Strategies for Growth

14TH WISDOM EXCHANGE CONFERENCE

Ottawa Congress Centre, Ottawa, OntarioFebruary 2008

WISDOMEXCHANGE

2008

Highlights from the forum for CEOs and presidents of Ontario’s leading growth firms

Event Report

In this report

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

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TSOn 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 firmsfrom 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.

With business conditions shifting unpredictablyacross North America and around the world,leaders of Ontario’s small and medium enterprises are recognizing and takingadvantage of global opportunities to innovate,expand and open new markets.

In his opening remarks to CEOs and presidentsat the Wisdom Exchange, Honourable HarinderTakhar shared his views on global growthopportunities for Ontario’s SMEs. “The U.S.market is important, no question about it, but wealso need to look at other markets like India,China and the Middle East where there are lotsof opportunities,” said the Minister.

In many countries, the best way to enter markets is through partnerships with local companies well established in the field. TheMinister cited the example of Samco MachineryLimited. A well-known designer and manufacturerof roll-forming systems and equipment, Samcoaggressively pursued international markets. Oneof its recent successes was to form a partnershipwith Tata Ryerson Ltd. in India to make parts forthe ground-breaking US$2500 Nano car, which is sending shockwaves through the internationalauto industry. The other was a global alliancewith Formia Tech Oy out of Finland, which alsohas manufacturing facilities in China. Samcoevolved from a one-man operation with a salesdesk to a global enterprise with locations inCanada, India, Finland and China, largely by innovating the company.

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Going global: Entering new marketsthrough partnershipsThe Honourable Harinder S. TakharMINISTER OF SMALL BUSINESS AND ENTREPRENEURSHIP

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We will continue to work with Ontario SMEsand industry associations to crbusiness environment for grexports and innovation. “

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With business conditions shifting unpredictablyacross North America and around the world,leaders of Ontario’s small and medium enterprises are recognizing and takingadvantage of global opportunities to innovate,expand and open new markets.

In his opening remarks to CEOs and presidentsat the Wisdom Exchange, Honourable HarinderTakhar shared his views on global growthopportunities for Ontario’s SMEs. “The U.S.market is important, no question about it, but wealso need to look at other markets like India,China and the Middle East where there are lotsof opportunities,” said the Minister.

In many countries, the best way to enter markets is through partnerships with local companies well established in the field. TheMinister cited the example of Samco MachineryLimited. A well-known designer and manufacturerof roll-forming systems and equipment, Samcoaggressively pursued international markets. Oneof its recent successes was to form a partnershipwith Tata Ryerson Ltd. in India to make parts forthe ground-breaking US$2500 Nano car, which is sending shockwaves through the internationalauto industry. The other was a global alliancewith Formia Tech Oy out of Finland, which alsohas manufacturing facilities in China. Samcoevolved from a one-man operation with a salesdesk to a global enterprise with locations inCanada, India, Finland and China, largely by innovating the company.

The Minister invited the audience to think of theMinistry of Small Business and Entrepreneurship asa partner in developing new markets world-wide.Ontario has a network of 10 international marketing centres, in New Delhi, New York,London, Los Angeles, Munich, Paris, Mexico City,Beijing, Tokyo and Shanghai. These centres,located in Canadian consulates, are there to assistOntario firms to make local contacts, participate intrade shows and explore new markets.

Recognizing the vital contribution of SMEs to the provincial economy, the Ontario governmentcreated the Ministry of Small Business andEntrepreneurship as a one-stop-shop for supportand advocacy. “I thank you for all your hardwork,” the Minister said. “You are the engine of Ontario’s economy.”

In closing, Minister Takhar said, “We will continue to work with Ontario SMEs andindustry associations to create a positivebusiness environment for growth, investment,exports and innovation, by providing a varietyof programs, services and resources to helpcompanies committed to growth and innovation,like yours, to gain market intelligence, exportassistance, support for new technologies andaccess to government programs.”

For more information on programs and services to support Ontario businesses at any stage alongtheir continuum of growth, visit the Ministry’swebsite www.sbe.gov.on.ca

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Going global: Entering new marketsthrough partnershipsThe Honourable Harinder S. TakharMINISTER OF SMALL BUSINESS AND ENTREPRENEURSHIP

We will continue to work with Ontario SMEsand industry associations to create a positivebusiness environment for growth, investment,exports and innovation. “ “

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.

“The key is to identify the hot buttons of your customers—or your customers’ customers,” saidHasenfratz. Meeting those customer needs in a waythat makes competitive sense could mean openingplants in other parts of the world, she continued,because “customers buy our camshafts not because of where they were manufactured but by what it cando for them.”

Linamar has a strong global presence and facilities inCanada, Germany, Korea, Mexico, the U.S.A.,Hungary and China. Hasenfratz said there are huge opportunities in foreign markets and identifiedaggressive market penetration in areas of opportunityas a way to maximize potential towards a prosperousfuture. Thinking globally, Hasenfratz listed Linamar’soperational philosophies as:

• Small manageable autonomous profit centres• Product focused factories utilizing flexible equipment

wherever possible• Plant clusters (link and leverage)• Decentralized organization• Commitment to continuous improvement• Stepping Stool goal setting and performance

measurement

Rewarding successThe foundation for the company’s continuing growth,Hasenfratz believes, is the strong culture they’ve built at Linamar. It’s marked by open communication,rewarding real contributions and making sure that

senior executives ‘walk the talk’ and demonstrate thesame attitudes and behaviours expected frof the workforce.

