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Wisdom Exchange 2008 - Strategies for Growth


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To extend the reach and success of this program into the important stakeholder group of high performing Ontario firms, the February 2008 event marked the first Wisdom Exchange in Ottawa, giving CEOs and presidents the opportunity to network with peers from across the province.

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Wisdom Exchange 2008 - Strategies for Growth

  1. 1. Highlights from the forum for CEOsEvent Report and presidents of Ontario’s leading growth firms WISDOM 2008 EXCHANGE Strategies for Growth 14TH WISDOM EXCHANGE CONFERENCE Ottawa Congress Centre, Ottawa, Ontario February 2008
  2. 2. On February 28, 2008, the Ontario Ministry of Small Business and Entrepreneurship hosted the 14th Wisdom Exchange for CEOs and presidents of small and medium enterprises (SMEs). Participating firms from the manufacturing; professional, scientific and technical services; information and cultural industries; and service sectors ranged in size from 10 to 500 employees with annual sales between $2 million and $100 million. This report provides an overview of the insights shared by CEOs, topic experts and workshop presenters at the event. In this reportWisdom Exchange 2008 TABLE OF CONTENTSWisdom Exchange 2008 TABLE OF CONTENTS Going global: Entering new markets through partnerships 3 Power to perform: Tight focus sharpens Linamar’s competitive edge 4 Sometimes things change: The new discipline of innovation 6 Leadership: Establishing, living and measuring the mission 8 Recruiting and retaining talent: Innovative approaches and solutions 10 Capitalizing from green: An emerging business paradigm 12 Financing Growth: Reports from the front lines 14 Business Advisory Services: Your partner for growth 15 2
  3. 3. “ We will continue to work with Ontario SMEs “ and industry associations to create a positive business environment for growth, investment, exports and innovation. Going global: Entering new markets through partnershipsWisdom Exchange 2008 NETWORKING LUNCH The Honourable Harinder S. Takhar MINISTER OF SMALL BUSINESS AND ENTREPRENEURSHIP With business conditions shifting unpredictably The Minister invited the audience to think of the across North America and around the world, Ministry of Small Business and Entrepreneurship as leaders of Ontario’s small and medium a partner in developing new markets world-wide. enterprises are recognizing and taking Ontario has a network of 10 international advantage of global opportunities to innovate, marketing centres, in New Delhi, New York, expand and open new markets. London, Los Angeles, Munich, Paris, Mexico City, Beijing, Tokyo and Shanghai. These centres, In his opening remarks to CEOs and presidents located in Canadian consulates, are there to assist at the Wisdom Exchange, Honourable Harinder Ontario firms to make local contacts, participate in Takhar shared his views on global growth trade shows and explore new markets. opportunities for Ontario’s SMEs. “The U.S. market is important, no question about it, but we Recognizing the vital contribution of SMEs to also need to look at other markets like India, the provincial economy, the Ontario government China and the Middle East where there are lots created the Ministry of Small Business and of opportunities,” said the Minister. Entrepreneurship as a one-stop-shop for support and advocacy. “I thank you for all your hard In many countries, the best way to enter work,” the Minister said. “You are the engine markets is through partnerships with local of Ontario’s economy.” companies well established in the field. The Minister cited the example of Samco Machinery In closing, Minister Takhar said, “We will Limited. A well-known designer and manufacturer continue to work with Ontario SMEs and of roll-forming systems and equipment, Samco industry associations to create a positive aggressively pursued international markets. One business environment for growth, investment, of its recent successes was to form a partnership exports and innovation, by providing a variety with Tata Ryerson Ltd. in India to make parts for of programs, services and resources to help the ground-breaking US$2500 Nano car, which companies committed to growth and innovation, is sending shockwaves through the international like yours, to gain market intelligence, export auto industry. The other was a global alliance assistance, support for new technologies and with Formia Tech Oy out of Finland, which also access to government programs.” has manufacturing facilities in China. Samco evolved from a one-man operation with a sales For more information on programs and services desk to a global enterprise with locations in to support Ontario businesses at any stage along Canada, India, Finland and China, largely their continuum of growth, visit the Ministry’s by innovating the company. website 3
