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Northland Power founder and CEO James Temerty.
Northland Power founder and CEO James Temerty.

Success Stories

Entrepreneur powers his way to the top Add to ...

As a kid, entrepreneur James C. Temerty didn’t know what indoor plumbing was until he was nine.

Born in the Donbas region of eastern Ukraine during World War II, his family members were refugees who fled the war, living in displaced persons’ camps in Germany and Belgium before coming to Montreal at the end of 1950. There his new Canadian friends called him Jim, after determining Constantine was unsuitable for the playground. Today the founder and chairman of Northland Power Inc., a Toronto-based green-energy company, is still Jim, although Constantine appears on official documents.

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Before establishing Northland Power, Mr. Temerty logged a 15-year career at IBM and then built the Computerland franchise into Canada’s biggest chain of computer stores. He was named the 2010 Ernst & Young Canadian Entrepreneur of the Year.

Q: What was the most challenging moment of your business career?

A: In 1986, I was in a series of tough negotiations to sell Computerland to Bell Telephone. We were in a dominant position with all the large accounts – the big banks, CN and CP – across Canada but I was feeling pressured by Bell, which had bought out Computer Innovations Distribution Inc., a public company, and then dropped its prices to compete with us. At the same time, grey markets were beginning to happen with all kinds of unauthorized dealers selling computers out of their garages. So I went to Bell and suggested that we merge. Then I had to pitch it to all my franchisees – over 30 individual business people. It had to be one agreement applicable to every single store across the country.

Bill Millard, the franchise founder in California, had given the go-ahead, but people were betting their houses that Temerty couldn’t make it happen. It fell apart at one point and I walked away from it; then we got back together and it closed. It was the best thing for all concerned but one of the most difficult things I’ve ever done.

Q: What clinched the merger with Bell?

A: I picked up the phone. It wasn’t easy because human nature steps in and you think, ‘No, I’m not going to deal with those guys because they’re unreasonable.’ You’ve got to swallow that, pick up the phone and try again. They wanted to meet. It was a question of who was going to call first, so I made the call. Everybody was very happy in the end. They asked me to be a consultant and join their public company board, which I did.

Q: How did you make the switch from computers to founding a power company?

A: As soon as I sold, I started looking around for another business. I was still a young guy, in my late 40s. I promised my wife Louise, who had worked alongside me in Computerland, that we wouldn’t do anything to risk our nest egg. So the next business had to be recession proof. I thought of health care ... and then I got a phone call from a couple of engineers who asked if I’d like to build a power plant. It was to be a wood-fired plant using wood waste from sawmills in Cochran in northern Quebec.

I joke that it took two qualities: arrogance and ignorance. I had this idea that I could do anything. I’d been lucky and done well. I’m an avid reader of business publications and saw that people were running all kinds of things – conglomerates with different businesses. So I thought, ‘why can’t I build a power company?’ That was an ignorant attitude because I didn’t know what it took, which is a great deal of expertise. We eventually got that, but at the start we were fledgling.

So I called my dad in Montreal, who was then retired from Alcan, where he had been chief of electrical engineering, to help me take a look. I did my due diligence. I read extensively and talked to the Ministry of Energy and the Ministry of the Environment, and liked what I saw. IPP (independent power production) was big business in the U.S., but below everybody’s radar in Canada, yet it was rolling out in the U.S. at the rate of about $5 billion a year. I had a sense that this was going to happen in Canada.

So I went in, but not just for that plant. I wanted to build a company with a name and a logo and was willing to put up 90 per cent of the money, about $3 million. One of the engineers dropped out and the other stayed on. We incorporated in February, 1987.

Q: You say you’ve been lucky. Is success luck?

A: There’s a great book called Luck that I read years ago. How is it that some people are so lucky and others work hard but aren’t lucky? It’s like a pinball machine. If you pull back gently, your ball will come out, hit a couple of things and that’s it. If you pull back hard, it will hit a heck of a lot of things and the points go up. Luck is about that. When you see things happen, you jump on it.

