Giving up on the 1-Yard Line: Finding triumph over mistakes that companies make

This article was published by CMC Canada in the Summer 2019 issue of Consult.

In my many years as a business advisor and venture capitalist, I have seen companies make a lot of mistakes.  There have certainly been successes, but mistakes, unfortunately, are a lot more common.  Some of the ones that are the most damaging are those that are analogous to “giving up on the 1-yard line”, where after a prolonged period of time of working, pushing forward, and focusing on their game, a company’s leadership throws up its collective hands and says, “I’m done”.  Why is this so harmful?

First, this situation tends to occur when facing challenging tasks that are integral to the success of a company; examples include areas such as properly conducted business planning, implementation of fundamental systems and processes, and successfully attracting financial and strategic partners.  Appropriately addressing these areas tends to take far more work than business leaders anticipate; they also represent initiatives that might be entirely new.  As a result, the keen enthusiasm that is apparent when a project begins tends to fade to an attitude of “we don’t need to work this hard”.

Second, companies sometimes have difficulty focusing on priorities, as key areas tend to be far less glamorous that the “fun” aspects of being in business, such as designing a new logo, touring office space options, or chatting up prospective partners that the company has little potential of actually attracting.  Days get filled with these activities, that are more about busy-ness and less about results, decreasing the amount of available time to focus on the real work that needs to get done.  This is a hard lesson that business leaders tend to discover far too late, and can be as damaging as losing key customers or running out of money.  Full stop.

A better approach is recognizing that advisors who have “been there” and “done that” are in a unique position to provide the important leverage that companies need, to ensure that they are focusing on the right things, conducting their work at a quality level, and not running out of steam.  How can this be achieved?

  • Priorities are not always obvious. Amazing, but true.  Business leaders can get so caught up in the challenges of running the company on a day-to-day basis, dealing with staff members, and responding to customer needs that they are unsure (or unaware) about the steps that should be taken to make meaningful progress on a corporate level and might lack the experience of what is required in order to do so.  Advisors can play a key role by identifying and prioritizing task items and keeping the implementation process on track.  All of these areas are common pitfalls and represent the difference between starting something and actually getting it done (activity does not equate to meaningful progress).
  • Experienced advisors are the “acid test”. Advisors with a strong experience and qualification base understand where important initiatives need to “get to”, such as what financial partners need to know in order to make a decision.  Companies tend to take the view that “what we provide to them will be good enough”, failing to understand the woeful inadequacy of this approach.  Using raising capital or financing as an example, experienced financial partners have typically reviewed more opportunities than they can count and operate in an environment of limited money and an investment mandate that guides selection.  They very quickly slot opportunities into a category, and chances are, it won’t be the “yes” file.  Experienced advisors have a skillset that is extremely valuable; one that can help a company put its best foot forward and anticipate what is required in order to get to a successful outcome.  Be sure to probe an advisor’s qualifications to ensure that they are the right fit for the particular initiative at hand.
  • Utilize skill to get there, faster and better. Teams who spend the whole game running around on the field, for the sake of running around, don’t win very many games.  Coaches of successful teams know how and when to utilize resources in a manner where they can make the best contribution, including recognizing that there are times when specialized help is needed.  This is where an experienced advisor can play an important role, providing the necessary expertise to quarterback complicated plays and get to the endzone more quickly.  Business leaders sometimes do not appreciate the value of resources with the right experience; this fact tends to get reinforced in times of poor advice, from those who are not qualified to help, or when receiving no assistance at all.  A company might not recognize the weaknesses that result, but the external party that they are trying to impress likely does.

These lessons might seem relatively straightforward, but reality reflects something quite different, as fumbles and mishaps in all of these areas, and numerous others, are quite common.  What can make a big difference is perspective; stepping back to see how far an initiative has come, the relatively short journey that remains, its level of priority, and what success requires.  If business leaders did this more often, there would be far fewer companies walking off the field with only one yard left to go.