  4. 4. Linamar Corporation is one of the great success stories of Ontario’s advanced manufacturing industry. From its beginning more than 40 years ago in Guelph, Linamar has grown to be a world-class designer and diversifiedWisdom Exchange 2008 KEYNOTE PRESENTATION manufacturer of precision metallic components and Power to perform: systems for the automotive industry, and mobile industrial markets. Today, it has more than 11,700 employees and 37 manufacturing facilities around the world Tight focus (25 in Canada). What strategies drove Linamar’s growth? More importantly, sharpens Linamar’s what strategies is the company now pursuing to meet today’s challenges? In her keynote presentation at the Wisdom Exchange, Linamar Corporation’s Chief Executive competitive edge Officer Linda Hasenfratz provided the inside view. Three drivers of success LINDA HASENFRATZ Linamar’s key business success factors in today’s volatile CHIEF EXECUTIVE OFFICER business environment lie in three areas: competitiveness, LINAMAR CORPORATION finding and pursuing opportunities, and maintaining a strong culture. “Competitiveness is about innovation, efficiency, speed,” said Hasenfratz. “We’re always learning, finding new and better ways to do things. New technologies and new materials are coming along all the time, so there are always opportunities to improve.” Linamar’s focus on competitiveness places product and process innovation and living Lean through continuous improvement high on its list of success strategies. The company has adopted many Lean processes, and the continuous improvement philosophy runs throughout the organization, from the plant floor through to planning, purchasing, labour-cost management and beyond. “You don’t do a ‘lean’ exercise once,” Hasenfratz said. “We’ve been doing it for about five years, every single day. It’s a never-ending journey.” For Linamar, competitiveness also involves minimizing risks wherever possible. As a multinational organization, volatile exchange rates can be a real headache and very costly. To mitigate this risk, Linamar makes a point of 4
  5. 5. “ “ You don’t do a ‘lean’ exercise once. We’ve been doing it for about five years, every single day. It’s a never-ending journey.buying materials and services in the countries they sellin, which creates a natural currency hedge.The pursuit of global opportunitiesOver the years, product and market diversification hasbeen one of Linamar’s core strategies both to mitigaterisk and grow the business. At the beginning, Linamarmachined parts. Now it designs and manufactures fullsystems. In the early days, it built power drives forRenault. Now it manufactures scissor lifts. senior executives ‘walk the talk’ and demonstrate the“The key is to identify the hot buttons of your same attitudes and behaviours expected from the restcustomers—or your customers’ customers,” said of the workforce.Hasenfratz. Meeting those customer needs in a waythat makes competitive sense could mean opening “The Linamar Way” focuses its efforts on peopleplants in other parts of the world, she continued, development, which includes succession planning,because “customers buy our camshafts not because as a key enabler to the company’s success. “Weof where they were manufactured but by what it can spent a good deal of time over the past ten yearsdo for them.” defining who we are and how we want to do business,” said Hasenfratz. “We realize that, forLinamar has a strong global presence and facilities in us, success in every area depends on having smart,Canada, Germany, Korea, Mexico, the U.S.A., capable people with a skill based foundation. OnceHungary and China. Hasenfratz said there are we find those people, we want to keep them.”huge opportunities in foreign markets and identifiedaggressive market penetration in areas of opportunity Rewards play a significant role in how Linamar recognizesas a way to maximize potential towards a prosperous the contributions of staff to the company’s overall success.future. Thinking globally, Hasenfratz listed Linamar’s The Stepping Stool Awards and Bonus program’s goaloperational philosophies as: setting and performance measurement system, part of the ‘lean’ strategy, has paid out $57 million in awards• Small manageable autonomous profit centres and bonuses since 1999.• Product focused factories utilizing flexible equipment wherever possible That drive for continuous improvement with a close• Plant clusters (link and leverage) eye on the bottom line is at the heart of Linamar’s• Decentralized organization outlook for growing the company in the decades to• Commitment to continuous improvement come. “We’re always evolving how we do things,”• Stepping Stool goal setting and performance said Hasenfratz. “The Tata $2,500 Nano car means measurement re-thinking engines. You can’t just cut costs by 90%, you have to re-think the whole thing.”Rewarding successThe foundation for the company’s continuing growth, Despite the turmoil in the auto industry, Hasenfratz isHasenfratz believes, is the strong culture they’ve built a firm believer that “in every challenge there is Linamar. It’s marked by open communication, In the words of Henry Ford—a plane always takes off intorewarding real contributions and making sure that the wind.” 5