Q: So how do you do that?

A: It’s about networking, being generally interested in people and developments and what’s going on. When you start a business, the single most important thing is to surround yourself with the talent that you’ll need to build the business. You network by going to conferences where people get together and talk about the industry. That’s how I met these two young engineers 23 years ago, John Brace and Tim Richardson, who were partners in a hydro development company. I was intrigued by John – a gold medalist in engineering physics from Queen’s University – so I invited him into the company. He turned me down but six months later, he joined. Today he’s my CEO. Both are still with me.

Q: How do you inspire loyalty?

A: We shouldn’t hold people because of money but because they love it. People like knowing that they’re sitting next to good, solid, qualified professional people. That’s a great feeling. It seems to work. We don’t lose anybody.

Q: How do you connect with your people?

A: I’m chairman now so it’s different, but when I was CEO, I didn’t direct people. Sometimes you have to but it’s very rare. And when you have to, something is wrong in the organization. Nobody is so smart that he or she has all the answers, so I’d say, ‘Let’s think about this, or here’s a suggestion.’ But I’d impart that with a lot of enthusiasm so people sign on, but it’s always a consensus.

The person who gives orders or edicts risks losing respect because along the way you’re going to make a bad call and then, it’s all yours. The smart person leaves an out. You do that by getting everybody together to coalesce around an idea. Then they’re chomping at the bit to get it done.

Q: What was your biggest learning curve starting Northland?

A: The toughest thing was learning to properly gauge what that project will look like in terms of its cost and schedule. You get a power contract and then you have to find out what it takes to build that plant. Prior to that, it’s estimates. You have a conceptual design but then comes the real detailed engineering and contract negotiating. You’ve got to get that right and we didn’t. Twice.

Q: That could have killed the company...

A: In one of these situations, I found myself in a high-rise downtown with the vice-president of a bank who was really nervous about the project – they were a 50-per-cent lender. I had two banks: my bank and this other one. This guy said to me, ‘If I were you, I’d be jumping out the window.’ (Laughs.) So it could have killed me. But what doesn’t kill you, makes you stronger.

I wasn’t as nervous, but it was tough. That bank left. Ultimately, we finished the project and made good money. The bank that stayed on also made lots of money and I was happy about that. Since then, we’ve never missed a budget or a schedule. We learned that lesson.

Q: What’s your strategy for risk taking?

A: Remember I promised my wife not to risk the nest egg, so I always calculate and build in enough buffer so I can take some untoward happenings.

Q: Where does your confidence come from?

A: (Laughs.) You’re born with a certain spirit or confidence. In my case, it came naturally to me to always see opportunities when there was a problem. The Chinese have a symbol for crisis that’s actually made up of two symbols – one for danger and the other for opportunity. I’m like that automatically.

Q: What makes a great executive?

A: The single most important talent that a good CEO has to have is the ability to recognize talent. You’d be surprised how many really smart people fail to recognize talent in other people.

Q: And then...

A: Give them a lot of room. And set a fine example – not of your brains or wit – but of your character. People want to work for character. It’s the little things you do every day and as much the things that you don’t do. Over time, people get a sense of who you are by what you didn’t do. You could have made this mistake and you didn’t.

Q: So when you look for talent...

A: I look for integrity, humility and above anything else – character. Then I look for intelligence, talent and the rest.

Q: What’s your advice to young business graduates today?

A: Seek everyone’s counsel but follow your own. It was my motto when I started in business because you get bombarded with advice. Then move. Don’t draw back or hesitate to go forward. I carry a quote with me from Johann Wolfgang von Goethe that says, ‘Whatever you can do, or dream you can, begin it. Boldness has genius and power and magic in it.’

And think big. People constrain themselves with small plans but that small plan often has as much intensity, work and stress as the much bigger plan. So go for the bigger plan.

Q: Is that your own philosophy?

A: Yes. Always has been. I don’t want to see limits. I want a very big, broad horizon.

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