BC Business
We all make mistakes. Einstein, Columbus, New Coke.... But more important is what is learned, and applied for progress to flourish
Rome fell after its citizens outsourced education and science to their slaves. Nazi Germany could have developed a war-winning atomic bomb if it hadn’t kicked out James Franck, Max Born and other world-class physicists from its universities because they were Jews. Johannes Kepler exposed a popular misconception about the Earth’s rotation. Charles Darwin about your ancestors. And maybe Tom Harpur about what day it is. If the former Anglican priest and professor at the University of Toronto is not mistaken about The Pagan Christ and Christians are worshipping someone who historically never existed, what year would 2005 really be anyway? Often we are not right about art either: Bizet’s Carmen flopped at its premiere, Herman Melville died a shipping clerk believing Moby Dick was a failure, and Emily Carr endured 15 years running a boarding house because she couldn’t make an income painting. Business, of course, has its own pantheon. Edison dismissed the talking picture, IBM lost the PC, Sony blew Beta and B.C. built Fast Ferries. Who remembers dry beer, the Isuzu Stylus, laetrile, the Vancouver Blazers, Alex DiCimbriani, CKO All-News Radio Network, Nelson Skalbania or the sons of Timothy Eaton? We don’t have to look that far to find error. The fault, dear Brutus, is not in our stars, but in ourselves: we who cooked with aluminium pots, smoked two packs a day, drove after drinking, pumped urea-formaldehyde insulation between our walls, and spent how much on Y2K? Yes, the same we who still believe we don’t need that regular check-up with the dentist, that our ex-spouse was wrong, and that what happened on the road will stay on the road. But let’s face it, it’s not our mistakes – it really is our stars’ mistakes that people care about and BCBusiness has coerced six, almost seven, notable B.C. stars into confessing theirs. While they were at it, we had these political, business and academic leaders share their wisdom about the hard lessons they’ve learned and offer their insights about some popular misconceptions the rest of us still believe. Grace Kwok William Vander Zalm Mat Wilcox Angus Reid Robin Louis Michael Stevenson Grace Kwok Grace Kwok is owner and VP of Anson Realty. She annually places within the top five sales people in MLS (Multiple Listing Service) sales volume in B.C.; she was the recipient of the industry’s Gold Georgie Award in 1996 when she recorded the highest sales volume in Greater Vancouver; and she is known as “the First Lady of Pre-Sales.” A ‘pre-sale’, as you know, is a real estate purchase normally paid for with a 10 per cent down payment before construction, often with some interim financing and a final payment when a project is completed. What is less known about the elegant and soft-spoken Kwok is that she is multilingual (Cantonese, Mandarin and Shanghaiese dialects), is a director of the Hong Kong – Canada Business Association, was once chosen the Lions Club International’s ‘Outstanding Citizen Of The Year’ and is a member of the Board of Governors of SFU where she earned a BA with majors in economics and commerce. And you can’t drive? Is that a mistake? You tell me. Well, I got my licence and I guess my mistake is not keeping it. I’m an idiot when it comes to rules. It took me three times to pass the driver’s test. First time I was driving on the wrong side of the street. What does a realtor who can’t drive do? Because I don’t drive, 20 years ago I started working on projects that take less time to look at. Not that I don’t take people out. I take people out in cabs, but it’s not as easy as driving yourself. Thus the pre-sale? Yes, I started doing pre-sale back in 1984. I was the first person to bring this idea to Vancouver. It was a difficult education for the local people. Buying early, you could plan your life accordingly and in most cases, the pre-sale price is the lowest price ever in the housing market. So the mistake worked for you? I guess. It’s not necessary I drive you out. I find out what you are looking for in a home and later on you can move in and feel good about it. I find it satisfying to match the right buyer with the right product. When people enjoy their homes, I’m happy. Are off-shore buyers still investing here? The majority of Hong Kong buyers, the investors … that market is smaller. That could very well be due to the economy in Hong Kong, which is slower. Also a lot of people are buying in China. For investors, sometimes it’s a trendy thing – Shanghai, certain cities. But those buyers have been replaced by buyers coming from the States as well as China and Korea. Vancouver is very, very fortunate because of the political climate and the climate itself – it’s always a good choice. Whether it’s Chinese from Hong Kong or Chinese from the States, we always have enough buyers. Are we talking investments? Multiple units? In the earlier days (late ’80s, early ’90s) when people were buying for investment, yes, people bought multiple units. These days most people are buying one to live in. Maybe some people buy one for themselves and