Business

Always fun to be in the studio for the CBC News Network Weekend Business Panel (so proud to be wearing a Winnipeg Jets pin on my lapel!).  This past weekend, Elmer Kim, Natasha Fatah, and I debriefed a busy week in business, including:

• La Presse Goes Non-Profit:  One of Canada’s longstanding publications will become a non-profit entity, setting the stage for receipt of donations, and perhaps, federal funding.  What does this development mean for the future of newspaper-style media companies?
• Canadian Tire Set to Acquire Helly Hansen:  This retailer has a long standing history in a range of sectors, including automotive, outdoor, and sporting goods.  Will acquisition of this Norway-based sportswear company take Canadian Tire in a new direction?
• Meet Google Duplex:  As AI continues to evolve, Google turned heads with a very human sounding voice making an appointment over the phone, engaging in a typical conversation with a human.  What issues and opportunities does this technology raise?

Print and newspaper media have undergone massive changes over the past decade, leaving many struggling with questions around the next steps forward, as well as their future viability.  Movement to a non-profit structure might give the impression that the revenue challenge is no longer an issue, but this is problematic for at least two reasons: (i) all organizations need money to survive, and in the case of non-profits, they need to demonstrate that they are worthy of donations and funding; and (ii) in order to do so, non-profits must be able to generate successful outcomes, which requires the right strategy and plan.  In a nutshell, La Presse needs to have the right business model in place, including a clear plan around what it seeks to achieve and how it will do so, which boils down to cash inflows, outflows, and results.  Moving a problem “from here to there” won’t fix it; stay tuned to see if this important work has been done.

The huge consumer appeal of “life wear”, those resilient fabric technologies that allow us to comfortably wear what was once thought as only athletic wear, from dawn to dusk, wherever we go, is a difficult trend for retailers to miss.  Canadian Tire has long been a source of more durable items, and with the billion dollar acquisition of Helly Hansen, the opportunity exists to expand their offering into this popular area.  In addition, since Helly is an established brand globally, the opportunity for Canadian Tire to generate revenues in other markets and, perhaps, expand product offerings into these channels could be of interest.  What’s critical in the retail industry is to ensure that product is turning over, and that inventory isn’t so broad that it puts a drag on results.  With Canadian Tire’s many departments, are they in the process of streamlining their offering to better align with the marketplace?

And finally, in the category of “the future is now”, Google just keeps on moving forward, with its Duplex technology that sounds oh, so human.  With the ability to make phone appointments and interact with conversational ease, it’s not difficult to see many potential applications.  As with any business, it’s important to also see the downside, including risks of utilizing this technology in unintended ways, such as impersonation and security breaches.  Questions are also being raised around job loss, as a mass of relatively low value roles could be displaced; such has been the case over the last century or more.  With so many high value things to do, call it progress.

Thanks for tuning in and see you next time, CBC!

The Winnipeg Whiteout made an appearance on the CBC News Network Weekend Business Panel this past Saturday.  It was great to be alongside Elmer Kim and John Northcott to discuss the week in business.  We chatted about:

• Millennials Delay Home Purchases, While Budgets Shrink and Rates Rise:  Research reports and surveys are finding that, although millennials have an interest in purchasing a home, the majority lack the financial resources to do so.  Mortgage stress test rules and income levels that have been slow to increase haven’t helped matters.
• Canadian Markets Close Early Due to Technical Problems:  All markets operated by the TMX Group closed early on Friday due to a technical glitch; the TSX, TSX Venture Exchange, TSX Alpha Exchange, and Montreal Exchange all stopped functioning around 1:37 PM Eastern time.  What are the implications for our financial and other systems, given their significant reliance on technology?

The topic of housing and millennials is one that could be discussed at length.  Although Canada’s housing market has generally seen significant price and inventory increases over the past several years, the path to ownership for millennials is impacted by a number of issues.  Rising prices and new mortgage stress test requirements represent challenges, however, so do the relatively slow increases in wage levels, impacted by a number of factors, including changes in workforce requirements and the potential for lagging career advancement rates, as Baby Boomers continue to hold onto senior roles and remain in the companies that they own.  Millennials also have a high level of interest in areas such as travel, lifestyle experiences, and luxury goods and services, making home ownership less of a priority for some.

