Peter Kuitenbrouwer | September 26, 2016
Corporate Canada is a timid place full of risk-averse leaders and it’s hurting the bottom line, says a new study that found that just 11 per cent of businesses in Canada are “truly courageous.”
The conclusion comes from a sweeping poll of 1,200 businesses across Canada by Deloitte, which on Monday released a 36-page report, The Future Belongs To The Bold, illustrated with photographs of Inukshuk and of jack pine trees clinging tenaciously to a cliff.
“At a time when Canada needs its businesses to be bolder and more courageous than ever before, almost 90 per cent aren’t up to the task,” the report concludes. “This lack of courage has serious implications for these organizations and for the Canadian economy overall.”
"Investments aren’t made. New ideas aren’t explored. And Canadian companies slowly fall further and further behind"The survey measured courage in five ways. It asked whether a business defies existing practices, takes risks, takes moral positions, has leaders who embody their convictions, and taps the potential of Canada’s many cultures.
A pre-screened group of leaders from firms across the business spectrum took part in the interactive voice response poll. For example, the survey asked, “How accurately does ‘Bring diverse perspectives’ fit into your methodology?”
Deloitte categorized 15 per cent of respondents as fearful, 43 per cent as hesitant, 30 per cent as “evolving,” and 11 per cent as courageous.
Almost half of the respondents said “courageous” described their organization. But when they probed further, the study’s authors found a “courage perception gap” — one third of companies believe themselves bold when they are not.
“The result?” reads the report. “Investments aren’t made. New ideas aren’t explored. And Canadian companies slowly fall further and further behind.”
Canadian firms invest less in machinery and equipment than in comparable industrialized nations, while investments in training have dropped 40 per cent in 20 years, the report notes. These kinds of risk-averse behaviours are a drag on an economy that will grow just 1.3 per cent this year, compared to global growth of over 3 per cent.
Courage helps the bottom line, the report says: 69 per cent of “courageous” firms has rising revenues, and 17 per cent increased their workforce. Just 46 per cent of “fearful” businesses earned more, and only four per cent hired more staff.
Frank Vettese, managing partner of Deloitte Canada, which just moved into a new 44-storey tower in Toronto’s financial district and put its name on the parapet, chose in an interview to look at the bright side.
“I am very encouraged that 11 per cent of the business are truly bold,” said Vettese. “And one third of the companies we surveyed were on the cusp of being courageous.”
“We came to conclusions about Canada being risk-averse,” Vettese added. “Canada has got some serious work to do.”
Sarah Kaplan, a professor at the Rotman School of Management who grew up in the United States, said the notion that Canadian firms lack courage confirms her own perception that corporate Canada prefers everyone to just get along. That’s all very nice, she said, but disruption drives profits.
“It’s an interesting paradox about Canada,” Kaplan said. “I notice in my adopted country that there is a need to not do something that is offside, not to rock the boat. That peaceableness can get in the way of the friction you need to be innovative and to grow.”
She acknowledged that, “the reason the Canadian economy did well in the 2008 crisis was because of its conservativeness. You don’t want banks failing but you do want to encourage creative thinking.”
Canadians shy away from arguments, she added. “I want there to be more conflict at the boardroom table.”
She asked, “How do you be bold and courageous in a country that values cohesiveness?”
Among the examples of Canadian corporate courage celebrated in Deloitte’s report:
• In the category “be proactive”: Loblaw Cos. Ltd.’s purchase, in 2013, of Shoppers Drug Mart, which helped boost the company’s net income by 117 per cent in two years.
• In the section “take calculated risks”: The launch, by 145-year-old Economical Insurance, of their Sonnet platform, which gives auto and home insurance quotes online
• Under the heading “start with yourself:” The commitment by Paramount Fine Foods, which serves Middle East cuisine, to hire 100 Syrian refugees.
Vettese said Deloitte has its own push for a more diverse staff, which the report says can counter the risk of “groupthink.” “We are trying to get to a place where everyone in our firm feels that they can bring their whole self to work,” Vettese said
Source: http://business.financialpost.com/news/fp-street/corporate-canada-lacks-courage-deloitte-poll-suggests