two for their children – the majority of these buyers are from Hong Kong. Most people believe our residential real –estate market will remain strong – at least until the Olympics. True? At least and beyond the Olympics. The cost of labour is not going to get any lower and the cost of land is not going to get lower. Okay, so how come Bob Rennie sold more real estate than you did last year? I don’t know. Maybe he has a car. William Vander Zalm These days William Vander Zalm – horticultural entrepreneur and 28th premier of British Columbia – lives in Ladner where, behind his home, tens of thousands of lilac bushes bloom. He retains interests in the nursery business in B.C. and Oregon. With partners in Hawaii and California, he is “trying to develop a theme park in Maui.” He is also involved with a start-up in the Kootenays to develop technology for removing oil from tar sands and shale more efficiently. “Oil shales in the U.S. make up 62 per cent of the world’s known oil reserves,” he says. From 1986 to 1991, a period of general economic prosperity but one embattled by controversy, the former Social Credit premier held strong views about abortion – opponents considered his social agenda to be driven by born-again and right-wing obsessions. And then there was Fantasy Gardens. The Gardens were ostensibly owned and operated by Lillian Vander Zalm, the premier’s wife – a woman with a lovely smile and pleasant demeanour who made the headband a fashion statement. But at the sale of the Gardens to a Taiwanese billionaire, the premier was actually present in the room, helping to negotiate the close. Among the allegations was that the premier and his wife left the meeting carrying a bag full of money. On the same day that Ted Hughes, –appointed B.C.’s conflict of interest commissioner, announced his findings into the sale of the Vander Zalm-owned theme park, the premier resigned. People can look at your career and disagree with your political decisions, those are essentially matters of opinion. Fantasy Gardens was the one place where an unequivocal error was made. If I were to do it over again, knowing what I know now, I would do it differently. But looking back on how it was and what I did, and knowing how I operated all my life, hands on, being there – anything Lillian’s done I’ve done with her; we’ve always been together on things – it didn’t seem unreasonable to go with her when a sale is being talked about, or negotiated, or a price is being set. She would not have felt comfortable sitting there with an accountant or a lawyer. She wanted me there – her husband and partner in life. What about the separation of public and private business? It’s true, we shared. When she was running the Gardens and I came home on weekends – or in between occasionally – we did share what was happening during the course of the week. She would tell me what was –happening at the Gardens, so there’s that. For anybody to say they would do it differently, I don’t know how they could. Love goes –beyond holding hands and meeting up once or twice a week. So your mistake was? Naiveté. I trusted people and took them at their word too often. I always believed my friends and colleagues would be there alongside and be of a similar mind. My biggest mistake was appointing Ted Hughes. I should have left the decision to the Supreme Court. But like I said, my mistake was naiveté. In that appointment, I trusted the NDP when they said it would be impartial. What was the lesson learned? If I was to go back into political life, I would handle things very, very differently. I learned a lot of lessons in politics. I would probably not speak out as much or be as available. I would try to dress things up a –little differently and not approach contentious –issues as directly as I did. There were a lot of lessons in that respect. At the height of the controversy, you seemed to carry it with ease. Luckily for most of my life I’ve been able to let things fall off pretty good, but there’s one thing about being open, outspoken and forthright: you don’t have too many regrets and you can take a lot more. What mistakes are you seeing being made in politics these days? I can’t believe the number of ads on TV telling me this is the greatest place on earth. I thought the only thing missing was “Sponsored by The Liberal Party and paid for by the tax- payers of British Columbia.” I said to Lillian, “How can they get away with this?” Mat Wilcox Mat Wilcox is Vancouver’s reigning PR diva. She’s the one the B.C. poultry industry called on during the avian influenza crisis, the wizard Telus brought in when they bought BC Tel and nobody could get their phone hooked up. In her 20 years managing crises and client egos, Wilcox has worked with Starbucks, Electronic Arts, Virgin Megastores and Krispy Kreme Doughnuts. As principal of Wilcox Group, she oversees one of Canada’s largest independent public relations firms. Wilcox Group sees itself as “guardians, protectors and salvagers of your reputation” and its website is rich with the language of public relations combat: emergency operations planning, rapid response, communications war-room and disclosure protocol. Is it a mistake to believe