Technology risk in large systems, such as finance, utilities, security, and information, is an area of increasing importance.  As we discussed on the Business Panel in December, 2017, concerns around the protection of information systems, including hacking, is a significant issue that is not yet fully addressed by many organizations.  Although the TMX situation has been reported as not being related to a hack, the concern relates to how integral these systems have become to our everyday lives.  Companies need to ensure that there are sufficient resources, checks, and balances in place to manage risk, and the urgency to do so is immediate.

A video link of the Weekend Business Panel is available here, including an appearance of the Winnipeg Whiteout.  As a lifelong Winnipeg Jets fan, I’m pleased to encourage everyone to join the legendary Winnipeg Whiteout, wherever you might be.  I would also invite you to check out Project 11, an important wellness initiative that means a lot to us here in Winnipeg.

Go Jets Go, and see you again soon, CBC!

Great to be back in the studio this past weekend alongside Elmer Kim and John Northcott to discuss what was a hectic week in business.  We chatted about:

• Humans Wanted, How Canadian Youth Can Thrive in the Age of Disruption:  A new research paper from RBC indicates that 50% of Canadian jobs will be disrupted by automation in the next 10 years.  Is Canada ready for this challenge?
• Tesla’s Troubles: Model 3, Stock Prices, and Autopilot Speculation:  With a track record of failing to meet Model 3 production targets and recent fatal crashes involving self driving vehicles, March has been the worst month thus far for Tesla’s stock performance.  Does the Company have what it takes to turn its current circumstances around?

We also discussed a late breaking tweet from Donald Trump, taking aim at Amazon for creating alleged losses at the US Post Office (more on that later).  Let’s talk about the business stories first.

It’s no secret that the workplace has changed, driven by evolving requirements.  Where the focus has traditionally been on jobs, remaining globally competitive also requires “human skills”, well beyond that of technical ability.  Businesses have a need for employees who can fulfill a range of important areas, including collaboration, communication, critical thinking, and creativity, all of which seem to have fallen by the wayside in a world where technical skills have been so important.  Staff members who have the ability to “bridge technology and humanity” will be of considerable value, as not everyone has the capacity (or desire) to do so.  Regardless of how this trend is considered, there is a shortfall of people who have the ability to meet the needs of a workplace in demand of digital literacy, as well as “digital thinkers”, a skill set that is so different from programming and coding.

In many respects, this skills shortfall is a reflection of leadership, in that senior teams in companies and organizations are not just responsible for present day requirements, but also for future needs.  Too many business leaders spend their time consumed by operational activities and internal matters, as compared to understanding industry and market trends and developments.  It is critical that future needs be fully understood so that strategies can be identified and put in place to ensure survival into the long term.  This situation is one that business leaders and boards of directors need to be addressing immediately.

The current situation at Tesla is an example of both sides of the entrepreneurial mindset.  Entrepreneurs are successful due to their creativity, vision, optimism, and relentless belief in their product or service.  The difficulty occurs when lofty objectives do not come to pass, given that the implementation process can significantly differ from the vision of what is possible over the long term.  Many entrepreneurs don’t excel at managing expectations, which can be particularly damaging to their companies in the investor world and public markets.  In the case of Tesla, the story could have been a lot different had progress and targets been conveyed more strategically, in addition to how building capacity was approached (much more could be said about this!).

And finally, it wasn’t a quiet Saturday morning in the Twitterverse, as Donald Trump took aim at Amazon, claiming that “…the US Post Office will lose $1.50 on average for each package it delivers for Amazon…”, among other things.  In continuing to target parties (and people) based on alleged information, personal views, unsubstantiated claims, and/or media beefs, Trump’s comments have already moved markets, resulting in billions of dollars being lost, at least in the short term.  This ongoing behavior does little to raise the credibility of the messenger, who seems more interested in demonstrating that his comments have market impact, rather than the underlying implications of doing so.