“The Linamar Wdevelopment, which includes succession planning, as a key enabler to the company’spent a good deal of time over the past ten yearsdefining who we arbusiness,” said Hasenfratz. “Wus, success in evercapable people with a skill based foundation. Oncewe find those people, we want to keep them.”

Rewards play a significant rthe contributions of stafThe Stepping Stool Asetting and perforthe ‘lean’ strategyand bonuses since 1999.

That drive for continuous impreye on the bottom line is at the hearoutlook for growing the company in the decades tocome. “We’re always evolving how we do things,”said Hasenfratz. “The Tre-thinking engines. Yyou have to re-think the whole thing.”

Despite the turmoil in the auto industrya firm believer that “in everIn the words of Henrthe wind.”

Linamar Corporation is one of the great success stories of Ontario’s advanced manufacturing industry. From itsbeginning more than 40 years ago in Guelph, Linamarhas grown to be a world-class designer and diversifiedmanufacturer of precision metallic components and systems for the automotive industry, and mobile industrialmarkets. Today, it has more than 11,700 employees and 37 manufacturing facilities around the world (25 in Canada).

What strategies drove Linamar’s growth? More importantly,what strategies is the company now pursuing to meettoday’s challenges? In her keynote presentation at theWisdom Exchange, Linamar Corporation’s Chief ExecutiveOfficer Linda Hasenfratz provided the inside view.

Three drivers of successLinamar’s key business success factors in today’s volatilebusiness environment lie in three areas: competitiveness,finding and pursuing opportunities, and maintaining astrong culture.

“Competitiveness is about innovation, efficiency, speed,”said Hasenfratz. “We’re always learning, finding newand better ways to do things. New technologies andnew materials are coming along all the time, so there are always opportunities to improve.”

Linamar’s focus on competitiveness places product andprocess innovation and living Lean through continuousimprovement high on its list of success strategies. Thecompany has adopted many Lean processes, and thecontinuous improvement philosophy runs throughout theorganization, 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 singleday. It’s a never-ending journey.”

For Linamar, competitiveness also involves minimizingrisks wherever possible. As a multinational organization,volatile exchange rates can be a real headache andvery costly. To mitigate this risk, Linamar makes a point of

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Power to perform:

Tight focus

sharpens Linamar’s

competitive edgeLINDA HASENFRATZCHIEF EXECUTIVE OFFICERLINAMAR CORPORATION

You don’t do a ‘lean’ exercise once. Wdoing it for about five years, every single daya 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.

“The key is to identify the hot buttons of your customers—or your customers’ customers,” saidHasenfratz. Meeting those customer needs in a waythat makes competitive sense could mean openingplants in other parts of the world, she continued,because “customers buy our camshafts not because of where they were manufactured but by what it cando for them.”

Linamar has a strong global presence and facilities inCanada, Germany, Korea, Mexico, the U.S.A.,Hungary and China. Hasenfratz said there are huge opportunities in foreign markets and identifiedaggressive market penetration in areas of opportunityas a way to maximize potential towards a prosperousfuture. Thinking globally, Hasenfratz listed Linamar’soperational philosophies as:

• Small manageable autonomous profit centres• Product focused factories utilizing flexible equipment

wherever possible• Plant clusters (link and leverage)• Decentralized organization• Commitment to continuous improvement• Stepping Stool goal setting and performance

measurement

Rewarding successThe foundation for the company’s continuing growth,Hasenfratz believes, is the strong culture they’ve built at Linamar. It’s marked by open communication,rewarding real contributions and making sure that

senior executives ‘walk the talk’ and demonstrate thesame attitudes and behaviours expected from the restof the workforce.

“The Linamar Way” focuses its efforts on people development, which includes succession planning, as a key enabler to the company’s success. “We spent a good deal of time over the past ten yearsdefining who we are and how we want to do business,” said Hasenfratz. “We realize that, for us, success in every area depends on having smart, capable people with a skill based foundation. Oncewe find those people, we want to keep them.”

Rewards play a significant role in how Linamar recognizesthe contributions of staff to the company’s overall success.The Stepping Stool Awards and Bonus program’s goal setting and performance measurement system, part of the ‘lean’ strategy, has paid out $57 million in awards and bonuses since 1999.

That drive for continuous improvement with a close eye on the bottom line is at the heart of Linamar’s outlook for growing the company in the decades tocome. “We’re always evolving how we do things,”said Hasenfratz. “The Tata $2,500 Nano car meansre-thinking engines. You can’t just cut costs by 90%,you have to re-think the whole thing.”

Despite the turmoil in the auto industry, Hasenfratz is a firm believer that “in every challenge there is opportunity.In the words of Henry Ford—a plane always takes off intothe wind.”

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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.“ “

• Suntech and Dr. Zhengrong: In China, Suntech’s Dr. ShiZhengrong is creating the world’s most efficient passivesolar arrays. The main Olympic stadium in Beijing ispowered almost entirely by passive solar energy. The outcome: remarkable environmental savings.

“If you hear about a new technology or innovative discovery that might be important to your business, findout where you can go to see it in person,” Keeley recommended. “You can’t just experience it intellectually.You have to feel it in your gut.”

He further advised, “As leaders you have to shape changeand redefine your business. Figure out what is fundamentallyand permanently changing in your industry and address thisshift—even if it scares you. Pick a focus, he recommends,and aim to be the best.”

