12th Annual Conference Report >>                                                                      WISDOMTHE FORUM FOR ...
The Ministry extends its appreciation to CEOs of Ontario’s fastest growing firms who took the time to “gather on the park ...
Table of Contents 2 Introduction 4 Canadian myth-busting and the real impact of the Internet   Leonard Brody, CEO, Author,...
It was a remarkable and rewarding conference,                                                 a chance for CEOs to compare...
For those who attended and couldn’t keep up with the flood of new insightsand ideas, the following report will help jog yo...
When it comes to pushing the boundaries of                                       innovation, Leonard Brody is one of the v...
“The Internet is changing us as people and as a                   society,” Brody said. “In fact, for some young people,  ...
Organizations don’t innovate, people do. While                                        that statement seems self-evident, i...
“When it comes right down to it, you can’t coerce, command, control or buy commitment and enthusiasm, nor can you order so...
For football fans, few plays are more exciting to watch                                       than an interception that tu...
“I guarantee that if you spend one hour each                 week sitting on a park bench, you’ll be amazed at            ...
If innovation is the path to greater profitability,                                        Larry Keeley wonders why most b...
What is the real driving force behind innovation? Keeley has no doubt.“Innovation is about leadership, about senior execut...
1                                                                 32                                                      ...
For companies like G.A.P Adventures, The Country                Grocer and Harry Rosen Inc., it means using new           ...
Med-Eng Systems of Ottawa was the poster child for                                      business growth and success until ...
“The goal is to become an organization with the                capability for continuous change,” said L’Abbé.            ...
There are more than                              They make up                             and account for more than340,000...
Leading Growth Firm SeriesCEO PerspectivesThe Leading Growth Firm Series researches and promotes the effectivemanagement p...
Proud Sponsors of Wisdom Exchange 2006
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Wisdom Exchange 2006 Report

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In May 2006, CEOs from more than 100 of Ontario’s fastest growing companies gathered to share their experiences with innovation, what worked and what didn’t, and what trends were emerging that would shape tomorrow’s business landscape.

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Wisdom Exchange 2006 Report

  1. 1. 12th Annual Conference Report >> WISDOMTHE FORUM FOR CEOS AND PRESIDENTS OF ONTARIO’S LEADING GROWTH FIRMS EXCHANGE 2006Profiles in InnovationMay 2006 Kingbridge Centre, King City, Ontario
  2. 2. The Ministry extends its appreciation to CEOs of Ontario’s fastest growing firms who took the time to “gather on the park bench,” gain perspective and exchange ideas at Wisdom Exchange 2006. Wisdom Exchange provided a stimulating networking forum, which was once again rated as a success by CEOs and presidents of Ontario’s leading growth firms who attended. Here’s what CEOs had to say: “I came away inspired by some of the speakers, and I am making plans to get more of our companies in touch with them.” David Hogg President, HPM Consortium“Our clinics generated lively discussion from participants who obviously care deeply about their businesses and the intellectual property they’ve created. Thanks for the opportunity for us to lead these clinics – it’s much appreciated.” Christopher Aide Partner, Toronto Intellectual Property Group Baker & McKenzie LLP“Excellent event…keeps getting better.” Fabio Saposnik President, Orvitek Inc. “I always come away invigorated as well as a little appalled at what I am doing or not doing, when having a chance to look at things from a different angle. My colleagues feel the same way. It’s a great learning experience. This venue is such a positive reinforcement…I salute the Ministry for having the foresight of making it available.” Jill Anderson President, Aecometric Corporation“Congratulations on a first-rate event. The quality of the participants was exceptional. I found my many conversations consistently interesting and productive. The speakers were outstanding -- each had insights that were valuable takeaways for me and, I’m sure, the other attendees. Now it’s on to next year’s event!” Mark Romoff President & Chief Executive Officer, Ontario Centres of Excellence For CEOs who missed the event, we hope that this report provides a profile of the insights shared by leading business strategists and demonstrates that there is no cookie cutter approach to successful innovation.
