his Mormon traditions.

Mormon conservatism, reflected in a deep patriotic streak, also boosted the local economy. Almost untouched by the soul-searching of the Vietnam experience, Utah enjoyed a parade of defense contracts that helped keep employment high.

Then came Zion's day of reckoning. Beginning in the early 1980s, key pillars of the state's economic foundation began to crumble. Foregin competition chewed up profits of the state's mining industry, forcing massive layoffs at Kennecott Corp., the state's leading private employer outside of the Mormon church. Congress drastically cut the MX program, then the Synthetic Fuels Corp. program. And the Intermountain Power Project, which promised to attract companies looking for low energy costs, was shelved. The results were devastating: in some rural areas, the unemployment rate jumped to 30%.

To make matters worse, the state's population grew by 61% during the 1970s, compared with a 33% increase nationally. The state has a fertility rate almost twice that of the nation, and a population with a median age of 24.2 (compared with the national median age of 30 years).

Policymakers saw entrepreneurship as the most promising way to create jobs. Looking to Silicon Valley and Massachusetts Route 128 as role models, they saw the University of Utah as a potential seedbed for company start-ups, especially in technology fields. The university had a good engineering school and perhaps the world's leading bionics laboratory, working on artificial hearts and limbs. Could Salt Lake City become a kind of "Bionic Valley"? The university established its own campus industrial park and small-business incubator, and encouraged faculty members to start companies.

But a funny thing happened on the way to Utah's high-technology dream: many of the same cultural traits that helped the "worker bee" economy hindered high-tech growth. Surprisingly, even the sacrosanct work ethic came under question. "Utah may be a good place to have a lot of docile workers, but it's not a place that encourages going against the grain, which is the essence of entrepreneurship," says James Clayton, dean of the University of Utah's graduate school and member of a blue-ribbon committee on Mormon/non-Mormon relations. Utah's hierarchical, highly cohesive society, he says, may be to blame for the state's tardiness in entering the Silicon Age. And because the state relied for so long on a few large companies, there are not many independently minded executives available to manage the start-ups. "Entrepreneurship here is thriving in terms of innovation; you see a lot of new ideas, but it's such a corporate state that the new projects aren't fostered," says William Sadleir, chairman and chief executive officer of Dayna Communications Inc., a Salt Lake City computer manufacturer.

 1 | 2  NEXT