Building Canadian champions: reflections on entrepreneurship, growth and resilience

Goldy Hyder:

Welcome to Speaking of Business – conversations with Canadian innovators, entrepreneurs and leaders. I’m Goldy Hyder, president and CEO of the Business Council of Canada.

We started this podcast in 2019 with the aim of getting to know some of Canada’s top business leaders on a personal level. For five years I’ve had the privilege of hearing compelling life stories from people who lead some of Canada’s largest companies and who care passionately about our country.

Incredibly, we have now recorded one hundred episodes of this podcast and we thought that warranted a celebration. So in September we gathered at the downtown Toronto campus of the Ivey School of Business to record our first Speaking of Business podcast in front of live studio audience.

Here’s that conversation, beginning with an introduction from Ivey’s new Dean, Julian Birkenshaw.

 

Julian Birkinshaw:

Welcome. I’m Julian Birkinshaw, new dean of Ivey Business School. I’m here today at the Donald K. Johnston Centre, our Toronto campus. On behalf of Ivey’s Ian O. Ihnatowycz Institute for Leadership, we are pleased to host the 100th episode of the Business Council of Canada’s Speaking of Business podcast, the first in front of a live audience. For over a century, Ivey has been dedicated to creating the leaders of tomorrow, leaders who think globally and act strategically to solve today’s pressing issues, a mission that has become more acute as we face a world with converging and complex challenges. At Ivey, we are fortunate to have the Ihnatowycz Institute to amplify our mission through their work on character leadership and help us teach our students both what good leaders do and who good leaders are. In other words, we develop our students’ character alongside their competencies. This is Ivey’s differentiator in our approach to creating leaders for a sustainable and prosperous world.

As a business school that employs the case study method as the foundation of our curriculum, we rely on the experiences of individuals and organizations to immerse our students in real business challenges. In many respects, this immersion into real world issues is also experienced when listening to the Speaking of Business podcast as it offers a unique window into the life stories of some of our nation’s most influential innovators, entrepreneurs and leaders. These frank and insightful conversations, so exceptionally facilitated by the Council’s CEO, Goldy Hyder, delve into many of the topics we address at Ivey, such as what makes a good leader? How do personal experiences shape a career journey? What can we learn from failure? And how do we build a strong and vibrant Canada for future generations? Today we have the opportunity to hear from three highly respected leaders representing three generations of Canadian business leadership.

Calin Rovinescu was CEO of Air Canada from 2009 to 2021 and now serves as a corporate director, venture capital investor and senior advisor to several corporations. Linda Hasenfratz is executive chair of the board of Linamar Corporation. She’s a graduate of the Ivey School of Business and is former chancellor of Western University. Mohammed Ashour is the co-founder and chairman of Aspire, a global pioneer in insect agriculture. He’s a leading voice in social entrepreneurship, climate sustainability, innovation and technology. And of course, the host of the Speaking of Business podcast is Goldy Hyder, president and CEO of the Business Council of Canada. Over to you, Goldy.

 

Goldy Hyder:

Thank you so much for having us here, Julian, and thank you to you and your team.

I’m just thrilled to have the three guests that we do today. And so I want to start off in a fun spot if I can. We’re here with young people who are thinking about where they’re going to be in their lives. I’m going to ask you, what did you want to do when you were a kid? And you can’t say pilot, Calin, I took that one. Go ahead.

 

Calin Rovinescu:

In thinking about this question, Goldy, I thought of the biggest influences as a child other than parents of course, and they were probably sports and television. Television because we came as immigrants from Romania and television was a great source of learning, fooling around with accents, whether it was an accent from the Beverly Hillbillies or an accent from Peter Falk or someone like that. Once I figured out that I wasn’t good enough to be a professional athlete, because that probably would’ve been my real childhood dream-

 

Goldy Hyder:

Which sport?

 

Calin Rovinescu:

Hockey. I’d go to the park and never good enough to actually make the A team, but I’d show up there every night. Once I realized that that dream had failed, the next best thing was the Hardy Boys. We used to read a lot of Hardy Boys books and the fascination with being a detective, figuring stuff out, thinking things through, I think that that whole theme was extremely appealing to me. But my dad was a doctor, and so pretty soon all of those dreams were dashed because he really wanted me to become a doctor.

And then I disappointed him by going into law school, which really, the decision to go into law school was to have as broad an education as is possible. I touched a lot of different things throughout that education. But I think from a fun perspective, the curiosity of being an amateur sleuth and then perhaps evolving into a professional sleuth. I remember thinking of Perry Mason, another show that was on television, the detectives in Perry Mason that would be more important than the courtroom drama. These were all drivers-

 

Goldy Hyder:

Good stuff.

 

Calin Rovinescu:

… and by the time I got into law school, I assumed I’d become a criminal lawyer.

 

Goldy Hyder:

Well, there’s a lot of things in there, like solving problems comes to mind. But Linda, what was your hope as a child?

 

Linda Hasenfratz:

I distinctly remember when I was a child wanting to be an astronaut. I don’t know if it was just the idea of going places where people hadn’t gone before. I’d always loved science and technology and it felt like a place that there’d be a lot of that happening. Somewhere along the line that dream got dropped, although I did do a degree in science followed by business and then ended up joining my father’s company. But I do feel like in many ways I’ve gotten to go to a lot of places and do a lot of things that did feel new and did feel like I was exploring a new world. So, maybe I’ve done so on earth instead of in space.

 

Goldy Hyder:

You’ve certainly helped Linamar go out of this world to great heights, so well done.

 

Linda Hasenfratz:

Thank you.

 

Goldy Hyder:

Mohammed, what about you?