  6. 6. We’ve all heard it a thousand times: innovation is the key to growth. But what if almost everything we believed about innovation is wrong? That might explain why only about four per cent of all Sometimes things innovation efforts are successful, says Larry Keeley. Fortunately, a new discipline of innovation is emerging today that can dramatically increase innovation success rates into the 35 change: to 70 per cent range. That’s not just wishful thinking. Keeley mentioned one of Canada’s most respected business thinkers, Roger Martin, Dean of the University of Toronto’s RotmanWisdom Exchange 2008 PLENARY The new discipline School of Management, is currently reinventing the training of MBAs to increase the success rate of innovation. Keeley, a renowned innovation strategist and business advisor of innovation who has worked to develop more effective growth strategies and innovation methods for over 27 years, while working with LARRY KEELEY some of the largest firms in the world, takes a practical and PRESIDENT, DOBLIN INC. business-minded approach to innovation. He captivated the Wisdom Exchange audience for 90 minutes with his droll INNOVATION STRATEGIST sense of humour and keen insights on innovation. AND PROFESSOR CHICAGO INSTITUTE OF DESIGN Keeley believes that most successful innovations are not just a happy product of random inspiration but the direct result of corporate or community leaders setting goals and making things happen. Innovation needs to be a hands-on process that personally engages an organization’s leaders. As Keeley explained: Out of problems and strategy comes a vision, and that vision is applied to a solution, which can differentiate an organization from the competition. He cited three transformative examples of problem-solving combined with leadership that led to innovations in North America, Europe and Asia: • Helsinki, Finland’s Municipal Lighting Project: Helsinki has become a global centre for innovations in lighting, which, Keeley pointed out, makes sense “because it’s friggin’ dark there for a lot of the year.” • Tata Group: In India, the Tata Group are recognized as one of the world’s finest hospitality chains. The brand is synonymous with luxury and high-quality service. For price-driven consumers, Tata Group developed an entirely new approach to low-cost, high-style hotels called Ginger. Their slogan is “Welcome to the world of smart basics. No frills chic, Indian style.” 6
  7. 7. “ If you hear about a new technology or innovative discovery that might be important to your business, find out where you can go to see it in person. You can’t just experience it intellectually. You have to feel it in your gut.• Suntech and Dr. Zhengrong: In China, Suntech’s Dr. Shi “ Zhengrong is creating the world’s most efficient passive solar arrays. The main Olympic stadium in Beijing is powered almost entirely by passive solar energy. The outcome: remarkable environmental savings.“If you hear about a new technology or innovativediscovery that might be important to your business, findout where you can go to see it in person,” Keeleyrecommended. “You can’t just experience it intellectually.You have to feel it in your gut.” creates a unique and holistic customer experience only loosely controlled by the platform owner; usually supportedHe further advised, “As leaders you have to shape change by proprietary technologies; and typically characterized byand redefine your business. Figure out what is fundamentally interdependent products and services provided through aand permanently changing in your industry and address this network of business partners.shift—even if it scares you. Pick a focus, he recommends,and aim to be the best.” Money, printing, free markets and capital markets, property ownership and the Internet are on his list ofThe first step in making the innovation process more effective 15 Top innovations of all time. “All of these platforms,”and efficient, said Keeley, is myth-busting. Contrary to explained Keeley, “transcended enterprises, industriespopular belief, innovation is not random, ‘eureka!’ inspiration and political borders.” Google, TIVO, MS Windows XP,that comes out of the blue. “Nonsense,” he says. “It’s about Yahoo and eBay are examples of the popular consumertaking a disciplined approach that has clearly stated goals platforms today. “All of the important stuff now cuts acrossand is guided by metrics that matter.” There are now proven companies and markets.” He added: “Think of moderninnovation protocols and diagnostics that help keep bikes as a system of platforms, where a bike ispeople focused. assembled by choosing your own frame, peddles, seat, stem, handle bars, wheels, etc.”According to innovation studies, the big winners in the inno-vation game over the past ten years got rich by developing Keeley shared 10 types of innovation to move beyondinnovative processes or partnerships, not products or products to win. Studies have shown that if you cantechnologies. For example, Dell Computer’s success came integrate six or more at once, you will achieve disruptivefrom breakthroughs in their business model, financing, market changes.service, brand, and customer experience, but not product.In fact, the strength of their consumer offer came from 1. Business model (how the enterprise makes money)positioning their product—a computer or peripherals—as 2. Networking (value chain and partnering)a reliably standardized commodity. 