The Globe and Mail

Learn from your mistakes

Ellis Jacob, CEO, Cineplex Inc. (No.188 on RoB's Top 1000)

On facing new rivals in movie distribution, including U.S.-based Netflix:

I don’t worry about the next quarter, like a lot of competitors.

I wonder what our business is going to look like in three to five years. You can’t worry about the stock going up 50 cents or someone saying, “Hey, you had a bad quarter.” That’s a huge problem with North American businesses.

You have to have people with the right aspirations and the focus to take you to the next level. As senior leaders, we spend too much time managing from the top down. There’s got to be a lot more communication that goes bottom-up. You check your ego at the door, and have more open forums with your people. If you start adding barriers and layers, you stifle the organization. The hardest thing for me today, in this bigger company, is keeping us nimble and entrepreneurial.

We’ve got a lot of volatility in our business because of the varying quality of the [movie] product. Because the business is so public, you get a lot of naysayers—people who say the movie theatre is going to die. The issue is, how do you adapt to change? In our business, we keep trying things. We tried showing golf in our theatres, but it does not work. Men do not want to sit together in an auditorium and watch golf. But with opera, we don’t have enough seats.

Sometimes the lowest points are the highest points. When I started the Galaxy theatre chain in smaller markets, we began in Sault Ste. Marie, where we built this beautiful 12-screen complex. But I didn’t realize I didn’t need 12 screens—I had overbuilt it. We learned our lesson for the next one. Some people keep building things the same way. But I feel you have to admit you made a mistake, and you change and move forward.

Eat humble pie

Patrick Daniel, CEO, Enbridge Inc. (No.35 on RoB's Top 1000)

On last summer’s three-million-litre pipeline spill in Michigan that put the company under a public microscope:

Enbridge Inc. CEO Patrick Daniel— Jeff McIntosh for Report on Business Magazine

Organizations go through visioning exercises and study corporate values and, to an extent, we wonder why we do it. We found out why firsthand when we were put in a crisis situation. The way our employees interacted with regulators, the public, politicians and the media—in a transparent, honest way, with integrity and empathy—is something you can’t teach on the spot. We ended up with 2,000 employees working in Michigan, and you can’t run around telling each one how to respond. I saw in action the value of that culture. Either it’s there when you have a crisis, or it is not.

I was in Michigan for two months, and there were dozens of meetings, some with bigger groups in community halls but also with individual homeowners in living rooms and backyards. You have to be able to listen, be patient and to explain things in terms that can be understood by a broad audience. You can’t act all superior or say, “Well, that is just not the way it works.” You have to be humble in knowing that people need to be able to understand you in their way and not in your way.

And you need to understand people’s anger. It may sound logical to close a road because we need access to the spill. If a resident comes up and complains, I might think I can say, “Well, I just have to do it.” But you can’t. They might have to drive another 10 miles to the next bridge across the river to get their kids to school. You have hugely inconvenienced them, so you need to understand that anger.

Because we had our senior executives in Michigan, we were able to dramatically shorten the decision-making cycle. We made decisions snap, snap, snap. We were all in one big auditorium, with none of this corner-office stuff.

No exercise [in emergency preparedness] under controlled circumstances can ever really prepare you. If you do exercises, don’t do them in fair weather. There we were, with the Kalamazoo River in floods after three 50-year record rains. We don’t do our spill exercises in pouring rain and with the rivers in flood. So do your disaster planning when things are at their worst, because that is most likely when Murphy is going to hit you.

Reject mediocrity

Henry Demone, CEO, High Liner Foods (No. 310 on RoB's Top 1000)

On undergoing a painful restructuring that had the company sell off its iconic fishing fleet and morph into a value-added seafood processor and marketer:

High Liner Foods CEO Henry Demone— Marvin Moore for Report on Business Magazine

The heart of our company disappeared with the loss of the Atlantic fishery. At first, we said let’s focus on value-added [processing] and marketing but not turn our back on fishing. “If the fish come back, imagine how great it will be!” we thought. But the fish stocks still haven’t recovered.

You have to think through your business model and ask if you have the wherewithal to be a leader with that strategy. The world is so interconnected and volatile. If your business model depends on the U.S. dollar being worth $1.50 Canadian or oil being $30 a barrel, it really needs to be more resilient—and that takes work and thought.

People may be the hardest part. We have 1,000 people, and we’re not necessarily going to have 1,000 top performers. But in the key management roles, we need top performers. Sometimes you run into people who are pretty good, work hard and they are loyal, but that is not good enough.

Everybody should have five or six people to talk to—people you really respect. It’s sometimes called the kitchen cabinet. You bounce things off them. If you talk to all five and they say to quit worrying, you stop. Or if they say to put a plan in place, you do it. In my case, these are really smart people.

Don’t get emotional

Brad Shaw, CEO, Shaw Communications (No. 48 on RoB's Top 1000)

On axing 550 employees, including some of the senior managers who mentored him, at a time when Shaw’s cable juggernaut is facing immense competitive pressure from its Western Canadian rival, Telus:

Shaw CEO Brad Shaw— Andrew Querner for Report on Business Magazine

You always think you’re going to be successful. But, you know, competition has increased. Telus is coming on. We have to adjust. And we have to make tough decisions. You have to be able to remove the emotion out of it. And you basically have to say, “Here’s what makes sense.” You look at the people and where their strengths are. And maybe you move a few people. But you also have to be forthright—“Nice to have but not a must-have.” And it was extremely tough on me, because

I knew eight or 10 of those managers, who had helped me since I started. But we hadn’t done any restructuring since 2002 and we added 7,000 jobs, so you’re not going to be as effective or as efficient. And, with competition, you need to be that way. There were new products, and growth. And the economy’s booming and all those things. You can kind of sit back—certainly it’s not as competitive. For us, every touch point’s critically important, every call. We’re in a million homes a year with our techs, and that’s why it’s important to focus on engaged employees—will they go farther than the Telus employee? At the end of the day, it comes down to that customer, to the interaction you have. And having someone that’s not grumpy and upset helps.