in the power of PR to manipulate anything? Absolutely. People have a perception of PR from the ’50s when the PR guy could manage the media, take them out for drinks and get them to do whatever he wanted. I wish I had that power. The whole idea of ‘spin doctor’ makes me crazy. That would suggest it’s a science. Really what public relations is now is all about telling the truth and the myriad of different ways to get information out to the stakeholders – and how to get it out at the speed of sound. With the internet and BlackBerries and blogs, misinformation is disseminated so quickly. Are we talking information control? Control, no. It’s just too easy to get misinformation out. People believe. Perception becomes reality. So a big part of our world now is to beat everyone at their own game and get the information – the truth – out more quickly. Control is more an issue of the number of requests coming in. We might have 70 or 80 requests a day for a CEO. You have to manage the flow of information so that everyone is following the same rules, or you could get nailed. You were involved with Telus during the takeover of BC Tel – a horrific time for its customers. I don’t know what PR could have done for them. Yeah, but I don’t see that as a mistake actually. We were brought in when the stock was five dollars and here we are today exactly where Darren [Entwistle, Telus –president and CEO] said we would be at $36. The customer service issue, we said give us three months to fix it. Three months, they [Telus] fixed it. It was horrific at the time, but we knew what to do to fix it. So I wouldn’t consider that a mistake. In fact, it was one of the more interesting companies I’ve had the pleasure of working with. Obviously my mistake, but let’s talk about yours. I’ve had press conferences where no one has shown up. In downtown Los Angeles we had 10,000 balloons that were supposed to explode to announce a new logo – and they didn’t explode. I’ve had interviews where the CEO got into a fight with the media and I didn’t step in early enough. I got Pavarotti the wrong juice. And? I got into a fight with Peter Pocklington in a bar one night. He was selling the Oilers to an oilman from Texas and the three of us were sitting in the bar having a drink. The two of them got into an absolutely huge fight, and told each other to go to hell, and the deal blew up. The next day my press conference wasn’t about selling the Oilers, it was about how the deal blew up. I often wondered about that, whether I should have stepped in and smoothed it over. And you learned? I think I could have saved the deal. There were a couple of other times when I should have spoken up. My guideline now is “out of line is out of line.” It doesn’t matter if you’re the CEO or the media, if you’re out of line, you should be told. Angus Reid Angus Reid says he’s “like the old cowboy getting back on the horse again.” Reid founded Angus Reid Group, grew it to the largest research company in Canada and sold it to Ipsos SA in 2000 for, he says, “a hundred million dollars. It was mainly owned by our employees. They did very well. I did okay.” Now as CEO of Vision Critical Communications, Reid is back in the saddle, working with the company his son, Andrew, founded. Vision Critical offers digital age web-enabled data collection. Reid says, “It’s the future of market research – faster, cheaper and better than traditional phone polling.” So I’m not the only one hanging up on pollsters? That is part of the problem. Look at the market research industry’s own stats published by the industry so you can be sure – if anything they’re on the low side. On the average survey, if you call 100 people, 80 people refuse to cooperate. You have problems with people now who are increasingly cellphone users. It’s illegal to do an inbound polling call to a cellphone user. Because it costs them money? Right. And you’ve got do-not-call lists, call screening and a whole set of issues arrayed against that industry that make the telephone have a limited half-life. Does this skew accuracy? Not really. In spite of these record-high refusal rates, the polling industry is able to still be reasonably accurate. What they are doing is making many more calls. The polling companies now have automated auto-diallers, predicted-dialling – all the technologies. It’s like the end of the sail age. At its very height, six-masted schooners and beautiful, elegant vessels sailed the oceans. Then along came these ugly steamboats and the sail guys were just in contempt of them but the reality was that the steamboat could get the job done more efficiently. You’re the steamboat. Internet penetration rates are now in excess of 80 per cent and climbing. In five or six years, only 15 or 20 per cent of polling is going to be done by the telephone. Governments decide what to do based on polling, is that a misconception? A huge misconception. You would think governments go out, do this polling, listen to what the public thinks and act on the basis of that. That is hogwash. Politicians use polling not to listen to what the public thinks, but to figure out how to sell their programs – in some cases how to dupe the public into