 

Mohammed Ashour:

Similar to Calin, actually, I grew up to immigrant parents. In my case, my parents came from Egypt. So, growing up I could be anything in the world I wanted to be, as long as it was a doctor or engineer. I actually ended up independently, or so I tell myself, falling in love with medicine and decided that was my path. Amazingly, I think I managed to one-up Calin in my parents’ disappointment because whereas he went to law school instead, I actually went to medical school and voluntarily withdrew to make it even more delicious in how devastating it was for my parents. But in all seriousness, it was always a passion for serving people that really drove me to want to be a physician. And I just found that there’s a business opportunity that could allow me to achieve that level of impact in a shorter period of time, in a much more global way than I ever could in 20 lifetimes as a physician.

 

Goldy Hyder:

Good stuff. All right, now that we’ve warmed each other up here a bit, let me get into topic number one here. And that is how it is that we can create the environment for companies to grow because obviously that’s part of the objective is how are you going to grow? Calin, when I did my podcast with you, you said something that really stuck with me and that is you said at Air Canada you still were running the place as if you were an 80-year startup. What did you mean by that?

 

Calin Rovinescu:

I admire startup entrepreneurs like yourself and maybe people in this room and people who will be entrepreneurs from people in this room. Many of the characteristics and drivers for a startup business are absolutely exportable to mature businesses. It requires a tremendous amount of commitment and communication. But when you look at what are the key drivers of this, no silos, so everybody does every job. Everybody is responsible for human resources, everybody’s responsible for finance-

 

Goldy Hyder:

Marketing, et cetera, yeah.

 

Calin Rovinescu:

… marketing, et cetera. We may not have started in someone’s basement or someone’s garage, but the reality is that the level of collaboration between groups, the innovation, the discussions that can take place, the level of empowerment, we adopted a philosophy where we were going to empower frontline people to do things that they couldn’t do before. So, I’ll steal the just do it logo from Nike. I had no shame in saying let’s just import that here and have that mindset here. Just do it. If you think something is the right way of doing it, just do it, which is of course what startup entrepreneurs would do. And it goes on and on when you look at some of the drivers for that, including the expectation of financial performance, the expectation of share price performance, how it was that we were intending to expand our business to countries that we had not been in before. Having ambitions that are beyond what it was that the people inside the organization thought they could do. At the height of the post global financial crisis, the organization’s back is against the wall, we said, we’re going to have an ambition to be a global champion here and conquer some of these markets. And of course, that again, is something that emerging entrepreneurs and startup businesses do. In the case of Air Canada, it’s going to be 85 years old. I’m also on the board of BCE, which is 175 years old, and Scotiabank, which I think is 196 years old.

 

Goldy Hyder:

Both are older than Canada.

 

Calin Rovinescu:

The point being that there are organizations that absolutely need to be transformed, and that kind of very powerful entrepreneurial mindset is a great starting point for a culture.

 

Goldy Hyder:

You mentioned basement. Basement is exactly where your dad was when he put his first machine in your home, in your basement. And today, you’ve got, what, 34,000 employees, 19 countries, four continents, 17 R&D centers around the world. It’s a great story. How did it happen? How did you grow this business to what it is?

 

Linda Hasenfratz:

I’ve given a lot of thought to that and what are the important elements that have allowed us to be successful? And I think one of the most important things that we really try and live every day is, stealing the title of quite a good business book if you haven’t read it, “Think Big and Act Small.” I just think this is a really critical way to run your business. It lines up actually with what Calin was just talking about, about running a startup throughout your business’s life. I think that we have always been very aspirational in our thinking of what we were going to do, the goals that we put in place for ourselves. When I came into the C-suite in the late ’90s, I set a goal for Linamar of being 10 billion in sales. At the time, we were just crossing 1 billion. It was a huge goal. It was 10 times where we were at that time.

We had a lot of naysayers. We had people who thought, you can’t do that, you can’t get there, but I really felt we could. And I’m very pleased to say that just this year we did cross the 10 billion dollar mark. Thank you very much. But I tell you that because it forced us to think differently. It forced us to think not about Canada or North America as our market, but to think about a global market. It forced us to think outside of the markets we were in. At the time, we were very automotive focused. Today, we’re in the automotive industry, we’re in the agricultural industry, we’re in access equipment and looking to expand into additional verticals as well. So, I think having an aspirational goal definitely helps you to think that way.

I think the other side of that saying to act small is really critical as well. It’s so easy as you grow your business to get acting big. I think that it can be the death knell of many companies as we become more bureaucratic, add more processes, more approvals, more bureaucracy in the way that we do things. We stop figuring out how to be ingenious and find a solution that’s $10,000 and we hire a consultant to do it for a million dollars. Sorry, if there’s any consultants in the audience. I know you do good things too.

 

Goldy Hyder:

You don’t like PowerPoint decks?

 

Linda Hasenfratz:

I know you do good things too. But that’s the tendency. And I think that you’re not going to survive the next decade in particular, I think, which is going to be pretty challenging out there in terms of the business environment, unless you can figure out how to do things ingeniously and do them yourself and to act small even while you’re thinking big so that you can be more cost-effective but more real and living inside of those moments where you make those decisions that are so impactful on your business. So, I think that’s for sure been a huge part of our success. It’s something that we constantly revisit as well. There’s never a shortage of people who push you to add more bureaucracy, add more layers, add more approvals. Something goes wrong and somebody wants to put a new process in place to avoid it. And you got to push back against that and really drive the accountability and ownership and decision making to the right levels and give people guidelines to work within and try and hold them accountable to that.

 

Goldy Hyder:

It’s a great segue to someone who’s trying to do all of those things with great aspiration at Aspire. I’m wondering if you could share with our listeners and our audience, what does it take, what are the elements that you need as a real startup in the 21st century, a co-founder of one, to grow? I don’t know if you have an ambition like Linda did, but how do you do it?

