The Maple Leaf – A Canadian success story
Immigration at Toronto airport didn’t like the way I looked and pulled me to one side. “How can you afford a CA$3,500 Business Class ticket? I’ve never heard of your organisation,” was the opening volley. Look behind you at the advertising billboard, that’s us! I explained why I was there. “So, you are here to teach” err no. “Yes, you are, pay CA$150 for a teacher permit.” I cut my losses and hand over my AMEX.
My role was to turn-around a flagging Toronto business that had embarked on multiple M&A ventures with a big bang approach … only to see the integration implode spectacularly. I met the COO, a nice guy of twenty plus years’ service and within two minutes it was obvious he was way out of his depth. He failed to escalate, failed to be transparent, failed to understand plummeting staff morale and sickness (one employee died) and didn’t deal with the regulator banging on the door in anger. Oh yes, CA$250m was missing or unreconciled. His response to me was “don’t worry, it will all come out in the wash”.
Fed up with being ignored, the regulator gave an ultimatum, show us your sustainable turnaround plan or stop trading! Within 48hrs I handed to them a plan, it was practical, deliverable and realistic, with clear deadlines. We got a reprieve, they got regular updates and quality progress reports. As for the COO, he didn’t last my first day and was escorted out the building. He failed in his duty to the firm, his people and to himself. He’d lost the dressing room. He failed to escalate with clarity and without ambiguity, didn’t see the red flags, wasn’t transparent, and most importantly, he didn’t ask for help!
It was key to get the disengaged employees on side. I recruited a strong team from the New York office, with whom I had a great relationship, to come and help. Despite the natural tensions between the milder Canadians and their more vocal US cousins, it demonstrated a willingness to quickly provide much needed ‘boots on the ground’.
The next step was to axe the ghost employees, invisible consultants ‘working from home’ for CA$800 a day who no one ever saw. HR protested. Then I stopped everyone, apart for my direct reports and me, from working beyond 18:00hrs. I threw them out the door to go home and spend quality time with their families. No point running like a hamster in a wheel if it’s not going anywhere.
Most importantly I segregated work between backlog, and business as usual. This lessened the pressure and focused each team, giving people clear parameters within which to operate.
We swiftly introduced Management Information Reporting and Key Performance Indicators to measure progress. We got IT to work wonders and rollout the single platform, and asked my US special forces to be ruthless with a process excellence review – giving them the remit to stop doing anything that wasn’t a core service or process. These were none-core, drained resources, took too long and provided no value to the bottom line. Employees were reassigned to core activity, to provide a quality service by getting the basics right first time.
At the next Board meeting, I told the Head of Wealth to exit low end business. If the portfolio was under £500,000 I questioned the suitability of having a bespoke portfolio for a client, and if it wasn’t generating at least £3,500 in fees I questioned its value to the business.The only block to this approach was Relationship Managers who refused to have this difficult conversation with clients. But they had a choice: do it or someone else will. They made the calls, some clients toped up their accounts, the RMs built stronger relationships with quality clients keeping them sticky to the bank, and they had more time to meet prospects and generate quality new business.
Finally, we replaced people at all levels who simply refused to change, introduced an effective management team and recruited the COO from the Vancouver office to run the business until a suitable replacement could be found. He was a great guy; Scottish, capable and smart. We only employed people who we could visualise being at the firm as part of its future.
We created a new culture, a new attitude, and a new way of doing things within an efficient organisation with lean processes, strong control and oversight, earning good fees and delivering a quality service.
My final handover to the Board was blunt. Based on the 52nd floor, in a room with towering windows that showed off the stunningly panoramic views of Ontario. My opening volley was a quote from Alexander the Great, “Upon the conduct of each depends the fate of all.” These were the people in charge and were accountable. They should have known how bad things were and acted sooner. The COO and others had lost their jobs, the rest of them were lucky and took away a strong lesson in accountability and responsibilities.