The first step in making the innovation process more effectiveand efficient, said Keeley, is myth-busting. Contrary to popular belief, innovation is not random, ‘eureka!’ inspirationthat comes out of the blue. “Nonsense,” he says. “It’s abouttaking a disciplined approach that has clearly stated goalsand is guided by metrics that matter.” There are now proveninnovation protocols and diagnostics that help keep people focused.

According to innovation studies, the big winners in the inno-vation game over the past ten years got rich by developing innovative processes or partnerships, not products or technologies. For example, Dell Computer’s success camefrom breakthroughs in their business model, financing, service, brand, and customer experience, but not product. In fact, the strength of their consumer offer came from positioning their product—a computer or peripherals—as a reliably standardized commodity.

The runaway success of the iPOD is not simply because it’s a better MP3 player. The iPOD is an innovative platform thatextends beyond a single industry and involves partnersincluding the iTunes software suite, an on-line music store and third-party accessories to create an integrated music“solution” for consumers.

Keeley believes in an interconnected world, platforms mattermost. He defined a platform as an integrated offering that

creates a unique and holistic customer experience only loosely controlled by the platforby proprietary technologies; and typically characterized by interdependent prnetwork of business par

Money, printing, frproperty ownership and the Inter15 Top innovations of all timeexplained Keeleyand political borYahoo and eBay arplatforms todaycompanies and markets.” He added: “Think of moderbikes as a system of platforassembled by choosing your own frame, peddles, seat, stem, handle bars, wheels, etc.”

Keeley shared 10 types of innovation to move beyondproducts to win. Studies have shown that if you can integrate six or mormarket changes.

1. Business model (how the enterprise makes money)2. Networking (value chain and par3. Enabling pr4. Core process (cr5. Product per

and functionality)6. Product system (pr

an offering)7. Service (how you suppor8. Channel (how you r9. Brand (how your customers per

10. Customer experience (intangible benefits ryour customers)

We’ve all heard it a thousand times: innovation is the key to growth. But what if almost everything we believed aboutinnovation is wrong?

That might explain why only about four per cent of all 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 to 70 per cent range. That’s not just wishful thinking. Keeleymentioned one of Canada’s most respected business thinkers,Roger Martin, Dean of the University of Toronto’s RotmanSchool of Management, is currently reinventing the training of MBAs to increase the success rate of innovation.

Keeley, a renowned innovation strategist and business advisorwho has worked to develop more effective growth strategiesand innovation methods for over 27 years, while working withsome of the largest firms in the world, takes a practical andbusiness-minded approach to innovation. He captivated theWisdom Exchange audience for 90 minutes with his drollsense of humour and keen insights on innovation.

Keeley believes that most successful innovations are not just ahappy product of random inspiration but the direct result of corporate or community leaders setting goals and makingthings happen. Innovation needs to be a hands-on process thatpersonally engages an organization’s leaders.

As Keeley explained: Out of problems and strategy comes avision, and that vision is applied to a solution, which can differentiate an organization from the competition. He citedthree transformative examples of problem-solving combinedwith 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 entirelynew approach to low-cost, high-style hotels called Ginger.Their slogan is “Welcome to the world of smart basics. Nofrills chic, Indian style.”

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Sometimes things

change:

The new discipline

of innovationLARRY KEELEY PRESIDENT, DOBLIN INC.INNOVATION STRATEGISTAND PROFESSORCHICAGO INSTITUTE OF DESIGN

If you hear about a new technology or innovative discoverthat might be important to your business, find out wheryou can go to see it in person. You can’it intellectually. You have to feel it in your gut.“

• Suntech and Dr. Zhengrong: In China, Suntech’s Dr. ShiZhengrong is creating the world’s most efficient passivesolar arrays. The main Olympic stadium in Beijing ispowered almost entirely by passive solar energy. The outcome: remarkable environmental savings.

“If you hear about a new technology or innovative discovery that might be important to your business, findout where you can go to see it in person,” Keeley recommended. “You can’t just experience it intellectually.You have to feel it in your gut.”

He further advised, “As leaders you have to shape changeand redefine your business. Figure out what is fundamentallyand permanently changing in your industry and address thisshift—even if it scares you. Pick a focus, he recommends,and aim to be the best.”

The first step in making the innovation process more effectiveand efficient, said Keeley, is myth-busting. Contrary to popular belief, innovation is not random, ‘eureka!’ inspirationthat comes out of the blue. “Nonsense,” he says. “It’s abouttaking a disciplined approach that has clearly stated goalsand is guided by metrics that matter.” There are now proveninnovation protocols and diagnostics that help keep people focused.

According to innovation studies, the big winners in the inno-vation game over the past ten years got rich by developing innovative processes or partnerships, not products or technologies. For example, Dell Computer’s success camefrom breakthroughs in their business model, financing, service, brand, and customer experience, but not product. In fact, the strength of their consumer offer came from positioning their product—a computer or peripherals—as a reliably standardized commodity.

The runaway success of the iPOD is not simply because it’s a better MP3 player. The iPOD is an innovative platform thatextends beyond a single industry and involves partnersincluding the iTunes software suite, an on-line music store and third-party accessories to create an integrated music“solution” for consumers.

Keeley believes in an interconnected world, platforms mattermost. He defined a platform as an integrated offering that

creates a unique and holistic customer experience only loosely controlled by the platform owner; usually supportedby proprietary technologies; and typically characterized by interdependent products and services provided through a network of business partners.

