BC Business
As the baby boom generation of corporate leaders rides off into the sunset, there is mounting evidence that the businesses they leave behind are facing a serious leadership shortage. A recent survey by UBC’s Sauder School of Business of 40 B.C.-based CEOs – each leading a company with annual revenues that top $1 billion – revealed that succession planning is a huge concern. “One of the things keeping them awake at night is, who is coming up around them and who can lead their company going forward,” says Karin Kirkpatrick, director of Sauder’s Centre for CEO Leadership.
Businesses around the world are grappling with this issue. After surveying more than 400 HR executives from 40 countries, IBM’s Global Human Capital Study 2008 found more than three-quarters were concerned about their organization’s ability to develop future leaders. Most worried were those in the Asia Pacific region (88 per cent), followed by Latin America (74 per cent), Europe, Middle East and Africa (74 per cent), Japan (73 per cent) and North America (69 per cent).
“Without sufficient leadership talent, who will set the direction?” asked the report’s authors. “Who will paint the vision? Who will lead the change? It’s not only an HR issue . . . it is a business imperative.” Organizational consultant Ken Keis, president and CEO of Abbotsford-based Consulting Resource Group International Inc., says much of the blame for our shallow leadership pool lies within the HR profession. “All too often, corporate HR is dysfunctional and powerless. They think they influence the way their business is run, but they don’t.” Keis – whose clients include Boeing Co., Chrysler LLC and London Drugs Ltd. – says that HR must be seated equally at the boardroom table and given enough muscle to ensure organizations don’t just pay lip service to people and leadership-development issues.
Perhaps the biggest contributor to B.C.’s leadership vacuum, however, is our aging provincial workforce. According to Kirkpatrick, over the next 10 years B.C. faces the largest wave of workforce retirements in Canada. “In 1975 the average age of B.C. workers was 27. Today it’s 41, and by 2035 it’s projected to be 52. Today 30-year-olds are doing jobs that people used to do when they reached age 40 or 45,” she observes. “We’re also seeing people who have only been with an organization five years suddenly becoming president – often without much in the way of leadership or people skills.” In an effort to fill the gaps, Sauder’s CEO centre is offering an accelerated leadership program to help prepare “c-suite” executives (those at the vice-president level) for eventual CEO succession. For those hoping to climb to the top of the corporate ladder, it’s also not a bad idea to talk to some of those who’ve already arrived. To that end, we’ve collected words of wisdom from six diverse B.C. CEOs – each with their own distinct insights on leadership and what it means to them.
Peter Robinson, CEO, David Suzuki Foundation, Chancellor, Royal Roads University You could say Peter Robinson has come full circle. On the heels of his first job as a park ranger (during which he twice won a Governor General’s Award for bravery), Robinson took a desk job with BC Housing, eventually becoming CEO. He then switched into retail, heading Mountain Equipment Co-op before this year assuming the helm of one of Canada’s foremost environmental NGOs. “That first career move was the most difficult,” he recalls. “But over the years, I’ve come to recognize that steep learning curves are valuable moments as you grow into leadership.” He is constantly seeking challenges that align with his own values, and his long-term humanitarian work with the Red Cross has placed Robinson, 56, in some harrowing situations. Top of that list: the six months he spent monitoring prison conditions in Rwanda in 1998, a life-altering experience that moved him to pursue a master’s degree in conflict management at Royal Roads University. “Conflict isn’t just endemic in the Third World,” he notes. “It’s also common in the workplace and in relationships at home. Learning how to deal with conflict has made me a much better leader.” Robinson believes there are plenty of skilled, committed young people ready to play a leadership role in the world of environmental sustainability. But he is less optimistic when it comes to the calibre of our current crop of corporate and political leaders. “I don’t think there’s a big leadership gap in Canada – just a shortage of strong, courageous leaders willing to change things for the better. Up until 10 years ago, we were viewed as a role model by other countries. Today there’s a distinct lack of business innovation, that whole myth that we’re a ‘green’ nation plus the fact that we’ve moved away from our traditional role overseas. When I talk to people around the world, they definitely give me the impression that Canada isn’t what it used to be.” [pagebreak]
