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Publication Date

August 2001


Jennifer S. Lobenhofer, Michael A. Stegman

A case study describes how significant engagement with community organizations and public officials helps a major employer in a declining industry remain competitive and a low-income minority neighborhood build a competitive workforce and prosper.

The partnership between Eaton Corporation’s Navy Controls Division (NCD), producer of high-tech electronic components for ships and submarines, and the Northwest Side community of Milwaukee, represented by the Northwest Side Community Development Corporation (NWSCDC), is unique in the degree to which the success of the business is inextricably linked to the success of the neighborhood.

The alliance is much more than good corporate citizenship or public relations; it is actually an essential part of doing business for the firm, and fits with the cost-cutting and efficiency-maximizing strategies it has pursued in response to a volatile defense industry.

The case illustrates the way in which real, significant engagement with community-based organizations and public officials has played a critical role in helping one branch of a major employer remain competitive in the context of the declining defense industry.

The hallmarks of the Eaton–NWSCDC relationship, the things that make it remarkable among joint corporate-community endeavors, are two of the characteristics Harvard Business School professor Rosabeth Moss Kanter has identified as key to successful initiatives of this sort: a clear business agenda and long-term commitment. These two principles are inextricably intertwined and mutually reinforcing in the Eaton-NWSCDC cooperation.

Throughout their seventeen-year involvement, their collaborative efforts have been identified and designed to respond directly to Eaton’s most significant business needs. As those needs and interests have evolved over time, so has the partnership, changing its focus and pursuing new projects to address current concerns.

At the time the strategic alliance was forged, Eaton’s greatest need was to recruit and retain white-collar design engineers to the inner-city plant; consequently, efforts first focused on safety and crime prevention issues and the general image of the neighborhood. A few years later, Eaton ramped up production and needed to quickly recruit and train a large number of skilled workers. This need resulted in an innovative welfare-to-work training effort in which the recruitment, curriculum, teaching, and hiring responsibilities were shared by Eaton, NWSCDC, a local technical college, and other workforce development organizations.

The most recent iteration centers on a fundamental shift in the way Eaton NCD does business. A need to become more efficient and competitive in the defense industry led the plant to adopt an approach called lean manufacturing, which emphasizes efficiency, reduced costs, and improved quality control in the production cycle. As part of this shift, Eaton sought a way to better manage its supply chain; this led to the creation of a supplier linkage program, through which NWSCDC connects the corporation with local businesses that can supply Eaton’s operational and production needs.

Each of these endeavors has also been structured in a way that benefits the Northwest Side community and addresses needs for safety, employment, and economic empowerment in the neighborhood. The business agenda has driven the order in which these problems are tackled under the auspices of the private-community cooperation. This order of primacy undergirds Kanter’s argument that “a corporation has a better chance of making a real difference if it knows clearly, in advance, how its business agenda relates to specific social needs.”

Moreover, it is this willingness to allow the collaboration to evolve along with changing business needs that has allowed the relationship to remain viable through both neighborhood changes and business cycles. It is also this commitment to allowing the relationship to be a living, organic thing that is indicative of the long-term commitment of both partners. Continually reevaluating and renewing activities demonstrates a desire to see them become as successful as possible in meeting both the corporate and the community needs, and to replicate that success in applying the requisite strengths of the principals to a growing array of needs.

The end results of an engagement that exemplifies these characteristics are a more skilled workforce in a largely low-income, minority neighborhood; a more viable local business community; and a large firm positioned to grow strategically despite being in a volatile industry.

Topics(s): Community Development Finance, Financial Inclusion