  3. 3. Table of Contents 2 Introduction 4 Canadian myth-busting and the real impact of the Internet Leonard Brody, CEO, Author, Technology Entrepreneur 6 Survive and thrive during the coming labour shortage Linda Duxbury, Professor, Sprott School of Business, Carleton University 8 Old brands, new beginnings and the importance of park benches Keith Pelley, President & CEO, Toronto Argonauts10 Innovation without the smoke and mirrors Larry Keeley, Co-founder and President, Doblin Inc.12 Renovating old business models A Town Hall panel discussion • Bruce Poon Tip, CEO, G.A.P Adventures • François Bouchard, CEO, The Country Grocer • Larry Rosen, Chairman and CEO, Harry Rosen Men’s Wear • John Hughes, Deloitte, Co-author of Building the Best – Lessons from Inside Canada’s Best Managed Companies14 Creating an innovation environment Richard L’Abbé, Vice-Chairman, Med-Eng Systems Inc. WISDOM EXCHANGE 2006 1
  4. 4. It was a remarkable and rewarding conference, a chance for CEOs to compare notes with their peers. At the same time, a strong line-up ofIntroduction engaging speakers challenged their beliefs on the innovation process and stretched their mental muscles with new facts and perspectives. • Technology entrepreneur Leonard Brody providedIn May 2006, CEOs from more than 100 surprising insights into the rising importance ofof Ontario’s fastest growing companies virtual communities.gathered to share their experiences with • Linda Duxbury revealed what lay behind theinnovation, what worked and what didn’t, coming labour shortage and offered pragmaticand what trends were emerging that would strategies for turning the changing workplace toshape tomorrow’s business landscape. your company’s advantage.The 12th annual Wisdom Exchange, held at • Keith Pelley, at the opening night dinner, hosted by the Minister of Economic Development and Tradethe Kingbridge Centre just north of Toronto, Joseph Cordiano, gave an insider’s report on thewas a thought-provoking forum for new remarkable turnaround of the Toronto Argosideas and stimulating conversations about football club.hot business issues. • Larry Keeley offered a systematic, disciplined approach to innovation that, to the delight of many Fortune 500 companies, has proven to be highly effective. • Richard L’Abbé described how his company grew so fast that it grew into trouble, then found its way back onto the road to global success.2 WISDOM EXCHANGE 2006
  5. 5. For those who attended and couldn’t keep up with the flood of new insightsand ideas, the following report will help jog your memory. For those whomissed the event, it can offer a taste of what took place and a tantalizinghint of what could be waiting for you at next year’s Wisdom Exchange.WISDOMEXCHANGE2006 WISDOM EXCHANGE 2006 3
  6. 6. When it comes to pushing the boundaries of innovation, Leonard Brody is one of the veterans who’s “been there, done that.” The lessons heCanadian myth-busting learned on the front lines of technology not only captivated the CEOs gathered for the opening sessionand the real impact of of the 2006 Wisdom Exchange, his lively presentation set the bar high for every subsequent speaker.the Internet Brody is one of Canada’s most respected technology entrepreneurs. He participated in one of the largest Internet IPOs in history and has raised millions of dollars for start-up companies. Currently, he is aLeonard Brody venture partner at Growthworks Capital, one ofCEO, Author, Technology Entrepreneur Canada’s largest technology funds, and a Director of Canada’s largest technology association, CATA. He is also co-author of the best selling books Innovation Nation: Canadian Leadership from Jurassic Park to Java and Everything I Needed to Know About Business...I Learned from a Canadian. In a far-ranging presentation that both informed and stirred the audience, Brody offered insights into the impact of the Internet and upcoming tech trends. But he began his remarks by destroying a number of myths about Canadian business in the 21st century. “We’re our own worst enemy,” he began. “We are a nation that sees the glass as half empty when the world sees us in a totally different light.”4 WISDOM EXCHANGE 2006
  7. 7. “The Internet is changing us as people and as a society,” Brody said. “In fact, for some young people, virtual communities can be more important than physical ones.”• He ticked off a rapid-fire list of telling points: Looking ahead, while the big picture is not clear, some key tech-related trends seem to be emerging• In the past 15 years, Canada has had the best from the mist, creating significant cultural shifts. economic turnaround of any nation in the This is especially true for young people born since the industrialized world. 1980s who have grown up with computers. For them,• The Economist forecasts Canada will be the most their sense of community is not restricted by competitive economy in the world through to 2009, geography but is highly mobile and built more on with the best overall business infrastructure. shared values and interests.