MEDIA: Celebrating 2 Years on CBC News Network!

Pleased to be celebrating two years of regular appearances on the CBC News Network Weekend Business Panel!  Our panel reviews the week in business every Saturday morning after the 10 AM news (Eastern Time), discussing a diverse array of topics.  Here’s just a sample of topics upon which I’ve provided commentary:

Such a range of topics, and never knowing what the news cycle could bring at any moment, makes providing commentary on the Panel so much fun.  Thanks to everyone at CBC News Network, as well as those behind the scenes who make us look so good; we couldn’t do this without you!

 

MEDIA: CBC News Network Weekend Business Panel (July, 2019)

Summer days also mean studio days for the CBC News Network Weekend Business Panel, alongside Sherena Hussain and Janet Stewart.  On a personal note, it was great to get a chance to work with Janet, who I know as the anchor of CBC News in Winnipeg!

There are so many stories we could have discussed on what was a busy and varied news week; here’s what we covered:

Facebook’s $5 Billion Fine.  Federal regulators have fined Facebook $5 Billion for US privacy violations.  What are the implications for the company, in what has become an ongoing saga of operational problems?

Boeing’s Max Mess.  Boeing is considering pausing production of its troubled 737 Max jets after two devastating crashes, a lengthy “fix” process, and public concerns.  With the grounding impacting airlines and ongoing regulatory scrutiny, can the Max’s reputation be salvaged?

When Inspired Honey Hits the Shelves.  Investigations by the Canadian Food Inspection Agency have found that some products that claim to be honey are anything but.  What should consumers do when shopping for food items and is there an even broader impact?

Although some have shown little concern about the magnitude of Facebook’s recent fine, there’s no denying that $5 Billion is a massive amount of money.  Given the many shortfalls that have been observed over the last few years, including in terms of privacy, security, unintended use of subscriber data, and questionable content, there should be significant concern over the potential for additional financial penalties that could be in store for Facebook.

It’s critical that the company put fundamental systems and processes in place to proactively combat threats and mitigate risk, and although new compliance measures require certification from Facebook’s CEO, the strength of such obligations tends to be related to the person who signs.  To this end, executives must have a full appreciation of the serious nature that certification entails, and not fall into the category of those who sign their name with little recognition of the magnitude and consequences.  Many will be watching this next chapter very closely, including regulators.

First and foremost, the story of the Boeing 737 Max is a tragedy, with two horrific crashes and the loss of hundreds of lives.  Couple this with a relatively slow response from Boeing to ground the planes, criticism and concern from pilots, lawsuits from victims’ families, and a significant financial and operational impact to airlines and there’s not denying that a crisis is at hand.

Companies in this type of industry must always be mindful of the high degree of attention that must be paid to areas such as design, testing, training, and communication.  In the event that there proves to have been weaknesses in these areas and others, Boeing must take steps to fully review what was behind this disaster, and resolving it should start at the leadership level.  Consumers have their eye on the Max; how many would trust this technology enough to get on board again?

It’s certainly disturbing when a food item turns out to be something other than what was expected; this is just what has occurred with some products labeled as honey.  Besides the obvious risk and unfairness to consumers, this scenario also impacts companies that are producing and selling quality products in an honest manner, as doing so tends to be more expensive than items that are “watered down” or laced with cheaper inputs.

There is no excuse for companies incorporating additives into a food item that is being represented as pure or of superior quality; how dangerous it is to have such products in Canada’s food supply.  Although shoppers have a job to do when it comes to reading labels, the onus is on companies to be truthful about their products; regulators must also take steps to ensure that standards are in place to protect consumers, as well as a robust enforcement regime.  There is no place for dishonest, fraudulent, or low quality food products in Canada, period.

These are serious topics, but there was a moment to smile.  The reason?  Watch the archived version and find out why!