 

Mohammed Ashour:

I wish there was a simple recipe, and in some ways, there are simple ingredients, but they’re not easy to bring to life. I think that for us, especially for the business that I co-founded, which we knew was a capital intensive business and a first of kind in the world, so you don’t have the benefit of others who made the mistakes, other playbooks you can rely on, you are inventing the plane and flying it at the same time, which is a very thrilling but also terrifying reality. I think for us, it really came down, I think, to three things. The first is you needed to have the financial capital. If you just don’t have enough gas in the tank, you’re never going to see it through. There’s a famous story of how FedEx’s CEO, Fred Smith, when he was down to the last $5,000 and the company was running out of cash, he went and famously gambled that $5,000 on blackjack and made $27,000 and paid their fuel costs, and somehow that turned around the business. Now, I’m not …

 

Goldy Hyder:

We’re not advising this, by the way.

 

Mohammed Ashour:

I’m encouraging anyone to go gambling.

 

Goldy Hyder:

Legal purposes, it’s not the advice that we’re giving.

 

Mohammed Ashour:

That’s right, absolutely don’t do that. But the point is, that could have been just another example of a company that never made it. So, having gas in the tank is crucial, and you have to size that to your organization and its ambitions. The second thing is human capital. You need the right people on the bus, and you need the right people on the right seat in the bus. The bus is always moving in a different direction, which means you can’t assume that just because someone was really good at a given role at a given time, that that continues to be the right person when the organization grows to a different stage with different needs. That’s a very difficult, very lonely reality because it does mean you’re constantly, as a leader in your head, questioning whether key people that you’ve relied on and depended on continue to be the right people and building the right contingencies to ensure that the right support is there.

Finally, and this is, I think, an individual aspect, the mental capital. There’s just a lot of ups, but there’s a lot of downs. You have to begin the journey with a real deep commitment to what you’re doing. I won’t use the word passion because not everybody necessarily gets passionate about business, but you have to care and you have to personally find fulfillment in what you do, especially in early stage companies when the downs are much bigger than the ups. And the probability of a failure is just exceedingly high because of a lot of factors, many of which are even out of your control. So, making sure that you have the fortitude and the right attitude and the right grit and understanding that that’s a huge part of your investment in the success of your idea is an absolutely critical and foundational piece to really helping the organization itself grow.

 

Goldy Hyder:

Let’s talk about another issue that I know is important to all of you and frankly shouldn’t be a surprise, and that’s the issue of skills and skills development. I know you and I have talked a lot about this, so I’m going to start with you, Linda, but first of all, whose job is it? Is it the job of government? Is it the job of academia? Is it the job of businesses? Who needs to do this?

 

Linda Hasenfratz:

I think the short answer is everyone. We all need to be involved in developing the talent we need for the future growth of our country and our organizations. There’s a role for government to play, there’s a role for business to play, there’s a role for academia, there’s a role for parents and our society in general to help steer young folks into roles that are going to be really important to us in the future. I am a big believer in science, technology, trades, engineering and math as being really critical skillsets for the future. I would say for a couple of reasons. One is just the breakneck speed of technology and how it is evolving. It is happening so fast that we absolutely need to have the strongest, most knowledgeable folks in STEM and trades to help us manage that, understand it, implement it, and maintain it in our organizations.

Secondly, I would say if I look at the countries we’re working in around the world, almost every one of them is facing a shrinking of working age population at a significant pace. That means we need to figure out how to do things smarter, better, faster with less people. That’s innovation for sure. It’s also inevitably going to be automation. So, we are going to need to automate more things than we are today just to get the job done because there just won’t be enough people to fill the roles. It means we need less and less unskilled and more and more skilled people to do those roles, which again brings me back to the STEM and trades areas

I also think that it’s an excellent place from which to be an entrepreneur and to start a business. You look around at entrepreneurs, many of them came from those backgrounds and have some trade, some skill, some technology, science. They have some idea that they’ve come up with and turned that into a business.

 

Goldy Hyder:

You’re also a great role model, Linda, for women. I know that’s also very important to you to make sure that they’re in STEM. Let me come back to you Mohammed, because again, you’re doing it now in real time. Talk a little bit about the tools that are necessary to start a business versus actually run the business. You’ve done both now. You’re doing both.

 

Mohammed Ashour:

Yeah, absolutely. I mean, I think it really dovetails nicely with this notion that you just need exceptional human capital. Every company needs really good people, but startups have this paradox, this really painful reality where you actually need the most talented people in the world because you’re trying to do something that wasn’t done before. And you’re trying to create a huge competitive advantage for yourself, and you’re trying to differentiate yourself. And to do that, you really need the very best, but the very best you often can’t afford. So, you usually have to give up big chunks of your company to make it worthwhile for someone to leave a very, very lucrative opportunity to come in and join you. But that trade-off ultimately becomes very much the right one to make, and we’ve had to do that of course, over and over.

And I think what we’ve learned is that the team it takes to start the business dramatically evolves, and we have to keep our eye out to our competitive landscape and how the world and the technology stack is changing and evolving every single month and whether or not we have what it takes to be able to compete at that level. I think from our perspective, I couldn’t agree more with Linda, that it takes a village and it’s not just the company’s responsibility, but in the end of the day, the buck does stop with you. And what you can control is who is the talent that you’re able to bring into the door and more importantly, keep in your business. And this is the other aspect that’s, I think, underrated.

The reality is a lot of excitement and euphoria goes into trying to attract and bring some of the most talented people, but oftentimes, the business doesn’t pay attention to whether or not those people continue to have that same sparkle in their eye a year in when new challenges emerge or new competitive tensions start to arise, and whether or not and how you can keep that talent in the door. In organizations who have 34,000 people usually when one person leaves or even 10 people leave, the quotient is just so different that the impact that has on the organization is typically absorbed. Whereas in an organization of a 100 people, if you have your top scientist leave, that is a massive amount of brain drain. And the cost for the business is not just measured in financial terms, it can really set back the business significantly.