• In 2005, the Anholt-GMI National Brand Index This shift away from geographic ties is also seen in ranked Canada as the second most respected brand the dramatic growth of mobility in the working world. in the world. The workplace is no longer fixed. People are working at home, at clients’ offices, in their cars• Alberta’s oil sands are a phenomenal source of and on vacation. wealth on a scale comparable to Saudi Arabia, ensuring long-term economic growth. “The mobile workforce can be a challenge to manage, but it’s well worth it to learn how,” Brody said. “Canada is the top producer of technological “While it may seem counter-intuitive, the business innovation in the world – bar none – and we are benefits are huge.” fierce competitors,” said Brody. “It’s time we got behind our own brand.” But for employers the benefits can be great, such as cost savings, better morale and performance, Brody then turned his spotlight on the Internet and enterprise scalability, access to the best talent, with illuminated emerging facts, trends and issues that no restrictions on geography, labour arbitrage, and will shape the business landscape. disaster risk management. Within the last 15 years, the Internet’s presence in Given the huge impact of technology, Brody surprised the mainstream of business and society has grown his audience with his closing advice for business from invisible to omnipresent. Its impact cannot be leaders looking to grow through innovation. overestimated. “Don’t focus on the technology,” said Brody. “If “The Internet is now as accepted as water,” said there is one key message I want to leave with you Brody. “In the U.S., 87 percent of teens use the it’s ‘community.’ Technology constantly changes. Internet every week. People now spend more time People and community are the only things that on the Internet than they do watching television.” matter. Focus on meeting their needs in new ways.” “What we need to understand is that we are still in the era of black-and-white TV in terms of Internet development,” he said. “It’s like we’re in kindergarten: we don’t know where we are, let alone where we are going.” WISDOM EXCHANGE 2006 5
  8. 8. Organizations don’t innovate, people do. While that statement seems self-evident, it has profound implications for knowledge-based companies,Survive and thrive particularly when coupled with a shrinking talent pool. “If you want your organization to thrive during theduring the coming coming labour shortage, it means shifting your focus from managing money to managing people,”labour shortage said Linda Duxbury as she launched into a lively, fact-filled and often witty overview of the coming labour crunch. Throughout her presentation Duxbury provided tips on what CEOs can do to help theirLinda Duxbury companies prosper.Professor, Sprott School of Business,Carleton University Linda Duxbury, a professor at the Sprott School of Business, Carleton University, has examined Canadian and international demographics and completed major studies on workplace issues. For many people, just the mention of human resources can make their eyes glaze over. But in a world where products and processes can become obsolete overnight, companies live or die based on the skill, talents and knowledge of their employees. And employees – not just good employees, but virtually any warm-blooded potential employee – will soon be in short supply. “That’s not an opinion, it’s a statistical certainty,” said Duxbury. For Duxbury, the picture is clear: “We are moving from a buyer’s labour market, where there were more good employees than jobs, to a seller’s market. We are facing a huge labour shortage for the next two decades.”6 WISDOM EXCHANGE 2006
  9. 9. “When it comes right down to it, you can’t coerce, command, control or buy commitment and enthusiasm, nor can you order someone to be innovative and creative,” said Duxbury in closing. “You need to create an environment that promotes these attributes. You do this by how you behave, not what you talk about. You have to start viewing employees as assets rather than costs.” The reason is simple, Baby Boomers didn’t have The challenge is to make your company a more enough kids to grow the labour pool to meet the attractive place to work than your competition. needs of a growing economy. In fact, they didn’t Marketing 101 tells you to study your target group – have enough children to replace themselves. in this case, current and potential employees – and meet their needs. But a close examination shows The numbers are clear. For the past 25 years, the that this may be more complex than you first thought. Canadian labour force has grown by approximately 226,000 per year. This decade, it will grow by Your workplace might include three or four different 123,000 per year. By 2010, that will drop to “generations” of employees, each with different 42,000 per year. needs and expectations, said Duxbury. Generations, in this context, are defined not strictly by their age The projected labour shortage is not purely a but by their formative influences and shared values. Canadian phenomenon. In many European countries, the situation is worse. Even China will be struggling Veterans were born before or during World War II and to cope with the after-effects of its long-standing their formative influences were the atomic bomb population policy of one child per family. and post-war reconstruction. In the workplace, they