 

They Used to Call it “Sexist”: Taking action against systemic gender bias

I’ve been in the business world long enough to remember the days when a person or organization that didn’t treat women fairly was referred to as “sexist”.  This term took a wide path; be it a lack of promoting women to more senior roles, paying them fairly, making inappropriate comments, or worse.  Although the terminology has advanced from this simple reference, the journey to reaching gender parity has made far less progress.

Statistics and research findings are readily available to support a lack of gender parity; be it the inequity of women in senior roles, Board of Directors positions, equal pay, or investment capital for female led companies.  While some have approached the issue with a musing of “we must do more” or claim that “mentoring young women and girls is the answer”, such commentary is woefully inadequate and off the mark.

As a former executive and venture capitalist still active in the industry, I have spent more time than most working in traditionally male dominated fields and certainly know what it’s like to be the only woman in the room; doing so has never bothered me.  I am bothered, however, by the relative lack of progress that has been made in advancing women to a point of parity in a range of senior areas over the last quarter of a century.  I recall unequal pay and the “glass ceiling” being regular topics of conversation when I was completing my university degree, which was some time ago.  In 2019, these issues are still very much a reality.

Given that there is an abundance of women who are qualified to hold executive roles, run companies, serve on Boards, and seek investment capital, the lack of progress is not due to insufficient supply; something else is at play.  Although there are certainly exceptions, this suggests the presence of a “systemic bias” that has not allowed women to progress as equally as men in some areas.  An example is as simple as filling a Board or senior executive vacancy by utilizing a “who do we know?” approach to identify possible candidates, drawn from the current members of the group and their network; we know that the majority of these are men.  The result, too often, is a disproportionate candidate pool that under-represents some groups, as well as inclusion of those who are less than ideally qualified.

Changing this reality requires more than wishing it away or “giving it time”; tangible action is needed on various levels.  Whatever the vantage point, there’s a role to be played in eradicating systemic gender bias:

  • If you are a member of a Board of Directors:
    • Refrain from relying solely on the “who do we know?” approach to fill senior roles and cast a wider net when seeking candidates. Ensure that the network that is approached has a balanced gender mix and engage an experienced advisor to draw candidates more broadly (don’t forget to request information about their diversity mandate).
    • Ask the business leader for a copy of the Company’s diversity policy (if this is met with a blank stare, engage a qualified advisor to help), set milestones, and monitor progress.
    • Ensure that Board and Committee meetings are kept at a professional level and that proceedings are respectful and comfortable for all. Diverse perspectives actually improve a group; studies have shown that the presence of women in corporate leadership generates better results.
    • If you see gender or any other type of bias, call it out.  A Board represents an important part of an organization’s leadership, and if this represents an area of discomfort, think twice about holding the role.
  • If you are a CEO or Senior Executive:
    • Ensure that the Company has a diversity policy in place and that equity is present, in terms of compensation and access to senior roles. If this is not the case and/or “we can’t find qualified women” seems to be a common complaint, seek advisory assistance.
    • When implementing strategies to enhance diversity, ensure that the approach that is being taken isn’t “tone deaf” to those that it is meant to help.  Too often, poor or less than thoughtful implementation results in the process backfiring, leaving a situation worse than it was in the first place.  Seek feedback from those who are skilled in the area of diversity initiatives and/or a sample of the target group, in advance, to avoid costly and embarrassing mistakes.
    • Track diversity progress and recognize that an organization that is gender balanced, viewed as “fair”, and comprised of diverse views will lead to better performance and be more appealing in the marketplace. Companies that achieve this in a meaningful way can showcase their accomplishments, while others face the prospect of being unfavourably labeled and less attractive to qualified candidates.
    • Remember that a company’s diversity reflects on its leadership in the Executive office.  Ask the hard questions: are you proud of what has been achieved in this regard during your tenure?
  • If you are responsible for managing the human resources function:
    • It is incumbent upon you to ensure that this functional area is managed fairly, regardless of whether you are a human resources professional or a manager who has been assigned this responsibility (such as a CFO). Where additional knowledge or expertise is required in order to do so, request it.
    • If the Company lacks a diversity policy, equitable compensation, workplace respect, or has other problems, it is not acceptable to stay the course and relegate the situation to a talk track of “it’s always been this way”. Meet with the business leader to discuss these areas and make an assessment of where progress can be made.  Be sure to seek professional guidance in situations that are truly unacceptable.
  • If you are a human resources advisor or consultant:
    • Have a diversity policy that guides recruitment and selection activities and be prepared to educate those who view this approach as “giving unqualified people jobs”. In many, if not most cases, there is a diverse range of qualified candidates.
    • “Walk the talk” with candidates and ensure that a diverse range is contacted on a regular basis. Situations where women, for example, are added to a candidate database so that it can be promoted as “diverse”, only to never be contacted or put forward for a role, is a legitimate complaint.  Rest assured that word travels quickly through the very network that is being sought.
  • If you are a business association or organization:
    • Although it might seem dated to make this statement, associations and organizations that have traditionally been targeted at men also need to walk the talk when it comes to diversity. Adopting a “we need to find more women” mantra, without doing the work to make a service offering diverse or to actively engage female participants is unacceptable.
    • In this type of situation, women are left with the perception of “being on a list” or having been “hoodwinked” to demonstrate an organization’s progressiveness, with no real intention of engaging them in a meaningful way. Not only does this represent a service delivery failure, it is also unprofessional and biased.
  • If you are a staff member:
    • In the event of inequitable treatment of others, speak up. Initial referral points can include a human resources officer, through a corporate “whistleblower” or code of conduct policy, or an employee assistance program.  A lack of respect or professionalism should not be tolerated.

