March 30, 2007

Complacency

This morning I was at a presentation in the leadership serie. The keynote speaker was Terry Matthews and after that we had Larry O'Brien mayor of Ottawa, and Antoine Paquin Rho Managing Partner. I've seen Terry Matthew presents twice now. The first time I got out of there wanting to take over the world, he had so much energy and so go-go-go. Today was also a great talk, but more an alarm bell he wants us all to hear about the business state in Canada. His main point is we're way too complacent. He travels quite a bit around the world, and he competes on a global scale in each of his businesses. His first point is simple, Canada, the government, by not encouraging in some ways Canadian products is not helping its companies abroad. He went on to explain that people who think that the US or France or Germany are not buying local are from another planet. I started thinking about this one for a while, and just look at the police cars - how many GM police cars in Germany or France for that matter? or how many BMW police cars in the US? Basically our procurement rules should encourage canadian content. His second point is much more difficult to address and it's one of quick exit. Too often canadian businesses sell out to the first offer, and we end up with tons of branches in canada, with no head quarters. The side effect of this are not immediately observable, in the short term it's creating wealth on a small scale, but in the long term the region would have benefited more from the company sticking around - if it was viable. Why? HQs are important to a region, they own the budget. Companies tend to get involved more in the community where its leaders are. Think of it this way the R&D budget of a corporation is on a sunny day 15% of its revenues, this means it spends 85% elsewhere, would you rather be the region where the 85% is controlled or the one with the 15%. Now - How do you convince someone to stick it out, go for the long term wealth creation? That is not an easy question. The answer lies in the mind set of the people running the business - let's make a buck and be free to do whatever I want after, work on another startup or sip pina-coladas in cuba. I think it's this freedom to do whatever that drives the quick exit. More viable businesses (qty of) could mean more businesses sticking it for the longterm. Also if businesses were built to generate profits for the long run, I think it would encourage entrepreneurs/investors to be more patient, because they could pay themselves dividends along the way. I don't know where I'm going with this post - it's more playing back in my head what I had the opportunity to hear from one of the most successful entrepreneurs in Canada. - all in all it was a great presentation, a wake up call, and if you get the chance to see Terry Matthews speak, jump at the opportunity - you will get first hand at what it's like to love to compete and kick some butts globally.

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