value loyalty and they tend to defer to authority. The labour shortage will be worldwide. In response, HR management will emerge as a critical success Baby Boomers were born 1947 to 1964. Their factor. As top employees become more difficult to formative influences were economic prosperity, civil find, how well a company can attract and retain rights, birth control and rock ‘n’ roll. In the workplace, employees becomes a competitive advantage. they tend to accept high levels of stress as the norm but demand good “perks” and status symbols. “In a buyer’s market, you can tell employees to work this weekend or else you’ll find someone who The Baby Bust (Generation X), born 1961 to 1974, will take their job,” said Duxbury. “In a seller’s grew up influenced by economic recessions, market, that won’t work. You need them more than environmental degradation and AIDS. They are they need you. They will tell you what they want. comfortable with technology in the workplace and If your company won’t give it to them, a company tend to be both ambitious and focused on job security. in Alberta will. And if Alberta won’t give it to them, a company in Australia will.” The Echo Boom (Nexus or Gen Y), born 1975 to 1990, were raised in a child-focused society amidst So, what can a business do? “I recommend that growing violence, terrorism and gangsta rap. More companies focus on employee retention,” said than any other generation, they tend to be independent Duxbury. “Losing a good employee carries huge and entrepreneurial with a focus on creating a good costs in terms of loss of corporate knowledge, work-life balance. customer relationships and recruitment. Besides, as anyone who has been through it will tell you, Different generations, different needs but with one hiring can suck the lifeblood out of you.” shared attribute: growing clout in the labour market. WISDOM EXCHANGE 2006 7
  10. 10. For football fans, few plays are more exciting to watch than an interception that turns the tide of a big game. For Toronto Argo fans, that’s exactly what ArgonautsOld brands, new president and CEO Keith Pelley has pulled off. Canadian Football League franchises have beenbeginnings and struggling financially in the past few years, and the Argos were no exception. When Pelley joined thethe importance of Argo football club in November 2003, the business was in receivership. “We had no GM, no office space and fewer than 10 employees, some ofpark benches whom had to share computers,” Pelley revealed during his dinner speech at the Wisdom Exchange. “We were a 131-year-old start-up.”Keith Pelley What a turnaround in one year!President and CEO, Toronto Argonauts In addition to the Grey Cup victory, 2004 saw the Argo season ticket base more than doubled and average attendance at Argonauts home games went from 12,000 in 2003 to over 25,000 a game in 2004. Sponsorship revenue tripled and 22 new sponsors signed on. Pelley joined the Argonauts after a broadcasting career that spanned more than two decades. He was the first Canadian to produce NFL football when he joined the Fox Sports Network in 1995. He has produced NHL hockey, Major League Baseball and the World League of American Football. He has worked for ESPN and Disney. He was president of TSN when the Argo owners enticed him into picking up the challenge. Although he had been involved in pro sports for most of his career, when it came to actually running a football club, “I had no idea what I was doing,” Pelley admitted. “I had so much to learn.” The biggest issue the Argos faced, Pelley felt, and the one that needed to be tackled head-on, was branding. The problem in terms of brand was and is that the professional sports market in Toronto is incredibly saturated. Maple Leaf Sports and Entertainment owns the Toronto Maple Leafs, the Raptors, Leafs TV, Raptors NBA TV and the Air Canada Centre. The Blue Jays are owned by Rogers Communications, which also owns the Rogers Centre (formerly Skydome) and8 WISDOM EXCHANGE 2006 a vast stable of magazines, radio stations, cable
  11. 11. “I guarantee that if you spend one hour each week sitting on a park bench, you’ll be amazed at the results. The time I spend there is invaluable. It gives me a chance to get back my perspective and it gives me great ideas.”systems and other media properties. That’s big league first-hand the devastating effects of violence. Withcompetition for a struggling brand like the Argos. their encouragement, the team started the campaign which has been a big hit with the community. It educatesThe most pressing problem was time. Pelley signed young people about guns, gangs and violence, raiseson just before Christmas 2003 and the new season money for underfunded community organizationswould start in the spring, whether the Argos were and creates opportunities for the players to becomeready or not. one-on-one mentors for youth-at-risk.”Then Pelley found an edge. “We determined that “I get emotional when I talk about it because thethe CFL brand difference was that we were campaign is making a difference to kids’ lives inaccessible,” he recalled. “We decided that we our community,” said Pelley. “At the same time, ifwould be out in the community more than any other you ask me is the