Money, printing, free markets and capital markets, property ownership and the Internet are on his list of 15 Top innovations of all time. “All of these platforms,”explained Keeley, “transcended enterprises, industries and political borders.” Google, TIVO, MS Windows XP,Yahoo and eBay are examples of the popular consumerplatforms today. “All of the important stuff now cuts across companies and markets.” He added: “Think of modernbikes as a system of platforms, where a bike is assembled by choosing your own frame, peddles, seat, stem, handle bars, wheels, etc.”

Keeley shared 10 types of innovation to move beyondproducts to win. Studies have shown that if you can integrate six or more at once, you will achieve disruptivemarket changes.

1. Business model (how the enterprise makes money)2. Networking (value chain and partnering)3. Enabling process (assembling capabilities)4. Core process (creating greater efficiencies)5. Product performance (basic failures, performance

and functionality)6. Product system (product extensions that surround

an offering)7. Service (how you support your customers)8. Channel (how you reach your customers)9. Brand (how your customers perceive you)

10. Customer experience (intangible benefits received byyour customers)innovation.”

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If you hear about a new technology or innovative discoverythat 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.“ “

“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 company, and the intellectual/philosophical origins of thesegoals. It should be clear, concise and doable.

The discussion broadened to cover on-going leadership challenges, such as motivating staff, planning for thefuture and coping with the impact of success. A numberof participants felt a mission statement was only part of a complex set of requirements for business growth, including long and short term strategies, capable and diligent execution and getting the right people on the bus.

Others emphasized “company fit,” suggesting that noamount of commitment to a mission statement was going to be able to adapt an individual who simply did not fit theculture. One CEO said his experience was that employeestend to “self edit” when a company vision does not coincidewith their own. Another pointed out that peer pressure is afactor in bringing people together. Another issue was how a firm’s vision impacts recruiting and retention “in this age of difficult staffing challenges.”

Don Gibbs, a successful financier and leader in aspectrum of firms, from start-ups to acquisitions, has been instrumental in building several of Canada’s mostsuccessful technology companies. Gibbs believes, “Toreally learn a business, you have to live and die in it.” Hestarted his career with Leigh Instruments and then movedto Mitel Corporation as its CFO, where in eight years, hehelped the company go public and grow in sales revenueto $250 million. As CFO of Cognos Inc. he successfullytook it public. Today, as Chairman and CEO of TarquinGroup Inc., Don leads by example and plays a primaryrole in the day-to-day efforts of his firm.

Other points raised wer

• How do you ask and imparcompany of 150 rather than 30?

• How are new values ingrained in lar• How does the company’

when the firm’• How many companies had excellent mission statements,

yet failed?

“The mission statement should be under constantevaluation,” Curof the company’

• Would I recommend us to your colleagues (customer satisfaction)?

• How would I rate our company against its missionstatement (1-10)?

• Does the mission statement translate into customersatisfaction?

Curry suggested ways of keeping the mission alive, such as sharing testimonials and ‘mission statement stories’ frcustomers and end users. He underscorbringing people togetherthem to collectively rof your employees is the most critical component of this forof leadership,” Curengagement to keep the mission alive day-to-day

Although approaches difparticipants was the same…to lead and grcompanies. For Genotek, its mission statement has proven to be a powerthe company’s impr

The look of today’s business leaders ranges from traditionalblue suits of Bay Street bankers to the funky informality of digital gamers, but the essential skills of great leadershipremain the same.

Exactly what defines great leadership was the source of hot debate among CEOs in this workshop where management styles spanned the spectrum, but their sharedcommitment to leadership and what it meant to businessgrowth showed there was a lot of common ground.

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 thisprocess is designing a mission statement.

“Lots of people don’t want to talk about mission statementsbecause they think mission statements are too ‘artsy’ or high-level,” said Curry. “But our experience has been that it can be a powerful tool for the organization.”

The proof of his approach may well be in the company balance sheets. DNA Genotek, which manufactures and markets a breakthrough DNA collection kit, has been laudedby everyone from the World Economic Forum to TIME magazine. Revenues and the number of employees have bothgrown by 100 per cent every year for the past four years.

Corporate mission statements are often designed to includeeverything and offend no one. But it can be more than that.For Curry, the key is to make the mission statement meaningfuland 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 employeesone-on-one in a ‘partial sentence exercise’ where staff members are asked to finish an incomplete statements aboutthe 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…”

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Leadership:

Establishing, living

and measuring

the mission1. DON GIBBS

CHAIRMAN AND CEO TARQUIN GROUP INC.

2. IAN CURRY PRESIDENT AND CEO DNA GENOTEK INC.

2.1.

As CEOs we sometimes make too many assumptions about what our employees know and don’“

“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 company, and the intellectual/philosophical origins of thesegoals. It should be clear, concise and doable.

The discussion broadened to cover on-going leadership challenges, such as motivating staff, planning for thefuture and coping with the impact of success. A numberof participants felt a mission statement was only part of a complex set of requirements for business growth, including long and short term strategies, capable and diligent execution and getting the right people on the bus.

Others emphasized “company fit,” suggesting that noamount of commitment to a mission statement was going to be able to adapt an individual who simply did not fit theculture. One CEO said his experience was that employeestend to “self edit” when a company vision does not coincidewith their own. Another pointed out that peer pressure is afactor in bringing people together. Another issue was how a firm’s vision impacts recruiting and retention “in this age of difficult staffing challenges.”