Think big-picture

Kathy Bardswick, CEO, Co-operators Group (No. 2, financial co-ops)

On managing a large insurance company through extreme weather and natural disasters:

Co-operators Group CEO Kathy Bardswick— Jeremy Lewis for Report on Business Magazine

CEOs and boards need to continually ask: Why do we deserve to exist? From a property and casualty perspective, if we’re not prepared to put more energy and commitment into helping people understand where the risks are coming from and what the trends are, we’re not doing our job. One of my immediate concerns is how we can come together as an industry to put forward national solutions. We need a stronger, more comprehensive disaster response program, and we don’t have that. We’re one of the few developed countries without a formal flood response plan—which troubles the hell out of me. Water is now the most serious cause of loss, and yet 70% of consumers believe they have flood coverage, and they don’t. So, as they say, I sleep like a baby—I wake up every couple of hours.

I was reflecting on Japan, which we considered one of the more aware countries in being prepared to respond to an earthquake. Consider the outcome of what happened there. If Japan couldn’t anticipate a 9.0-level earthquake and the resulting devastation, what don’t we know?

We also have a life insurance business, and so I’m interested in health trends, particularly children’s health, with obesity and chronic illness levels. We can’t assume the generations that succeed us will live longer than we are. The industry for many decades has depended on the reality that we are going to live longer, and that played out in our approach to product structures. But now when we look at our children and grandchildren, the trends are very troubling.

Stay hungry

David Mondragon, CEO, Ford Motor Co. of Canada (No.5, private companies)

On helping turn around the struggling automaker and jumping into first place in the vehicle sales race in Canada in 2010— the first time Ford has been No. 1 in more than 50 years:

Ford Motor Co. Canada CEO David Mondragon

Throughout the company, we’ve kept a “challenge your mindset” mindset. We don’t consider ourselves to be champions at all. Our goal was never to be No. 1 in Canada, and it’s never been our goal to be No. 1 globally. Our goal has been to create an exciting, viable Ford that delivers profitable growth.

It’s an equation and a mantra and a battle cry for Ford that kept us in that “challenge your mindset” mode. I just heard a great example from somebody: “I got my black belt and before you know it, I started putting on a little weight, I started going to the gym a little less, and I got in the ring with a red belt and he knocked me out. That woke me up. I needed to have that red-belt mentality. I needed to have that desire, that hunger, because he wanted what I got.” At Ford, one of the things we won’t do is regress. We won’t get fat and happy.

It’s lonely at the top

Pierre Duhaime, CEO, SNC-Lavalin Group (No. 57 on RoB's Top 1000)

On running a global engineering giant during upheaval in the Middle East and other key markets:

SNC-Lavalin Group CEO Pierre Duhaime

What’s the toughest thing I’ve learned as CEO? To be alone. Sometimes, when you’re at the top, you’re more alone than anybody else in the company. You need to take tough decisions without the same level of discussion that you had when you were co-ordinating things as a manager. But I’m fortunate. I have a large, strong management group under me. We call it “the office of the president,” and it’s 10 people. All have their own responsibilities, and they manage their business area like they own it. What’s left to me is to see the priorities, the strategies, and manage relationships. I’m not immersed in the operations.

I’ve learned there is not one way to be a leader. You should be true to yourself, and you should apply that style of leadership every day. That’s what I’m trying to do. I’ve always said that I will not push people in one direction—I will just show the way. In this company, every one of us has his or her ego. We are professionals. We often believe we know better, and so we need to have that kind of respect from other people. As a company, we need to have that ego in everyone.

In the midst of this turbulence, I keep my cool by being convinced we are doing the right thing, and that we are improving the world. So when we build a big highway, or when we build a transport system, I want to know I’m doing something positive for the population in that country.

Sweat the small stuff

George Cope, CEO, BCE Inc. (No. 9 on RoB's Top 1000)

On turning one of Canada’s largest conglomerates into a lean, mean Rogers- and Telus-eating machine:

BCE Inc. CEO George Cope

What we really needed to do, first and foremost, was to get everybody understanding—truly—the numbers in this company, right down to a 180-page monthly report: line-by-line comparisons of expenses and costs and trend lines.

There’s no expense that’s too small to manage, and getting all that in one place, in a company as large as BCE, and having it at my fingertips every 30 days, was absolutely critical—to know where we were going to pull the cost levers. I’ll give you a specific example. A lot of companies would have a line called “payroll,” but contract labour would be somewhere else. So, someone might show that their payroll line is getting a little more efficient, but in reality it’s because their contract line’s growing, and you can’t see it. In some sense, that will sound pretty basic, but it actually isn’t in an organization as large as this—managing down to detailed levels, not high-level, $300-million expense lines in a $10-billion company. That’s not granular enough. We’re talking about down to the hundreds-of-thousands and thousands-of-dollars items. Without understanding where we were, we had no idea how we were going to get where we needed to get to.