campaign good for our brand?brand. We would create opportunities for the fans Yes. Absolutely. No question about it.”to meet the players and the coaches. We wouldcreate awareness of the team in new areas. Our The Argo turnaround taught Pelley a few lessons.goal was ‘more touches’ than any other team.” First, the tremendous importance of branding.He and his small staff kicked into high gear. “When I was at TSN, I was known as a big brand“It was four months I’ll never forget,” he told the guy. Today, I’m even more so. Today, its brand,Wisdom Exchange audience. “I made sure I was out brand, brand. You have your vision statement orevery night speaking about the Argo brand. I’d get your mission statement and you never, ever, everhome by 10 pm, sleep ’til 3:30, read ’til 5:30, deviate from it.”sleep ’til 6:30 then start again. I was determined Second, he has learned to hire people based onto learn everything I could to do the job properly.” four criteria: work ethic, attitude, intelligence and“I can’t tell you the number of times I had the door knowledge. “Knowledge is a distant fourth,” heshut in my face,” he continued. “It was a brand no said. “Knowledge can be acquired. Work ethicone wanted to be associated with. In 2003, the and attitude are right at the top of the list.”brand lost $9 million. We had one cash sponsor. The third lesson has to do with Pelley’s philosophyWe were at zero.” of leadership. “I once worked for someone whoToday, it’s a whole different picture. Now, there are said that being a boss is not a popularity contestover 600 events per year in the community involving and I have come to disagree with that. I thinkArgo players, coaches and team employees. The Argos it’s really, really crucial that your employeeshave more than 45 cash sponsors and another 20 in like you. If they like you, they’ll take a bullet forcontra. Attendance has grown to 30,000 per game. you. If they just respect you, you’ll die.”“We are a brand people want to be associated Finally, and perhaps most importantly, “spendwith,” said Pelley. some time on the park bench,” Pelley advised his fellow business leaders. Like most CEOs,But the Argos have become more than a business. Pelley’s schedule is jammed with travel,One of the initiatives that Pelley is most proud of is meetings, long days and answering e-mails atthe team’s Stop the Violence Foundation. night at home. But, near his office, there is a park bench where he retreats to get away from“The last few years have seen a rise in street violence, the pressure.especially in Toronto, and especially involving guns andyoung people. Some of the Argo players come frommajor U.S. cities like L.A. and Detroit. They experienced WISDOM EXCHANGE 2006 9
  12. 12. If innovation is the path to greater profitability, Larry Keeley wonders why most businesses are so bad at it.Innovation “Innovation fails 96 percent of the time. No other area of management science puts up with thiswithout the level of randomness,” he told the CEOs gathered for the opening session on the second day of the 2006smoke and mirrors Wisdom Exchange. “Innovation is surrounded by myths and clichés. You have to separate lore from logic to get innovation to happen reliably.”Larry Keeley Keeley, president and co-founder of Doblin Inc.Co-founder and President, Doblin Inc. and graduate-level teacher in innovation strategy at the Institute of Design in Chicago, has helped Fortune 500 companies from American Express to McDonald’s, Pfizer and Xerox significantly increase their innovation success rate. BusinessWeek recently named him one of America’s top innovation gurus. His refreshingly contrarian views on innovation cut through much of the smoke and mirrors that often surround the topic. He began with a very pragmatic definition. “The term innovation should be reserved for an initiative that can produce a viable new concept that throws off enough free cash flow to justify itself,” he said. “This keeps us from the sloppy habit of calling anything ‘new’ an innovation. It also begins to force some expectations. This is when innovation builds real value.” Secondly, he said, to focus only on product innovation is nearly always wrong. Henry Ford’s big innovation was not the production line. His breakthrough was that he changed the business model for the auto manufacturing industry. After nearly going bankrupt three or four times, Ford started selling the cars to his dealer network which gave him immediate cash flow to finance growth. Dell did not become rich by building a better personal computer. Dell revolutionized the industry through innovations in financing, marketing, distribution and customer service.10 WISDOM EXCHANGE 2006
