Canadian HR Reporter

SEPTEMBER 8, 2014 Canadian HR RepoRteR & StRategiC Capability netwoRk a family affair Solid values, long-term vision keys to staying competitive, says Linamar CEO By Liz BeRnieR By all accounts, linamar is a beacon of success in a struggling econ- omy. in the midst of ontario's turbulent manufacturing sector, the Guelph-based company has grown to become an international player in global auto parts manufacturing. with 19,000 employees, targets of at least 10 per cent growth per year and a recent $101-million gov- ernment grant, the organization is planning to create 1,200 new jobs in the province at a time when layoffs are almost expected. So how does Linamar do it? Its success is due in large measure to the long-term vision that comes with being a family business, said CEO Linda Hasenfratz during a Strategic Capability Network CEO Spotlight event in Toronto. Linamar is a publicly traded company but the Hasenfratz fam- ily retains about one-third of the shares, she said. "at's an important part of our success because we have a very long-term viewpoint in terms of how we want to run the company and the strategy… you often see that in many family-influenced or family-controlled companies." In fact, it's been statistically shown that the long-term re- turns of a family-run company are significantly higher — in the neighborhood of 30 to 40 per cent higher, said Hasenfratz. "at really is because of that long-term viewpoint. I'm not managing the company for this quarter — although the quarter is important, for the shareholders in the room — but we're also think- ing a lot about five years, 10 years, 20 years, 50 years down the line, and what do we need to be doing today to ensure the long-term vi- ability of the company? "Long-term perspective is very key to creating that consistent, sustainable growth that we're looking for in the long term," she said. "Also very important to a company's success is the culture that you create in the organization." Integrating culture, values Linamar has invested a lot of time over the last 10 years into articu- lating its culture and values, said Hasenfratz. Balance is one value that is very important — par- ticularly balancing the needs of customers, employees and share- holders, she said. "We can't manage just for the bottom line because if you're managing just for the sharehold- ers, then your employees will suf- fer and your customers will suffer. And, similarly, we can't just man- age for the customer — we need to think about our employees and think about our bottom line." Linamar has built that value into how it does business by cre- ating a "balance" scorecard mea- suring system that every plant and group and the overall company is measured on every month. It also impacts how employees are bonused. Being entrepreneurial is an- other key value, as are respect and responsiveness. "A customer who feels that they can rely on you, they know you can move quickly — that kind of situa- tion can bring all kinds of business down the road," said Hasenfratz. A strong work ethic is an- other critical value, along with innovation. "We're always looking to inno- vate in terms of product design, in terms of process design… And that innovation, to me, is a huge part of what makes us competi- tive," she said. Leadership, succession Hasenfratz herself is a prime ex- ample of the thought, experience and care that goes into developing leaders and succession planning at Linamar. Before taking the CEO reins from her father in 2002, Hasen- fratz started at Linamar working on the shop floor as a machine op- erator. She spent about five years shifting through many different jobs to learn the business from different perspectives. "I worked in every different de- partment. I went from the shop floor to engineering, quality, ma- terial control, accounting, mar- keting, really trying to get just a very broad viewpoint of how the company was run, which was in- valuable to me in terms of not just understanding how the company worked but exposing me to a lot of different people in the organi- zation who I can call and ask for help, and who are my supporters within the organization as well," she said. Linamar recently created a management training program that is modelled on that experi- ence and called LEAP or the Lin- amar Entrepreneurial Advance- ment Program. "We pick up to five people each year to put into the (LEAP) pro- gram, which is designed to groom them to be a general manager of one of our facilities," said Hasen- fratz, adding that people shift from plant to plant, department to department to get experience in every area. When it comes to choosing potential leaders, Linamar consid- ers many different personalities — not just those who appear aggres- sive or outgoing, she said. "We've given a lot of thought to leadership at Linamar and what we think is important in terms of leadership traits, and we've tried to really instill that as part of our culture and let people know this is what we're looking for in leader- ship at Linamar, and try to drive it into recruitment and into as- sessments and build it into how we train our leaders as well," said Hasenfratz. There are several leadership behaviours they look for in their people. e first is passion — peo- ple who are excited and motivated about what they're doing. Anoth- er is planning and vision, she said. "You can have a vision of where you want to go, but you have to be able to put a plan together of how you're going to get there. And then, of course, you have to be able to execute on the plan," said Hasenfratz. Linamar also looks for edge and acumen in decision-making, good communicators and, finally, leaders who truly care about their people. "We feel if your people feel you care about them and you care about what happens to them, then they're going to follow you wherever you want them to go. If they feel like you don't care about them, why would they follow you?" she said. These values and leadership behaviours are also a big part of assessing people's performance every year, said Hasenfratz. "That assessment is equally weighted to their performance in terms of meeting goals," she said — and it helps determine who the strongest candidates are for lead- ership roles. "Succession is very key, I think — trying to balance people with- in the organization to allow us to continue to grow effectively is critical. We want to grow in the double digits, and we're not go- ing to be able to do that if we don't have the right people with the right skills in the right places." In fact, Linamar is in the pro- cess of launching a rebranded suc- cession program called "Each One Teach One." "Each person is teaching at least one other person to either do their job or develop within the role that they're in, or develop for another position," she said. "(So) you're sig- nificantly enhancing the depth of capability." Employee development is top- of-mind for Linamar, she said. "To me, there's nothing more important as a leader than devel- oping your successor. To me, if your successor isn't as successful or hopefully more successful than you, then you've failed as a leader." Linamar chairman Frank Hasenfratz hands over the podium to his daughter CEO Linda Hasenfratz during the annual general meeting of shareholders in Guelph, Ont., in 2010. Credit: Mike Cassese (Reuters) "if they feel like you don't care about them, why would they follow you?"

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