Canada and the United States have long coexisted as respectful neighbours who have agreed to disagree on many things while benefiting from the integration of our economies and fighting side by side to defend common values. But since winning the recent U.S. election, Donald Trump has been threatening to put a 25 per cent tariff on Canadian goods and suggesting he might deploy economic warfare to coerce Canada into becoming America’s 51st state. Although sweeping trade threats often give way to more limited measures, even a blanket tariff of 10 per cent could trigger a Canadian GDP contraction of 2.4 per cent, while putting 500,000 jobs at risk. Nobody knows what to expect in the days ahead and Canada needs to stop publicly issuing threats of our own until the lay of the land becomes clear. Publicly disagreeing over what Canada should do in a trade war before it even starts only makes us look weak. Pointing out America’s flaws while trying to avoid anti-Canadian policies is equally counterproductive. Canadians need to stop thinking we can sell a win–win solution directly to Trump. Let’s focus on collectively and calmly educating Americans on how trade with Canada benefits them. This can be done in partnership with U.S. interests that would be hurt in a trade war. We should also figure out how to increase internal trade while diversifying our economy and reducing our reliance on the U.S. market. Finally, we should consider giving Trump the appearance of a win by aggressively moving to meet our NATO commitments.
Why dealing with turnover requires understanding how the traditional foundation of the workplace has been cracked by a seismic shift in the employer-employee relationship.
Given the turmoil in the cryptocurrency sector, some say the blockchain revolution is over. Others think market setbacks and implementation challenges will eventually be overcome, potentially enabling the mass adoption of a decentralized “Web3” that will revolutionize how people work, play, and earn a living. So, what should executives think? In this Ivey Business Journal interview, Alex Tapscott discusses what has happened since the publishing of Blockchain Revolution, along with his new book Web3: Charting the Internet’s Next Economic Frontier. Tapscott explains how with the rise of Web2, Internet users agreed to a system of digital feudalism by giving away their data in exchange for free services. The future he sees will invert the model from digital feudalism to a form of self-sovereign identity where you control and own your data, and you decide how and when it’s used—and if it’s used, you can get compensated. People will enjoy more privacy rights and many might end up working for a decentralized autonomous organization (DAO), which will benefit people in places where local markets don’t offer many employment opportunities. Creators will enjoy new ways to connect with fans and directly earn money from them, while fans will have a new way to experience the creativity they enjoy. However, without decentralized blockchain we’ll end up with hyped-up databases controlled by a single company, which wouldn’t be Web3 but “virtual Disneylands.”
A major reason for the purchase of Pornhub owner MindGeek by Ethical Capital Partners (ECP) is the chance to profit by winning back the support of Visa and Mastercard, who previously cut off Pornhub from payment services. ECP’s partners appear to be trying to put an ethical spin on MindGeek’s operations, aiming to drive growth by promoting a commitment to ethical leadership along with the adoption of tools for detecting and deterring illegal online activity. But branding MindGeek’s operations as ethical will take more than respecting industry workers and getting rid of illegal content. MindGeek’s content moderation practices still enable adult consumers to live out morally questionable fantasies. ECP freely admits it plans to unlock shareholder value in MindGeek through state-of-the-art tech and intellectual property investments. This has some observers speculating that the Pornhub acquisition is all about cashing in on the savings that can be achieved by investing in technology-generated porn, which could eliminate any reputational risk of being associated with child pornography. Nonetheless, Pornhub still allows viewers to engage in fantasies that are taboo, unethical, or illegal. And while anyone can try raising money for a company that does this by talking about free markets and freedom of expression, the investment banking community probably won’t bite.
Ukrainian president Volodymyr Zelensky is a skilled actor, but that’s not what makes him an invaluable leadership role model for his people and the rest of our troubled world.