And, if you are a qualified woman (and there are many of you!), the last word is for you:

If you are not being treated fairly, speak up; If you are qualified, but not given an opportunity, show up; When an organization proves to be a “dead end”, move along.  There are places that will value your contribution, progressive leaders that you can learn from, organizations that will promote your talent and ability, equally. Seek them out and pursue what they have to offer.

Recognize that the problem is not you and those who are stuck in the days of “sexism” don’t (and won’t) appreciate your ability.  For so many years, the future has been regarded as distant and aspirational, but in many aspects of our world, it is now.  Never forget that you are not alone; numbers brings comfort, perspective, strength, and a better path forward.

MEDIA: CBC News Network Weekend Business Panel (June, 2019)

In studio this past weekend for a fun CBC News Network Weekend Business Panel, alongside Sherena Hussain and Jacqueline Hansen.  With a city and country still reeling from the Toronto Raptors’ big win, we couldn’t help but start our conversation there.

  • Raptors (and businesses) win bigWith all of the excitement around the Raptors’ playoff run and championship win, many restaurants and businesses hosted events and shared in the fun.  What’s the financial impact and will it last?
  • Mountain Equipment Co-Op and “the Pink Tax”.  MEC faced a social media backlash when two similar items had a price difference, with shoppers having to pay more for “the women’s version”.  Is this an example of the Pink Tax and what are the implications for companies in this situation?
  • Beyond Meat’s Big Deal.  Tim Hortons introduced Beyond Meat products in their 4,000 locations across Canada this week; what does this say about the company and customer preferences?

There’s no denying that the Raptors’ playoff run caught the attention of local fans and those across Canada, including many who do not follow basketball on a regular basis.  I would be remiss to not mention the beautiful diversity story that this fan base represents, including people from every walk of life, so uniquely Canadian.

It’s true that much of the game day spending, such as visiting restaurants and attending games, is event specific, however, when a team is able to expand its fan base, it can create benefits in the future.  I was fortunate to be around the corner from Jurassic Park Halifax the night of Game 6, watching fans arrive on foot from every direction to cheer on their team.  Shout out to those who arranged these events, providing Raptors enthusiasts in Halifax with a venue to share in the fun.