doing what they didn’t think it wanted to do in the first place. Let me give you an example. Sure. Paul Martin, 1993. He arrives and says for whatever reason the deficit has to go – and some people, myself among them, feel that the government hugely overreacted to the debt of the government, given the mess that health care and other programs are in today. When Martin arrived on the scene in 1993, believe me, if you asked Canadians what was the most important issue in the country, the debt was down at 5 per cent. Martin’s job was then to use polling to figure out how to sell this issue, to turn up the temperature. And he did a great job. By 1994, Canadians had been convinced the sky was going to fall. What’s really interesting: all those right-wingers who were up in Canada peddling this snake-oil about how this debt and deficit was going to kill us, those same people are down in the U.S. as that country is faced with record deficits, and now they say, “It’s really not an issue. It doesn’t matter.” I have to ask about mistakes. Any serious polling mistakes? I think back to an election I covered in Manitoba in the 1980s. The only one I ever got wrong. We overestimated the NDP vote. It was a mistake, a technical mistake in a sampling protocol and we learned from it. What about people? HR? I’ve made lots of mistakes at the human resources level. You learn over time that if it takes more than two weeks of negotiations to hire someone, you shouldn’t hire that person. And in business? Look, when I started my company I didn’t know how to read a balance sheet. I was a sociologist. I honestly thought that the bank manager was my friend. Robin Louis Dr. Robin Louis is president of Ventures West, a venture capital company that for the past 30 years has invested over $700 million in about 130 early stage technology companies. There’s an intensity about Louis, which is probably very evident to those who play squash against him or try to stay step-for-step with him up the Grouse Grind. A journalist who previously interviewed Louis warned me he could be an intimidating brainiac. What you discover about Louis is that he’s the player you wouldn’t want at your table on the World Series of Poker. While he may be one of Vancouver’s most important technology investors, he doesn’t give a lot away. “We say no 99 times for every time we say yes. That’s typical for the venture business.” Let’s talk about your mistakes. The trite comment about venture capital is that only three things matter: people, people and people. To a considerable extent that’s true. When I look back on the mistakes I’ve made – and I’m in the unfortunate position to have lots to look back on – the recurring theme is how to decide on the people you’re going to invest in. How do you? I’m a guy that did three degrees in physics and am focused on the things you can measure and attach numbers to. People aren’t like that. There’s never a precise measurement of a person’s likelihood of success. All evidence says to do one thing and your gut feeling says, “I just don’t feel quite right about this person in this situation.” It’s amazing how good your gut feeling is. The few times I’ve ignored it, it’s been the wrong thing to do. For example? I won’t name names, but when you make a mistake about people in our business, it tends to be very, very expensive. Say you hire a key person in a company. It takes you six months to find a person, another six months to find out they’re not the right person, six more months to decide to make a change, another six months to find a new person, and you’ve lost a couple years. A couple years for a start-up is an eternity. That kind of mistake is life-threatening. What would be an example? Often in our business, the end company isn’t exactly the same as when it started. A good management team will make mid-course adjustments. They’ll get to where they’re producing something – and showing something – before they run out of money. Then they’ve got a good story so they can go out and raise some more money. A not-so-good management team will beaver away at a market and bash their heads against the wall and never figure out – to the day the last penny is spent – why there are no sales being made. I’m dying for a specific. Okay, a great example is a company in Vancouver known as Pen Magic. They were developing software for pen-based computers back in the early ’90s. They did a wonderful job with a couple of applications; won industry awards for their solutions. The trouble was the pen-based computer industry just never happened. But they had the right people. They were run by a very experienced management team led by Norm Francis who was a successful repeat-entrepreneur and he saw that the pen-based industry was not going anywhere. So, before he used his first round of financing – which came from people other than us, by the way – he turned his team to ‘customer relationship management software’ which was emerging at the time and developed some prototype software so they had a good enough story to go out and raise some more money. I guess we know what came next. We did participate in that financing. Pen Magic became known as Pivotal Software. They were