Forward-looking firms have been linking executive compensation to corporate social responsibility (CSR) for years. Research has identified two common types of CSR-contingent compensation contracts. Some firms take a formulistic or objective approach in which executives know in advance how much they can expect to gain by pursuing specified CSR-related activities, while other firms take a more subjective approach in which CSR-contingent compensation is subject to the discretion of compensation committees ex post. Implementing either approach can improve a firm’s CSR ratings. But the pros and cons differ depending on a firm’s industry, growth prospects, and earnings volatility. The subjective approach can be more efficient when, for example, firms are high-tech, risky, young, or fast-growing; are highly visible and facing more public scrutiny; or are implementing new, unconventional CSR projects. On the other hand, the objective approach may make more sense when firms are traditional or mature; are implementing conventional CSR projects or continuing existing CSR projects (so the target is clear and measurable); are expecting stable and predictable project outcomes; or are experiencing poor CSR standings. All firms can try taking a conservative, objective approach to gain experience designing a reward and evaluation system, and then move to a more subjective contract if it makes sense to do so.
Impact investing and Socially Responsible Investing (SRI) have traditionally had different objectives, with the former being about supporting businesses committed to making a difference, and the latter focusing on mitigating the risk of harm. However, these two worlds appear to be merging, with the SRI industry talking more and more about having a positive impact. Yet in the corporate world, positive talk doesn’t always translate into positive action. The SRI industry might very well adopt impact practices, but if the worst-case scenario comes to pass, we are looking at a takeover by a dominant player that has frequently engaged in greenwashing. And given today’s market challenges, the last thing we need is to give investors who seek to make a positive impact another reason to stay on the sidelines. What’s needed is more transparency when it comes to language, promises, and practices. To clarify the distinction between SRI and impact investing, key players such as corporate managers, the accounting sector, environmental, social and governance indexers, market regulators, and industry standard setters need to work together to develop standardized evaluation criteria and certification systems for both impact and SRI funds. Actively sharing experiences and knowledge might even lead to the creation of a hybrid category like “impact SRI.”
In this Ivey Business Journal Q&A, Ivey Business School Professor Tima Bansal—one of the sustainability field’s most cited scholars—explains why there is nothing anti-capitalist about sustainability, while making the case for old-school capitalists to embrace Ivey’s ambitious Innovation North initiative, which aims to save the planet (and capitalism) by disrupting traditional approaches to innovation. She says sustainability suffers from two issues. First, some people think that sustainability is about asking them to do less. The second issue is that many people, including executives, just don’t know what to do about sustainability and how to do it. Bansal claims we need to reframe the discussion as prosperity—an opportunity to realize better health and community. Instead of talking about sustainability as reforming capitalism, we need to think about sustainability as innovating for prosperity. Innovation North assembles senior business leaders, academics, and world-renowned systems thinkers every three months to discuss how to innovate the innovation process. It is working with partner companies to create a toolkit that bakes systems thinking into innovation—the Innovation North Compass. This uses both ideas (as in the stage-gate model) and solutions (as in design thinking). Ultimately, Bansal says, a systems thinker thinks differently than how we teach people to think in business schools. They work though problems differently, not looking for the right answer but instead looking for patterns and possibilities.
<p style="color: rgb(197, 183, 131);"><strong> AWARD WINNER - Responsible Leadership Category at European Foundation for Management Development (EFMD) Case Writing Competition</strong></p><br>In early 2021, McKinsey & Company (McKinsey) agreed to pay US$573 million to end US state-level investigations into claims that it had helped exacerbate the global opioid crisis. Tom Peters, an influential and highly respected management guru, was upset by how far his former employer had been willing to go in helping US drug maker Purdue Pharma LP increase sales of OxyContin, a narcotic-based painkiller that helped drive an opioid epidemic responsible for hundreds of thousands of tragic deaths. As far as Peters was concerned, there was no question as to whether what McKinsey did was wrong: it had ignored the “moral responsibility of business” by helping an unethical client maximize profit by aggressively promoting the wide-scale use of a highly addictive drug. In addition to asking why McKinsey was still open for business, Peters posed a previously unimaginable question: “At this moment in time, why would anyone want to go to work for McKinsey?”
