CEOs talk

Chatting with Canadian CEOs about training and development
By
|Canadian HR Reporter|Last Updated: 04/11/2005

It’s often said that in a financial crunch, training and developing is the first portfolio thrown out the window.

Canadian HR Reporter

asks six Canadian business leaders for their views on T&D. Here, they share their strategies for developing skills and values, from innovation to leadership through to customer service.

Claude Garcia

President of Canadian Operations
Standard Life

With its Canadian head office in Montreal, insurance industry stalwart Standard Life employs more than 2,400 people across Canada and has more than $33 billion in assets under management.

In 1995 Standard Life Canada introduced a total customer satisfaction philosophy based on seven core competencies: customer focus, teamwork, action orientation, leadership, business acumen, strategic thinking and professional development.

Those seven competencies have served as the foundation for the human resources strategy since then, shaping hiring, development and compensation and performance management strategies, says Claude Garcia, president of Canadian operations.

“We decided late in 2002 that it was time to repeat this total customer satisfaction training. So last year we brought everybody to Montreal; all our employees from Canada for one day of training on customer service. Basically we try to help employees identify the issues — the focus was on what sorts of things are essential for the customer. What adds value to the customer — look at it from the customer’s eyes. That was the focus of the training.”

Aside from the one-day, all-employee workshops — “We did spend a couple of million dollars on that,” he says — Standard Life introduced other new initiatives in 2003 that pushed the training budget up by about 16 per cent to roughly four per cent of payroll.

“One of the reasons for the increase is that we increased the tuition refund policy,” he says. Beginning in 2003, all employees are entitled to $2,000 for university and college tuition, up from $1,000.

There is also more on the job training with more people taking insurance industry specific exams.

“Our products are always a bit more complex than we would like them to be,” Garcia admits, and thus training becomes even more important. “We encourage people to do that because we find it is very useful for them to understand the business.”

Increased investment in training, while perhaps not immediately obvious will, he is sure, pay off in the end. The development and improvement of the seven core competencies will drive business and ensure success, he says.

Customer feedback is one important indicator of the effectiveness and therefore value of training; so too is employee turnover. “We have lower employee turnover than the industry. Is this a result of training and development? Certainly I would suspect it is the result of overall good human resource management.”

But ultimately gauging the value of training and development is “more of an art than a science,” he says.

“We do ask (HR) to provide some numbers,” he says. But in some cases launching a new program takes “a bit of a leap of faith,” he says. “And sometimes we are prepared to do that on a pilot piece.”

Last year Standard Life introduced a new training program for all new customer service staff.

The organization is committed to an ambitious growth strategy, he says. “So we have to hire more people than we need just for the growth. We felt that we could become much more efficient, and these people would be much more efficient much faster if they got the training.

“When we hire a customer service representatives now, we hire about 10 to 12 of them at once and we train them for a few weeks before we put them on the job.” About 40 per cent of all staff are dealing with customers, so the course covers a variety of jobs.

“By taking the program, they become more efficient much faster, within a matter of months rather than two or three years,” he says.

“We still have to see the results but the indications I have at this point is that it has been a success.”

“We knew for example how long it took for an employee to be efficient and we know that if we are able to cut that time by half, then the program will pay for itself by a long shot,” he says. “In any business case you make it is not always obvious up front that you are going to be successful. The same applies to HR programs. The feedback I have had at this point is that it has been pretty good. So we will give it a couple of years.”

Howard Thomas

President
Canadian American Transportation Systems

CATS will employ about 145 people to run “the Breeze,” a new ferry service between Toronto and Rochester, N.Y.

Any time a new organization is getting off the ground, or in this case into the water, a lot of training is in order.

For Canadian American Transportation Systems, the company running a new high-speed ferry between Toronto and New York State, the training needs were greater than most. (“The Breeze” is scheduled to begin plying the waters of Lake Ontario this month.)

“The marine industry is very highly regulated,” says Howard Thomas, the Toronto-based president of the new company. As a startup staffed mostly by workers who have no experience in the that industry, the company had to do a great deal of training to meet the rigorous standards set by both the U.S Coast Guard and Transport Canada, he says. “So it was a requirement as a startup of business to invest a significant amount of our startup dollars in highly technical training.

