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When it comes to attracting investments, Canada is a laggard despite being a trading nation with all the talent and tools required. The main reason is that few in Canada have tried to answer the why-invest-in-Canada question. With or without Canadians leading large corporations, investment decisions made in Detroit are not influenced by any special love for Canada; they’re based on business. In 2016, the argument for playing the incentive game is very strong, and Canada could end up being bypassed for new plant investments for an entire investment cycle. But Canada isn’t just losing the competition for new auto plants. While the Canadian economy still attracts a reasonable share of foreign direct investment, there has been a significant shift in the industrial composition of Canadian FDI inflows. Over the past 15 years, Canadian oil and gas FDI has grown four-fold, while there has only been modest growth in manufacturing investments. As a result of weak performance in new greenfield projects, staunch free-marketers now accept the need to play the incentive game. Ivey’s Lawrence Centre has developed three overarching recommendations to help Canada raise its investment-attraction game to the level of its best-practice competitors: 1. All governments involved should make a formal commitment to act in a coordinated fashion when engaged in investment attraction. 2. Government players should jointly develop an explicit business plan for investment attraction to guide all parties, with results judged by incremental tax revenue generated. 3. Canadian political leaders and senior government officials should become engaged in a sustained way in all stages of the investment attraction process.

It is easy to blame corporate fraud and financial-sector misconduct on a lack of morals. But framing the issue of businesses behaving badly strictly as a morality problem is problematic because it leads to solutions — ranging from expanded compliance programs and codes of conduct to compensation claw-back clauses — that aim to install and strengthen moral sensibilities for the purpose of positive behaviour modification. And these have proved largely ineffective. Ivey research has shown that it would be far more productive to interpret misconduct and misbehaviour in the business sphere as a failure of judgment caused by weaknesses in dimensions of character. This is because while most leaders aspire to have better judgment, many resist suggestions that they are morally flawed and see solutions that teach ethics and morals as condescending. The development of the Ivey Leader Character model, a framework currently being deployed across a wide variety of organizations, has opened the door to reframing misconduct and misbehaviour in business as a judgment issue. The dimensions in the Leader Character Framework are habits of behaviour that can change over time, for better or for worse. Leader character must be present wherever there is a competitive/strategic requirement for strong competency. Ultimately, strengthening leader character will positively influence and change an organization’s culture and (potentially) industry context.

Andrew Fastow, chief financial officer at Enron during one of the largest corporate frauds in U.S. history, knows how easy it is for businesses to misbehave when faced with grey-area decision-making. He sees principle-breaking everywhere today — in business deals, political fundraising, and tax avoidance. There can be a contradiction between “doing what’s right” and “doing what the rules permit.” It is important for managers to understand where judgment needs to be applied in financial reporting, keeping in mind that the use of differing accounting estimates and policies can result in significant variation within financial results. Leaders must also consider the alignment between an organization’s long-term strategy and its incentive systems. <br><br> When it comes to misleading numbers in the marketplace, it is important not to confuse “accounting” with “reporting.” An analysis last year of results from 500 major companies warned that the gap between the so-called “adjusted” profits that analysts often cite when advising investors and actual bottom-line earnings, which companies are legally obliged to report, has widened dramatically in recent years. A more recent study found that 90 per cent of the companies listed in the Standard & Poor’s 500-stock index used non-GAAP results when reporting results to the market last year, a significant increase since 2009. Ultimately, board members should ask tough questions whenever official result figures vary significantly from the numbers used to entice investment. Or as Fastow puts it, it is time for directors of companies to “Stop worrying about personal liability and start worrying about shareholders and other stakeholders by looking at the real risks and dealing with them, instead of looking the other way and being happy not knowing what is really going on.”

Following the surprise Brexit vote, business leaders need to stop worrying about the occasional Black Swan and understand that dealing with unexpected world-changing events is the new normal. Despite some opinions that Britain’s exit from the European Union could be good for Canadian business, nobody knows yet whether the Brexit vote will be good over the long term for Canadian exports, not to mention the loonie. Heightened uncertainty is where the lessons from the Brexit vote can be found for both the public and private sectors. For corporate leaders, the lessons of Brexit are about planning for unexpected events—a prevailing characteristic of the “new normal” caused by more robust mega-trends created by social, economic and political forces. Brexit should drive business leaders to review existing strategy in this much larger context. Winning firms will pay extra attention to agility when planning overall business models, including a portfolio approach to asset configurations and the particular locations of value creation and value extraction. The rise of socio-economic and political mega-trends will trigger the growth of “no-equity” corporations—businesses that are extremely agile and capable in managing across existing and emerging networks and boundaries, thanks to reduced reliance on equity-based business models. Instead of developing contingencies, leading firms will disrupt themselves to come up with new business models that allow them to stay ahead of the competition.