3. Enabling process (assembling capabilities) 4. Core process (creating greater efficiencies)The runaway success of the iPOD is not simply because it’s 5. Product performance (basic failures, performancea better MP3 player. The iPOD is an innovative platform that and functionality)extends beyond a single industry and involves partners 6. Product system (product extensions that surroundincluding the iTunes software suite, an on-line music store an offering)and third-party accessories to create an integrated music 7. Service (how you support your customers)“solution” for consumers. 8. Channel (how you reach your customers) 9. Brand (how your customers perceive you)Keeley believes in an interconnected world, platforms matter 10. Customer experience (intangible benefits received bymost. He defined a platform as an integrated offering that your customers)innovation.” 7
  8. 8. 1. 2. The look of today’s business leaders ranges from traditional blue suits of Bay Street bankers to the funky informality of digital gamers, but the essential skills of great leadership remain the same. Leadership: Exactly what defines great leadership was the source of hot debate among CEOs in this workshop where management styles spanned the spectrum, but their shared Establishing, living commitment to leadership and what it meant to businessWisdom Exchange 2008 WORKSHOP growth showed there was a lot of common ground. and measuring For Ian Curry, President and CEO of DNA Genotek, leadership starts with setting the course for both the company and employees, and the cornerstone of this the mission process is designing a mission statement. “Lots of people don’t want to talk about mission statements 1. DON GIBBS because they think mission statements are too ‘artsy’ or high- CHAIRMAN AND CEO level,” said Curry. “But our experience has been that it can TARQUIN GROUP INC. be a powerful tool for the organization.” 2. IAN CURRY The proof of his approach may well be in the company PRESIDENT AND CEO balance sheets. DNA Genotek, which manufactures and DNA GENOTEK INC. markets a breakthrough DNA collection kit, has been lauded by everyone from the World Economic Forum to TIME magazine. Revenues and the number of employees have both grown by 100 per cent every year for the past four years. Corporate mission statements are often designed to include everything and offend no one. But it can be more than that. For Curry, the key is to make the mission statement meaningful and a living part of the hearts and minds of all employees. One hundred per cent buy-in is critically important. To help accomplish this, DNA Genotek engages all employees one-on-one in a ‘partial sentence exercise’ where staff members are asked to finish an incomplete statements about the company such as: • “The things I value most at work are…” • “I believe our mission is to…” • “We will be successful when…” • “I believe our customers are…” • The key issues/standards we must maintain with vigilance are…” 8
  9. 9. ““ As CEOs we sometimes make too many assumptions about what our employees know and don’t know.“As CEOs we sometimes make too many assumptions aboutwhat our employees know and don’t know,” said Curry. Thesimilarities and differences of the answers are discussed inwhat Ian described as “getting what is in people’s heads onpaper,” and “100% participation equates to 100% buy in.”In addition to achieving buy-in, the practice also has animportant result: clarifying what your employees think, knowand don’t know about your business.According to Curry, the mission statement may appearsimple, but it should project the aim and direction of the Other points raised were:company, and the intellectual/philosophical origins of thesegoals. It should be clear, concise and doable. • How do you ask and impart employee opinion in a company of 150 rather than 30?The discussion broadened to cover on-going leadership • How are new values ingrained in larger companies?challenges, such as motivating staff, planning for the • How does the company’s values and character changefuture and coping with the impact of success. A number when the firm’s revenue goes up from $2 to $10 million?of participants felt a mission statement was only part • How many companies had excellent mission statements,of a complex set of requirements for business growth, yet failed?including long and short term strategies, capableand diligent execution and getting the right people “The mission statement should be under constanton the bus. evaluation,” Curry said. It should serve as a benchmark of the company’s success, built on questions like:Others emphasized “company fit,” suggesting that noamount of commitment to a mission statement was going • Would I recommend us to your colleaguesto be able to adapt an individual who simply did not fit the (customer satisfaction)?culture. One CEO said his experience was that employees • How would I rate our company against its missiontend to “self edit” when a company vision does not