So, for us, it’s all about what do we need to do to create a high-performing culture that is engaging and exciting, and where people find in this organization the roadmap and the career trajectory that gets them excited about their own growth within the broader scheme of the growth of the business. And I think we’ve learned that the hard way because we’ve made situations where we’ve hired people either too soon or people that we just simply, our growth trajectory did not match the logarithmic growth they were looking for, and so that tension exists. But once you create the right balance between those two, that’s when you can really have an incredibly high-performing culture.

 

Goldy Hyder:

A lot of wisdom there. I’m going to unpack it a little bit with Calin. I want to talk to you a little more about the EQ side, the culture, the talent, the retention issues that you face, not just skills and training, but you had said that during COVID, for example, the thing that really mattered was your communication skills, how you communicated with your employees to get them through this period of anxiety. Today, we’re dealing with employees who are anxious about technology and whether technology will replace them. How important is that soft stuff in getting that ability to keep your talent and develop those skills.

 

Calin Rovinescu:

EQ skills have not really been taught in schools and certainly not in business schools. And perhaps things are changing these days, but they certainly were not taught in our time. The communication tools that we have at our availability are materially different than they were 10 years ago, materially different than they were 20 years ago, 30 years ago. The universe has changed, and I think leaders are still adapting as to the use of those tools, whether it’s social media or whether it’s just some video communication. When I came in as CEO in 2009, the airline was coming off of the back of the global financial crisis and its back was against the wall, an extremely tough time, we had set out a very ambitious transformation program, which affected everything, affected pension, affected labour, affected finances, affected the product, affected virtually everything. We needed to get our employees to understand that quickly.

And I remember our head of our marketing agency at the time suggested to me that I should do a YouTube video. Of course, nobody did YouTube videos in business in 2009. Nobody, nobody. I remember thinking at the time, I guess I was ahead of my time because I was thinking somebody could put other words in my mouth and pretend that I’m out there, put a different head on my body-

 

Goldy Hyder:

Well, that’s come now. We’ll come to that in now.

 

Calin Rovinescu:

That’s come now. With some trepidation, we did these and they were enormously successful. They were different at that time. Obviously, today they’re nothing, but at that time, they were seen as being a different way because the idea of having an organization of 34,000 or 44,000 now people moving in the same direction is extremely complicated. That is a skill that you need to teach. It’s not just for the CEO, but for many, many, many layers of management down the line.

You can have the greatest of vision and you can build something in a garage and you can explain to five people what it is, but as it gets larger and larger and larger, being able to convey with clarity what that vision is and get people to line up behind it, it’s an extremely important tool, which I would encourage those that are capable of changing curricula to figure out ways to get that type of skillset into folks. I totally agree with Linda, STEM is so important but that’s an area where especially you need to have some capability of communication skills and EQ.

 

Linda Hasenfratz:

Are you suggesting that STEM grads are not good communicators?

 

Calin Rovinescu:

I will add one thing to the first discussion on skills development, and this was a bit of a bugaboo that I had when I was at Ottawa. I thought that none of the universities in Canada were doing an adequate job of it, of partnering in a meaningful way with industry. The Silicon Valley models of usually Stanford have worked out really, really well. Every business school does it to some degree. But I’d say that on a scale of one to 10 as a collaboration, I would give us a five or a six on that. And I think that that is one untapped area for both skills development and quite frankly, for industrial evolution because the partnerships that come out of those collaborations can be extremely powerful. And I’d say many, many emerging businesses are dying, I would think, for partnerships with universities.

 

Linda Hasenfratz:

I just wanted to jump in to agree that I think the EQ side and how we communicate with people is absolutely critical. When I look at the training that we do for our own leaders, our internal training programs, they’re 100% focused on that. There’re modules on conflict management, communication, building your team, implementing change. All of that is more of these soft skills of how do you communicate with people, how do you assess your team. When you’re communicating with your team, recognizing that you communicate that change or that desired outcome in a different way from person to person is really important. I do think I learned some of that at Ivey, by the way, a little plug for Ivey. But I will say that that is very much the focus of our internal leadership training is giving our folks those skills that make them effective leaders.

 

Goldy Hyder:

One of the big things, of course, everybody talks about these days is AI. More broadly, of course, we have a productivity problem in Canada. I want you to talk a little bit about, each one of you, how you see AI, where we are today, and what impact it may or may not have on your business. Mohammed, why don’t we start with you?

 

Mohammed Ashour:

To answer that, maybe I’ll give a very brief overview of my business. I’ve co-founded a company that basically builds vertical farms that grow insects as a protein source. And our primary focus is livestock feed, pet food, the world needs more protein produced more efficiently. And we found that insects use a fraction of the amount of land, water, and energy to produce compared to virtually any other form of conventional livestock. So, you have this sort of protein in a box modular farm that you could put anywhere in the world and it can theoretically produce significant amounts of protein and fertilizer. Because of this, this is a business that is extremely well-positioned for the application of a lot of technology. So, we use internet of things and sensors throughout the entire farm to determine things like temperature, humidity, light intensity, sound pressure.

There’s billions of crickets inside a building. And you want to find what are the optimal conditions to grow the healthiest, most number of crickets in the shortest possible timeframe without having to use certain types of drugs or antibiotics or any kind of supplemental methods. That’s a very meaningful way to leverage this technology because you’re collecting 30 million data points every single day. And unless you have an army of data scientists who can go through this data, and even if they did, they would go through it and look for intuitive correlations in the data. But what applications like machine learning and deep learning can help you do is actually find non-obvious correlations in the data and produce recommendations. But now, we’re taking it a step further. Our scientists who are conducting research all the time trying to figure out what is something we can change in the formula of the feed we feed the crickets to improve. What can we do around some of the effects inside the habitats themselves?