Not long ago, it was generally accepted that nice guys and gals finish last in the cutthroat world of big business. Over the past decade, the social enterprise movement has changed the way many people view the end game of capitalism. Nevertheless, the idea that jerks make better CEOs survived the 2008 financial crisis. Since then, Ivey Business School research on leader character has demonstrated that long-term sustainable success is best gained through company executives having a balance of personality traits including compassion, humility, and empathy. In other words, putting a jerk at the helm of a company isn’t advisable even if they have excellent experience, drive, and competencies. <br><br> There is a persistent notion among entrepreneurs that the right “Startup DNA” is comprised of characteristics such as resilience and the ability to accept risk, along with arrogance and the ability to be a huge jerk. But what if billionaire jerks had reined in their inner boor when bringing ideas to market? According to Ivey Professor Ann Frost, many of the world’s successful jerks might be richer if they had played nice, or at least nicer. When venture capitalists invest in start-ups, they spend a lot of time with the management team they’re betting on. VCs also typically add founders of their new portfolio companies to their CEO networks, which tend to function better when members comfortably share ideas instead of aggressively clashing over egos. As such, some VCs have “no A-holes” policies, meaning having a bad reputation can limit one’s ability to strike a favourable deal before negotiations even begin. “The goal [of negotiations] is really finding common ground,” says Professor Frost. “And nobody wants to share ground with a jerk, so they are inclined to make them pay.” While conflict over ideas generally leads to superior outcomes, interpersonal conflict leads to the A-hole tax.

If you think you know your customers well enough, think again. Every organization, regardless of its earnings and marketing sophistication, can benefit from a better understanding of its customers. Indeed, figuring out how to dramatically improve your customer experience is something to think about right now, if you want your organization to have a future. Coming waves of disruption threaten every established business on the planet. Since these waves are driven by a shift toward consumers, as well as a number of low-cost new technologies, they are unstoppable. Companies like Uber and Airbnb haven’t spent much money on marketing, but are taking over by word of mouth and by creating value through servicing customers in better ways. Established players should learn how to proactively raise the customer service bar and offer a “lights out” experience that can’t be beat. If leaders don’t focus on what it takes to get customers to stick with them, then the cost of customer acquisition becomes forbiddingly expensive. <br><br> Deploying analytics alone can no longer be relied upon as a source of competitive advantage because most analytics strategies are easily replicated. Companies must investigate what customers want before they want it. Knowing where customers want you to take them before they realize it (or someone else takes them there) involves creativity and design thinking. It requires understanding how generational thinking can bias your product or service development. It also requires getting outside of your industry and understanding how the ideal customer experience changes. Don’t be fooled by good surveys, reviews, sales, or market share data. They won’t tell you what’s coming or what weaknesses expose you to eager competitors with a better emotional connection to your market.

Anyone looking at stock charts these days has good reason to feel like cutting their losses. Despite the partial recovery after the Global Financial Crisis, sovereign and consumer debt levels have only increased while commodity prices have plummeted along with China’s economic growth levels, so thinking about rebalancing investment portfolios is clearly a good idea. When thinking about rebalancing investments, it is unwise to let stock charts alone convince you to sell or buy. Stock charts are widely used to help professional and retail investors make decisions regarding when to buy or sell equities. But research shows that stock charts display information in a way that leads to irrational decision making. The problem with using stock graphs to decide whether or not it is time to sell a company’s shares has to do with the importance that people place on observations. Simply put, the most recent past is frequently seen as more diagnostic than the distant past and so lines on a graph can be misleading. Furthermore, research has found that feeling isolated or ostracized causes consumers to pursue riskier financial opportunities.

Hap Klopp founded The North Face, where he served as president and CEO for 20 years and built the largest and most successful retailer in its industry. In this Ivey Interview, he discusses lessons learned over his impressive career and warns against businesses looking to get rich overnight, because for every Silicon Valley success story there are countless failures and disappointments. The North Face is an example of disruptive technology, as it took materials developed for the Vietnam War and applied them to the camping industry. “If you’re not clearly differentiated, you are just another bottom player,” he says, “so the only tool you can use to beat competition is pricing. In other words, right out of the gate you’re sowing the seeds of destruction.” Klopp argues that start-ups work best when employees have a common vision and pay scheme, rather than disparate goals and compensation levels. Finally, he discusses the recent shift of power to consumers, predicts that domestic manufacturing will make a bigger comeback than expected, and says that whoever truly utilizes omni-channel marketing will meet great success.