BlackNorth founder Wes Hall’s rags-to-riches journey is the quintessential story of liberal market capitalism rewarding resilience and hard work. But Hall’s success story has a dark side, since he climbed a corporate ladder that wasn’t designed to help him reach the top. Hall has warned companies to expect an open season of investor activism on companies that fail to take equity, diversity, and inclusion issues seriously. In this Q&A with Ivey Business Journal editor Thomas Watson, the self-proclaimed King of Bay Street explains why he thinks generational change is in the cards while offering advice to companies on how to make it happen. BlackNorth is talking to partners about reforming everything from healthcare and education to homeownership. Corporations have a responsibility to reflect society, he says, so change is a must. When it comes to issues like diversity and inclusion, he says too many organizations aim to address things internally and fail to bring in outsiders with a different perspective. Leadership is key to making progress and a board member who says, “We don’t think social issues are our responsibility” is demonstrating a lack of leadership. Hall advises professionals that if they feel that they will not get treated fairly based on who they are and not the contents of their character and abilities, they should seek other opportunities. In the long run, this will bring them closer to a genuine opportunity where they are empowered to succeed.
An alarming number of leaders have been failing to serve as role models for future generations at a time when positive examples of leadership have never been more important. Like everyone, leaders make mistakes, which we often attribute to bad morals. But in most cases, these mistakes occur as consequences of poor judgment resulting from weaknesses in character. Most organizations fail to understand the key role that developing and maintaining character plays in improving judgment, and fail to seriously focus on character when hiring. In Developing Leadership Character—which offers a deep dive into Ivey’s research on how the interrelationships of various dimensions of character support good judgment—the case for character development is broken down into four parts. First, individuals can work on developing their own character strengths. Second, organizations can contribute to the character development of both individuals and organizations. Third, these processes must occur if individuals and organizations are to succeed in the contexts in which they operate. Finally, the results from character development will yield critical benefits to individuals and organizations, thereby justifying the effort required. While there are long-established selection criteria for competencies, it’s relatively rare for employers to discuss the character dimensions required to succeed in leadership roles. When hiring and promoting in today’s disruptive world, organizations need to ensure that leadership candidates have the essential dimensions of character required to selflessly lead others.
As the second wave of COVID-19 was ramping up in 2020, a three-day virtual summit organized by the Ivey Academy brought together senior HR professionals from across Canada to discuss working on the front lines of organizational disruption. Day 1 examined equity, diversity, and inclusion (EDI) efforts. As 2020’s civil rights protests demonstrated, the institutional programs conducted around EDI in the past have failed to deliver what is expected today, not to mention what justice demands. Day 2 was themed “from staying afloat to charting a course.” With remote work leading to problems—ranging from rising mental health issues and Zoom fatigue to increased cyberattacks—most companies are still trying to figure out what level of remote work makes sense for future operations. Summit attendees discussed the need to further develop virtual working skills and leadership empathy, while focusing employees on purpose more than profits, beefing up mentoring/coaching, and breaking down virtual silos. Finally, Day 3 examined the re-humanization of the workplace. The pandemic has essentially stripped the workplace of direct human-to-human interaction as work hours soar. As a result, employee stress is up, along with substance use, which has impacted engagement. HR summit attendees discussed the need to explore new ideas that go well beyond offering flexible hours, technical training, and mental health support programs—these included blackout periods, high-end virtual events, and online food vouchers for team lunches.
When a company is looking to expand, it is natural for the managers involved—including the CEO—to have location preferences. Ivey Professors Andreas Schotter and Paul Beamish investigated how location hassles influence foreign investment decisions and sales. They found that these hassles significantly affected individuals or small groups of employees tasked with assessing potential opportunities. Firms must overcome managerial biases and identify champions willing to tackle location hassles in difficult markets that have the potential to generate a high return on investment—especially if the hassle factors of those markets are keeping the competition away. Many characteristics that are perceived hassles for managers of firms from traditional industrialized locations like Europe, the United States, Canada, and Japan are not seen as such by managers from rapidly internationalizing emerging-market firms. The authors recommend three actions to take to utilize and build on the hassle factor: 1) raise awareness of managerial biases and on-the-ground location factors, 2) raise global strategic capacity, and 3) leverage a more diverse talent pool. Firms should hire for a global mindset and not just for technical job competencies or single-location knowledge. They should also recognize that some otherwise high-performing managers may be ill-suited for roles involving high-hassle locations.
