Courage under fire
Perhaps Monday’s report from consulting firm Deloitte didn’t intend to call out Canadian businesses as lily-livered, but it must have stung just the same. The opening page begins with what might elsewhere pass as an inspirational quote — “It can be done. It just takes the will to act and the grit to see it through.” But in the context of a report concluding that nearly the entire Canadian business sector lacks “courage,” it sounds like a lecture.
After interviewing 1,200 executives, Deloitte concluded that just 11 per cent of firms can be considered “truly courageous,” with 30 per cent “evolving” towards courageousness. Another 43 per cent are “hesitant,” and 15 per cent Deloitte considers “fearful.” With all that trepidation, it makes you wonder how the entrepreneurs behind all these firms ended up incorporating and growing their businesses in the first place. Perhaps all these mice once were lions. Makes you wonder what changed.
Could it be that doing business in Canada is now less about innovating and taking risks and more about navigating bloated taxation and creeping over- regulation while seizing the opportunities of government preference and subsidization? There are certainly several companies right now just itching for the chance to courageously stake billions of dollars on massive new construction and infrastructure projects in Canada, but they’ll first have to trudge through extensive permitting processes, layers of regulatory reviews, and consultations and confrontations with any environmental, First Nations or NIMBY group not utterly in love with the project.
But then, the Deloitte report doesn’t quite measure courageousness according to whether a risk-taking venture capitalist is confident enough in a particular vision to wager a fortune running a punishing gauntlet of politicians, regulators and NGOs. Rather, Deloitte measures courage by more metaphysical metrics. In fact, the paradigm it uses might not be entirely unfamiliar to readers of self-help books. Here we present what are defined as the five “elements of courage.”
Start with Yourself. Deloitte wants business executives to understand the importance of beginning with a “single act,” of leaders who “choose to stand up and embody ( their) convictions” so they can “bring others along (on) that journey.” The report highlights the CEO of Paramount Fine Foods who, after visiting a refugee camp, has been hiring up Syrian refugees.
Unmentioned is the family controlling Bombardier Inc. They have stood for the conviction that they should not have to dilute control over their increasingly shaky company ( its debt rating was downgraded again last week by Standard and Poors after yet more delays from the bold, new C-Series). But are nevertheless confident they merit more than $2 billion in subsidies from Quebec and Ottawa, ensuring that other businesses and taxpayers can’t help but join the Beaudoin-Bombardiers on that journey of perennial government dependency.
Challenge the Status Quo. In this case, the courage to “embrace disruption” and “defy industry norms or existing practices” is illustrated by Loblaw’s decision to acquire Shoppers Drug Mart for $ 12.4 billion, widely heralded as a success. Yet, not too long afterward, retailer Staples was blocked by the federal government for trying to buy Grand and Toy, because the combined entity would control too much power selling pens and Post-its to the rest of Canada’s timorous business sector.
Do What’s Right. No one admires the bravery of a jerk, so the courage we value is virtuous courage, which is why Deloitte measures how companies “impact on our society’s moral and ethical fabric.” The shout out here is to TD Bank for its support for gay, lesbian, bisexual and transgender causes, sponsoring dozens of Pride marches. Certainly admirable. The quest to build pipelines that keep energy affordable and the country prosperous, or the fight for for-profit surgery clinics to alleviate the suffering of people on waiting lists are, on the other hand, nowadays the kind of ethical values that Canadians march against. Wrong kind of courage.
Unite to Include. It seems logical enough that Deloitte would consider it courageous of a company to allow different and dissenting perspectives to flourish. But when the dissenting minority voices of heavily funded ENGOs dominate the conversation and the politics to block the development of LNG plants, pipelines, cargo ports, logging, mining, and even ski resorts, it doesn’t lead to unity. It leads to incapacity.
Take Calculated Risks. The authors celebrate the use of “strategic, thoughtful bets on an uncertain future.” Lucky businesses in Canada, which remains heavily resource based, get to make bets amid the uncertainty of a federal government promising a mandated price on carbon, with no sign of what it will cost or look like; provincial governments arbitrarily announcing more restrictions, bans and taxes on certain fuels, while badly distorting energy prices with oversubsidized but uneconomical power types; the two most economically vital provinces running record levels of red ink; and a federal government convinced that, regardless of what economists say, it can revive growth in a small open economy by always spending more, deferring the tax hikes to pay for it all. That same government last week revealed the details of an enhanced Canada Pension Plan that will take more money from companies’ and workers’ pockets. And in most provinces this fall governments will be forcing companies to increase employee wages.
When the only predictability is that politicians, regulators and agitators will keep gaming and rearranging the system and its rules, you can hardly blame Canadian companies for being reluctant to swallow more risk given they’re already facing so much. In this environment, what might look to some like cowardice might just be canny.