MEC’s situation with the Pink Tax is a good reminder of the importance of a well managed system for procurement, production, and pricing, so that problems like this do not occur.  Production costs can differ, however, it is important to have a good understanding of costs and pricing in advance, to ensure that parity and reasonableness exist across a company’s product line.  And as for the Pink Tax generally, it does exist, with studies indicating that women pay in excess of $1,000 more annually than men for similar products.  Companies need to make a dedicated effort to eliminate this inequity; how about a diversity officer who is responsible for pricing parity and fairness?

And finally, as Beyond Meat continues to expand its distribution, management is, again, a key issue.  Strong systems in the areas of supply chain, production, and logistics are critical, to ensure that customers (and their customers) are not disappointed by a lack of supply.  New products can be in demand in the early days, but generating sustainable interest is something quite different.  We’ll see where Beyond Meat’s story goes from here.

As I mark my 20th appearance on the Biz Panel, a special thanks to everyone who has supported and helped with my segments on CBC News Network, especially those behind the scenes.  On a personal note, it was especially fun to have my dog, Laci, walk me to work!

 

MEDIA: CBC News Network Weekend Business Panel (May, 2019)

My long weekend involved time in studio for the CBC News Network Weekend Business Panel, alongside Elmer Kim and Natasha Fatah.

It was such a busy week, beginning with Westjet’s news of potential acquisition by Onex, soon followed by Air Canada entering talks to acquire Air Transat. We didn’t even get around to chatting about that, and instead, focused on these stories:

Here’s a quick take.  There’s no doubt that tariffs on steel and aluminum that were imposed on Canada by the US for so called “national security” reasons have been harmful.  Once faced with these tariffs, Canada imposed its own retaliatory levies soon after, and this challenging environment was in place for almost one year.  Although the White House has taken the position that tariffs are helpful, not harmful (albeit through a series of tweets), the bottom line is that companies that utilize steel or aluminum are left with higher input costs, which decreases margins and typically results in higher prices.  This situation can create a domino effect, where products become less competitive, sales decline, jobs are lost, investment activity declines, and consumer spending, in time, is negatively impacted.  Going forward, removal of the tariffs will hopefully refuel business investment that was delayed or lost, and provisions to combat steel imports from other countries with unreasonably low prices (aka “dumping”) should set the stage for a return to a more favourable marketplace.  Regardless, it’s good news for business, employees, and consumers.

It’s concerning when a communication app that is supposed to be secure gets hacked, and that’s what happened with WhatsApp.  As the speculation around who was responsible and why this occurred continues, it’s a good reminder that device security starts with users and we need to pay timely attention to updates and notification of security breaches.  It seems that hackers are always a step or two ahead of technology security, and it makes me wonder just what these hackers were seeking.  As a Facebook company, this is yet another security/privacy related story, and although hacking isn’t something that can be blamed on anyone other that the hacker, there are undoubtedly implications for the provider.  As has been noted numerous times, Facebook needs to ensure that users are protected through a better regime of fundamental business practices and systems across a range of areas, as the threat of hacking and security breaches are a given in the tech industry.

And finally, cattle producers sought protection of the definition of “meat”, as the popular Beyond Meat referred to its product as “plant-based meat” (which leaves me wondering “are they or aren’t they?”).  As Beyond Meat continues to experience rapid growth, producers should be looking carefully at their own business, as it’s yet another to experience significant change, as has been the case with so many others.  It’s interesting how what is essentially a technology development is poised to take such a big bite out of a traditional industry.

That’s a wrap!  See you next time, CBC.

MEDIA: CBC News Network Weekend Business Panel (April, 2019)

Back in studio this past weekend for the CBC News Network Weekend Business Panel, alongside Sherena Hussain and John Northcott, with a diverse array of topics:

Ontario Budget 2019.  With no new taxes on a personal or corporate level and ongoing deficits for the next while, what should we make of the budget?

