News

January 16, 2023  by

MEDIA: CBC News Network Weekend Business Panel (January, 2023)

A new year, another appearance on the CBC News Network Weekend Business Panel; this time, alongside Dennis Mitchell, Christian Bravo, and Chris Glover, talking inflation rates, possible changes to mortgage guidelines, and business succession (of particular relevance for small business owners!).  You can watch our segment here.

Some thoughts on our conversation.

The rate of inflation announced this week in the US indicates a continued decline over the past six months; what does this mean?  It’s important to remember the need to step back and consider in context, as this allows trends to be identified, even if only on a preliminary basis.  Although six months of inflation rate declines can be reasonably considered as a trend, it is important to recognize that the timeframe is short term in nature (less than one year), and that rates may vary slightly from month to month (real life isn’t always a straight line).  Further, much of the most recent decline can be attributed to falling gas prices, so it will be important to monitor movement in this regard in the coming months.

Further, as the US is expected to reach its debt ceiling this week, it remains to be seen how Congress will address this issue in the coming months.  Failure to raise the debt ceiling could result in confidence issues, which can lead to economic and financial risk.  While business lives in the practical world of the direct impact of rising prices, a tight labour market, and ongoing supply chain challenges, politics can get lost in the theatre of partisanship, holdouts, and tradeoffs; stay tuned.

As interest rates continue to rise, Canada’s top banking regulator is considering tightening mortgage rules.  Although it makes sense to manage risk in areas where households in situations of significant debt and mortgage amounts, a balance is needed to ensure that those who should reasonably qualify for a mortgage are able to do so.  It is not helpful to create additional stress on the rental market, or to slow reasonable home sales in a manner that could also impact the construction market.  Rules can sometimes have unintended consequences, so understanding the practical realities is important, prior to development and implementation.

And, finally, a recent (and familiar) report from the Canadian Federation of Independent Business indicates that 76% of owners plan to exit their businesses within 10 years.  As a business advisor and author of Defusing the Family Business Time Bomb, this headline is not surprising, as reports over the last decade or more have had similar findings.  A few things to think about on this topic of critical importance to business owners and Canada’s economy:

  • Unless a business leader has bought and sold several companies, they tend to have little experience in the areas of succession and transition.
  • These studies tend to find that only a small percentage (in the single digits) have a formal, written succession plan.  While some have an “informal plan”, the majority of business owners tend to indicate that they do not have a succession plan.
  • For numerous reasons, succession planning should commence years in advance of the time of transition (a minimum of three to five years) and it is critical to demonstrate a track record of “good to great” financial performance (over years, not months).  Keep in mind that companies that are able to generate a strong exit value (i.e., sales price) have a track record well in excess of the norm.
  • Qualified successors/acquirers with the necessary capital to undertake a transaction are limited, which makes business succession competitive.  This is something that business owners tend to underestimate.

Advisors can help, and the sooner that business owners put a priority on succession planning, the better (a new year is a great time to start).  Thanks for watching, and see you again soon.

 

 

in Business & Strategic Planning / Leadership / Media / News / Succession Planning 0 comments
November 14, 2022  by

MEDIA: CBC News Network Weekend Business Panel (November, 2022)

Another busy week on the CBC News Network Weekend Business Panel, alongside Jeanhy Shim and John Northcott, talking layoffs at Meta, the collapse of crypto platform FTX, increasing financial strain, and more; watch our segment here.

 

Some thoughts on our conversation.

Although businesses with emerging ideas can be exciting places to be, one of the challenges is that the plan to make these ideas a reality is not always as well developed as it should be.  When opportunity appears, growth companies have a tendency to put resources to work first, which could include hiring people without fully understanding the necessary roles, skillset, and quantity, as well as allocating funds to a range of areas.  Before long, a lot of money could be spent, and without sound project management, these initiatives tend to drift and may not fulfill what was initially envisioned; they can also run well behind expected timelines.  A company’s core business can also suffer, while focus and resources are allocated elsewhere, resulting in problems in various areas.  These situations can “snowball” and become quite significant,

Some might think that this scenario would primarily occur in smaller businesses, however, this can happen in any size of company, where growth gets ahead of good planning (analogous to the cart before the horse).  The Meta layoffs raise the question of how well the “metaverse” plan was established, resourced, and managed, and also brings to mind the importance of market timing, in terms of the extent to which consumers are ready for what companies develop or are planning to bring to the marketplace.