Don Gibbs, a successful financier and leader in aspectrum of firms, from start-ups to acquisitions, has been instrumental in building several of Canada’s mostsuccessful technology companies. Gibbs believes, “Toreally learn a business, you have to live and die in it.” Hestarted his career with Leigh Instruments and then movedto Mitel Corporation as its CFO, where in eight years, hehelped the company go public and grow in sales revenueto $250 million. As CFO of Cognos Inc. he successfullytook it public. Today, as Chairman and CEO of TarquinGroup Inc., Don leads by example and plays a primaryrole in the day-to-day efforts of his firm.

Other points raised were:

• How do you ask and impart employee opinion in a company of 150 rather than 30?

• How are new values ingrained in larger companies?• How does the company’s values and character change

when the firm’s revenue goes up from $2 to $10 million? • How many companies had excellent mission statements,

yet failed?

“The mission statement should be under constantevaluation,” Curry said. It should serve as a benchmark of the company’s success, built on questions like:

• Would I recommend us to your colleagues (customer satisfaction)?

• How would I rate our company against its missionstatement (1-10)?

• Does the mission statement translate into customersatisfaction?

Curry suggested ways of keeping the mission alive, such as sharing testimonials and ‘mission statement stories’ fromcustomers and end users. He underscored the importance ofbringing people together, aligning their vision and allowingthem to collectively respond to change. “Mining the visionsof your employees is the most critical component of this formof leadership,” Curry said, “and finding tangible ways ofengagement to keep the mission alive day-to-day.”

Although approaches differ, the goal of workshopparticipants was the same…to lead and grow theircompanies. For Genotek, its mission statement has proven to be a powerful tool in helping to achieve the company’s impressive growth rates.

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As CEOs we sometimes make too many assumptions about what our employees know and don’t know. “

“

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

“Innovative benefits should help staff meet their real needs,”said Jullian. For example, recent immigrants who return totheir native country for several weeks each year to visit familyare offered a flexible vacation schedule that allows employ-ees the “extra” time off without compensation.

“People want to be treated fairly,” he said. ”If there is asurvey in place you can use to establish your wage rates,use it.” He adds, “We have profit sharing and are veryopen in our communication with employees.”

Michael Palmer of Ceridian Canada, a thriving HR/Payrolloutsourcer for many SMEs—primarily in high technology,financial services and telecomm—talked about the importance of tailoring the message to find the candidate.

Palmer said, “You can’t just post a job ad and pray that you’ll get good candidates. Recruiting is not about posting and praying. Recruiting is figuring out what you need and strategizing where to find people to fill that need.”

Taking it a step further, “you have to market tough to fill positions, not just advertise to fill them,” he advised. To attract the right people and tailor your recruiting messagingand vehicle to various audiences, Palmer offered the following tips:• Analyze your workforce and break it down into categories

if possible• Identify what elements of the job and benefits are impor-

tant to applicants in particular categories• Determine where certain types of candidates are likely to

seek employment

Palmer and Jullian agraspects of retention is engaging your workforto be meaningful to all generations; the millenials (cur18-25 years soon to be leaving university or college),Generations X and Y as well as the baby boomers. “At OCM, we give quaremployees feel morwhere their efforempowering employees with knowledge and training, theyengage in the company’

After you have found and hirbest ways to keep them is to make surfirst impression of the companyprogram, where a buddy is on hand. Everto welcome and show new hirto confirm their choice. The prculture and helps employees to live and experience theemployment brand.

With its employment brand well underto leverage its talent pool to communicate new openings andbuild its candidate network. The firlaunched four years ago and Jullian continues to prcompany through OCM’papers. With HR pragainst a specific ra way to respond to each and everapply, when they ar

With a greatly imprsolutions in play, OCM now “avoids the black hole” when newpositions become available and Drenvironment whercontribution to the company as a way of life.

For most employers, finding and keeping good people is oneof the toughest challenges, and the competition for talent isbecoming even tougher.

Dr. Michel Jullian of Ottawa-based OCM Manufacturing Inc.has been through the hiring process numerous times and hasdeveloped some innovative approaches and effective solutionsto improve his firm’s recruitment and retention (R&R) success rate.

OCM, with a small management team and staff of 50, provides turnkey electronics manufacturing services for small and mid-sized companies whose products include electronics.Customers are in the transportation, industrial, consumer, medical, oil and gas, mining, security, and instrument and controls sectors.

The three top R&R considerations at OCM are attracting and retaining good people, satisfying a diverse workforce,and maintaining both quality and processes through good ongoing performance.

One challenge OCM grappled with, once they attracted theright potential employees, was that the hiring process did notscreen the candidates very effectively. “There are always somepeople who are great at interviews,” said Jullian. “They’re per-sonable, they say all the right things, but then they’re not verygood when they get the job.”

In 2005, OCM went through a corporate re-brandingprocess to heighten its “brand name recognition” and attractboth customers and talent that would be a great fit. A newcorporate identity, website and media presence were created to increase OCM’s competitiveness in the localmarket, both as a supplier and employer.

OCM’s revamped approach to hiring incorporated an industrialpsychologist who developed standardized questions, a multi-stage interview process that includes three interviews withthree different people, asking open-ended questions, and havingcandidates 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 a

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Recruiting and

retaining talent:

Innovative

approaches

and solutions1. DR. MICHEL JULLIAN, PANELIST

PRESIDENT & CEO OCM MANUFACTURING INC.

2. MICHAEL PALMER, PANELIST VICE-PRESIDENT AND GLOBAL LEADERTALENT ACQUISITION PRACTICECERIDIAN CANADA

2.1.