Short Selling Canada’s Banks.  Short sellers have been betting that Canada’s banks will see declines, in light of ongoing consumer debt, a slower housing market, and decreased credit growth.  As bank earnings continue to increase, is this a good bet?

Bezos Minimum Wage HikeCEO Jeff Bezos has challenged competitors to meet or exceed the $15 per hour minimum wage level that is currently in place at Amazon.  What is behind his comments and what could it mean for competitors?

Here’s a few thoughts.  Given the uncertainty that we have seen in the business world and broader community over the past couple of years, in terms of trade, tariffs, and relationships between countries, some relative stability could be helpful.  In times of uncertainty, companies tend to delay longer term, investment oriented decisions, which could impact the economy in a host of ways, including employment, purchasing, and construction, to name a few.  When these sectors of the economy are not as robust as they could be, consumer confidence and consumption can start to wane.  It’s all connected, and important to try to keep all areas afloat in uncertain times.

Having said that, Canada’s banking system continues to find ways to make money; something that won’t surprise business owners and consumers.  There are significant differences between the US and Canadian banking sector, and although we’ve been on a favourable economic run for some time, the “short” opportunity might not be as imminent as speculators think.

And finally, online based businesses like Amazon have taken the opportunity to make an impact on the retail sector, with the demise of many traditional “bricks and mortar” companies that have fallen behind the times, unable to compete.  It’s important to remember the importance of a company’s business model, in terms of how they make money, what the cost structure is, and the extent to which expense escalations could be borne.  As social conscience continues to rise among the need for a living wage, companies that haven’t migrated to a place where they can provide one might just find themselves in difficult circumstances (and short of staff!).

When it comes to business, we can look at where we are, but the strength is in truly understanding what the future could bring and knowing what is needed to thrive there.  Business savvy leaders understand this; unfortunately, most either lack the ability or have not taken the time to focus on what’s important in this regard.

Thanks, CBC News Network, for the on-air mention of my new book, Defusing the Family Business Time Bomb, helping business leaders to address a range of challenges to achieve market relevance over the long term.  See you again soon!

MEDIA: Appearance on Moolala (Sirius XM)

Pleased to appear on Moolala (Sirius XM radio), joining host Bruce Sellery to talk about my new book, Defusing the Family Business Time Bomb.  You can listen to our chat here.

This discussion is a great reminder that what’s good for companies in general is also good for family businesses!  Too often, family businesses tend to have the view that catering to what’s best or most convenient for the family is an acceptable priority (and sometimes, the main priority!).  In our highly competitive, rapidly evolving, technology fueled world, this approach can be particularly dangerous.  Consider the following realities:

  • Consumers favour flexibility and convenience, in terms of how they procure goods and services.  With a world of options at their fingertips, consumers have never had more choices, and companies that do not perform well or fail to meet expectations are quickly replaced by more savvy competitors.  Getting a customer back once they have been lost is difficult, if not impossible, in many cases.
  • An abundance of things that used to be done “manually” are now driven by technology, think shopping, logistics, communications, manufacturing, and even depositing a cheque.  Companies who have not kept up with the technologies that impact their industry or have failed to invest in these areas are unlikely to have a future (they barely have a “present”).  Family business leaders who consider succession to be as simple as handing over the keys to the next generation need to think again.
  • A well managed company leads to good outcomes, including financial performance, customer loyalty, and longterm employees; these are some of the building blocks of establishing a brand.  When a company is guided by what is most convenient for itself, shuns the systems and processes that generate good performance, and fails to seek advice to bring valuable perspective and expertise, it is not in a position to establish a brand presence that represents meaningful value to a potential successor or acquirer down the road.