coincide statement (1-10)?with their own. Another pointed out that peer pressure is a • Does the mission statement translate into customerfactor in bringing people together. Another issue was how satisfaction?a firm’s vision impacts recruiting and retention “in this ageof difficult staffing challenges.” Curry suggested ways of keeping the mission alive, such as sharing testimonials and ‘mission statement stories’ fromDon Gibbs, a successful financier and leader in a customers and end users. He underscored the importance ofspectrum of firms, from start-ups to acquisitions, has bringing people together, aligning their vision and allowingbeen instrumental in building several of Canada’s most them to collectively respond to change. “Mining the visionssuccessful technology companies. Gibbs believes, “To of your employees is the most critical component of this formreally learn a business, you have to live and die in it.” He of leadership,” Curry said, “and finding tangible ways ofstarted his career with Leigh Instruments and then moved engagement to keep the mission alive day-to-day.”to Mitel Corporation as its CFO, where in eight years, hehelped the company go public and grow in sales revenue Although approaches differ, the goal of workshopto $250 million. As CFO of Cognos Inc. he successfully participants was the same…to lead and grow theirtook it public. Today, as Chairman and CEO of Tarquin companies. For Genotek, its mission statement hasGroup Inc., Don leads by example and plays a primary proven to be a powerful tool in helping to achieverole in the day-to-day efforts of his firm. the company’s impressive growth rates. 9
  10. 10. 1. 2. For most employers, finding and keeping good people is one of the toughest challenges, and the competition for talent is becoming even tougher. Dr. Michel Jullian of Ottawa-based OCM Manufacturing Inc. Recruiting and has been through the hiring process numerous times and has developed some innovative approaches and effective solutions to improve his firm’s recruitment and retention (R&R) success rate. retaining talent:Wisdom Exchange 2008 WORKSHOP OCM, with a small management team and staff of 50, provides turnkey electronics manufacturing services for small Innovative and mid-sized companies whose products include electronics. Customers are in the transportation, industrial, consumer, medical, oil and gas, mining, security, and instrument and approaches controls sectors. The three top R&R considerations at OCM are attracting and solutions and retaining good people, satisfying a diverse workforce, and maintaining both quality and processes through good ongoing performance. 1. DR. MICHEL JULLIAN, PANELIST PRESIDENT & CEO One challenge OCM grappled with, once they attracted the OCM MANUFACTURING INC. right potential employees, was that the hiring process did not screen the candidates very effectively. “There are always some 2. MICHAEL PALMER, PANELIST people who are great at interviews,” said Jullian. “They’re per- VICE-PRESIDENT AND GLOBAL LEADER sonable, they say all the right things, but then they’re not very TALENT ACQUISITION PRACTICE good when they get the job.” CERIDIAN CANADA In 2005, OCM went through a corporate re-branding process to heighten its “brand name recognition” and attract both customers and talent that would be a great fit. A new corporate identity, website and media presence were created to increase OCM’s competitiveness in the local market, both as a supplier and employer. OCM’s revamped approach to hiring incorporated an industrial psychologist who developed standardized questions, a multi-stage interview process that includes three interviews with three different people, asking open-ended questions, and having candidates complete a computer-based behavioural test on site. For specialized positions, Jullian hires recruitment experts. With employees ranging in age from Gen X to Boomers of numerous mother tongues from many geographic regions, Jullian understands the importance of satisfying the needs of a10
  11. 11. “ “ People want to be treated fairly. If there is a survey in place you can use to establish your wage rates, use it. We have profit sharing and are very open in our communication with employees.diverse workforce. OCM has developed four broad solutionsto meet their diversified needs:1. Open communication to understand each other2. Recognize you can’t assess or reward everyone in the same way3. Provide a mixture of advantages (good wages, health and dental benefits, lenient vacation schedule, telecommuting, flex hours and job sharing, and perks like cell phone, laptops, etc.)4. Team building and social events Palmer and Jullian agreed that one of the most important aspects of retention is engaging your workforce. Work has“Innovative benefits should help staff meet their real needs,” to be meaningful to all generations; the millenials (currentlysaid Jullian. For example, recent immigrants who return to 18-25 years soon to be leaving university or college),their native country for several weeks each year to visit family Generations X and Y as well as the baby boomers.are offered a flexible vacation schedule that allows employ- “At