“There are two mandatory levels of training. One is called SOLAS (safety of life at sea.) Everybody on board has to go through that level of training. That is a very basic familiarization with the vessel, basic life saving procedures, medical emergencies. It is a long drawn-out process over a couple of weeks. Everybody has to go through that and be SOLAS certified.

“Then there is a higher level which is called STCW (seafarers’ training, certification and watchkeeping). That is a more advanced level of water survival…We have actually been taking people to Olympic-sized pools, and they have to jump in the water, get people on the safety rafts and learn how to use all of the stuff in cold water conditions.”

With employees cleared to work on board the ferry, the next challenge is making sure they do the job well enough to make the company a success. “The win for us is going to be customer service,” he says.

Good customer service begins with an understanding of the customer experience. But without experienced customers to talk to — and until just before startup, no boat — the CATS management team had to imagine it on their own. The company’s chief marketing officer for customer experience, Sue Austin, put staff through the Breeze experience, explains Thomas.

“She has run through three day-long sessions where we walk through in excruciating detail everything that happens from the moment you come in. Sue has created the customer journey on both sides so we have a good visual articulation of everything that everyone will experience from the moment they set foot into the terminal area,” he says.

“She has created some interesting benchmarks around that. She will also be the one who will be doing all of the customer satisfaction surveys at both ends and tracking our whole performance in that area. And that is going to be truthfully almost a day by day (exercise) during the first 30 days because we will have so many kinks to work out.”

Head of HR Glenn Gardner has also been working to create a series of training initiatives, but a lot of learning will be on the run, says Thomas. “After the boat leaves there will be team meetings to discuss how well it went, or didn’t go, and what the benchmarks will be for the next time around. That will be ongoing, and we will need to formalize that in due course.

“It has been impossible to do performance reviews with anyone in a formal way because we don’t even have office space and phones for everybody. We have been doing it fairly informally but we are putting that formal performance management review system into place right now. And we are going to have to quickly implement that by the end of the summer to kind of do a three-month check.”

In time, company practices and procedures will emerge to ensure good customer service, but in the first hectic days after the boat starts crossing Lake Ontario, employees will be expected to do a lot of it on their own, he says.

“There is going to be a lot of confusion and chaos in terms of how people get on board, what they do, what the procedures are for checking in and out associated with the border crossing. So we are really going to have to force the decision-making in terms of customer service down to the lower levels.”

Tom McCabe

President
Theatre Calgary

The non-profit cultural organization employs 19 people.

Despite its profile as one of the largest professional theatres in Western Canada and its 35-year history, lagging ticket sales and competing claims on the philanthropy dollar brought Theatre Calgary to near-bankruptcy in 1996.

The theatre needed a rescue strategy, and it decided on one built around an overhaul of its marketing approach. First, the theatre raised the standard of performance it expected from employees, particularly in the areas of sales and customer service. Then it threw out some “old marketing ideas,” such as a mailing campaign that targeted every address in Calgary’s wealthiest postal codes.

To support a new marketing approach, Theatre Calgary “invested a lot in training for aggressive marketing and up-selling and so on,” says McCabe. Staff were sent to seminars on a range of techniques from how to cross-sell through to how to analyze demographics for marketing opportunities and how to create a customer profile from the client database.

“We also empower them to make decisions and if we don’t like the decisions, we talk about why afterwards,” says McCabe. “I get comments all the time about how fabulous our sales staff is.”

But the theatre’s new marketing strategy doesn’t depend on just the four-person sales team alone. “We realized that coming to the theatre involved more than just arriving with your ticket at the door. The experience starts from the time you pick up the advertising in the newspaper and it inspires you to phone us. And if you’re not treated well along the chain, the chain is going to get broken,” says McCabe.

“We quickly realized that we had to do a much better job, from getting the client from their house to the theatre in a way that makes them reasonably happy. That’s so when they sit in their seats, they do so with the right attitude, that they’re here to have a good time.”