People want to be treated fairly. If theryou can use to establish your wage rates, use it. Whave profit sharing and are very open in our communicationwith 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

“Innovative benefits should help staff meet their real needs,”said Jullian. For example, recent immigrants who return totheir native country for several weeks each year to visit familyare offered a flexible vacation schedule that allows employ-ees the “extra” time off without compensation.

“People want to be treated fairly,” he said. ”If there is asurvey in place you can use to establish your wage rates,use it.” He adds, “We have profit sharing and are veryopen in our communication with employees.”

Michael Palmer of Ceridian Canada, a thriving HR/Payrolloutsourcer for many SMEs—primarily in high technology,financial services and telecomm—talked about the importance of tailoring the message to find the candidate.

Palmer said, “You can’t just post a job ad and pray that you’ll get good candidates. Recruiting is not about posting and praying. Recruiting is figuring out what you need and strategizing where to find people to fill that need.”

Taking it a step further, “you have to market tough to fill positions, not just advertise to fill them,” he advised. To attract the right people and tailor your recruiting messagingand vehicle to various audiences, Palmer offered the following tips:• Analyze your workforce and break it down into categories

if possible• Identify what elements of the job and benefits are impor-

tant to applicants in particular categories• Determine where certain types of candidates are likely to

seek employment

Palmer and Jullian agreed that one of the most importantaspects of retention is engaging your workforce. Work has to be meaningful to all generations; the millenials (currently 18-25 years soon to be leaving university or college),Generations X and Y as well as the baby boomers. “At OCM, we give quarterly updates on the business andemployees feel more connected because they can see where their efforts can make a difference,” said Jullian. “Byempowering employees with knowledge and training, theyengage in the company’s success.”

After you have found and hired the right person, one of thebest ways to keep them is to make sure they get the right first impression of the company. OCM has a Great Start program, where a buddy is on hand. Everything is set up to welcome and show new hires the ropes, which helps themto confirm their choice. The program focuses on company culture and helps employees to live and experience theemployment brand.

With its employment brand well underway, OCM continues to leverage its talent pool to communicate new openings andbuild its candidate network. The firm’s Chinese operation waslaunched four years ago and Jullian continues to promote thecompany through OCM’s website, newsletters and whitepapers. With HR processes in place, OCM tracks candidatesagainst a specific requisition and metrics. The policy is to finda way to respond to each and every candidate: when theyapply, when they are declined and they are selected.

With a greatly improved R&R success rate and quality /processsolutions in play, OCM now “avoids the black hole” when newpositions become available and Dr. Jullian continues to foster anenvironment where every individual can experience his/hercontribution to the company as a way of life.

11

People want to be treated fairly. If there is a survey in placeyou can use to establish your wage rates, use it. We have profit sharing and are very open in our communicationwith employees.“ “

major car companies participated in a panel discussion ongreen 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,President of Bullfrog Power Inc. Launched in 2005, Bullfrogprovides residential and commercial customers in Ontarioand Alberta with clean, green power from 100 percentrenewable sources such as wind power and low-impacthydro facilities.

“There is a diverse range of companies that have chosen togo green and a long list of reasons why,” said Heintzman,who talks with businesses every day about sustainabilityissues. For some companies, their motives are altruistic: theysimply want to reduce the environmental impact of theiractivities. Others may want to earn a position on the DowJones sustainability index. Still others see it as a competitiveadvantage because they can add “green” points to theircustomers’ value chains.

“More and more, we’re hearing that the impact oninternal staff is as important as the external impact oncustomers,” Heintzman said. “In terms of attracting toptalent, people want to work for companies that reflecttheir personal beliefs.”

Green initiatives are no longer just for activists, asenvironment and social issues are, more and more,becoming a public concern and critical factor forgovernment policy and corporate strategy. A critical questionis “how to differentiate your company?”

According to a survey of 500 business executives conductedby Grant Thornton, “Company executives believe that corporate responsibility programs can positively impact their business and help achieve strategic goals (…) 77 percentsaid they expect corporate responsibility initiatives to have a major impact on their business strategies over the next several years.”

In exploring green opporabout products. It’infrastructure, waste, and looking throrganization to identifyinitiatives. “Part of it means understanding your own customerbase to see what their concer“Customers are always looking for leaders. In addition tofinancial gains, your grmarket, keep customers and be perHiscox added. All of these merits can add to the bottom line,which one CEO attested to, having won an enviraward that resulted in a “big payof

Some participants found themselves strtheir desire to go grsocial responsibilities seriously and we arhaving a product that is as envirpossible,” said the head of a specialty manufacturcomfort and safety prlook at components that go into our prtravel 10,000 miles to get herways, but how can I go to my customers and say this is agreen product?” The panel rthe best policy.

For Ontario manufacturgas emissions, Heintzman of

1. Gather baseline data on enermaterials etc.

2. Reduce consumption thrnew technologies, etc.

3. Buy green pryou can’t eliminate.

4. Offset your grpurchasing carbon cr

“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 meansand how they can begin to reduce their carbon footprint.

Niel Hiscox, publisher of Green Business magazine, iswatching the impact unfold at companies in many sectors. The whole discussion, he reports, has shifted from ‘green’advocacy to a hard-nosed analysis of ROI (return-on-investment),strategic implementation and decision-making issues.

New companies, such as Patagonia clothing, are emergingthat have sustainable materials and processes as a core partof who they are and how they do business.