Think about what this means.  When family businesses fail to operate in a manner that is based on fundamental business practices and the needs of the marketplace, they put the future of everyone involved at risk; this reality has never been more true.  Business leaders must take action, now, to ensure viability over the longterm, to the benefit of the company and the family (and those in the Baby Boomer generation, who have led companies for a while and are now facing retirement are a particularly important group, when it comes to succession considerations).

Get started by reading Defusing the Family Business Time Bomb, helping business leaders face the most explosive challenge in a generation.  Your business and your family’s wealth generation should have a future, right?

A World Away from Yesterday

This article was published by CMC Canada.

There was a time when it was a given that a family business would be passed from one generation to the next; in many cases, it was just a matter of time.  Over the course of 20 or 30 years in business, things changed, but not at the pace or in the manner that has been the case over the past few years.

We have certainly seen the impact of demographics and technological disruption on business succession, but there’s also considerations that relate to changes in the global economy and the financial uncertainty that continues to evolve.  Consider the following factors, in terms of their impact on both the current operations and future viability of family businesses:

Trade relations.  Recent years have brought numerous trade developments, including tariffs, disputes, and negotiation of new agreements, such as the USMCA (to replace NAFTA).  This agreement not only includes new clauses, it has also created uncertainty, given the lengthy negotiation timeframe and the fact that it is yet to be formally enacted.  In addition, ongoing trade discussions between the US and China and the friction associated with the detainment of a Huawei executive have left many countries wondering what the outcome will be, along with uncertainty associated with Brexit, the European Union, and turmoil in Venezuela.  This state of flux impacts critical areas such as business investment and growth strategies, as well as financial performance, when unexpected tariffs and trade bans come into play (the case of Canadian canola imports being halted by China is a recent example).

Ally uncertainty.  For those of us who have been on this Earth for a while, there has been relative consistency in terms of who are considered to be global allies and those who are foes to be regarded with caution.  In challenging times, it has been a given that countries such as Canada and the United States would work together with allies in Europe and the rest of the Commonwealth to protect interests and combat potential harm.  In recent years, traditional alliances have become less certain, with US leadership effectively reducing its global profile and “making nice” with questionable regimes.  Besides the obvious “headline” appeal, the reality is that economic circumstances tend to follow relationships, and when uncertainty occurs, it could translate into business risks, and sometimes, opportunities, if the situation is approached effectively.  Regardless, companies are impacted by these developments, even if they occur in faraway places (think about the realities faced by farmers and everyone who counts them as customers, when Canadian canola shipments are turned away by China).

Financial matters.  In addition to how trade, alliance, and global economic factors could impact a company, there are also matters closer to home that contribute to changing times.  Consider areas such as increasing interest rates, changes in tax legislation, and the challenges associated with access to capital.  Canadian businesses have seen significant tax changes in recent years, some proposed, some enacted.  In addition to the real life implications, business leaders have had to seek specialized advice to understand areas such as income splitting and potential clawback of the small business deduction.  Potential successors are challenged to procure the necessary capital in order to undertake a business transaction, in an investment and financing environment that has become increasingly competitive and complex, as financial partners also monitor global developments.

The bottom line is that a company must have the ability to demonstrate marketplace relevance well into the future; in the absence of doing so, there is no basis to achieve ongoing successful operations, making transition irrelevant.  Leaders of tomorrow must be able to demonstrate a viable business model, strategy, and plan to make their time at the helm worthwhile, but also to secure the necessary capital to complete a succession transaction.  Current and future family business leaders can (and should) take action now by reading Defusing the Family Business Time Bomb.  A world of opportunity (and risk) awaits!

MEDIA: CBC News Network Weekend Business Panel (March, 2019)

Back in studio this past Saturday for the CBC News Network Weekend Business Panel, alongside John Northcott and Mark Warner; what a busy news week!  I find it especially fun to discuss a range of topics that can be linked together, a reminder that so much of our business, political, economic, and demographic world is connected and can sometimes impact us in unexpected ways.

