Canadian HR Reporter

CANADIAN HR REPORTER February 22, 2016 14 EXECUTIVE SERIES/NEWS Strategic capability not built overnight Canlan Ice Sport has grown from a startup to the largest private sector owner and op- erator of recreational ice sports facilities in North America. While it might seem like the success occurred overnight, it took a great deal of effort and time. Joey St-Aubin's story carries lessons both leaders and organizations can use to better understand what contributes to building strategic capability. Discipline and practice: From a young age, St-Aubin played hock- ey. He learned that discipline and practice helped him develop skills to move to the next level. As his passion for the game grew, disci- pline and practice became an in- tegral part of the game and his life. Facing fears to build confi- dence in new skills: In junior school, his parents insisted he participate in presenting a speech. e same discipline and practice he learned in hockey was now re- quired to develop a new skill. St- Aubin mastered the task and went on to win speaking contests in school. He excelled in this skill and has come to rely on it in a variety of situations in his life and career. Taking advantage of unex- pected twists: Playing with Ot- tawa, Kitchener, Ont., and the University of Ottawa, St-Aubin experienced the different ways people work together and differ- ent cultures. He used his speaking skills with the media. He learned different approaches from differ- ent coaches. He played tourna- ments and learned lessons that would serve him well in his busi- ness career. Making the best of what you have: At 27, St-Aubin became general manager of an unbuilt sports facility. ere was an empty field and an unadorned trailer for an office. He decorated the trailer to be presentable, developed ap- proaches and worked on gaining interest and support so that when the facility opened, it was packed. Conscious focus: e vision for Canlan was centred around ex- ceptional customer service, every time. Discipline and practice were required to ensure the vision was not just a sign on the wall. ere was an awareness that teamwork and employee interactions impact that customer experience. ere is a formal culture statement and this too is reinforced by ongo- ing actions, including a regular culture survey. Culture happens regardless of a formal process but formally acknowledging and embedding it can make it more compatible and supportive of an organization's vision. Open to new ideas and op- portunities to: For-profit fa- cilities devoted to ice surfaces and sports face competition on a number of fronts, including municipally supported facilities. Canlan has added the concept of a "sportsplex" and diversified to provide access to soccer and other field sports. Most recently, it developed customizable pro- gramming to market the venue for office team events. By thinking in terms of its stra- tegic capabilities, what it has to offer and how those capabilities can be deployed in new and dif- ferent ways, Canlan has taken a seasonally oriented business and expanded it into a year-round operation with a much broader potential customer base. Often in business we use words such as resilience, learning and agile that tend to lose their mean- ing and become just jargon. Or we look for concrete proof or research to point us in a certain direction. Yet, stories like those shared by St- Aubin are often more meaningful, feel more authentic and provide a mentoring quality. Karen Gorsline is SCNetwork's lead commentator on strategic capability and leads HR Initiatives, a consult- ing practice focused on facilitation and tailored HR initiatives. Toronto- based, she has taught HR planning, held senior roles in strategy and poli- cy, managed a large decentralized HR function and directed a small busi- ness. She can be reached at gorslin@ pathcom.com. Karen Gorsline Strategic Capability contribute to the plan will do so beginning Jan. 1, 2017. e gov- ernment's goal is to have every employee in the province enrolled in either the ORPP or a compara- ble workplace plan by 2020. Business concerns However, the 2017 implementa- tion timeline is an ambitious one, said Karl Baldauf, vice-president of policy and government rela- tions at the Ontario Chamber of Commerce in Toronto. "When you take into consider- ation a limited amount of direct communication from the gov- ernment to employers in rela- tion to their obligations under the ORPP, when you take into account changes that are going to be made to payroll in advance of implementation starting, we believe the timeline is very ambi- tious," he said. "at lack of communications is leading to the ORPP quickly becoming a source of confusion for many employers... they're un- able to determine whether or not they will have to participate in the ORPP, which implementation wave would apply to them, wheth- er they will have to update their current compensation and retire- ment savings plans and, beyond all of that, there's no indication from the government when employers will receive this information." e ORPP has been an ongoing challenge and concern for many chamber members, he said. "We're going to continue to rec- ommend the government modify the implementation timeline. But regardless, as a chamber, we're going to continue to work with the government to ensure that if this is their desired plan, as much as possible, we'll make sure it can be implemented with limited impact." The new plan has also been a major concern for small and medium-sized businesses in the province, said Plamen Petkov, vice-president for Ontario at the Canadian Federation of Indepen- dent Business (CFIB) in Toronto. "e ORPP has