Intrawest Navigates the Passage of Time

When a company gets old, it doesn't have to die.

When a company gets old, it doesn’t have to die.

According to the late management guru Peter Drucker, the lifecycle of most companies has shortened considerably. In today’s fast-paced world, a 30-year-old company is getting on in age and probably suffers from serious hardening of the arteries that can lead to illness and even death. Intrawest ULC, the venerable Vancouver-based ski-hill operator that owns Whistler Blackcomb and nine other ski resorts around North America, discovered in 2005 that it was beginning to feel the passage of time. Having started out as a ski-resort real-estate developer, it had become a retailer of sports gear, a resort owner and manager, a housing developer and the operator of a luxury adventure travel agency. By 2006 it was a wide-ranging resort conglomerate employing 22,000 people that was trying to make the move into yet another area: four-season resort operation. Problem When real-estate developer Joe Houssian formed Intrawest in 1976, it was the quintessential entrepreneurial operation. It found its business sweet spot when it developed Blackcomb mountain a decade later and kicked off a rapid growth path as a developer of ski resorts throughout North America. By 2006 it was still headed by Houssian and several others who had helped the company grow into a giant worth US$1.6 billion. An entrenched management team and wide-ranging interests are not uncommon characteristics of organizations that begin as entrepreneurial start-ups and grow into large companies. These opportunity-oriented companies can sometimes get stuck in the entrepreneurial mindset, even though they are far too large to operate that way; their primary business methods often involve stalking opportunity and expanding explosively. In this case, it was the trade coming from North America’s 80 to 90 million baby boomers who, as active skiers in their youth, provided the food for Intrawest’s growth. But now, hitting their 60s, these boomers are slowing down a little and looking for luxury leisure that isn’t quite as strenuous. Solution Intrawest had noticed this trend and was dipping its toes into more luxurious and quieter pursuits, including golf resorts, but couldn’t quite get a handle on how to exploit it. So the publicly listed company was sold in August 2006 for US $2.8 billion to Fortress Investment Group LLC and taken private. “We have a great opportunity to continue Intrawest’s evolution into a leading global leisure player,” said Fortress principal Wesley Edens at the time, clearly signalling a new focused strategy for its acquisition. The new strategy required cleaning out the old company’s arteries, starting with its management team. Founder Houssian retired, as did the company’s chief financial officer. Quickly, a new president and COO, Alex Wasilov, a 30-year veteran of large corporations including Eastman Kodak Co., Xerox Corp., American Express Co. and Rosenbluth International, was installed, along with a new CFO and chief marketing officer. It also involved committing fully to some directions that Intrawest had already begun pursuing, namely the movement to four-season resorts. Intrawest would from now on be an operator of “experiential destination resorts” based near ski mountains, beaches, wine regions or other resorts and drawing a market seeking “unique experiences,” wanting to enjoy an active lifestyle and with lots of money to invest in vacation real estate. Fuelled by Fortress money and removed from the glare of the public markets, Intrawest could also embark on a resort-acquisition campaign that would meet these market requirements. In a little over a year, it became owner of the Steamboat resort in Colorado, the largest heli-skiing operation in the world, and several ocean-front resorts in Florida. It is now developing new resorts in Hawaii, Bora Bora, New Zealand, the Napa Valley and the Bordeaux region of France and is on its way to becoming a global resort operator. Lessons • Stay out of the rut. Even the most reactive and flexible business can get into comfortable habits that can hamper growth. • Review, repair and recycle. You don’t have to kill a company to change it. Often the seeds of a strong strategy are there and just need nurturing. • Avoid the glare. It’s a lot easier to create and execute a strategy when a company is closely held and doesn’t answer to many different owners.