Major corporations, such as Interface, the world’s largestcarpet manufacturer, are transforming themselves into widelyrecognized world leaders in sustainability practices.

Still other companies are devastated when they discover thatthey have huge liabilities in terms of environmental clean-upsfor issues that no one had even thought about ten or twentyyears ago.

“Everybody agrees that sustainability is going to be the next big thing because it changes the shareholder valueparadigm of business costs and risks,” said panellist Thibaut Millet from Deloitte and Touche. “People arebeginning to realize that sustainability has the potential for both value creation and value protection.” Defined byMillet, “sustainability is simply how a company manages its business to generate shareholder value, while having apositive impact on the community, and minimizing adverseimpact on the environment.”

The value-creation concept was born out in a comment from the president of a firm providing packaging andcrating for all industries. “Customers want less packaging,customers want shorter supply chains, customers wantbranding, and customers want to get an edge over theircompetitors. This has actually driven down our costs,” he said.

Niel Hiscox related how consumer behaviour and ‘goinggreen’ are not always clear. He recently attended a mediabriefing at the Canadian auto show where presidents of the

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Capitalizing

from green:

An emerging

business paradigm1. NIEL HISCOX, MODERATOR

PUBLISHER GREEN BUSINESS MAGAZINE

2. TOM HEINTZMAN, PANELIST PRESIDENTBULLFROG POWER INC.

3. THIBAUT MILLET, PANELIST SENIOR MANAGERCORPORATE RESPONSIBILITY & SUSTAINABILITY SERVICESDELOITTE & TOUCHE

2.

3.

“ “

1.

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 ongreen 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,President of Bullfrog Power Inc. Launched in 2005, Bullfrogprovides residential and commercial customers in Ontarioand Alberta with clean, green power from 100 percentrenewable sources such as wind power and low-impacthydro facilities.

“There is a diverse range of companies that have chosen togo green and a long list of reasons why,” said Heintzman,who talks with businesses every day about sustainabilityissues. For some companies, their motives are altruistic: theysimply want to reduce the environmental impact of theiractivities. Others may want to earn a position on the DowJones sustainability index. Still others see it as a competitiveadvantage because they can add “green” points to theircustomers’ value chains.

“More and more, we’re hearing that the impact oninternal staff is as important as the external impact oncustomers,” Heintzman said. “In terms of attracting toptalent, people want to work for companies that reflecttheir personal beliefs.”

Green initiatives are no longer just for activists, asenvironment and social issues are, more and more,becoming a public concern and critical factor forgovernment policy and corporate strategy. A critical questionis “how to differentiate your company?”

According to a survey of 500 business executives conductedby Grant Thornton, “Company executives believe that corporate responsibility programs can positively impact their business and help achieve strategic goals (…) 77 percentsaid they expect corporate responsibility initiatives to have a major impact on their business strategies over the next several years.”

In exploring green opportunities, Hiscox advised it’s not justabout products. It’s also about processes, how you manageinfrastructure, waste, and looking through the entireorganization to identify, implement and sustain greeninitiatives. “Part of it means understanding your own customerbase to see what their concerns are about you,” he added.“Customers are always looking for leaders. In addition tofinancial gains, your green image can help you to head amarket, keep customers and be perceived as an innovator,”Hiscox added. All of these merits can add to the bottom line,which one CEO attested to, having won an environmentalaward that resulted in a “big payoff” for the company.

Some participants found themselves struggling to balancetheir desire to go green with practical concerns. “I take oursocial responsibilities seriously and we are interested inhaving a product that is as environmentally friendly aspossible,” said the head of a specialty manufacturer of acomfort and safety product for men and women. “Then Ilook at components that go into our products. Some of themtravel 10,000 miles to get here. We are green in manyways, but how can I go to my customers and say this is agreen product?” The panel recommended transparency isthe best policy.

For Ontario manufacturers wishing to reduce their greenhousegas emissions, Heintzman offered a simplified outline:

1. Gather baseline data on energy use, use of recycledmaterials etc.

2. Reduce consumption through efficiencies, conservation,new technologies, etc.

3. Buy green products and services to replace those thatyou can’t eliminate.

4. Offset your greenhouse gases, as a last resort, bypurchasing carbon credits.

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.

1. DENNIS ENSING, MODERATORPARTNERWISE MENTOR CAPITAL

2. DENIS GODCHARLES, MODERATORMANAGING PRINCIPALINTERIS CONSULTING INC.

To kick-start the discussion, co-moderatorDennis Ensing pitched out the provocativequestion: “So, how are bankstreating you these days?”

Following are fly-on-the-wall quotes fromparticipating CEOs with the names omitted.

Commercial banks“We’ve found that if you’ve got good EBITA(earnings before interest, taxes, depreciationand amortization) you can get pretty good deals.”

“We recently went bank shopping and I wasreally surprised that they all came back withvery different platforms, very differentapproaches. Some banks won’t look atSRE&D financing credits, others will.”

“We put a lot of effort into our relationshipwith our bank. We’ve been with them 12years. We tell them that, every two years,we’ll benchmark them against the best offerwe can get. At one point, we told them

‘You’re our partner. We want you to help usfind additional financing.’ That’s when theybrought in BDC.”

Business Development Bank ofCanada (BDC)“Our experience with BDC has been quitegood. Our bank really loves working withBDC. We find that it’s not too intrusive, theconditions are quite reasonable.”

Export Development Canada (EDC)“The EDC is also a good way to check acompany’s credit. If EDC won’t insure them,you may not want to get involved.”