Now, you can actually build simulators that can run simulations of thousands and thousands and thousands of experiments to then tell your scientists which are the experiments they should actually run in vitro that are most likely to yield the greatest results. We’ve partnered with Western University and we’re actually doing a digital twinning of our facility to also do the simulation in an even more intensive type of way. We see that this can create a form of internet of farming where imagine as we build the next, let’s say, 10 facilities in South Korea and France, the United States, more facilities in Canada, now you have all these facilities that actually connect to one another and you have this self-correcting, self-improving system because all that data from all these different facilities and all the unique attributes are being shared and each facility becomes smarter and better and faster.

Our factory, just to give you an idea, based on the amount of protein it should produce at scale, at full 100% production capacity, if it were a livestock operation, whether it’s poultry, pork, even cattle, you would probably need about 780 employees. We have about 14 people on the factory floor. The level of automation that is utilized and that can be utilized is so incredible, and this only gets better and more accurate and precise over time. So, we’re very excited about these applications in agriculture where Canada has a huge competitive advantage compared to the rest of the world. We’re blessed to be one of only a handful of countries that actually produces more calories than we consume, and I think this could give us a huge position.

 

Goldy Hyder:

Linda, Linamar, what’s it doing with AI?

 

Linda Hasenfratz:

We think AI is incredibly exciting, a huge opportunity for us in literally every area of our business. We see it as a way to obviously analyze data better, as we’ve just heard. It helps us automate tasks more efficiently. It helps us better predict what might happen by looking at our past and our forecast and helping us do a better job of making predictions around what might happen even on the HR side, who’s going to be more successful in a role, for instance.

We have certainly embraced AI as a way that we can really improve productivity, improve product performance, do a better job of those predictions, improve employee engagement. We’ve tasked every plant around the world, we have 75 plants around the world and every department as well, not just our manufacturing facilities, to be regularly implementing AI projects. When I go to visit our plants around the world, it is on my agenda of things that they are to tell me about is what is their most exciting AI project that they have implemented so that I can read that across. We give awards to our top AI projects around the world. So, again, we can have some read-across opportunities there. Frankly, this is something that we’ve long done obviously, is adopting new technologies to drive productivity.

I just want to make a little comment about your observation that Canada has a problem with productivity, which I wholeheartedly disagree with. In our business, we have doubled our productivity in the last 10 years. Our Canadian plants are our most productive in the world. We have about 30 plants in Canada versus 75 globally. Our Canadian plants are by far our most productive. They adopt technologies the quickest, they implement at the quickest, they’re most excited about doing that. We are not alone on an island, you just heard a story about a company that’s incredibly productive. I know many other companies who are as well. I appreciate that that’s not what these statistics are telling us, but in my opinion, if you want to make data meaningless, aggregate it. This data that we’re interpreting a story from, I think we should understand it a little bit more. What’s driving the top of that equation? What’s driving the bottom of it? There’s all kinds of factors that are at play.

Canada is an amazing country for immigration for instance. All three of us, in fact… I neglected to mention that I’m also the child of immigrants. In fact, my father was a refugee to Canada, came here with nothing. When he arrived, he was given $5, which was the way it worked at the time, permanent residency on the spot, $5 in his pocket, the only $5 he had. Last year, our contribution to Canada’s CRA tax department was $400 million. That’s not a bad return on investment for five bucks. But anyhow, I’m getting a little off topic. We have great immigration, which is amazing because some of those folks are doing things like what you’ve heard from all three of us and what my father did and many other companies as well. When all those new folks come in, until they get that process going, they’re going to be part of the denominator in that equation.

I look at our government institutions, which have blossomed by 40% in number over the last, I think, five years. We have 40% more government workers than we did five years ago. So, they’re in the denominator. Let’s understand this a little before we start pointing fingers at Canadian companies and saying that they’re not productive because that is not my experience. That’s not my experience and it’s not the experience of a lot of companies that I know.

You give examples of great successes and you inspire people. If we tell Canadians, you’re unproductive and you don’t invest enough and you don’t do this and don’t do that, they’ll believe it and they feel bad about themselves. By the way, the words that we say don’t fall to the ground at our borders. People hear us talk about how bad we are and how unproductive we are. Do you think that will encourage more investment in our country? Let’s stop doing this. Give the examples of companies like Aspire, like Linamar and many others.

 

Goldy Hyder:

I’m not the Bank of Canada deputy governor who said we need to break the glass on this issue and we have a productivity crisis, but subject for another day. But this is why we do this podcast. I’ve heard Linda say this before, so I’m glad she got it out because what you measure does matter and how you measure it matters. And I think those are valid points that we can unpack as we continue the show in the episodes to come. But I want to come back to you Calin, because again, I want to get your take on AI. Is it much ado about nothing? Is it going to be game-changing like the internet? How do you see this moving forward?

 

Calin Rovinescu:

I agree with much of what has been said in these other industries. At Air Canada, we started working with machine learning in the early days of Watson, some of you’ll remember, which was an IBM product, which could have been the first and the most successful, but it wasn’t in terms of creating AI models. We started working with how much fuel to board on an airplane for example. We have managed to use one form or another of machine learning and more recently AI in the airline industry for the quantity of fuel, the algorithms that determine route planning and revenue management. Cargo, in terms of the cargo facilities, in terms of the boarding of more time-sensitive cargo and freight.

So, this is something that affects, as we’ve heard, and it will affect, virtually every business. Just like the internet affected everybody. I think some industries will go faster than others. It is a new form of adaptation. I would say the biggest risk from a business perspective, and I’ll leave aside for now, the so-called more esoteric moral risks and some of the criticisms we’ve heard about the social consequences of generative AI. But from a business perspective, one of the great challenges will be change management because the way people interact with this massive amount of information is going to be different. My role as an employee who receives this information will be different. My job will likely be different. The conclusions I come to may make me uncomfortable.