OCM, we give quarterly updates on the business andees the “extra” time off without compensation. employees feel more connected because they can see where their efforts can make a difference,” said Jullian. “By“People want to be treated fairly,” he said. ”If there is a empowering employees with knowledge and training, theysurvey in place you can use to establish your wage rates, engage in the company’s success.”use it.” He adds, “We have profit sharing and are veryopen in our communication with employees.” After you have found and hired the right person, one of the best ways to keep them is to make sure they get the rightMichael Palmer of Ceridian Canada, a thriving HR/Payroll first impression of the company. OCM has a Great Startoutsourcer for many SMEs—primarily in high technology, program, where a buddy is on hand. Everything is set upfinancial services and telecomm—talked about the to welcome and show new hires the ropes, which helps themimportance of tailoring the message to find the candidate. to confirm their choice. The program focuses on company culture and helps employees to live and experience thePalmer said, “You can’t just post a job ad and pray employment brand.that you’ll get good candidates. Recruiting is not aboutposting and praying. Recruiting is figuring out what With its employment brand well underway, OCM continuesyou need and strategizing where to find people to fill to leverage its talent pool to communicate new openings andthat need.” build its candidate network. The firm’s Chinese operation was launched four years ago and Jullian continues to promote theTaking it a step further, “you have to market tough to fill company through OCM’s website, newsletters and whitepositions, not just advertise to fill them,” he advised. To papers. With HR processes in place, OCM tracks candidatesattract the right people and tailor your recruiting messaging against a specific requisition and metrics. The policy is to findand vehicle to various audiences, Palmer offered the a way to respond to each and every candidate: when theyfollowing tips: apply, when they are declined and they are selected.• Analyze your workforce and break it down into categories if possible With a greatly improved R&R success rate and quality /process• Identify what elements of the job and benefits are impor- solutions in play, OCM now “avoids the black hole” when new tant to applicants in particular categories positions become available and Dr. Jullian continues to foster an• Determine where certain types of candidates are likely to environment where every individual can experience his/her seek employment contribution to the company as a way of life. 11
  12. 12. 2. 1. 3. “Going green” has suddenly slipped into the mainstream, taking many companies and consumers by surprise. Now, many leading growth firms are exploring what it all means and how they can begin to reduce their carbon footprint. Capitalizing Niel Hiscox, publisher of Green Business magazine, is watching the impact unfold at companies in many sectors. The whole discussion, he reports, has shifted from ‘green’ from green: advocacy to a hard-nosed analysis of ROI (return-on-investment),Wisdom Exchange 2008 WORKSHOP strategic implementation and decision-making issues. An emerging New companies, such as Patagonia clothing, are emerging that have sustainable materials and processes as a core part of who they are and how they do business. business paradigm Major corporations, such as Interface, the world’s largest carpet manufacturer, are transforming themselves into widely 1. NIEL HISCOX, MODERATOR recognized world leaders in sustainability practices. PUBLISHER GREEN BUSINESS MAGAZINE Still other companies are devastated when they discover that they have huge liabilities in terms of environmental clean-ups 2. TOM HEINTZMAN, PANELIST for issues that no one had even thought about ten or twenty PRESIDENT years ago. BULLFROG POWER INC. “Everybody agrees that sustainability is going to be the 3. THIBAUT MILLET, PANELIST next big thing because it changes the shareholder value SENIOR MANAGER paradigm of business costs and risks,” said panellist Thibaut Millet from Deloitte and Touche. “People are CORPORATE RESPONSIBILITY beginning to realize that sustainability has the potential & SUSTAINABILITY SERVICES for both value creation and value protection.” Defined by DELOITTE & TOUCHE Millet, “sustainability is simply how a company manages its business to generate shareholder value, while having a positive impact on the community, and minimizing adverse impact on the environment.” The value-creation concept was born out in a comment from the president of a firm providing packaging and crating for all industries. “Customers want less packaging, customers want shorter supply chains, customers want branding, and customers want to get an edge over their competitors. This has actually driven down our costs,” he said. Niel Hiscox related how consumer behaviour and ‘going green’ are not always clear. He recently attended a media briefing at the Canadian auto show where presidents of the12
