This series looks at what skills future business leaders need to have to tackle the challenges of an ever-shifting marketplace.
As manager of one of Canada’s biggest law firms for more than 15 years, one of the most important insights into leadership Sean Weir has had is to always expect the unexpected.
“The biggest thing about managing risk is to understand not only all aspects of your business, but to also understand what is outside your business that can be disruptive,” says Mr. Weir, national managing partner and chief executive officer of Borden Ladner Gervais LLP.
With more than 700 lawyers in offices across Canada and in Beijing, BLG can find risk and disruption anywhere, at any time, and from unanticipated corners.
When Mr. Weir took his position in 2000, the Twin Towers were still standing in New York, the technology bubble was just bursting, China was booming, Russia was still recovering from the Cold War, the property market seemed indestructible and terrorism-related attacks from Islamic State and Boko Haram were not a threat, because they didn’t exist.
That was then. Today, managing in risk-riddled times is comparable to playing chess – no matter how clever your moves, you have to keep looking in all directions.
Sean Weir, national managing partner and chief executive officer of law firm Borden Ladner Gervais LLP, remembers sitting in a meeting on Sept. 11, 2001, when someone knocked on the door and told them a plane had crashed into the World Trade Center. (Mark Blinch for The Globe and Mail)
To complicate matters further, there are disruptive forces in businesses and professions that were once thought to be insulated from change – including, in Mr. Weir’s case, the legal profession.
“You have to understand the potential sources of risk and you have to be able to react,” Mr. Weir says. “Fortunately we don’t have the kinds of physical risk in Canada that you see in other countries.”
Except when we do. He notes that BLG’s Ottawa office looks out over Confederation Square in Ottawa, where in 2014 Corporal Nathan Cirillo was slain by a gunman who later attacked Parliament before he was killed.
While these kinds of physical threats seem to occur more frequently, they’re not new, Mr. Weir notes.
“I can remember sitting in a management meeting in Montreal on Sept. 11, 2001, when someone knocked on the door and told us a plane had crashed into the World Trade Center,” he says. The agenda quickly turned to deciding when and how to evacuate BLG’s various offices in different cities.
Managing risk is equally complicated, if not more so, for banking executives, says Janet Ecker, former Ontario finance minister and now president and CEO of Toronto Financial Services Alliance.
“Not only do they have to think about and worry about economic changes and what their competitors are going to do, they now have a whole new level of political and regulatory risk,” Ms. Ecker says.
“You can’t predict in some cases how a policy maker is going to move. We’re seeing that in China now.”
At the beginning of 2016, as markets began a steep slide in China, that country’s regulators twice activated a “circuit breaker” mechanism to halt trading, only to abandon it after it appeared to make the drop in the market even worse.
The lesson is that sometimes “business practices and even business products that seem acceptable today, for whatever reason, when something happens can be considered things you shouldn’t be doing. There’s more policy unpredictability than ever before,” Ms. Ecker says.
“In an increasingly risky world, a CEO needs to be increasingly flexible and adaptable. You also need to have a team and know what the latest threat might be.”
That isn’t necessarily easy, she adds. “There’s no rule book. When I was in politics, people used to ask me what we should anticipate. I’d tell them, ‘Read science fiction books.’ ”
Mr. Weir says, for example, that his firm does a lot of work in international trade and procurement, and that meant working in Russia and Ukraine, among other places.
“When Russia took over Crimea [from Ukraine] and sanctions [against Russia] were imposed, we had to do a lot of work with our clients, and also educating ourselves,” he says.
In addition to being prepared for physical threats or economic crises, it is important to be ready when disruptive business models appear that can threaten previously solid activities and professions, he adds.
“Probably the biggest one we’ve seen [in the taxi industry] is Uber,” Mr. Weir says.
Lawyers face disruption, too: “We have legal-process outsourcers, in places like South Africa, in Manila, in India. You have to look at which services are going to impact what we do, and if they can do it faster, better or cheaper, maybe we should partner with them.”
To meet this business disruption head on, Mr. Weir says his firm looks at “disaggregating” some of its services, outsourcing the processing aspects of legal work while focusing on the high-level brainpower that clients expect from a major national law firm.
“When you’re dealing with top firms, it’s table stakes that clients are going to get the best advice. Clients want more,” he says.
Concentrating on strengths is not just a matter of providing service, it’s also defensive, because in an increasingly volatile economy, competitors are vying for the same clients, he says.
CEOs in today’s risky world also need people skills that may not have been necessary before, says Shaharris Beh, director of Hackernest, a Toronto-based not-for-profit group that connects worldwide tech companies.
“CEOs have always needed strong skills around rapid decision-making and failure mitigation. In today’s hypercompetitive startup business climate, leaders need two more: pivot-resilience and proleptic consensus leadership,” he says.
“Pivot-resilience is the ability to tolerate the stress of gut-wrenching risks when dramatically shifting strategy. In other words, be able to take the blame gracefully while still warranting respect among your team members.”
Proleptic consensus leadership is especially important for startups, Mr. Beh says. “It’s the ability to garner the team’s support for taking big risks by giving them the assurance of what backup plans are in place should things go sour.”
This consensus building “is how you keep support,” he adds. In a volatile economy, “people can jump ship at any time or even unintentionally sabotage things if they’re not convinced a particular course of action will work.” So you have to constantly persuade.
Ariel Garten is founder of InteraXon, a Toronto-based startup that makes and sells Muse, a brain sensing headband that helps users relax. While business people may not find it easy to relax in turbulent times, she does offer some advice.
“In times of volatility, it’s especially important to understand what your business does well. Knowing your business’s strengths, will help you identify any areas that you can improve and ensure that your business is ready for any changes that lie ahead,” Ms. Garten says.
Most importantly, Mr. Weir says CEOs should remember why they have customers and clients in the first place.
“In today’s environment you have to have a service offering that people want to buy,” he says.
Five tips for managing through upheaval
1. Look for opportunities as well as risks
While oil prices have collapsed, “the Trudeau government has said it’s going to invest heavily in infrastructure. Well, that happens to be a strength of our firm. They’re also big on the environment. We’re big in wind and solar,” says Sean Weir, national managing partner and chief executive officer of law firm Borden Ladner Gervais LLP.
2. Do research but be intuitive, too
“You need to have tolerance for ambiguity and cognitive dissonance [contradictions between what you see and what may be happening]. You should have that little bell that goes off. You need the ability to function in an illogical world,” says Janet Ecker, former Ontario finance minister and now president and CEO of Toronto Financial Services Alliance.
3. Act, don’t react
Derek Luke, CEO of Toronto startup InteraXon, says that reactive behaviour can limit your creative responses in quickly changing circumstances: “Trust your instincts and rely on your training, experience and advisers.”
“Maintain and open dialogue with your employees. Trust your team – you put them there for a reason,” Mr. Luke says.
5. Plan, but be flexible
Contingency planning is critically important, but in these turbulent times, who knows what the contingencies might be. As boxer Mike Tyson said, “Everyone has a plan until they get punched in the mouth.”Report Typo/Error
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