Just like in the early days of that Watson example that I was talking about, the pilots and the people who were in our operation center were not too happy to have a machine tell them how much fuel to board. That is the reality of it. So the change management aspects are extremely important here. And I think often they’re understated in terms of what some of these AI consequences can be.

 

Goldy Hyder:

You’re talking about change management, I remember a billboard I saw in my home city of Calgary like 30 years ago and it was on a church and it said, the only one looking forward to change is a wet baby. And yet we know, as you’ve said, the change is constant and we need it.

 

Linda Hasenfratz:

I just want to have a comment on change. Somebody said something to me a few weeks ago that I thought was awesome. If you don’t like change, you’re going to like irrelevance even less.

 

Goldy Hyder:

Yeah, even less. Good point. Who’s got the first question? Why don’t we get the dean?

 

Julian Birkinshaw:

Thanks, panel. Fascinating stuff. My question is very specific. What can you do to help your employees build personal resilience? The capacity for initiative or even risk-taking in their work. Because for me, that goes even higher than the basic emotional skills around interpersonal connectivity.

 

Goldy Hyder:

Mohammed.

 

Mohammed Ashour:

So I fully agree with the comments earlier. I think the one thing that I was never prepared for is that CEO would be chief emotional officer. There’s this huge premium on managing people’s emotions, and you’re talking like grown adults, but they’re still the same human drama and the challenges and the interpersonal issues. I think that for us it comes back to understanding the emotional language of each person. Some people what rewards them, what makes them feel valued? Is it money? Is it opportunity? Is it fulfillment? Is it having clarity on expectations? But I also think it’s important for us to cultivate an environment that is congruous with what we preach. We can’t be telling people that in our startup, we have to move quickly and it’s okay to make mistakes, but then the moment somebody tries something bold and it fails, they’re punished for it. There has to be an alignment in that.

I think what we’ve done, and I think some degree successfully, is we’ve sort of sandboxed what kind of high level risk innovation we will accept. And then everything else is okay, this is the core, we can’t mess this up. That way people can compartmentalize and know when it’s okay to be taking very, very high levels of risk with a possibility of very high reward, but also that they can’t be betting the farm, in our case, literally on a specific idea or a specific intervention. I think for us it’s really mapping the emotions and the culture to those expectations and then personalizing that to each person because we have to appreciate that everybody’s just a very different person and it just sucks, but it’s part of the job and you have to do it.

 

Linda Hasenfratz:

I couldn’t agree more that if you want people to be innovative and be a risk-taker, you can’t punish the failure. You have to help people understand that failure is just a form of learning. We like to look at, let’s say, corporate control on a continuum from zero to 100. When you’re at zero, when corporate has zero, no approvals, no nothing, we’re not involved at all, innovation is at the peak because everybody is coming up with their own ideas and being incredibly innovative about how they do things, but risk is also at its highest. Now, at the 100% corporate control, you have zero innovation because you’re forcing everybody to do everything the same way, but you’ve 100% mitigated risk. The problem is that there’s a lot of folks that try and push you towards the 100% corporate control end. Bankers, customers, everybody wants consistency, predictability, and more and more of those rules and approvals. And it’s our job as leaders to force ourselves back to the other end of that spectrum.

 

We target about 20%. We say 80% of the decision should be made in the plant by the person running that particular plant. 20% of it we should be getting involved in. We recognize that that could create some areas of risk. But what we’ve done is try to identify a few core systems, not unlike what you just talked about, Mohammed, that a few key things that look, these things have very high risk implications. We’re all going to do it the same. We’re going to do these five things the same way. If it’s not detailed in what we call our GOS, global operating system, which is literally one piece of paper back and forth, you can detail it out, then it’s the decision of the plants.

And I think that understanding what those five critical, or maybe in your business it’s three or maybe it’s six things are that we really need to control. And then being very clear that everything else is the decision of the individual, in our case, individual plants, so that we can really drive the innovation and the performance. Because alongside accountability, performance, innovation, it all goes together. When you have the most accountability, the most innovation comes out and the best performance for sure.

 

Goldy Hyder:

Okay. I know there’s a couple more questions from the floor I hope, so I’m coming to you in a second. But I wanted to ask Calin, because you’re free now. You’re not running the company. You and I have talked a lot about this and it’s come up in other discussions, the role of government and business, how is to function?

 

Calin Rovinescu:

This is one of the biggest challenges that we have, I believe, in Canada. I think maybe it’s a good segue from what Linda was saying quite passionately about productivity. There are many outstanding and productive companies in Canada we should be extremely proud of. But at this moment in time, over the last X number of years, call it 15 years, the level of partnership of government and business has been extremely poor and has encouraged entrepreneurs to leave the country, has encouraged people to not invest in the country, has even encouraged pension plans to invest… I think something like 3% of their capital is invested in publicly traded Canadian companies. It is bad, bad, bad, all around. And quite frankly, the two leading candidates to form the next government, the liberal government of Canada and the conservative government of Canada, neither one of them are particularly business friendly, at least based on their current platforms. That has to change. And I think when we look at-

 

Goldy Hyder:

Is that the way it is in other countries? You’ve operated all around the world.

 

Calin Rovinescu:

This is just what I was going to say. When I look at other countries that I consider successful models for this, where they you say you can see that… We want to create global champions. We want to create successful companies. It exists in Germany, it exists in the UAE, it exists in Singapore, it exists in Korea. It exists in many, many, many places in the world where they say we need to have a synergy that we are proud to build great companies. It is not a bad thing to say we are proud of our businesses. We have taken many, many steps back. I’d say the last government that I can give 10 out of 10 in terms of having that level of encouragement, I was already identified as the senior citizen of this panel, is the Mulroney government. The Brian Mulroney government is the last government that I would describe any success whatsoever at building a partnership with business.