Apple, the tech firm founded by Steve Jobs and Steve Wozniak in 1976, could soon be a trillion-dollar enterprise. Its power to invoke fear in competitors is directly related to Jobs’s success as a market disruptor. But while Jobs’s passion for the design and quality of products created under his leadership is worth trying to emulate, the leader character of the man is not. Besides significant shortcomings in his personal life, Jobs had no problem taking credit for work done by others and declined to join The Giving Pledge. His burning passion for design caused him to fail as a businessperson more than once, and much of Apple’s success can actually be attributed to happenstance and good fortune. While the business world can learn a lot from Steve Jobs, the leader character of Apple’s legendary co-founder is not pedestal-worthy.

The hacker attack on Toronto's Avid Life Media — in which confidential information on 32 million Ashley Madison users was released — offers lessons for all companies, not just controversial ones. After all, the hackers in question did not act simply because the company runs the infamous Ashley Madison infidelity service. They were also moved to act by its aggressive marketing and customer service claims, not to mention its short-term thinking when developing tactics to make the firm more attractive as an investment. In this article, Ivey Business Journal Editor Tom Watson takes readers back to his 2010 investigative journalism on Ashley Madison during the time of its attempted initial public offering, when one of his questions to a boardroom of potential Avid Life backers was enough to make the bankers second-guess their decision. In addition to examining the stakeholder versus shareholder perspectives, he explores the threat that hackers and hacktivists pose to firms and cautions that leaders, such as the former CEO of Avid Life, can in fact have too much bravery.

Following Greece’s failure to repay its loan to the International Monetary Fund, it is easy to claim that the Greeks should simply pay back borrowed money. But there is never a clear answer when asking who should be responsible for a nation’s unmanageable debt, and the question is far more complex when it involves a member of the eurozone. Greece lacks its own currency to devalue to gain economic relief, and the nation’s debt problem cannot be solved by issuing more debt with conditions that kill economic growth. Arguably there has never been a bailout designed to bail out the Greeks. The aid issued to date has been more about buying time to play “musical bondholders.” <br><br> When it comes to sovereign debt, few countries ever pay back principal in the international financial system today. Yet if the Greeks manage to set a precedent that other troubled E.U. countries try to follow, then the fallout could sink the euro and send the global economy into turmoil. Nevertheless, the risks to the global financial sector have been reduced following the bailout deal with the European Union. Investors need to understand that nobody knows what is going to happen, and yet market buying opportunities could arise. Ultimately, when thinking of Greece, it helps to take note of the fact that spending money you don’t have eventually comes back to haunt you.

Many early adopters of data mining wasted millions of dollars due to the significant amounts of dirty data contained in IT systems and the length of time required to build data warehouses. But the potential payoff of data mining has soared along with the growth of digital data. Today, thanks to the massive amounts of user-generated content online, firms do not need to build a data warehouse to benefit from data mining. Mining social media sites for actionable intelligence should be on the radar of consumer product businesses. This article examines research that has helped develop an innovative, high-validity method of mining online product reviews such as those on Amazon.com. Firms can now learn what customers consider the strengths and weaknesses of their products and competitors’ products — right from the horse’s mouth — without conducting costly surveys or focus groups.

When it comes to new government budgets, politicians are usually criticized regardless of whether they undertake new spending or embrace austerity. Canadian Finance Minister Joe Oliver’s spending restraint should be appreciated, however, at a time when world debt has jumped $57 trillion since the so-called Age of Austerity started in 2007, with governments accounting for $25 trillion of the extra liabilities. Oliver has been criticized for his plans to cut the small business tax rate, because the move will widen the gap between what small businesses and large businesses pay in taxes and will possibly incentivize businesses to stay small. But new research discussed in this article shows that a nation’s strongest, largest companies get hit with a lower rating after a sovereign downgrade faster and more often than firms with ratings that are worse than that of the state. This asymmetric effect leads to a greater reduction in investment for a nation’s healthiest firms, while also increasing their cost of capital by pushing up their bond yields. In light of these findings, this article argues that companies big and small stand to benefit from Canada’s return to surplus under Joe Oliver.

For Eva Kor, one of the Mengele Twins used in horrific Nazi experiments after being torn away from her family as a 10-year-old, forgiveness is not just key to peace on Earth — it also clears the minds of decision makers. After the Holocaust survivor thanked a former Nazi doctor who agreed to go on record about working at Auschwitz, the “Book-keeper of Auschwitz” gave Kor a kiss that was tweeted around the world, creating a mixture of hope and outrage. But as far as the 81-year-old Kor is concerned, forgiveness is for victims, who have the right to be free. Although forgiving is rarely easy, Kor sees it as key to achieving internal peace, which improves quality of life, not to mention management skills and productivity in both our professional and personal lives.