selling software at a hundred- million-dollar-a-year rate and Pivotal went on to have a market cap of more than a billion dollars at the height of the boom back in 2000. Not much of a mistake. In the venture business, if you get two out of 10 big winners, that’s good. This is very much a hit-driven business. What really matters is that you have a few companies that do exceedingly well. The way the industry has always worked is that the return from a group of investments comes mostly from a very small number of big hits. Michael Stevenson Dr. Michael Stevenson is president and vice-chancellor of SFU, a man with an impeccable resumé: a Rockefeller Foundation Fellow, professor of political science at Western Michigan University, associate senior fellow of Massey College in Toronto, and for seven years vice president of academic affairs and provost at York University in Toronto. It’s difficult to believe he made any mistakes in his career, but an email might top his list. Asked by a colleague to rate a candidate nominated for the J.S. Woodsworth Chair of Humanities, a tenured position at SFU, Stevenson emailed: “. . . avoid the candidate like the plague.” The social sciences professor in question had previously been labeled by UBC’s Ubyssey student newspaper as “an outspoken critic of commercialized education.” At the end of the hiring process, the candidate, David Noble of York University, did not receive the chair and the matter was investigated by the Canadian Association of University Teachers. It has become one of those ugly academic turf wars. The CAUT, suggesting the email had “tainted” the hiring process, concluded in its report released September 2003 that Noble’s academic freedom was violated in the appointment process, and recommended that Noble should be offered the position – which remains vacant. You sent that email and the matter is still before the courts? The answer is yes and yes, although I don’t want to discuss it because there is still the matter of the legal action. So I can’t. Is there a life lesson learned? Undoubtedly it’s a mistake to indulge in off-the-top and rather frivolous commentary on email. About ‘commercialization’ of universities, is there a valid argument? I don’t think there is. There is an argument about too much of a drift toward corporatization and that the universities are increasingly subject to corporate influence. I think this is a very exaggerated point of view. Not that one shouldn’t be vigilant about the potential restrictions on academic freedom – and there have been some notable worrying cases about researchers under contract to private companies – but generally speaking, the reality in Canada is that corporate R&D levels are so low and the private funding in research is actually very low. So statistically speaking, the phenomenon is of negligible importance in Canadian universities. The Economist reported that because of increased U.S. restrictions on foreign students, some of the best minds are now migrating to other countries. Are they coming to Canada? They have been, actually. Practically all universities in Canada, ours included, have experienced some upturn in interest by foreign students and we’re getting very good foreign students partly as a result of Mr. Bush’s mistakes. If we’re looking at U.S. mistakes, we’re also seeing a complete turnaround in terms of the ‘brain drain’ that was a worry a few years ago – because of funding levels and the U.S. economic clout with respect to attracting top professionals and researchers. These days we seem to be able to employ Americans and other nationals, and I think that’s because the environment of the United States has taken a political turn that is less hospitable to universities. Is there a provincial resentment about foreign students? I think you have to parse that very carefully. For some while there has been a lot of pressure on access to universities. There was certain scapegoating seen in the foreign student enrolments, which are not high in B.C. And that scapegoating continues but it is a mistake, a very serious mistake, because the quality of education of our students is enriched from contact with a diverse population of international students. The economic consequences are very beneficial. Foreign students don’t in any way make the access problems for domestic students more difficult. On the contrary, they ease it because we charge [foreign students] very large fees, a necessary proportion of which helps fund our universities. So it’s all good? One can go overboard. There’s been a huge interest in saving the universities from the financial retreat of governments in Britain and Australia, by very heavy marketing of the universities to foreign students. So many of these countries’ institutions have become dependent on foreign student fees. We in B.C. and Canada are nowhere near that picture. With your resumé, I’m not seeing a lot of mistakes. The ones that stand out in my mind are mistakes in personal relations. Having screwed up on a number of personal relationships has made me conscious of the value of good human relationships. Fortunately, I’ve repaired the damage in terms of a very happy second marriage.