The FTX collapse is a reminder that the crypto sector is one of high risk and brings to mind the pitfall of thinking that all companies associated with a novel business category are “winners” (examples of this were also seen in industries such as technology and the internet).  High risk businesses include those that have a limited track record, weaknesses in areas such as governance and oversight, and thin business models; they also tend to have people in leadership roles with limited experience.  This story is a reminder to keep risk considerations in check, especially in those “seems too good to be true” situations.

And, finally, as inflation rates remain high and interest rates continue to rise, there is no doubt that Canadians are feeling the stress of the situation.  Over the past couple of years, a drive around many communities is all that was needed to recognize empty office spaces and companies that were no longer in business; this includes job losses.  Despite a tight labour market, moving one displaced employee to a vacant job is not always feasible, making solvency difficult for some Canadians.  It is important to recognize that, like COVID, our economy may not reach brighter days for a while, despite our best hopes.  This is an important area to continue to monitor, for consumers and businesses alike.

It was a pleasure to join this week’s Business Panel from beautiful Nova Scotia!  Thank you for watching and see you again soon.

in Business & Strategic Planning / Media / News 0 comments
October 3, 2022  by

MEDIA: CBC News Network Weekend Business Panel (October, 2022)

Pleased to join the CBC News Network Weekend Business Panel on a busy news week, alongside Jeanhy Shim, Gareth Watson, and John Northcott, talking the impact of Hurricane Fiona and changing travel rules.  You can watch our segment here.

A few thoughts on our conversation.

Hurricane Fiona has brought significant damage to Atlantic Canada, including Nova Scotia, a place that has been close to my heart for many years.  Although the human toll and importance of personal safety are top of mind, our discussion (being the Business Panel) focused on business.

There are many aspects of how disasters and challenges that have the potential to impact business for any period of time can be problematic.  Despite technological advances and increases in remote work arrangements, companies of all sizes tend to generate a lot of paper; this is especially the case for small businesses.  When disaster strikes, it is a good reminder to think about the ease with which a company could continue to operate, in the event that “the office” could not be accessed for a period of time, is damaged, or worse.  Here are a few things for business leaders to think about:

  • What information is critical to the company’s operation?  Where is it stored (i.e., online, paper, both, etc.)?
  • Does the company have online systems that are secure and operating well?  Consider areas such as accounting, banking, staffing, payroll, sales, customer service, operations, etc.
  • Does the business leader have access to critical information in the event of a disaster?  Consider areas such as insurance, banking, financial information to complete claims and support applications, etc.
  • Does the company have a communications strategy in place for contacting staff members, customers, suppliers, and other stakeholders?
  • Does the company have a plan and strategy for continuing to operate, where possible, such as through remote operations or an alternate location?
  • Does the company have a list of alternate suppliers, in the event that existing vendors are unable to fulfill their role?
  • Does the company review its insurance coverage on at least an annual basis?  Business continuity insurance is an area to discuss with qualified insurance advisors, among others.
  • What areas of the business still need to be migrated to an online solution?  In other words, what is in all of that “paper” anyway, and what are the areas of priority that need to be addressed?

This is an important area and something that will not be resolved in a day or two for most companies.  Advisors can help business leaders work through the detail to developing and implementing a plan to resolve this problem.

We also discussed the travel industry, in terms of the impact of rising costs/inflation, the removal of some COVID19 related travel requirements, and airline services from new providers.  While rising costs are expected to have an impact on spending in range of areas, some travelers will likely be looking for ways to make their money go further.  Tactics could include shorter duration trips, lower cost destinations, or traveling with others to make the most of accommodation dollars.  Given that the travel industry has struggled during the pandemic, it will be interesting to see whether the relaxing of restrictions such as masking on planes are an attraction or detraction for travelers, as COVID numbers rise in some areas.