This new tack involved brushing up workers’ skills in a range of customer contact points, from telephone manner to up-selling to meet-and-greet. “We spend a lot of time on developing scripts and rehearsing how you deal with people and how you deal with people with problems.” Spending per employee averages from $300 to $500 a year, says McCabe.

One aspect of the theatre’s training and development strategy involves vision-building. In the quiet winter month of January, the entire staff retreats to a hotel.

“We spend three days talking about where we are and where we’d like the theatre to be. And then we choose what part of that gap we’ll have to close. And the staff actually commit to what we’re doing and trying to do at that particular session.”

The discussion then forms the basis for an annual rewrite of the five-year strategic plan, which McCabe then presents to the board.

“It’s been a very successful process for us because everyone on staff is virtually focused on the same thing. They all understand where we’ve been and where we want to go and what we need to do to get us there. It’s a very effective way of engaging and focusing everybody on the staff, no matter what their job is.”

The success of the theatre’s new approach is there in the numbers: eight consecutive surpluses, $5.5 million in revenue and a production schedule that’s back up to six productions a year. And from a low point of 3,000 subscribers, Theatre Calgary has brought subscription figures up to 9,000 today. Ticket sales, at 120,000 a year, account for 51 per cent for the organization’s total income.

But McCabe measures the organization’s progress not just in numbers, but also in terms of staff attitude. “When I first stood before them and says we were setting our target at 12,000 subscribers, everyone just looked at me. Now I have to hold our staff back. They’re saying, ‘We’ll grow by 30 per cent this year,’ and I’m the one who has to say, ‘I admire your ambition, but we’ll have to be realistic.’ It’s a total shift in attitude, and it’s very exciting to see. Seven or eight years ago, everyone was worried about surviving. Now we’re thinking about how to kick butt.”

Nathalie Le Prohon

General Manager
Nokia Products Ltd

Based in Ajax, Ont., this wireless telecommunication subsidiary employs 600 people in Canada.

At Nokia Products Ltd, the training imperative is expressed by the corporate value of renewal.

Renewal is one of four values, that include customer service, achievement and respect, and used to be expressed as “continuous learning” until last year.

“Renewal speaks to not just the learning but the mindset that embraces change, that embraces new thoughts, new skills,” says general manager Nathalie Le Prohon, who heads the Canadian division of the Finnish wireless giant.

If the pace of change sometimes feels overwhelming to business leaders and workers in tech-driven industries, it’s even more the case for people in the wireless phone industry. While Canadian consumers are still getting used to making calls on a mobile phone, the industry is already developing superior imaging and gaming capabilities, turning the wireless phone into a digital camera or a gaming console akin to the X-Box.

“We need people who have a vision of the marketplace and who can translate this vision into technological solutions for the client,” said Le Prohon. “From that, we can see that two very important sets of skills that need development in our workforce. The first is leadership, which includes the ability to manage a team, lead an effort, lead a thought. The second is technology skills, which includes the ability to envision what technology can do.”

If Canada is behind other countries in mobile phone adoption, Le Prohon says that lag can be leveraged for training and developing the Canadian workforce. Training and mentoring programs are set up to make the most of the knowledge that Nokia’s international staff bring when they’re in Canada on assignment. “A lot of our people also travel to other countries to spend a few days with other teams around the world, to go get the knowledge and information that they need.”

When it comes to leadership development, Nokia prefers approaches that draw out vision and innovation. One approach has teams of mid-level managers in Canada going head-to-head against their peers in other countries in business simulation games. After watching their game points rise or fall in response to their business decisions, these managerial gamers then pick apart their moves in a classroom setting.

The business problems thrown at these gaming teams are fictitious; those set out in the company’s new leadership training program called appreciative inquiry aren’t. In this second leadership development approach, a mix of workers selected from different levels sit down together to scratch their heads over actual big-picture problems facing Nokia.

The exercise involves modelling what the future may be, what the perfect solution may be, and what needs to be done to get there.

“It’s very unstructured, very open to innovation and imagination, and very powerful as a tool for developing new thought leadership, new ways to approach business problems,” says Le Prohon.