  13. 13. What is the real driving force behind innovation? Keeley has no doubt.“Innovation is about leadership, about senior executives sensingwhen and where is the time and place for change,” he told the CEOs.“Your job as leaders is to get a finger on the pulse of the market,then get ahead of what your customers want.”Starbucks reinvented a commodity as a consumer By multiplying the types of innovation, organizationsexperience. multiply their impact. Keeley came to this understanding through 26 years of studying innovation andThe list goes on. What’s important, Keeley told the interviews with literally thousands of leading CEOsaudience, is to broaden the drive for innovation around the world.beyond products. What he advocates is a much more disciplinedResearch by Doblin has identified ten different types approach to the process of innovation, from diagnosisof innovation within four distinct areas: finance, through invention, launch and extension. A highlyprocess, offering and delivery. The goal is to stitch simplified process summary includes four steps:together different types of innovation into a coherentand effective approach that creates value. 1. Study the fundamental components of yourKeeley offered an Ontario example of innovative industry, looking beyond products and at thethinking that has paid big dividends for the organization. full spectrum of innovation types.“The University of Waterloo has the reputation 2. Set an innovation goal that identifies changingof a Canadian innovation incubator because of themes and customer discoveries.two major decisions that the founders of the school 3. Build fewer but bolder concepts that focus onmade early on,” he explained. “The first was to allow platforms, not products.the faculty to claim ownership of their researchrather than handing it over to the university. The 4. Implement clearly and swiftly with prototypes,second was to have the students work as a part of not spreadsheets.their academic studies.” By using this process, Keeley said, companies have“This gave UW an ‘entrepreneurial’ edge and led to been able to improve their success rate by up toa proliferation of high-tech start-ups created by 70 percent.students and faculty; the most famous of which isResearch In Motion. It has also given UW a huge “Clearly defined protocols help people do what iseconomic impact, $1.6 billion province-wide in 2001, most useful in the heat of battle,” he explained.and extended its influence beyond its region to the “How can you improve what you don’t definewhole of Canada, Silicon Valley and globally, with and measure?”formal academic exchanges in over 40 countries.” Keeley also holds a contrarian view on the challengesThose early decisions by the University of Waterloo of intellectual property (IP) rights in an era in whichinadvertently stitched together five different types innovation is the Holy Grail.of innovation. Financially, it changed the university’sbusiness model and created new financial networks “The best way to protect IP today is to keep itwith faculty and spin-off businesses. It changed moving forward at a pace that others can’t keep upone of the university’s core processes – the creation with,” he said. “Secondly, the real payback comesof intellectual property offered students a new kind when your IP becomes the platform that everyoneof academic experience and forever changed the else builds on. In that sense, IP management is lessuniversity’s “brand.” about keeping your competitors out and more about encouraging partners to adapt your platform.” WISDOM EXCHANGE 2006 11
  14. 14. 1 32 4 If there was one imaginary, all-in-one, combined customer for the four experts gathered for this year’s Town Hall at the Wisdom Exchange, it would be an Renovating impeccably dressed male backpacker in the hills of Costa Rica who takes a break to order Canadian old business models groceries online and read a business bestseller. The annual Town Hall at the Wisdom Exchange is a popular forum that provides a practical counterpoint to the discussion about trends to watch for and new A Town Hall panel discussion technologies around the corner. Once again, this 1 Bruce Poon Tip, CEO, G.A.P Adventures year’s session brought together business leaders 2 François Bouchard, CEO, The Country Grocer who have been on the front lines of innovation and 3 Larry Rosen, Chairman and CEO, Harry Rosen Men’s Wear who have returned with hard-won lessons that they 4 John Hughes, Deloitte, Co-author of Building the Best – shared with conference delegates. Lessons from Inside Canada’s Best Managed Companies They were Bruce Poon Tip, founder and CEO of G.A.P Adventures; François Bouchard, CEO of The Country Grocer; Larry Rosen, chairman and CEO of Harry Rosen Inc. and John Hughes, a chartered accountant and partner in the Private Company Services of Deloitte. G.A.P Adventures began with a new idea for the travel industry: cultural tourism. Why not take small groups of travellers on guided tours off the beaten track so they could experience local culture up close? Fifteen years ago, this was a revolutionary concept. Today, the company that pioneered it has grown to be a market leader, providing more than 1,000 adventures to over 100 countries. That explosive growth was propelled by a second innovation: understanding tourism as an exportable service. Why not, for example, convince a group of Belgians to buy a trip to Mongolia from a Canadian company? “We began with new ideas; our challenge has been to remain innovative,” said Bruce Poon Tip. “Over the years, our focus has shifted back and forth between product and market focus. We started as very product-focused, with trips for backpackers. Then, as we offered more and different types of adventures, we became more market-focused.” 12 WISDOM EXCHANGE 2006