And, finally, here are a few photos of beautiful Nova Scotia; thinking of everyone in Atlantic Canada who has been impacted by Hurricane Fiona and hoping for calmer seas ahead.  Thanks for watching.

in Media / News 0 comments
September 12, 2022  by

MEDIA: CBC News Network Weekend Business Panel (September, 2022)

Pleased to join the CBC News Network Weekend Business Panel on what has been a somber news week, alongside Dennis Mitchell and John Northcott.  The passing of Queen Elizabeth on September 8th brought a different tone and perspective to our conversation.  While Canada continues to find its way forward after what has hopefully been the worst of the global pandemic, inflation, rising interest rates, supply chain issues, and a tight labour market are all challenges.  Given the current news cycle, it is a good opportunity to step back and consider how Canada’s economy has evolved during the Queen’s remarkable 70 year reign.  You can watch our segment here.

This period has seen an incredible amount of change, from the post- World War II era to the present day digital society.  Canada has long been known as a resources-based economy, however, one of the major developments that we have seen over the past decades is the movement towards building a vibrant technology sector.  There are numerous aspects, including technology across various industries, such as business, consumer, medical, financial, and scientific applications, encompassing hardware, software, mobile, artificial intelligence, and more.  The impact of e-commerce platforms, for example, has significantly influenced how we live and has set high consumer expectations, requiring most businesses to get onboard or find themselves at a clear disadvantage in the marketplace.

Technologies tend to pass through various stages, from conceptual ideas, research and development, intellectual property, testing, commercialization, and ongoing evolution to keep up with changing times.  These stages require specific types of financial support, including grants, seed capital, venture capital, private equity, and the public markets, among others.  Although we have seen Canada’s technology sector develop, including companies operating on national and global levels, there is still much work to do (and capital to raise) to support this effort.  Regardless, this is an important development that has helped to strengthen the diversity of Canada’s economy and position on the world stage; these accomplishments are integral to ongoing economic growth.

I was fortunate to see the Queen in person once; she was about an arm’s length away.  Growing up, most of the people that I saw in leadership roles were men; but, there was always the Queen.  This represented a powerful role model for girls, a female leader who had a very particular and important job to do, but did it on her own terms.  Although some might not understand the significance, others will recognize the impact and importance of diverse leadership, regardless of how it might have come to pass.  As is the case with any job, it is up to the person in the role to do it well, as getting the position is only the beginning.  Thanks to the Queen for setting this example and for her service.

Thank you for watching our quick segment; it was a privilege to be part of this historic news coverage.

 

in Insights / Media / News 0 comments
August 15, 2022  by

MEDIA: CBC News Network Weekend Business Panel (August, 2022)

Pleased to join the CBC News Network Weekend Business Panel on a very busy news week, alongside Mark Warner and John Northcott, talking inflation, Canada’s rising retirement numbers, and the state of streaming (with some big news from Disney Plus); you can watch our segment here.  A few thoughts about our discussion.

Canadians have been challenged with record inflation levels over the past several months, and it’s a popular topic of conversation on a number of fronts, including the all important question of when it will end.  Falling commodity prices in Canada and a slight easing of inflation in the US are positive developments, however, this does not mean that challenging times are over.  What tends to get lost in macro level conversations is what is occurring on the front lines, for both businesses and consumers.  A trip to the grocery store still brings some eye-opening prices, while business owners continue to face even more complex problems, including ongoing supply chain issues and labour shortages.  Both of these factors can limit the extent to which a business can operate, as well as develop and deliver goods and services.  These supply challenges tend to result in rising prices and trying to determine how much can be passed to consumers, while still generating demand (which takes us back to that consumer retail setting).  These practical issues are the realities of what must be managed on the front lines of business, and it is anything but easy.

Canada’s latest jobs numbers have revealed an interesting trend: rising retirement rates, especially by those aged 55 to 64 years.  What is important to keep in mind here is that this likely includes various groups, including those who have simply had enough and were particularly impacted by the challenges of COVID19 (such as healthcare workers and other frontline roles), business owners, and, perhaps, those who are able to live relatively comfortably (private pension plan members come to mind).  In the case of business owners, it is a reasonable assumption that many considered exiting their companies prior to the pandemic, but for whatever reason, did not do so.  A lot could be said about the typical lack of preparedness that business owners tend to encounter when attempting to sell their company, resulting in numerous closures during and after the pandemic (the empty business spaces in many communities are evidence).  Nonetheless, many may remain retired, while others might find the need or desire to embark on a new career before too long, even if only on a part time basis; time will tell how this situation will unfold.