Tamara Vrooman CEO, Vancouver City Savings Credit Union (Vancity) Tamara Vrooman was a co-op student with B.C.’s public service when an assistant deputy minister agreed to mentor her – but she had to do something in return. “I thought, ‘OK, she wants me to clean her car or cut her grass – I can do that.’ But she said, ‘When you become rich and famous, and I know you will, if someone asks you for help, you have to give it.’ I’ve always remembered what she did for me, and I’ve kept my commitment by mentoring other people whenever I can.” Armed with a master’s degree in history from the University of Victoria and a natural skill with numbers, Vrooman went on to cut a 14-year swath through the Ministry of Health Services and the Treasury Board before becoming B.C.’s deputy finance minister. One of the leaders she respects most is former finance minister Carole Taylor. “As a boss she was extremely supportive. I admire her consistency: she’s exactly the same when you meet her one-on-one as she is in a group of 5,000 people.” Days after Vrooman announced she was leaving government in mid-2007 for the private banking sector, the financial world was rocked by a dramatic collapse in asset-backed commercial paper. While Vancity had minimal exposure, she notes, it was obligated to guarantee its members’ investments. Vrooman’s chair was barely warm when she reorganized, cutting her senior management team from 28 to nine. “Under normal circumstances, I would have taken more time to understand the rhythm of the organization, but, in the interest of accountability and clarity and to allow us to respond more quickly to the markets, I had to move quickly. As a leader, you sometimes have to make tough, unpopular decisions in the best interest of the organization.” When it comes to listing essential leadership qualities, Vrooman, 40, says humility tops the list. “You need a sense of how you fit in the world – who came before you, who will come after you, who is relying on you. As a leader, you must be focused, a bit tenacious and courageous. And I believe courage comes from humility.”
Bob Elton CEO, BC Hydro Graduating from the University of Cambridge with a degree in English lit and a yen to write, Bob Elton never imagined he would one day be heading one of Canada’s largest electrical utilities. “When people ask me for advice on becoming a leader I always tell them, ‘First of all, never assume you will move in one direction.’ ” Like Goldcorp Inc. chair Ian Telfer, he arrived at his current desk by switching to accounting, allowing him to sample a number of different sectors, including a short stint in the gold mining industry at age 48. “I’ve had a very interesting professional journey,” says Elton, “but I’ve probably learned more about leadership from coaching girls’ soccer for 25 years. It gave me the chance to experiment with different ways of building teams and achieving results.” An avid biography and history buff who has read more than 25 books about Abraham Lincoln but rarely reads a business bestseller, Elton offers three key tips to would-be leaders. First, learn to understand people and what’s important to them and find out how to bring out their best; second, discover who you are and stay true to your own values; and finally, know when to make tough decisions and when to take your time. “In recent years, it has become much harder for leaders not to be blown off course,” he notes. “Today no matter what kind of organization you head, people expect immediate results. And that’s not always realistic.” Elton, 56, who has two daughters, mentors women executives through a non-profit organization committed to increasing the number of women on Canada’s corporate boards. A strong believer in leading by example, last year he joined a group of BC Hydro’s residential customers in a study to monitor their energy use. He wound up saving 18 per cent of his household consumption, he says, just by increasing his own awareness. [pagebreak]
Jacqui Cohen CEO, Army & Navy Department Store Ltd. When Jacqui Cohen inherited the third-generation retail dynasty in 1998, critics thought she would soon run it into the ground. Today Army & Navy is the only surviving family department store chain in Canada, and Cohen, the glamorous public face of the “A&N boutique,” is planning its 90th anniversary. “After everything people said about me, I’m still here and doing very nicely, thank you,” the 55-year-old Cohen says with a laugh. “And you know what? That’s the best revenge.” Cohen admits she never expected to be so hands-on, and for a time sought outside help to run the company. “But after a few attempts, I realized that no one was as passionate about the business as I am. Plus I figured if I was going to make mistakes, I might as well make them on my own.” By far her toughest challenge, she says, was having to lay off staff and consolidate her stores from eight to six in 1999 and attract reluctant consumers back to her flagship downtown Vancouver store. “It was very painful to change the way we had traditionally operated,” she says. “But tough as it was, it had to be done. It was a major learning experience.” Unlike other CEOs, Cohen doesn’t have to worry about succession planning. Her daughter, Kasondra, who runs the real estate side of the privately held family business, plans to one day take her place. “I really don’t have any anxiety about the leaders of tomorrow,” says Cohen, a renowned philanthropist who this year raised a record $1.24 million at her annual Face the World Gala benefiting inner city charities. “I was in my 30s before I started raising money to help people in my own backyard,” she adds. “At 21, Kasondra already has her own foundation offering micro loans to people in developing countries. All her board members are in their 20s – how great is that? Today’s young people have a lot to teach their parents.”
