Bradbury Building Operator Encourages Self-Development : Dropouts Get Chance to Move Up

Becky Vega has come a long way.

When she dropped out of Garfield High School two years ago, Vega went to work as an elevator operator, earning the minimum wage, at the historic Bradbury Building located downtown at 3rd Street and Broadway. Today, the 19-year-old is manager of a restaurant in the building and earns enough to have moved out of her parents’ home and have her own apartment.

Vega is typical of the staff at Bradbury’s 1893 Cos., which is 100% owned by Terry McKelvey. His firm holds the master lease on the 93-year-old structure and operates a number of small businesses within it, including the Bank of Bradbury Restaurant, where Vega works. Other businesses include leasing, construction, a print shop and soon a catering business and a public relations unit.

McKelvey is the only university-trained member of his staff of 40, 80% of whom are high school dropouts. He operates under the unusual philosophy of what he calls a “free corporation,” which he defines as an organization that exists primarily for the people belonging to it. The idea is that employees work for their own development as well as for the company’s goals.

Began Experiment at Restaurant

After working as an inventor and commercial office developer, McKelvey evolved his philosophy soon after he acquired the Bradbury lease in 1969. Two years later, he opened the first restaurant in the building, Bradbury’s 1893 Parlour Restaurant, a sandwich place. But he was dissatisfied with his staff then. “I had some university students who were really clowns,” he explained.

So he began an experiment at the restaurant. He put two people in charge, one of whom spoke only Spanish. McKelvey developed a budget for the restaurant and put the two in charge of meeting the goals. They made the restaurant successful. One of the employees, Aida, a high school graduate with bilingual skills, later married McKelvey.

A few years later, McKelvey was feeling “burned out,” so he took some time off from running the Bradbury and left his staff in charge. Again, he learned that, given the right incentives, his employees fulfilled a broad range of responsibilities.

They also learned to be flexible. For example, the Bradbury Building now is experiencing its worst vacancy rate in three years. So far, the employees haven’t had to take a pay cut, but at one point in the 1970s they were willing to take as much as a 12% cut in order to keep the entire staff on.

In 1981, McKelvey expanded his experiment with unskilled workers to other ventures when the Bradbury bought three copy machines and developed a copying, printing and publishing business. The next start-up came when the original tenant of the Bank of Bradbury Restaurant left in 1983. (The restaurant had previously been closed in the late 1970s.)

The space was best suited for a restaurant, so McKelvey re-established the eating place with the help of some people with restaurant expertise, who helped Bradbury employees such as Vega learn to run the business on their own. Now Vega and another manager have assumed most of the day-to-day responsibilities such as ordering supplies. Bradbury’s central administrative staff, however, provides accounting and other backup services.

Bradbury employees are usually high school dropouts who are hired as trainees in entry level jobs such as elevator operator, janitor or unskilled construction worker. “Any successful business person, I don’t care if he is Lee Iacocca, has to start from somewhere,” McKelvey says.

He says there are two kinds of dropouts: those who just can’t make it and those who “are brilliant but didn’t want to waste their time with high school stuff.”

Says Vega: “I learned how to talk and communicate with people. School was a bore. I wanted to learn something different.” Many Bradbury hires do not have reading or writing skills and some speak only Spanish when they start.

Rotated in Jobs

The Bradbury uses the training period to help assess whether trainees can get to work on time, get along with people and follow directions. Once they pass these preliminary tests, they are rotated through different jobs, which range from receptionist, paste-up, waitress and construction worker.

“Everybody knows five or six jobs,” McKelvey explains. “This allows people to float around so you get a natural cohesion of people.”

This so-called bounce system allows the staff to remain lean and flexible so that, if some employees are ill, others can readily fill in. The workers are encouraged to improve their reading and writing skills, and they often joke about the “university of Bradbury.”

The pay begins at the minimum wage and rises with new job responsibilities, and it is augmented by a bonus and profit-sharing system. Of Bradbury’s five executive managers, only two have high school diplomas, and they can earn $20,000 to $25,000 or more a year.

One executive manager, Laura Marie, finished Newport Harbor High School early by passing a high school equivalency test. She began junior college but discovered that she liked working better at the Bradbury printing operation. Now she is in charge of developing Laura’s Catering Etc., a new Bradbury business.