  13. 13. “ Sustainability is simply how a company manages its business to generate shareholder value, while having a positive impact on the community, and minimizing adverse impact on the environment.major car companies participated in a panel discussion on “green initiatives. “These senior executives are seeing a verybig disconnect between consumer awareness of sustainabilityissues and any connections with their purchasing decisions,”stated Hiscox. “Consumers are saying ‘yes, environmentalissues are very important to me,’ then they are getting in theirSUVs and driving away.”“The continuing escalation of gas prices may changeconsumer response, but price pressures are not the onlydrivers of behavioural change,” said Tom Heintzman, In exploring green opportunities, Hiscox advised it’s not justPresident of Bullfrog Power Inc. Launched in 2005, Bullfrog about products. It’s also about processes, how you manageprovides residential and commercial customers in Ontario infrastructure, waste, and looking through the entireand Alberta with clean, green power from 100 percent organization to identify, implement and sustain greenrenewable sources such as wind power and low-impact initiatives. “Part of it means understanding your own customerhydro facilities. base to see what their concerns are about you,” he added. “Customers are always looking for leaders. In addition to“There is a diverse range of companies that have chosen to financial gains, your green image can help you to head ago green and a long list of reasons why,” said Heintzman, market, keep customers and be perceived as an innovator,”who talks with businesses every day about sustainability Hiscox added. All of these merits can add to the bottom line,issues. For some companies, their motives are altruistic: they which one CEO attested to, having won an environmentalsimply want to reduce the environmental impact of their award that resulted in a “big payoff” for the company.activities. Others may want to earn a position on the DowJones sustainability index. Still others see it as a competitive Some participants found themselves struggling to balanceadvantage because they can add “green” points to their their desire to go green with practical concerns. “I take ourcustomers’ value chains. social responsibilities seriously and we are interested in having a product that is as environmentally friendly as“More and more, we’re hearing that the impact on possible,” said the head of a specialty manufacturer of ainternal staff is as important as the external impact on comfort and safety product for men and women. “Then Icustomers,” Heintzman said. “In terms of attracting top look at components that go into our products. Some of themtalent, people want to work for companies that reflect travel 10,000 miles to get here. We are green in manytheir personal beliefs.” ways, but how can I go to my customers and say this is a green product?” The panel recommended transparency isGreen initiatives are no longer just for activists, as the best policy.environment and social issues are, more and more,becoming a public concern and critical factor for For Ontario manufacturers wishing to reduce their greenhousegovernment policy and corporate strategy. A critical question gas emissions, Heintzman offered a simplified outline:is “how to differentiate your company?” 1. Gather baseline data on energy use, use of recycledAccording to a survey of 500 business executives conducted materials Grant Thornton, “Company executives believe that 2. Reduce consumption through efficiencies, conservation,corporate responsibility programs can positively impact their new technologies, and help achieve strategic goals (…) 77 percent 3. Buy green products and services to replace those thatsaid they expect corporate responsibility initiatives to have you can’t eliminate.a major impact on their business strategies over the next 4. Offset your greenhouse gases, as a last resort, byseveral years.” purchasing carbon credits. 13
  14. 14. Financing the growth of high performance companies has always been a challenge, but today’s economic and financial market conditions are enough to test the most optimistic entrepreneur. Amidst these somewhat discouraging and contradictory conditions, 16 CEOs from Ontario firms sat down to discuss financing growth. Breaking from the usual workshop format, the moderators rearranged the seating into a large square so everyone could talk face-to-face .1. 2. Financing growth: Reports from the front lines 1. DENNIS ENSING, MODERATOR ‘You’re our partner. We want you to help us PARTNER find additional financing.’ That’s when they WISE MENTOR CAPITAL brought in BDC.”Wisdom Exchange 2008 WORKSHOP 2. DENIS GODCHARLES, MODERATOR Business Development Bank of MANAGING PRINCIPAL Canada (BDC) INTERIS CONSULTING INC. “Our experience with BDC has been quite good. Our bank really loves working with To kick-start the discussion, co-moderator BDC. We find that it’s not too intrusive, the Dennis Ensing pitched out the provocative conditions are quite reasonable.” question: “So, how are banks treating you these days?” Export Development Canada (EDC) “The EDC is also a good way to check a Following are fly-on-the-wall quotes from company’s credit. If EDC won’t insure them, participating CEOs with the names omitted. you may not want to get involved.” Commercial banks Private equity “We’ve found that if you’ve got good EBITA “VC’s (venture capitalists) want 25–40% (earnings before interest, taxes, depreciation return per year. Angels want 60%.” and amortization) you can get pretty good deals.” “The question is, what do you give up? Everyone thinks the magic number is 50%. It’s not. It all “We recently went bank shopping and I was depends on how the deal is structured. The key really surprised that they all came back with is your relationship with your investors and your very different platforms, very different agreement with your Board.” approaches. Some banks won’t look at SRE&D financing credits, others will.” Words of wisdom “You have to ask yourself—Is money really “We put a lot of effort into our relationship the missing engine of growth? Sure, it’s an with our bank. We’ve been with them 12 easy answer. But sometimes you need years. We tell them that, every two years, innovation or new management. Sometimes we’ll benchmark them against the best offer it’s really important to step back and think we can get. At one point, we told them about it.”14
  15. 15. The Ministry of Small Business and Entrepreneurship delivers direct support to Ontario business leaders to help small and medium sized companies (SMEs) identify and access critical information, key resources and expert advice needed to overcome obstacles or pursue new growth opportunities. Bob Marrs, Director, Business Advisory Services with Dennis Ensing, Partner, Wise Mentor Capital and Dr. Michel Jullian, President, OCM Manufacturing Inc.Wisdom Exchange 2008 MINISTRY PROGRAMS AND SERVICES Business Advisory Services: Your partner for growth As a sounding board to provide unbiased, government funding programs, and information on objective and strategic advice, the Ministry’s other programs of interest to Ontario manufacturers team of experienced business advisors located and exporters. in twelve regional offices across Ontario have assisted literally thousands of companies over Leading Growth Firm Series the years. Business advisors have a network of The Leading Growth Firm Series of publications business contacts in both the pubic and private researches and promotes the effective sector to assist with market intelligence, management practices of CEOs and presidents R&D programs, export assistance, support of successful Ontario firms. Report 16: Thinking for innovation and new technology, and Lean…Improving performance, customer expansion plans. satisfaction and the bottom line was released in April, 2008. The series delves into a range of With expertise in business planning, finance, critical business issues and shares best practices, exporting, and more, one of your local advisors growth strategies, tactics and perspectives through will get to know your company, assess its interviews/profiles of CEOs of successful Ontario operations and identify issues that are crucial to SMEs, insights from topic experts, lessons learned your firm’s growth. Business Advisory Services from corporations and resource information.To connects you to government programs and access all of the reports, visit services, networking, and growth opportunities (click Leading Growth Firm Series). through events, workshops, seminars, publications and one-on-one consultation. The Ontario Oil Sands Connection Business Advisory Services is working to connect The Wisdom Exchange qualified Ontario manufacturers and suppliers Now in its 14th year, the Wisdom Exchange is with the right Alberta Oil Sands opportunities. “the forum” where CEOs and presidents of Alberta Oil Sands development is creating Ontario’s leading growth firms meet to hear from demand for manufactured products from across top business strategists, share knowledge, learn North America, with an estimated $170 billion in best practices and make valuable business oil sands related development. With a focus on connections. For information on past Wisdom metal fabrication and industrial machinery, Exchange events, visit equipment and service sectors, Business Advisory Services has developed the means to connect The Breakfast Series you with a pipeline of opportunities. One of our Business Advisory Services just launched a series Business Advisors will consult with you to assess of breakfast sessions to support Ontario business your current position and help develop your leaders by exploring timely growth topics and Oil Sands Market Development Plan. providing the latest on government programs and (Click Grow Your initiatives. The first three events in southwestern Business/Talk to Experts). Ontario (June, 2008) feature a presentation/ discussion on Lean and how it is reshaping Let Business Advisory Services help manufacturing, updates on two new Ontario to put the pieces together for you! 15
  16. 16. Contact: Ministry of Small Business and Entrepreneurship Business Advisory Services Branch Partnership and Business Development 56 Wellesley Street West, 4th Floor Toronto, Ontario, M7A 2E7 in Ontario, Canada on recycled paper © Queen’s Printer for Ontario, 2008