Editor's note: Barrick Gold founder Peter Munk has died at 90.
Some years ago, Nina Munk was leafing through dusty files that her pack-rat father had stored at the family cottage on Georgian Bay. Her father is Peter Munk, the gold-mining tycoon, and the files documented his most humiliating failure, the collapse of stereo equipment maker Clairtone in the 1960s.
It was not something the family talked about a lot - this blot on 80-year-old Mr. Munk's ultimately soaring career that took him through ventures in South Pacific resorts and office skyscrapers to the building of Barrick Gold, the world's largest gold producer.
But she came across a photo that intrigued her - a shot of crooner Frank Sinatra listening dreamily to sounds emanating from futuristic globe-shaped speakers. It was part of a promotion built around Old Blue Eyes. One ad had the caption: "Listen to Sinatra on Clairtone stereo. Sinatra does."
Until then, Nina had dismissed Clairtone, as many have, as a deeply flawed outlier in Canadian business. The stereo maker is cited as a case study in failed regional development, corporate excess and hubris for a couple of overreaching young pups - Mr. Munk and his partner David Gilmour.
But the Sinatra picture intrigued Nina. As she talked to her father, Ms. Munk emerged with a revisionist view of Clairtone - the Apple Computer of the 1960s when, for one brief moment, a Canadian product captured the world's imagination.
"I grew up thinking Clairtone was the biggest disaster and embarrassment," Ms. Munk says. "But it is so much more complicated than you can imagine."
Clairtone, which lasted from 1958 to 1971, is indeed a case study - in Canada's mediocre track record in taking product innovation to the world. Clairtone should have been the start of something big. Instead, it joined the parade of products that, after initial promise, failed to achieve sustained success. Canadian business history is littered with dashed dreams - from the Avro Arrow, a futuristic aircraft shut down by Ottawa in 1959, to the Canadarm, now reduced to a political football.
It has been a long dry period between Clairtone and today's BlackBerry, one Canadian product that has achieved global cachet.
Is there something in the Canadian psyche that militates against product development and marketing? That question is not addressed head-on in Ms. Munk's new book, The Art of Clairtone, The Making of a Design Icon, co-authored by Rachel Gotlieb, a design curator.
But the undertone is there: Canadians are so showered with resources - such as gold, through which Mr. Munk has prospered - that we have no aptitude for selling human design to global markets.
In the rare cases where Canada has bred popular designs - the Skidoo, the Roots beaver logo, or the Tilley hat - they seem to arise from our wilderness-resource background.
That was clearly not the case with Clairtone. It emerged in the late 1950s as a combination of European styling and hipster sensibility in the manner of Hugh Hefner, the Rat Pack and Clairtone's playboy founders, Mr. Munk, a Hungarian-born engineer, and Mr. Gilmour, scion of an old Anglo-Canadian family.
Clairtone's advertising pitched the two men's personalities as if they were candidates for political office. After all, the ads were created by Dalton Camp, the iconic adman for the federal Conservatives. The Munk-Gilmour ads captured the Swinging Sixties spirit of Trudeaumania. Mr. Munk was the dynamic engineer, cigarette dangling from his fingers; Mr. Gilmour a suave design guru with Savile Row suits.
But the real star was Project G, the stereo with globe-shaped speakers, that popped up in the seduction scene of the 1967 movie, The Graduate. Project G in its various forms was the creation of a cluster of talented designers, many with European background.
But the company was badly run, spending was out of control, and organization was chaotic.
"Peter was quick to spend money when he got it," says Michael Dugan, a U.S. manager who came in when the company hit a financial wall. "He was not very frugal. If he had an idea and issued some stock, they would use [the proceeds]up quickly."
The biggest mistake was typical Canadian folly - grabbing easy money in regional development funding. As finances became pinched - and the U.S. market turned down a bit - the partners actually looked to expand. The government of Nova Scotia funded construction of a highly automated factory for stereos and TVs in rural Stellarton.
The problems were endless. Clairtone had to hire an unskilled work force and deal with strained logistics. It had trouble recruiting managers. Its board members were politicians and local business people, not electronics experts.
Mr. Munk has said in an interview that he sees Clairtone as an impossible dream - a Canadian company that made its mark in an electronics market dominated by foreign players. But he made "a very major mistake" by moving to Nova Scotia. He hired 3,000 people "who were more interested in lobster fishing and drawing their unemployment insurance, and we got screwed up."
Asked if he didn't bear some responsibility, Mr. Munk said: "I had all the responsibility. I was the boss. I got wiped out, I got fired."
If anything, Clairtone may have been too timid. For all its bold design, it never stopped turning out clunky mainstream stereos encased in period furniture. Project G was actually a small part of the product line. It could be argued that Clairtone could only survive by catering to popular tastes. Yet Apple's Steve Jobs has prospered by leading tastes, not by bending to those of the masses.
The iPod and the iPhone could be seen as 2008 versions of Project G, but Apple has managed to make the mainstream adapt to its designs. In the end, the Munk-Gilmour team seems thoroughly Canadian in its reticence to take single-minded design leadership.
Research In Motion Inc.'s BlackBerry is also a spiritual descendent of Project G - which shows Canadian innovation can conquer the world. There is more support today for commercializing ideas - in university technology transfers, venture capital and R&D incentives. It helps that RIM's builders are more disciplined entrepreneurs than the young hipsters at Clairtone.
Ms. Gotlieb argues that Clairtone was about great design and innovation, while the BlackBerry, so far, is a triumph of mainly innovation. For most of its history, the BlackBerry has been targeted at business use, and she does not see it as ground-breaking or easy-to-use design.
Perhaps staid Canada was not ready for entrepreneurs with the flash of Mr. Munk and Mr. Gilmour. Nina Munk says she was struck by the abuse the two founders received as they fell from grace. She calls it the "tall poppy syndrome" -a tendency in outposts of the old British Empire to take delight in cutting down their successful people.
Michael Dugan, who was part of a U.S. team parachuted in to try to save Clairtone, had enormous respect for Mr. Munk as a leader. He left Clairtone to pursue a career in the U.S. furniture business, including many years as president of high-end Henredon Furniture Industries in North Carolina. To inspire him in seeking great design, he has always kept a Clairtone catalogue in a desk drawer. At 67, as business chairman at Lenoir-Rhyne College in Hickory, N.C., he still has that well-thumbed copy
For former Clairtone designer Burton Kramer, the dearth of innovation since the 1960s reflects a fear of failure. He's not sure whether it's a Canadian trait specifically, but he sees it all the time in companies. Mr. Munk is one of the few fearless ones. "You have to have an oh-yeah-I'll-show-you attitude and climb back in the ring," he says.
The Clairtone duo did that, and both went on to success, Mr. Munk in property and gold mines, and Mr. Gilmour, among other things, in bottled water. Three years ago, he sold his company, Fiji Water, for a reported $150-million (U.S.).
Before Mr. Dugan left Clairtone in 1969, Mr. Munk offered him a job in the partners' next venture - resort properties in Fiji. Mr. Dugan thought: "Oh my gosh, that's all I need. They've already bankrupted one company and now they want me to go to the Fiji Islands."
And yet, given the two men's track record since then, "I probably would have done all right," Mr. Dugan says.