The global recession should be a disaster for CAE Inc., CAE-T the Montreal company that makes flight simulators for the aviation industry. Robert Brown, the company's CEO, agrees things aren't rosy. But in his five years at the helm, CAE has diversified its business and strengthened its finances to heighten resilience. Mr. Brown, 64, an aerospace veteran and former boss of Bombardier Inc., also has some views on creating innovative companies - he recently headed an expert panel that reported that Canada's productivity is being undermined by tepid innovation .
Why are you so well-prepared for this downturn?
I've been in the aerospace business virtually all my working life, and we know there are cycles. So the way to deal with economic problems is the preparation that you do before you get into these cycles.
It's fairly straightforward. Right now, we're very much in a balance-sheet recession, and so a fundamental piece of what you need when access to capital is limited is a very strong balance sheet.
You've said crises like this are what managers are trained for.
It's about assembling a leadership team that can assess what's happening, and not be afraid to try different things. If certain things don't work, people should have the courage to say, 'That's not working, we've got to do something else and undo this.' We've created a culture of innovation, of change, of accountability that has spread into the various layers.
The job of a leader is to be a teacher. With all of the experience I've had, I've spent a lot of my five years at CAE mentoring and encouraging people. What's positive is seeing these people doing similar things with their own teams. It is filtering down. It's not one or two people who make the difference, but the culture in the whole organization.
The CEO is hero one day and bum the next. How do you deal with that?
I don't look at it that way. It's all a positive experience. I feel fortunate I've been able to work in this industry - in government, at Bombardier, Air Canada and CAE. It's a product area you can get excited about, it's global, and we're leaders.
There will be up times and down times that go with economic cycles. But you have to like competition and winning; you have to like being a leader. You have to like interaction with people, you have to like problem-solving and you have to like thinking broadly and strategically.
We don't have enough of these jobs in Canada. I worry about that.
What do you mean?
We've lost head offices and jobs of that kind. We really have to make sure we continue to support companies that can be globally competitive and that we can be more innovative.
I've been involved in this study on innovation ["Innovation and Business Strategy: Why Canada Falls Short," prepared for the Council of Canadian Academies]and we have been looking at why Canadians are not more innovative. It seems there are all kinds of reasons - closeness to the United States, the security in having access to that market, having a smaller domestic market without the scale to create businesses that are larger - and many times companies are forced to be sold to become bigger.
I am a strong believer in keeping a company smaller, more flexible, more agile and keeping overheads lower. We really have to encourage the creation of those companies.
Give me one silver bullet that might create them.
We have to have absolute determination that we feel this is valuable as it relates to our culture, our sovereignty, who we are. There are certain activities we need to be involved in that give young people the opportunity to maximize their potential, and have an opportunity to do it here in Canada and not necessarily abroad.
Don't we really need more corporate leaders who think globally?
We probably have them. It's very tough. We are small in this global game and we have to pick areas carefully where we can be leaders. It is more a matter of being determined to do it and make sure we have the environment - the fiscal and tax environment and general support in the university system. It's a way of thinking about things.
Looking at your career, 16 years as a federal bureaucrat doesn't sound like a promising CV for a global CEO.
The bureaucracy has been excellent preparation. In government you deal with a wide range of issues. So if you have a curious mind - I think I do - you get a chance to be exposed to a whole lot of things and a whole series of industries.
People who are doers, who want to make things happen and can lead people over the wall, will have the same results in government as in the private sector. I have taken a lot of those things from one sector to another. There are many strategic thinkers in government who have to take many complex issues, simplify them and come up with a plan. That was one of the forces I had that helped me going into the private sector.
What do you bring to the game?
An ability to take a lot of complex issues, simplify and understand them and come up with a plan - and to be able to select people to make up the team. I would add an absolute determination to win and to find ways to get people to do things that maybe they don't think that they can do. And get them motivated and have fun doing it.
Didn't you have doubts about taking on the CAE job after you left Bombardier?
Yeah, I did. I had been involved as chairman in the restructuring at Air Canada, which was very tough and I was very proud of what we were able to do there. I was almost 60 at the time and questioned what I really wanted to do.
But when I saw the challenge at CAE and got into it, I realized I loved it. I'm the kind of person who is probably going to keep on working for a long time. I really like what I'm doing, the interaction with people and making things happen.
At 64 now, how long will you stay at CAE?
I think for a while. We have clearly identified Marc Parent as the chief operating officer; he has done a wonderful job since I brought him into the company four years ago. This company has had to go outside to hire CEOs the last two times and one of my mandates was to make sure there was a succession plan. I feel good on where we are on that issue.
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Robert Brown
TITLE: president and CEO
CAE Inc., Montreal
BORN: February, 1945, in England
EDUCATION:
BSc, Royal Military College; Advanced Management Program, Harvard Business School
CAREER HIGHLIGHTS
1971: Joined federal public service, working in Atomic Energy of Canada, Public Service Commission and Treasury Board
1978-1986: Assumed various federal economic posts, including associate deputy minister for regional industrial expansion
1987: Joined Bombardier as vice-president, corporate development
1990: Rose to president of Canadair and headed Bombardier's aerospace group
February, 1999, to December, 2002: president and CEO of Bombardier
2003-2004: chairman of Air Canada
2004: Joined CAE as president and CEO