Ian Telfer Chair and former CEO, Goldcorp Inc.; chair, Uranium One Inc. After graduating from the University of Ottawa with a ho-hum degree in political science, Ian Telfer toiled unhappily for several years in a series of low-level sales jobs. As he looks back from the pinnacle of a legendary 25-year mining career, which saw Goldcorp become the world’s second-largest bullion producer, Telfer urges anyone with ambition to try at least one sales role. “Nothing in business happens until someone makes a sale,” he says. “It’s very useful experience.” To kick-start his stalled career, Telfer went back to the University of Alberta, got an MBA and became a CA. Before long he was in the mining biz, focusing his number-crunching and entrepreneurial skills on financing, developing and operating mines throughout the Americas, Asia and Australia. Telfer, 62, considers his re-education so transformational that he decided last year to invest in Canada’s future corporate leaders, with a $25-million donation to the University of Ottawa’s business school (now called the Telfer School of Management). With Canada’s mining sector facing a serious workforce shortage, Telfer urges social science grads who haven’t yet found a direction to follow in his footsteps and consider a mining career. During Telfer’s two-year tenure as Goldcorp CEO, he devised a nifty project, loosely based on the TV show The Apprentice, in which MBA grads competed for a one-year spot as his personal trainee. Both chosen apprentices turned into full-time Goldcorp employees, he notes. “It was a creative way to attract strong people and give them broad experience within our organization and our industry.” When it comes to the style of leadership he admires, Telfer cites rock-solid industry peers such as Teck Cominco Ltd.’s Don Lindsay, Barrick Gold Corp.’s Peter Munk and Kinross Gold Corp.’s Tye Burt. At a time when mining giants such as Inco and Falconbridge have succumbed to what Telfer calls “disastrous” foreign ownership, these CEOs are firmly focused on global expansion, which Telfer insists is the only way to ensure a golden future for Canadian producers.
Bill Hunter President and CEO, Angiotech Pharmaceuticals Inc. Bill Hunter understands more than most what it means to lead through adversity. When it hit the marketplace in 2004, the company’s Taxus stent, a tiny, drug-coated wire-mesh tube used to prop open narrowing coronary arteries and prevent the formation of dangerous scar tissue following artery clearing angioplasty procedures, caused a sensation, aiding the recovery of millions of heart patients worldwide. “It was the biggest product launch in medical history,” he says, “bigger than either Vioxx or Viagra.” A physician with no formal business training who came up with the concept of a drug-coated stent in his third year of medical school, Hunter admits he was pretty naive when he first embarked on product development. “If I had known the mountain was so high, I might never have climbed it,” he recalls. “But one day, I woke up and we were listed on the TSX and that was the end of my medical career.” Hunter, 45, who has steered Angiotech through two gut-wrenching market cycles, has recently watched its stock sink to a new low of less than $1, due to reported safety questions concerning the stent, increased competition and rocky economic times. Slowly but surely – there is no other speed in the snail’s-pace world of biopharmaceutical development – he is reducing the company’s dependence on royalties from Taxus (two-thirds of its revenue now comes from other products), but that couldn’t prevent September’s painful restructuring announcement, replete with job cuts, plant closures and a delayed product launch, designed to reduce corporate debt and keep Angiotech off the block. While his CFO describes him as “a benevolent dictator,” Hunter stresses it’s important to have a collaborative management style and surround yourself with people you trust. “When you talk things through, nine times out of 10 the right decision becomes apparent. However, there is always that one time when you have to make a decision regardless of the consequences. Fortunately as the saying goes, adversity doesn’t build character – it reveals it.”