And, finally, Disney Plus achieved an important milestone, with a slightly higher number of streaming subscribers than Netflix.  The pandemic certainly left many looking for things to do, and the streaming industry benefitted as a result.  It is important to remember that businesses and industries move in cycles, and significant growth does not continue forever.  Growing a company is very different than maintaining it, with business leaders having to find new and compelling ways to retain customers.  When customers migrate away, increasing the price to compensate is not a long term strategy, as subscribers will continue to evaluate the level of value that they derive.  Inflationary times also put financial choices into perspective, something that companies of all kinds need to recognize when making business decisions.

Thank you for watching, and enjoy what remains of these Summer days!

 

in Media / News 0 comments
August 8, 2022  by

Celebrating 5 Years on the CBC News Network Weekend Business Panel (August, 2022)

Grateful to be celebrating five years on the CBC News Network Weekend Business Panel; what a journey it has been!  It began with two and a half years live in CBC’s flagship studio in Toronto, followed by over two years of remote work, all the while covering an incredible range of business stories.  Here is a sample of topics upon which I’ve provided commentary over the past five years:

On a personal level, a story that I have been watching closely is the Russian invasion of Ukraine, a tragedy on so many levels.  As a Canadian of Ukrainian descent, it is difficult to imagine what people in Ukraine are experiencing from a personal and family perspective, much less on a business and economic level.  Everyone deserves to live in a peaceful world, and I hope for this for everyone in Ukraine each day.

The Summer of 2022 brought my first travel since before the pandemic and an opportunity to provide my commentary from beautiful Nova Scotia!  Each week also brings a bit of home studio styling fun.

Thanks for watching; it is a privilege to bring the news to you, whatever the business world has in store!

in Media / News 0 comments
July 4, 2022  by

MEDIA: CBC News Network Weekend Business Panel (July, 2022)

Thrilled to join the CBC News Network Weekend Business Panel from my home away from home in beautiful Nova Scotia, alongside Elmer Kim and Natalie Kalata.  Our discussion included thoughts on Air Canada’s flight schedule cuts, Canada’s latest economic numbers, and the Cineplex fee that has would be movie goers talking.  You can watch our segment here, and below are some thoughts on our discussion.

The travel industry has been hard hit by the COVID19 pandemic and it’s not surprising that after more than two years, people are eager to get out and explore again.  It has been well reported that many air travel entities are short staffed, including airports, security, and airlines, resulting in numerous delays and cancelled flights.  Air Canada announced a schedule cut of approximately 15% of its Summer schedule, while Westjet proactively scaled back its own schedule.  This is analogous to making the playing field smaller, in an attempt to achieve successful operating outcomes within a larger system that has been challenged and is not able to operate at full capacity.  This situation is a good example of the many challenges of implementation, and businesses that face significant deviation from the plan can find themselves in a host of excess costs and resource drains in an attempt to recover.  It will be interesting to see the degree of operating success that airlines are able to find over the Summer, as well as what the Fall might bring.

Canada’s economy experienced a slight decline in May, as preliminary numbers indicate that GDP fell by 0.2%.  Although in contrast to earlier months, the recovery is not expected to be a straight line; ongoing monitoring is the approach that should be taken here.  Of note, the housing market continues to cool, demonstrating that interest rate hikes have had an impact, and manufacturing and construction are sectors to watch, as staffing and supply chain issues are likely to continue to have an impact.  The services sector is also one that suffered during the pandemic, and the relatively slow recovery could be a function of staffing concerns, but also consumer choice tradeoffs, as inflation continues to soar.

Cineplex’s new online ticket fee hasn’t impressed some movie goers, as the company says it plans to invest and evolve its digital infrastructure.  Although the fee doesn’t apply to all ticket purchases, such as those bought in person at the box office, it seems to be a counterproductive move at a time when entertainment and events companies should be doing what they can to welcome customers back.  It might not seem like a lot of money, but the reality is that consumers have a lot of choices, and once they are lost, it can be very difficult to get them to return.  This is an important reason why business leaders should think carefully when making decisions that impact customers directly, as well as their company’s competitive position in the marketplace.

It’s been great to join from Canada’s Eastern shore; thanks for watching!