Besides the two training and development fronts — on technology and leadership — the company also encourages workers to be self-driven in identifying their own training needs, says Le Prohon. The training budget, set out by the parent company, has remained stable at an average of $2,138 per employee per year. The amount does not include informal training methods such as mentoring or on-the-job training.

“With the improvement of creative training tools, we believe that although our actual spending has stayed flat, the value we’re getting for that money has increased over the last couple of years.”

That said, Le Prohon admits she doesn’t have a detailed analysis on the return on training investment.

“What I use as a personal tool is to look at three things to measure whether we’re being effective with the development of our people. First, can we see tangible business results, or are our people helping us meet the business requirements? Second, are we really developing the leadership positions we need to win in the marketplace? And three, how are we perceived by our employees?” says Le Prohon.

“Those are the three dimensions that I look at. If those three things are moving in the right direction, then I have to believe I’m doing something right in developing our people.”

John Stanton

President and founder
The Running Room Ltd.

Started in 1984, the Running Room now operates more than 60 stores and employs more than 600 people across Canada, with headquarters in Edmonton.

Canadian running retailer the Running Room may be moving from an “entrepreneurial to a more corporate environment,” but CEO John Stanton wants the company to retain much of its entrepreneurial spirit.

He doesn’t like manuals or rigid policy. He doesn’t have an HR department nor plans on having one any time soon. But he is a big believer in the importance of training and development.

“People don’t want to do a bad job — they are ill trained,” he says. “We can make excuses that we didn’t deliver for our customer, but that is all it is — excuses. It really comes back to the fact that we didn’t deliver on our training,” he says.

“Sometimes we look at it and say, ‘Does it make sense to really do all this on training?’ But any analysis that compares performance to training quickly proves it is,” he says. “You can say it is area X that is our weak sister in our group, and then look at who is the weakest in their training and it is always area X,” he says.

“Training and development is kind of like upgrading stores. When you upgrade your people or you upgrade your facility or your product it always comes back and pays dividends.”

Stanton shares responsibility for training, and indeed all human resources management, with his store managers. There is a payroll department that manages payroll and benefits, but ultimately, store managers are in effect the human resources managers, he says.

“I have worked in a large corporation and too often the human resources department, if you are not careful, can become sort of the scapegoat for what is not working. They are more political than they are functional. And human resources have to be functional.

“To create a training department, I am not big on it,” he says. “To spend money on human resources, and to spend money on training absolutely, but keep it with the delivery mechanism that is there and that is at the store level with the management.”

With that in mind, the Running Room, which now has more than 60 stores and 600 employees across Canada and plans for expansion into the United States, relies heavily on a train-the-trainer approach. Each year, all store managers are brought together to talk about training issues, initiatives and challenges.

“It is really focused on floor sales training because that is kind of the essence of our business — that customer service on the floor,” he says.

The training is dynamic and interactive. “It’s not a lecture hall-type meeting,” he says. “We have role playing sessions where we teach them how to greet a customer to how to do merchandising, how to handle security and greet customers and do selling at the same time.” The goal is to make it fun and enjoyable, rather than just handing them a training manual. “People hate reading manuals and most manuals get read by the people who wrote them and the rest of the time they sit in a binder.”

As the organization grows and development needs increase, the Running Room will rely heavily on technology to ensure staff are effectively trained and making customers happy, says Stanton. While customer service inevitably has to be taught face to face, all new employees go online to learn about the culture of the Running Room and why the organization is about more than just selling shoes. All managers have online access to training policies and procedures, as well as forums with other managers to share training ideas and best practices.

“So often training systems are stagnant,” he says. “The nice point about using technology is that (training) is a living breathing thing. If what you are doing today isn’t working, give us a better way and we pop it in there tomorrow, and change it. And it is disseminated to your whole team tomorrow. You are also able to do more creative things electronically. You can do streaming audio, streaming video, you can do graphics and all kinds of fun stuff that keeps people’s interest.”

From the Edmonton home office, Stanton’s son John oversees training for the organization. “He very much drives the training programs at our retail stores, so his responsibility is to make sure that our retail staff are trained, our store managers are trained, our area managers are trained. He is a former teacher, so he has good teaching skills. And being a teacher, he understands you have got to make it fun and educational,” he says.