And of course, NAFTA came through that and the GST amendments came through that and some of the key cornerstones of what we have as a country came through that. I would give the same lecture, I could care less. I’d give the exact same lecture in front of all of the current federal politicians. What they are doing is effectively destroying innovation, the capital gains tax. All of you have undoubtedly heard and seen that, all of the views of the tech communities, tech entrepreneurs on how they feel about that. So, I think this is a real issue and I think business schools need to take it on, head on. I think that doesn’t mean we don’t have great companies, of course we do, but we better pay a lot of attention.

There was a hollowing out of Canada, again, being the senior statesman here, I can say that there was a hollowing out of Canada that occurred in the ’70s and ’80s. We tried to reverse that. There was a panel, Red Wilson formed a panel at the time. We’re at the stage now where we better be paying a lot of attention. It’d be a different type of a hollowing out, but there will still be a hollowing out. Maybe I’ll pause there.

 

Goldy Hyder (00:57:53):

It’s important contribution because obviously, these are some of the people are going to inherit that opportunity to do something about it. Question from the front here.

 

Audience question

Hi, my question is centered around entrepreneurship, specifically in Canada. If there was one thing that each of you could do in our country to improve the entrepreneurship environment, encourage more people to embark on that journey, what would it be?

 

Goldy Hyder:

Go ahead Mohammed.

 

Mohammed Ashour:

I actually think that we have an amazing starting point that’s, I would say, disproportionate to many other countries. I really do feel, and not just feel I’ve seen this and observed this and experienced this, there is a lot of raw material inside so many Canadians that can position them to be great entrepreneurs. Most people, myself included, never think of themselves as entrepreneurs. I did not grow up with parents or even extended family, my mom has this one uncle that she swears as a great entrepreneur, but whatever. But generally speaking, I did not grow with-

 

Goldy Hyder:

Another failed doctor in your family.

 

Mohammed Ashour:

Yeah, exactly, another failed doctor. But I did not have aspiration to be an entrepreneur. And in fact, I actually grew up with a relatively cynical view of business where I felt that business often advanced the interest of only a very small number of shareholders at the interest of the environment and et cetera, et cetera. And then when I was in university at McGill, I came across a business competition, and it was a competition that invited me to build a business to solve global hunger. And that was very compelling because it made me realize that wow, there’s a paradigm shift here. Business can actually be a tool that can accelerate solving a problem that as a physician, I simply can’t. I wanted to be a neurosurgeon. The very first day of medical school, the dean stood in front of class and said, “Half of what we’re about to teach you is wrong. The problem is we don’t know which half it is yet.”

If that wasn’t uncomfortable enough and awkward enough as a joke, showed us a slide that showed that although 80% of healthcare dollars in Canada go into clinical medicine, clinical medicine drives less than 20% of health outcomes. The vast majority of what impacts people’s health is outside of clinical medicine entirely. This was such a depressing thought. This is the first day of medicine and I’m already thinking, what am I doing here? By the time somebody needs to see a neurosurgeon whose intervention is now either cutting into your brain or your spinal cord, it means a lot of things upstream failed as interventions, and now we’re really getting to the most serious point. This is when I had this paradigm shift of if we can solve how we actually feed the world, how we use resources, et cetera, this can have much more reverberating impact.

But my point is there had to be a point of inspiration, a spark. I ended up leading a team from McGill University to defeat 10,000 teams from 180 countries. Until today we’re the only Canadian company that won that million dollar prize. And it was just a very, I wouldn’t say an average group of students. Certainly, everybody was a high achiever and capable, but it was this opportunity that made us not only reimagine the world but reimagine ourselves. That’s when I started asking myself, what is the vocation and the path that I’m choosing? I think we need inspiration and opportunities that really give people low-risk opportunities to try their hands at starting a business. One of the pieces of advice I always give anybody who says, I want to start a company or I’m interested, I’m not sure, go work for a startup, learn off of someone else’s dime. You don’t have to start it yourself.

 

That’s what I did personally. I had worked at a startup prior to applying to graduate school, and it was such a fascinating experience to see how quickly things move, the drama, the pace at which you can make decisions and actually compete. If you can give yourself that experience and that exposure, that’s great. I think we need to invest more in Canada. I think we’re getting more resources, but it’s certainly not, I would say in the world-class level of competitiveness when it comes to venture capital, when it comes to startup accelerators, when it comes to incubators, when it comes to mentorship. We’re starting to really move in that direction, but that needs very concerted collaboration and investment. If you can provide those ecosystems and those sparks of inspiration, you’re going to see an entire generation of world changing entrepreneurs emerging from Canada.

 

Goldy Hyder:

Very inspirational.

 

Linda Hasenfratz:

I love that answer. And I couldn’t agree more that I think that what we need more of is encouragement. Encouragement, mentorship, examples, people being inspired to do the things that Mohammed has done, and many other entrepreneurs as well. Let’s look at our technology sector in Canada, the corridor from Waterloo to Toronto, and I would say coming up to Ottawa, but just that Waterloo, Toronto corridor is the second-highest density of technology startups in the world next to Silicon Valley, in the world. How many people know that? Maybe you guys know that, but I’m going to say most Canadians don’t know that we already have the second-highest density of startups in the world.

We’ve got thousands of people who are starting companies, who have great ideas. We’ve got these great universities that are teaching young people these amazing skills and technologies and are incubating these startups. You see it at almost every university. We’ve got so much happening and we just need to share those stories so that people will be more encouraged to do more of the same. And then of course, the venture capital and all the support behind that to help people really make it a go. But I think that sharing those stories and to create the inspiration and encouragement is really critical.

 

Goldy Hyder:

Last question at the back here.