IMG_7601

in Media / News 2 comments
June 6, 2022  by

MEDIA: CBC News Network Weekend Business Panel (June, 2022)

Always a pleasure to join the CBC News Network Weekend Panel, alongside Sherena Hussain and John Northcott, talking rising interest and inflation rates and the latest directive from Elon Musk regarding the end of remote work at Tesla; watch our segment here.

IMG_6906

Here are some quick thoughts on our discussion.

One of the interesting things about the perspective of organizations such as central banks, financial institutions, and large firms is how little it tends to reflect the realities of what is happening at the front lines of business.  Although there are exceptions to this, such as when the viewpoint is expressed by someone who has extensive experience operating a small business, the overall perspective gap is evident.  An example of this is the commentary from a while ago about inflation being “transitory” (some admitted the error if this comment earlier this week); a pronouncement that seemed oddly dismissive at the time, given the numerous real world problems, such as COVID, supply chain delays, and the scarcity of labour and materials that only serve to raise uncertainty.

Small businesses are the backbone of the Canadian economy and it is important for the owners and leaders of these companies to never assume that people in large organizations and government understand their reality.  Looking solely at macro factors, such as unemployment or inflation levels, does not always reflect what companies are experiencing.  As an example, a low unemployment rate is generally viewed as favourable at a macro level, however, it doesn’t reflect the scarcity of labour that small businesses might be experiencing; something that is very much the case today.  Operating realities at the business level, such as the challenges associated with acquiring materials and labour and getting products to customers in a timely fashion, suggest that macro level factors, such as inflation and increasing interest rates, may be with us for a while.

Related to this point, Tesla CEO Elon Musk’s demand that employees return to the office is something that appears out of context, when considered at the front line level.  In the case of jobs that “can be done from anywhere”, the labour market is extremely tight, as employees (especially the top performers) have more job opportunities than the norm, with flexible work arrangements and salary rates being of particular appeal.  Business leaders who draw a line in the sand on employment arrangements might find themselves in a position of losing their best employees, with only the average and marginal performers remaining.  This reality might not appear to have a pronounced impact in the early days, but can be highly damaging to a company as time goes on, as the quality of work and information decline.  Examples include poor financial reporting, products/services that don’t meet quality levels, and costly mistakes due to inexperience.  When this happens, business leaders tend to have more work on their plate, as well as the difficulties associated with trying to find better qualified staff members in a challenging labour market.

In the case of Tesla, it’s true that some staff members may choose to comply with the directive to return to the office full time, simply because they want to work there.  Others, however, might find the draw of their current role to be less powerful than expected, valuing work flexibility and other arrangements much more.  Business leaders need to remember that employees and customers might value corporate “culture” much less than they do, as markets are always competitive; either way, there is a cost.

Thanks for watching and see you again soon!

in Management / Media / News 0 comments
May 9, 2022  by

MEDIA: CBC News Network Weekend Business Panel (May, 2022)

As flood waters continue to rise in my area, pleased to join the CBC News Network Weekend Business Panel, alongside Mark Warner and John Northcott, talking rising interest and inflation rates, falling stock markets, implications of the latest jobs report, the end of COVID19 support programs, and consumer shopping habits. A lot to discuss, watch our segment here.

IMG_5814

The intersection of all of these areas, something that tends to not be particularly well understood, is the impact on the “front lines” of business. It is relatively easy to step back and look at the economy through a broad lens, such as GDP, employment levels, or even the stock market; however, what businesses face directly, especially in difficult times, is much different. A few things to keep in mind as we consider this issue:

  • Unemployment doesn’t tell the whole story.  Just because unemployment levels are low, it does not mean that businesses have the staff members that they need.  In fact, many companies are having a difficult time finding (and keeping) staff in a wide range of areas, including accounting, technology, sales, and healthcare, as well as front line workers; this includes both staff numbers and key skills.  Ask a business leader how hiring has been going in what is a very tight labour market (they will likely have a lot to say).
  • The “stars” can write their own ticket.  Related to this point, it is the best staff members, in terms of performance and skillset, who have the most choices in this type of market when it comes to employment opportunities.  Companies should re-think their compensation strategy and flexibility in terms of work arrangements, in order to be competitive.  The “we just want people in the office” mindset, when not essential, is a losing proposition and some companies have likely found this out too late.
  • Supply chain problems persist.  This crisis has impacted companies more than is generally realized, and this reality can only be fully appreciated at the front line level.  In short, companies need supplies and inputs to manufacture products and deliver services.  In the absence of this, their ability to do so stalls, resulting in either delays or inability to fulfill customer needs and generate revenue.  Remember that revenue eventually becomes cash, and it is easy to understand where a business is left when its sources of cash are impacted or lost.
  • COVID19 support programs concluded.  As these programs effectively end this weekend, a lot of companies may find themselves unable to operate on a sustainable basis.  This can vary, as some industries have been impacted more than others (think tourism, events, and some services).  Expect to see the impact of this in the coming months.

The bottom line is this: building a company to the point where it can successfully operate over time and employ staff is not something that happens overnight.  Numerous companies have either quietly closed up shop over the past couple of years (think about the vacant retail and commercial spaces in your community) or are on the brink of doing so.  Many of these are small businesses, however, some are larger, impacting a lot of jobs and families.

Once a business is gone, it’s gone.  How long does it take to replace this loss with another company?  Years, decades, sometimes longer.  It is the patchwork of these companies that make up Canada’s economy and there is a need to better understand business issues at the frontline level, instead of taking primarily a broader approach.  This is especially true in challenging times, which are reasonably expected to continue for at least the next year and likely longer.

And finally, on a personal note, my contribution to this week’s Business Panel came directly from a flood zone, surrounded by water, but safe (there should not be any water in this field).  Not sure how long this “island life” will continue, but it is a reminder that we are living in unusual times.  Thank you for watching!

IMG_5656

 

in Media / News 0 comments
April 4, 2022  by

MEDIA: CBC News Network Weekend Business Panel (April, 2022)

Pleased to join the CBC News Network Weekend Business Panel on a busy news week, alongside Mark Warner and John Northcott.

 With a diverse array of topics, here are some thoughts on our chat:

The early days of Russia’s invasion of Ukraine were met with shock, anger, and sanctions by a range of countries.  Over a month later, what has the impact been?  It’s true that many companies have indicated that they will no longer do business with or in Russia, which should impact supply on both a consumer and corporate level.  It has been reported, however, that some companies continue to operate there under franchise arrangements, and in the absence of being able to see the details of the agreement (franchise, license, joint venture, or otherwise), it is difficult to identify exactly why this is the case (an important lesson for business leaders considering doing business abroad).  Regardless, companies that continue to operate in Russia will certainly face negative response from customers and the public in areas such as North America and Europe, which could result in costly brand and financial damage where it matters.

As we look ahead to Canada’s budget day, it will be interesting to see the impact of the arrangement between the Liberals and NDP, policy announcements in areas such as national defence spending and security, as well as the balance between moving forward from COVID19 and recognizing that the pandemic still has a considerable impact on businesses, consumers, and the economy.

And speaking of inflation, Dollarama’s recent results announcement indicates that the Company has been financially successful over the past while (not surprising for companies of this nature in difficult economic times) and a plan to incorporate products with a $5 price point.  Those who shop at Dollarama know that existing products can cost as much as $4, and given inflation and cost increases related to supply chain and other manufacturing and procurement problems, it is not surprising to see rising retail prices.  This approach might also bring in additional products to Dollarama, providing more variety for shoppers (let’s hope they did their research!).

And, finally, Amazon warehouse workers in the New York City area voted to unionize on Friday, representing the first successful US organizing effort in the Company’s history.  This situation did not involve major trade unions and has been characterized as a grassroots effort, and given the significant wealth gap between business owners/leaders and the “average worker”, expect to see this trend continue; the question is: how far will it go?  Consider the many people who effectively piece together their own income, through various casual or gig economy jobs, with little in the way of security or benefits, while multi-billionaires exhibit excessive lifestyles on social media.  The reality is that there is a cost to this gap, and as we have discussed on the Business Panel before, it is not about everyone earning the same amount of money, but, rather, bringing a sense of fairness to the issue to generate better outcomes for everyone.

Thank you for watching, and let’s hope that we see peaceful days in Ukraine very soon.

IMG_4436 e

in Media / News 0 comments