“If I was going to hire a human resource person, I’d make sure they were a teacher.

“I think that is the fundamental thing, we are hiring human resource people who may be (experts in) payroll or accounting and that is not really important. That stuff we can all figure out eventually. What is really important is how you take knowledge and disseminate it to people so that they grasp it.”

Bob Young

Owner
The Hamilton Tiger-Cats

In addition to the Ti-Cats, Young was the founder and CEO of open source pioneer Red Hat, and is now CEO of Classy Formal Wear and Lulu.com, a website tool for self-publishing.

Last year the Hamilton Tiger-Cats won one game and lost 17. Obviously change was in order.

It came in the form of a new owner who hopes to instill in his organization a new attitude about winning.

Bob Young, Hamilton born and raised CEO of Classy Formal Wear, Lulu.com and now head of the Tiger-Cats, believes that just like in any business, winning in the sports world begins with a desire to learn, adopt and incorporate best practices.

“The good organizations tend to not only hire people who are curious about the world around them, but they then motivate their people to understand the need to stay curious and to embrace change, because it is coming at us all the time — whether it is from some Asian supplier, or some competitor down the street, or the Toronto Argonauts,” he says.

The key to success is having people who want to learn new things and best practices, and are willing to take whatever training they need to do that.

“Training is always very important and those companies that excel are the ones who invest directly and indirectly,” he says. “The measurable training — when you send someone off on the training course — is all very important. But it is the less direct-expense training where you create more of an attitude among your staff to try to constantly improve their skills, even when they are not being sent on training courses, that is the difference between successful companies and companies that struggle to keep up with their industry,” he says.

“One of the mistakes that the CFL has traditionally made was that they compared their success to each other so it became very insular.” But the Tiger-Cats have brought in new people, including Christopher Dean as vice-president of business operations, who brings new ideas in sports management from the United States.

“What he is doing is bringing in best practices. And that is what education is all about. Instead of you having to reinvent the wheel, go out and learn from what the best wheel-makers do and then improve on their wheel,” he says.

Because the team is virtually starting from scratch after emerging from bankruptcy, Young is hopeful the desire to learn best practices, and new and better ways of doing things will infuse everything his Tiger-Cat employees do.

“If you have 10 people and none of them are particularly used to, or interested in, learning new things and they are all happy doing what they did yesterday, and you insert one more person but the new person is wildly enthusiastic about learning new things, that person’s ability to change the culture is very difficult,” he says.

“But if you start with that one person being wildly enthusiastic about training and you incrementally add the other nine, people are forced to adapt to the culture they find in their office. Once you have a bad culture it is very hard to change it. Once you get a good culture it is equally hard to change it. Good cultures tend to replicate themselves,” he says.

“That new person coming in can’t expect to change all 10 people that week. His job is to find one other person who he can convert to his way of thinking and then the two of them work on the third. And then the three of them work on the next person and soon enough the people who don’t want to change are in the minority and they are forced to change.”

Without an HR person to assist, it is up to the chief operating executives at each of his organizations to decide how to improve the skill levels across their organizations, he says. “Whether they do that through training or upgrading their staff is actually a choice. But as we all know the cost of replacing staff is incredibly high. It is a great deal less expensive to take an under-performing staff member and turn them into a performing staff member than it is to try and terminate that staff member and go out and recruit someone who already knows what you need them to know.”

What skills does he look for to ensure his organizations succeed? That is easy, he says. “In colloquial terms we think of it as curiosity.” It’s what HR might call a recognized ability to learn new concepts, he adds.

“I am always looking for it in any staff members that I am responsible for, and it is the number one thing I am pushing the people who report to me (to look for) in their recruiting tasks: are these people curious people who are going to learn at the pace we need them to learn new things?

“The failure of many training programs is that you are forcing people to take training that they are not motivated to take, and it is being taught by people who are not overly motivated to teach it. And if you can solve that conundrum, if you can hire people who are genuinely eager to learn new things and give them access to people who are genuinely enthusiastic about the subjects they are teaching, moving your organization forward becomes suddenly very easy.”

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