What should businesses be doing during the coronavirus pandemic? That’s a tough question, and few of us imagined the challenges we face while being isolated from friends, family, and colleagues. Any crisis will serve up some market opportunities to help consumers adjust, and business leaders should seize them. While doing this, it is important to note that the role of corporations was already under pressure to change prior to the pandemic. Ensuring your business does its part as a good corporate citizen isn’t just the right thing to do. When the dust settles, consumers will remember how organizations acted. Former Ivey Professor Christine Pearson recommends executives focus on the following actions: hope for the best, prepare for the worst; make your role model proud; create a superb crisis management team; treat your employees right; and model healthy self-care. Ivey Professor Andreas Schotter advises multinationals to ensure they keep track of all vulnerabilities as they scramble to maintain operations because retreating from globalization is not a viable long-term strategy. Ivey instructor Eric Janssen recommends that early-stage ventures try to increase revenue; move to collect receivables; delay payables; cut non-essential spending; and consider temporary layoffs. To maintain morale, Ivey faculty member David Wood suggests end-of-week team parties on Zoom or similar platforms to give employees a virtual meeting that they can enjoy. Finally, Ivey Professor Paul Beamish notes that everyone in business should maintain perspective—the type of setback they experience as a hassle of doing business often manifests in poor countries as a life-or-death situation.
For people who aspire to drive change, studying the impact that character had on RBG’s judgment is as important as replicating her commitment and competence
This article explores how companies can make themselves more competitive by understanding how crises open the door to innovation, then offers advice on how to foster innovation in good times and bad. Thanks to the coronavirus outbreak, organizations around the world are experimenting like never before, and this forced increase in experimentation represents a unique opportunity to take innovation to a higher level because it is taking place while everyone’s standard operating environment has been disrupted. One lesson for organizations experimenting during the pandemic is that there can be value in mistakes. Making sure that you don’t miss the serendipitous opportunity of a lifetime requires the willingness to venture down a rabbit hole without being held back by your original objective. Working without a clear objective can be wasteful, but it also opens the door to finding something unique and valuable. At the same time, the tension that typically exists between an organization’s fiscal stewards and its creative folks exists for a reason—failure is costly. As a result, building an innovative culture that is also a sustainable and profitable culture is a balancing act.
This article examines the value of peer networks, then offers advice on how to maintain and grow professional relationships when physical gatherings are not an option. Developing a robust peer network has long been considered mission critical for business professionals. However, if you want them to last decades, networks require regular maintenance, which is more difficult when physical distancing requirements exist. Anyone who puts time and thought into virtual networking can build a more robust professional network that can help improve decision-making, identify career opportunities, and overcome personal challenges for years to come. The main obstacle to networking virtually is not taking the time to do it. Virtual networking, of course, will never replace connecting in person, so as you network online, think about ways to maintain and deepen your connections when larger physical gatherings become possible. No matter where your professional connections were formed, keep in mind that everyone on the planet has shared the soul-searching experience of being isolated from others during the pandemic. This represents an opportunity to connect with others like never before, which can help advance your career—not to mention improve how we collectively face the challenges and inequities that exist in the workplace and our communities in this disruptive age.
Smoking was once considered as American as apple pie, but times change. Cigarette sales in the United States dropped to 216.9 billion in 2018, marking the industry’s lowest level in demand since the tracking of cigarette sales began in 1967. But today’s smokers are not just being banned from lighting up at work—they are being banned from employment by companies like U-Haul, at least in the United States. (In Canada, the Human Rights Act theoretically protects nicotine users from this sort of selective hiring policy.) There is no question that well-designed wellness programs can benefit employers and society alike. But on the other hand, besides having the potential to negatively impact employee morale, aggressive wellness initiatives can spawn a culture of deceit, fostering unhealthy attempts to beat the system. In the case of weight-loss programs with financial incentives, studies have found that employees often attempt to manipulate results by binge eating and crash dieting. As a result, wellness programs must be well designed. Providing employees with knowledge, risk management tools, and positive incentives has a role to play in today’s workplace. But refusing to hire people who, for better or worse, use any legal product can do more harm than good.