  15. 15. For companies like G.A.P Adventures, The Country Grocer and Harry Rosen Inc., it means using new technologies to renovate an age-old business model. The result? Financial success – and a happy backpacker in the hills of Costa Rica.Today, the pendulum is moving back towards a more accolades for the way it has adapted customerproduct-driven offering for G.A.P Adventures, and relationship management tools and staff training tothat seems to make him happy. “I’ve always wanted provide the personal customer care that exemplifiedto take people to Antarctica and now we can do the original store, but in a modern, database-it,” he revealed with a big smile. “We’ve bought our supported retail chain environment.own icebreaker!” “We don’t sell clothes,” revealed Larry Rosen,For The Country Grocer, success came not so much chairman and CEO. “We’re in the relationshipfrom a new product but from putting a cyber-twist on business. It started with my father, who kept cardsa traditional service. The Country Grocer successfully on every customer. Today, we spend more thanoperates a 10,000 square-foot store in the south $1 million every year on training to teach our staffend of Ottawa, but business growth and fame has how to build relationships.”sprung from its Internet operation. Each successfully innovative company seems toWhile ordering groceries online may have seemed find its own path, observed Deloitte’s John Hughes,like a radical notion when the website was launched, co-author of Building the Best: Lessons from Insidecompany owner and CEO François Bouchard Canada’s Best Managed Companies. The Canadianexplained, “We’re just doing what grocers were bestseller gives a behind-the-scenes tour of 10doing 50 years ago. You’d call them on the phone, highly innovative companies that have met toughthey’d put it on your tab then deliver on a bike. challenges and gone on to break away from the packWe’ve just adapted that model to new technology.” and become market leaders.The Country Grocer is doing a booming business “Magnotta Winery, for example, started with awith Canadian ex-pats around the world. It has so business plan that called for distribution throughmany customers in the High Arctic that it offers daily the LCBO in Ontario but that didn’t happen.deliveries to the region. Another major market is the What did they do? They opened their own stores,”“Gen X” age group. Buying groceries online suits said Hughes. “Cirque du Soleil burst on the scene,their lifestyle and, for many of them, it helps them to then faced the challenge of keeping that creativelook after an aging parent. In fact, one-third of their spirit alive, year after year, as the company grew.customers are shopping for someone else. SpinMaster, which needs new toy ideas constantly, created a whole network of inventors to feed themAnd while some social commentators worry about innovative products.”the loss of personal contact through Internet sales,Bouchard said that online relationships can be very “There is no cookie-cutter approach to successfulstrong. “We get e-mails from our regular customers innovation,” said Hughes. “If you study 50 companies,telling us, ‘Don’t worry. I’m going on vacation next you will find 50 different approaches.”week. I’ll be back.’”Like The Country Grocer, Harry Rosen Inc. has foundsuccess by using the latest technology to provideexceptional levels of old-fashioned service. It hasgrown from a single, 500-square-foot store in Torontoto become a powerhouse in Canadian retailing. Its16 stores nationwide account for 40 percent of themarket in high-end men’s wear. The chain has drawn WISDOM EXCHANGE 2006 13
  16. 16. Med-Eng Systems of Ottawa was the poster child for business growth and success until 2004.Creating As a developer and manufacturer of protective equipment for police and military markets, they had 90 percent of the world market for bomb disposalan innovation suits. Launched in 1981, they grew rapidly and were named one of Canada’s best-managed companiesenvironment for several years in a row. They won more than half a dozen export awards from the federal and provincial governments. They grew so fast, they grew right into trouble.Richard L’AbbéVice-Chairman, Med-Eng Systems Inc. “In 2004, revenues dropped by 37 percent and we were in deep trouble,” Med-Eng co-founder and Vice-Chairman Richard L’Abbé recalled during his lunchtime speech at the Wisdom Exchange. “But now, we’ve turned it around. This year, we’re in hypergrowth. Not only that, about 85 percent of this year’s revenue is coming from products that didn’t exist 12 months ago.” “A company goes through a lot a phases during 25 years,” L’Abbé told the gathering. “Mistakes are made and lessons learned.” One of the big lessons was that, when you dominate a niche market, you can get cocky. “We got used to owning the market,” he revealed. “But it didn’t take long before we were being copied by nine companies on four continents. Our proprietary product became a commodity. We weren’t prepared for it and we found we couldn’t respond quickly.”14 WISDOM EXCHANGE 2006