In early 2015, Target announced that its Canadian operation would seek bankruptcy protection and abandon all the retail locations that it had acquired from the Zellers discount chain less than two years before, a move that would eliminate 17,000 jobs. This article examines how management strayed from the company’s founding principles when planning the expansion, which led Target to enter Canada with mutated brand DNA. <br><br> In the 20th century, Target staked out a niche for itself in the United States by catering to value-oriented shoppers seeking a high-quality experience. At that time, it carefully selected locations that fit its business plan and practiced industry-leading inventory management. When Target Canada first opened its doors, inventory control issues cooled the excitement of many Canadian consumers. Pricing was problematic, especially for cross-border shoppers who did not find the same deals that Target offered in the United States. The plan to open so many stores in a short period stemmed from an opportunistic, aggressive takeover of Zellers. In Canada, Target lost the ability to take things slow while compromising the ability to get locations right. As a result, management gave up control over the Target experience that had won the company so much goodwill.

The CEO of Coeur Mining, the largest U.S.-based primary silver producer and a significant gold producer, saw a need for immediate change during week one on the job. Instead of wasting time changing culture, Mitch Krebs built a new one by moving the company to Chicago, a non-traditional mining city, and replacing most of the corporate office. The firm he had inherited was informal and decentralized, as well as overly focused on next-month and next-quarter results to the extent that it risked losing sight of relations with the communities in which it operated and communication strategies. Krebs set a goal for Coeur to become the best precious metals mining company in the world, not the biggest. In this interview, he praises going big with organizational change as worth the effort, and recognizes the value of good relationships as the best lesson he learned in business school. For any team to excel, he states, a firm has to have the right kind of constructive conflicts that focus on the problem involved, not the people. Finally, he cautions against building anything in the mining industry until you know exactly where the money is going to come from.

In 2013, controversy arose over the actions of Adria Richards, a developer-evangelist, in response to remarks she overheard being made by two male attendees at a technology conference. After she reported what she believed to be sexist remarks by posting a photo of the men and a comment on Twitter, the two men were asked to leave the conference session and one was soon fired. A firestorm ensued during which Richards' actions were subjected to scrutiny and the larger question of whether sexism hindered women's participation in the technology industry received a great deal of attention.

The Ivey Business Journal interviews Robert Kennedy, the dean of the Ivey Business School. He characterizes globalization as disruptive in the short term but crucial for long-term growth and discusses how the globalization of services has accelerated. To transfer work overseas (e.g. through call centres), firms have to implement new IT systems and digitize processes, and these typically generate a much larger return than the savings realized on labour, due to more efficiency. People often believe that heading offshore is just for “low-end” operations like call centres. However, what makes an activity amenable to going offshore is related not to being low end, but to whether or not one has to be physically present. <br><br>Dean Kennedy lists three foundational elements that position a country well for the services shift: a large English-speaking population, a higher-education infrastructure, and a tech-savvy environment. As an economist, he possesses three main global concerns: 1. America’s huge savings shortage, driven by huge government deficits and low personal savings rates. 2. Europe’s social welfare system, which is unsustainable because of the rapidly aging E.U. population. 3. Tensions between China’s economy and its fairly centrally controlled political system.

In 2013, controversy arose over the actions of Adria Richards, a developer-evangelist, in response to remarks she overheard being made by two male attendees at a technology conference. After she reported what she believed to be sexist remarks by posting a photo of the men and a comment on Twitter, the two men were asked to leave the conference session and one was soon fired. A firestorm ensued during which Richards' actions were subjected to scrutiny and the larger question of whether sexism hindered women's participation in the technology industry received a great deal of attention.

PyCon, a developer conference for a computing language community, implemented a code of conduct in response to allegations of sexism and misogyny in the tech community. Later, when a female attendee at a PyCon conference overheard inappropriate sexual jokes, she posted a picture on Twitter of the audience members responsible. One of them was fired from his job and the individual responsible for the tweet — a developer evangelist for an email company — received harassment and death threats, and her company’s website was disabled. The issue divided the tech community and her company fired her soon after. <br><br>“Donglegate” illustrates the need for appropriate mechanisms for reporting wrongdoing, as well as the need for people to feel confident that reporting bad behaviour will get results. When acting as a whistleblower, one must consider the repercussions. In the age of smart phones, expectations about privacy should be re-conceptualized to protect reputations and data. The authors provide three steps to achieve this: 1) Leaders need to develop guidelines for internal stakeholders about how and when information is shared. 2) Because it is almost impossible to control all potential exposures, leaders should be proactive and ensure that they have less to hide. 3) It is essential to plan for the times when, despite all efforts, negative information gets released.