Here’s an overview of the topics we discussed:

  • Huawei’s US Court Challenge. As trade talks and friction between the US and China continue, tech giant Huawei launched a challenge to being labelled as a “security risk” in US court.  What are the implications, and is the Company’s role in development of the global 5G network even more uncertain?
  • China Halts Canadian Canola Shipments. Relations between Canada and China are also tense, with the detainment of Huawei’s CFO and two Canadian men earlier this year.  Is the revoking of a major Canadian exporter’s registration to ship canola a business matter or a political one?  Is this a sign of more things to come?
  • Facebook’s New Vision. With the social media giant being under fire for years regarding privacy, content, and user protection challenges, founder Mark Zuckerberg outlined a future vision with a decidedly more private and secure environment.  Is this approach the way of the future or a means to move away from Facebook’s current challenges?

Over the past couple of years, “nation” oriented issues have risen in profile globally, with developments in the US, UK, China, and Venezuela representing a few examples.  In the case of China, there has long been the dichotomy of the potential to access a large market with the challenges of doing business with a country that doesn’t have the best reputation for “playing by the rules”.  The challenges associated with Huawei remind us that good products are not always enough, when it comes to choosing a business partner, and that we are judged by the company we keep.

The US has been firm in indicating its lack of comfort in terms of doing business with Huawei and has gone as far as encouraging other countries not to involve the Company in 5G network development.  As the saga continues, other developments have come to light, such as in the case of Canadian canola shipments being halted for “quality” issues, leaving many to suspect that the underlying rationale is more political in nature.  The lesson for Canadian companies is to remember that developments in faraway places can (and do) impact your business, as will be the case with canola farmers and everyone who counts them as customers.  Business leaders need to remember that the long term success of their company requires a strategy that hedges against reliance in one area and to always keeps a careful eye on what is occurring in the broader marketplace and industry.  This is also true for countries.

In recent years, we have seen Canada step up in a number of areas, and while the US is certainly its core trading partner, it has been interesting to watch developments in this relationship and others.  As referenced by former President Barack Obama at an event in Winnipeg a week ago, the level of US influence globally has declined from where it once was; this has brought both opportunities and risks.  Regardless, Canada has both an opportunity and a need to continue to build its global trade strategy.

In terms of Facebook, hopefully, it is finally taking to heart the need to strengthen its environment to effectively address the challenges of an increasingly complex world.  As I have said for some time, many of the challenges that Facebook has encountered are what I consider to be fundamental business practices: the need for the right systems and processes, protecting user data and rights, knowing who you are doing business with, and having appropriate contracts and documentation in place.  All companies need to address these areas, regardless of their size or type of business, and emerging technologies do not get a pass.  We will see if Facebook will take the necessary steps to address these areas and others in its existing platform, or whether future evolution to a more robust environment will be the case.

And finally, on the 10th anniversary of the “bottom” of the financial crisis market, have any lessons been learned?  Of particular interest is the need for companies to have the right strategies in place to support long term survival, a point that might seem out of place on this topic.  In fact, it is very much related to the strength of our business community and economy, in terms of the importance of having a core of companies that: offer the right products and services, in a manner that customers want, at a competitive price, by way of competent systems, processes, and people.  These companies also understand the trends in their industry and where they need to migrate to as a business, to ensure their longterm relevance to the marketplace; this also includes shuttering areas that simply do not work anymore.

Consider this in the context of the many companies that have ceased to exist over the past few years; these include giants of yesterday, who were lacking in most or all of the areas mentioned above.  The result impacts the economy as a whole, as well as jobs, household spending, and a range of other areas.  Let the need for strong, thoughtful, and nimble leadership at both governance and executive levels be the lesson on this 10th anniversary, and if any in these ranks do not understand the connection and urgent need for action, they are probably in the wrong job.

Thanks again, CBC News Network, for the on-air mention of my new book, Defusing the Family Business Time Bomb and see you next time!