Private equity“VC’s (venture capitalists) want 25–40%return per year. Angels want 60%.”

“The question is, what do you give up? Everyonethinks the magic number is 50%. It’s not. It alldepends on how the deal is structured. The keyis your relationship with your investors and youragreement with your Board.”

Words of wisdom “You have to ask yourself—Is money really the missing engine of growth? Sure, it’s aneasy answer. But sometimes you needinnovation or new management. Sometimesit’s really important to step back and thinkabout it.”

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Financing growth: Reports from the front lines

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1. 2.

Financing the growth of high performance companies has always been a challenge, but today’s economic and financial market conditions areenough 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.

As a sounding board to provide unbiased,objective and strategic advice, the Ministry’steam of experienced business advisors located in twelve regional offices across Ontario haveassisted literally thousands of companies over the years. Business advisors have a network ofbusiness contacts in both the pubic and privatesector to assist with market intelligence, R&D programs, export assistance, support for innovation and new technology, andexpansion plans.

With expertise in business planning, finance,exporting, and more, one of your local advisorswill get to know your company, assess itsoperations and identify issues that are crucial toyour firm’s growth. Business Advisory Servicesconnects you to government programs andservices, networking, and growth opportunitiesthrough events, workshops, seminars,publications and one-on-one consultation.

The Wisdom ExchangeNow in its 14th year, the Wisdom Exchange is“the forum” where CEOs and presidents ofOntario’s leading growth firms meet to hear fromtop business strategists, share knowledge, learnbest practices and make valuable businessconnections. For information on past WisdomExchange events, visit www.wisdomexchange.ca

The Breakfast SeriesBusiness Advisory Services just launched a seriesof breakfast sessions to support Ontario businessleaders by exploring timely growth topics andproviding the latest on government programs andinitiatives. The first three events in southwesternOntario (June, 2008) feature a presentation/discussion on Lean and how it is reshapingmanufacturing, updates on two new Ontario

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Your partner for growth

The Ministry of Small Business and Entrdelivers direct supporhelp small and medium sized companies (SMEs) identifyand access critical inforadvice needed to overgrowth opportunities.Bob Marrs, Director, Business AdvisorWise Mentor Capital and Dr

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As a sounding board to provide unbiased,objective and strategic advice, the Ministry’steam of experienced business advisors located in twelve regional offices across Ontario haveassisted literally thousands of companies over the years. Business advisors have a network ofbusiness contacts in both the pubic and privatesector to assist with market intelligence, R&D programs, export assistance, support for innovation and new technology, andexpansion plans.

With expertise in business planning, finance,exporting, and more, one of your local advisorswill get to know your company, assess itsoperations and identify issues that are crucial toyour firm’s growth. Business Advisory Servicesconnects you to government programs andservices, networking, and growth opportunitiesthrough events, workshops, seminars,publications and one-on-one consultation.

The Wisdom ExchangeNow in its 14th year, the Wisdom Exchange is“the forum” where CEOs and presidents ofOntario’s leading growth firms meet to hear fromtop business strategists, share knowledge, learnbest practices and make valuable businessconnections. For information on past WisdomExchange events, visit www.wisdomexchange.ca

The Breakfast SeriesBusiness Advisory Services just launched a seriesof breakfast sessions to support Ontario businessleaders by exploring timely growth topics andproviding the latest on government programs andinitiatives. The first three events in southwesternOntario (June, 2008) feature a presentation/discussion on Lean and how it is reshapingmanufacturing, updates on two new Ontario

government funding programs, and information onother programs of interest to Ontario manufacturersand exporters. www.sbe.gov.on.ca

Leading Growth Firm SeriesThe Leading Growth Firm Series of publicationsresearches and promotes the effectivemanagement practices of CEOs and presidents of successful Ontario firms. Report 16: ThinkingLean…Improving performance, customersatisfaction and the bottom line was released inApril, 2008. The series delves into a range ofcritical business issues and shares best practices,growth strategies, tactics and perspectives throughinterviews/profiles of CEOs of successful OntarioSMEs, insights from topic experts, lessons learnedfrom corporations and resource information.Toaccess all of the reports, visit www.sbe.gov.on.ca(click Leading Growth Firm Series).

The Ontario Oil Sands ConnectionBusiness Advisory Services is working to connectqualified Ontario manufacturers and supplierswith the right Alberta Oil Sands opportunities.Alberta Oil Sands development is creatingdemand for manufactured products from acrossNorth America, with an estimated $170 billion inoil sands related development. With a focus onmetal fabrication and industrial machinery,equipment and service sectors, Business AdvisoryServices has developed the means to connectyou with a pipeline of opportunities. One of ourBusiness Advisors will consult with you to assessyour current position and help develop your Oil Sands Market Development Plan.www.sbe.gov.on.ca (Click Grow YourBusiness/Talk to Experts).

Let Business Advisory Services help to put the pieces together for you!

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Your partner for growth

The Ministry of Small Business and Entrepreneurshipdelivers direct support to Ontario business leaders to help small and medium sized companies (SMEs) identifyand access critical information, key resources and expertadvice needed to overcome obstacles or pursue newgrowth opportunities.Bob Marrs, Director, Business Advisory Services with Dennis Ensing, Partner, Wise Mentor Capital and Dr. Michel Jullian, President, OCM Manufacturing Inc.

Printed in Ontario, Canada on recycled paper © Queen’s Printer for Ontario, 2008

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

www.sbe.gov.on.ca