  17. 17. “The goal is to become an organization with the capability for continuous change,” said L’Abbé. “Innovation happens when you create the environment for it to flourish.”The company had grown larger, but it had become Their goal was to hire the best people for eachcumbersome. specific job, pay them well and create an environment that would foster innovation. To achieve that, they“Managing growth requires good processes,” said created product management teams with aL’Abbé. “But developing processes is boring, so I marketing person, an engineer, a designer andwould hand it off to staff, usually to someone who an outsourcing expert.was not really doing much anyway. The resultsweren’t very effective.” “We wanted a highly focused and motivated team,” said L’Abbé. “We needed them to be likeAs the company grew through diversification and a wolfpack.”acquisition, all the attributes of a good start-upcompany – strong market knowledge, flexibility, Today, when a client has a problem, the whole teamclient focus and decisiveness – were handcuffed, goes out to the meeting. They all hear directly fromL’Abbé said. Internal silos developed between R&D, the client about the problem, and they all hear themarketing, sales and operations. Innovation died. details filtered through their own expertise. They canThey instituted a phase-gate approach to new start designing the solution on the plane ride backproduct development. They ended up with a process home. They go back and check their solution withthat required 85 signatures and 135 checkpoints the client, fix it, go back again and fix it again.where projects could be killed. “Typically, after the third visit, the client says ‘Wow!“However,” L’Abbé observed dryly, “adversity This is fabulous’,” said L’Abbé. “This approach ispresents a great opportunity to change.” now generating 40 percent of our revenues.”Their first step was to cut staff by 15 percent. The For Med-Eng, one of the biggest lessons theycompany needed to change and it was clear that learned during 25 years of rapid growth is the criticalthere were people on staff who didn’t want to work importance of focusing on human resources.in an environment of change. “As soon as we did it,productivity went up,” he said. “Focused teams really work,” said L’Abbé. “The right teams will come up with new products so fastBut changing an organizational culture takes time. your competition will be left shaking their heads.”They started by teaching managers how to hirebetter. They profiled their best people to see whatqualities they wanted in new hires. Then theyscrapped the gate process and replaced all theirproduct managers. WISDOM EXCHANGE 2006 15
  18. 18. There are more than They make up and account for more than340,000small and medium-sized businesses >> 99% of the province’s businesses >> 50% of all jobs(SMEs) across Ontario Entrepreneurs have built the province’s small business community into a key driver of Ontario’s economy. They are principal contributors to innovation, investment and job creation in every part of the province. In May, Premier Dalton McGuinty underlined the importance of Ontario’s small business community by creating the new Ministry of Small Business and Entrepreneurship. The ministry is focused on helping SMEs to grow and prosper, and will be a source of programs, information and advice for business owners across the province. The annual Wisdom Exchange and Leading Growth Firm Series are two successful programs that support and showcase Ontario’s growth firms. The government will continue to share critical business information, insights and best practices with CEOs to promote effective management practices that will help them to innovate and compete. To access reports in the Leading Growth Firm Series and for updates on the Wisdom Exchange visit: www.wisdomexchange.ca Make a note to attend the next Wisdom Exchange… We’ll keep you informed! • Stats at a Glance: Contact: • 2.7% of Ontario businesses are leading Ministry of Small Business and Entrepreneurship growth firms that created 60% of the new Partnership and Business Development jobs between 1997 and 2000 56 Wellesley Street West, 4th Floor Toronto, Ontario M7A 2E7 • 99% of Ontario firms are small and Phone: 416-325-8772 medium enterprises (SMEs) with less than 500 employees Visit the website: www.sbe.gov.on.ca • 97% of Ontario firms have less than 100 employees • SMEs accounted for over half of total private sector employment in Ontario (1994–2003)16 WISDOM EXCHANGE 2006
  19. 19. Leading Growth Firm SeriesCEO PerspectivesThe Leading Growth Firm Series researches and promotes the effectivemanagement practices of CEOs of Ontario’s high performing firms. 14 Shifting Demographics: The Search for Talent 13 Outsourcing: Alliances for Growth 12 Why Leading Growth Firms Matter 11 Planning for Succession 10 Partnering for Growth 9 High Performing Advisory Boards 8 Winning Management Teams 7 Leveraging Customer Relationships to Drive Growth 6 Dynamics of Growth: Is High Growth Sustainable? 5 The Wisdom Exchange 2000 Report 4 The E-Business Readiness Assessment Report 3 The Six Stages of Growth 2 The Growth Builders Report 1 The Innovation ReportFor copies of the reports, visit www.wisdomexchange.ca and click on  Leading Growth Firm Reports.
  20. 20. Proud Sponsors of Wisdom Exchange 2006

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