 

Audience question:

My question goes back to Linda with you were talking about your really long-term goals that you were setting for the company. What was your process for setting those goals? And I guess the question is for anybody, what’s the process to set those goals? What metrics do you look at and how do you communicate that to create buy-in with your teams?

 

Linda Hasenfratz:

I think when it comes to long-term goals, it’s not going to be something that you spend an inordinate amount of time calculating and et cetera, et cetera because it is longer term. When we set the goal to be 10 billion, I didn’t have a roadmap for that exactly. I knew if we grew at roughly the level that we were growing, I thought we could get there in 20 years. We actually set the goal for 2020, so we’re four years late to our goal.

 

Goldy Hyder:

There was a pandemic.

 

Linda Hasenfratz:

Yeah, speed bumps. But I think you do something simple like that just to give it a little reality check. Okay, we’ve been growing this fast. What’s realistic to go forward and set your marker there? You’re not going to have all the pieces in place that this is how we’re going to get there. As another example, we sat down about 10, 15 years ago to think about what are the markets that we want to be in long term? At the time, we were mostly automotive, we just started expanding into the access market with we had acquired a company called Skyjack and was in infrastructure, rebuilding infrastructure. And we started thinking about what are the other markets we can into because we wanted to keep this growth story going. And we sat back and looked at what are the kind of trends that are going on, what’s happening in the world, rapid technology evolution, the growing imperative to address climate change, urbanizing, growing, aging populations, what’s all of that mean?

Again, we didn’t spend months analyzing it. We, again, sorry for the consultants, did not hire a consultant to help us with this. We just talked about it myself, who’s now our CEO, Jim Jarrell, my father, we talked about what are these trends that are going on? What are the markets that we think are going to be most important? And we identified six: mobility –  automotive, fast car, on-highway vehicle – that we’re in today. Agriculture and food, which we’ve made a big plan, we are now much more heavily invested in. Access infrastructure, which we’re starting in. We also identified med tech, power and water as three more markets that we think are really interesting, lots of opportunities for growth and technological change.

We set our sights on those six markets, and we actually call it our 2100-year plan. It’s a 100-year plan. We don’t have it all mapped out from here to 2100, but we think that these markets are going to be pretty interesting. Will others evolve? Probably. Will we evolve the plan? Yeah. It’s 100-year plan, so we’re going to evolve that. But we’ve been following along with that and we’ve expanded our access business. We’ve made a big footprint now in agriculture and food, and we’re going to keep chipping away at those other markets as well. So, you don’t need all the answers. You need to have some idea. You need to give it a gut check and then set your marker on something and start moving towards it.

 

Goldy Hyder:

Okay. We’ve heard from Mohammed and Linda on the advice to you, I want to ask Calin as a wrap-up question, the same question then. In our podcast, when we did our, in 2019 or whatever it was, you had said something that no one owes you anything. So, based on that, what advice do you have for this group here and the people listening?

 

Calin Rovinescu:

The no one owes you anything is I think, a bit of a message in terms of the expectation of keeping things humble. And I think you heard a little bit about that from each of the three of us. No one owes you a living. No one owed Mohammed the million dollars to give you that grant. You had to earn it, the same for our stories, Linda and myself. The advice I’d give people here is number one is the, I believe, as broad an education as is possible. I think that science, technology, maths, et cetera, absolutely. Go beyond that. Be exposed as much as you can in the early days whether it’s to a startup environment, whether it’s to a corporate environment, understanding finance, understanding the way things come together. A lot of people have come into organizational structures and are clueless around many, many parts of the organization.

I think this almost brings us full circle to where we started today, which is to say that when you have an organization that is small, even if you’re thinking big or a startup entrepreneur or an 80-year-old startup, the idea of if you’re able to understand the jobs that others are doing, it’s going to make you more successful inside the organization. The long-term thinking, the long-term conversation we just had, also very helpful. I think what often goes on in publicly traded companies is that you operate from one quarter to the next, and that’s really difficult, very bad for long-term planning. As a leader, you struggle with that because you know that you have to deliver short-term results while you have to still have your eye on the long-term prize. So, having deliverable objectives and milestones that are achievable is another way, whether it’s in managing your career, coming out of business school, or whether it’s inside an organization, having, these are the things that I hope to achieve in my first year and my second year, my third year.

These are the things I hope to achieve in a 10-year plan or in a 100-year plan. We certainly did that while having to keep our eye on the quarterly results. So, the breadth of a plan, understanding other people’s roles, having milestones that are achievable and that are understandable by others, and then having that communicated. A lot of people then do all of that and then fall flat on their face because they’re not able-

 

Goldy Hyder:

No one knows.

 

Calin Rovinescu:

… to communicate. No one knows. No one knows that we’ve got the second-best corridor in tech. No one’s communicating that. The same idea inside companies, no one knows in some cases. That would be my Coles Notes of advice here.

 

Goldy Hyder:

Well, there you have it. Our first live podcast on our 100th episode. I can’t begin to thank you as the audience and Ivey for having us, but most importantly, to thank our three panelists for giving of their time, sharing of their wisdom, providing the inspiration, the challenge. This is what this podcast is all about. I really appreciate you listening in and participating. We look forward to 200 one day. Thanks everybody.

Calin Rovinescu is the former CEO of Air Canada, Linda Hasenfratz is Executive Chair of the Board of Linamar Corporation and Mohammed Ashour is the Co-founder and Chairman of Aspire.

You can see photographs from our 100^th episode on our website at: the business council dot c-a slash podcasts. While you’re there, I encourage you to explore our rich back catalogue of Speaking of Business conversations. If you haven’t already, please subscribe wherever you get your podcasts, and take the time to give us a review. We sure love to hear from you.

Until next time, I’m Goldy Hyder. Thanks for joining us.