It’s a reasonable expectation that a country’s leader should be encouraging corporate growth and success, to the benefit of employees and the broader economy, however, what’s occurring in the US has strayed from this path.  Regardless of Trump’s claims, don’t expect the US to return to the traditional economy of the past anytime soon.

Thanks for watching!

Fun discussion this past weekend with Natasha Fatah and Elmer Kim on the CBC News Network Weekend Business Panel.  In a busy segment, we discussed the week that was, including:

Falcon Heavy, Spacex, and Tesla’s Wild Ride:  With the breathtaking launch of the largest rocket in history, what does this mean for the future of space exploration?  With a Tesla Roadster being launched into space, could the Company’s future reach similar heights?

The Cost of Raising the Next Generation of Olympic Athletes:  As the 2018 Winter Olympics commence, what are the financial implications of rising to this level of competition?  Can Olympians bank on endorsements after they have represented Canada at sport’s highest level?

As a life long space enthusiast, all aspects of the Falcon Heavy launch are not only exciting, but also fascinating from a business perspective.  Since humans are explorers at their core, traveling beyond our world and seeking to understand it are within our DNA.  Advancements such as more robust space exploration at a much lower cost, the ability to re-use components, and greater functionality are to be celebrated, not to mention the phenomenal release of that Tesla Roadster!  Expect far more in the future, including a variety of projects and the Mission to Mars, and hopefully further advancement of rockets and air travel right here on Planet Earth.

And speaking of Earth, Tesla has some definite work to do in resolving its operational issues and increasing its Model 3 production.  What’s important to remember is that the Company is moving from a niche manufacturer to “mass production”, which represents a very different business.  When this occurs, companies can face a host of growth related issues, many of which are not glamorous and require a lot of analysis and hard work to resolve.  Critical to doing so is having the right people in place to get the job done, and advisors can help to move the growth strategy forward.

For many athletes, the pinnacle of their careers is completing on the global stage, something with which the Olympics is synonymous, but getting there in financial terms can be just as challenging.  Although some funding is available, what’s often needed is taking a broader approach, including donations, sponsorships, scholarships, and even crowdfunding.  The earlier that high potential athletes and their families can start planning, the more resources that can be identified.

We had hoped to chat about the Dow’s wild ride of its own, but time was short on this busy news day.  As always, thanks so much, CBC, and see you next time!

Happy New Year!  Back in the studio this past weekend for the CBC News Network Weekend Business Panel with John Northcott and Elmer Kim.  We discussed the week in business, including:

• NAFTA and Mixed Signals from the US.  First, Trump says the US might pull out of NAFTA; next, he says the talks are moving along well and he might extend the deadline.  What could be in store for Canadian businesses?
• Tim Hortons and Minimum Wage.  Canada’s favourite coffee shop has faced a backlash over how some franchisees have responded to minimum wage increases in Ontario.  What are the implications for the brand and lessons learned?

Both of these stories have received a significant amount of public and media attention.  Here’s a quick take:

• In terms of NAFTA, it’s no secret that Trump’s target of dissatisfaction has been Mexico, and that Canada and the US are significant trade partners.  Bringing an end to NAFTA isn’t as easy as some might think, and regardless, Canada and the US need a basis to do business together, whether it is under NAFTA or some other arrangement.  Canada should be focusing on its global trade strategy, as well as its options for trade with the US.  Canadian businesses, on the other hand, should be focusing on the significant work that needs to be done in order to approach global opportunities.  Talking to a business advisor is a great first step!
• The Tim Hortons saga is a good example of what can happen when important business and implementation planning are not managed well.  This type of situation can also be impacted by a lack of communication: between a company and its franchisees (or locations), employees, and customers.  And as for the public sector, we can all agree that providing a fair wage is a good thing, but leaving it up to companies to implement a large increase simply isn’t a wise strategy, given that a business’ payroll is typically its largest expense.  A more gradual approach that starts sooner rather than later would have been a better idea.

Thanks for watching and see you soon, CBC!