been our mem- bers' top concern since it was first announced in 2014... e vast ma- jority of them will be impacted by the ORPP because, currently, they can't afford to offer a workplace pension plan." ere's nothing wrong with the objective — everyone wants to have a more comfortable retire- ment, said Petkov. "But the ORPP comes with a very high cost and, unfortu- nately, it will be mostly small and medium-sized business owners who will have to bear that cost," he said. "Really, what our members are mostly concerned about is when you operate a small business, you have a small budget. And when new business costs or payroll costs such as this are being intro- duced, you have to find the money from somewhere." Generally, employers have two options: Increase prices or find the money from payroll — which means reducing hours, reducing positions, freezing salaries or not giving wage increases, said Petkov. "(In) the latest survey that we have done on this, about 70 per cent of our members indicated that they will have no choice but to freeze or cut salaries to be able to cope with the additional costs," he said. "e people who the ORPP is meant to help are going to be the first ones that are going to ex- perience the short-term impact of this by either getting their hours reduced, getting their positions reduced or even losing their job because the employer is not able to cope with the financial impact." A cost-benefit analysis of the plan that came out in December predicted a negative effect on the economy over the first 20 years of its lifespan, said Baldauf. "While in the long-term this cost-benefit analysis suggests that the ORPP would have positive im- pacts on consumer spending and the GDP, there is a period over the immediate future where the plan would be taking money without any payout, and so that will have a negative impact," he said. "We want government to recog- nize that there's an obligation for them to help mitigate the negative consequences by introducing mea- sures that would offset the incom- ing costs of the new pension plan, offset that decline in consumer spending, offset the loss in GDP through target tax relief." e best solution? And though the ball is already rolling, some are still questioning whether the plan is the best option to address retirement savings gaps in the province. Universal expansion is far from the ideal move, according to Ian Lee, assistant professor at the Sprott School of Business at Car- leton University in Ottawa. "ere is no justification for a universal CPP reform, nor is there any justification for ORPP," he said. "We do not have a 'pension crisis,' we do not have a 'savings crisis' — there is a small minority of Canadians that do have a prob- lem. It is not a universal problem requiring a universal solution whereby we reform the entire CPP system." Almost 10 per cent (7.2 per cent) of retirees are below the poverty line, which represents one of the lowest percentages among Organisation for Economic Co- operation and Development (OECD) countries, he said. "en, when you look at the people who have not yet retired, there is agreement amongst the researchers that somewhere be- tween 15 and 20 per cent of Ca- nadians who have not yet retired are not pension-ready. In other words, over 80 per cent of Cana- dians are pension-ready. So the idea that there's large numbers of Canadians who face an imminent collapse into poverty is simply an urban legend," said Lee. And the widely held idea that the bottom quintile or the bottom 20 per cent of income earners will be in trouble when it's time to re- tire is largely untrue, he said. "eir income goes up on aver- age by over 20 per cent when they retire. at may sound astounding but the logic is very clear. People in the bottom quintile tend to be minimum wage (earners) when they are working," said Lee. "When they retire, they get old age pension which is non-con- tributory — they qualify because they're below the low-income cutoff (which is the poverty line). ey get GIS, which is the guaran- teed income supplement, and they get CPP. e three together bring them up on average in retirement by plus 20 per cent. "e problem, contra Premier Wynne, is not in the bottom quintile." e problem is overwhelmingly people in the middle- and upper- middle class, said Lee. "And when they drill down to say, 'Who are these people in the middle and the upper-middle?' they have a profile — they have characteristics. Number one, they don't have their own employer pension, which in that sense I do agree with Premier Wynne to a degree… but it goes beyond that because there are many others who don't have an employer pen- sion who are pension-ready." ey also have other character- istics that co-relate, said Lee. ey typically have no savings, they do not contribute to retirements savings plans and they don't have any savings outside of a pension plan. ey're not self-saving and they tend not to own real estate. So what happens to them when they retire? "ey'll drop from $100,000, $125,000 a year, they'll drop down to around $40,000. Now that's a precipitous decline, let's be clear — but that is not poverty. e poverty line in Canada is $22,700," said Lee. All this seems to suggest a broad-based solution such as the ORPP may not in fact be the best solution at all, he said. Some advocates are still call- ing for a different solution, said Petkov. "Ideally, what our members want is that the government halts implementation or at least delays implementation. Ninety per cent of our members are opposed to it and this is a very, very strong op- position... especially given that 98 per cent of all businesses in On- tario are small or medium-sized," he said. "ere is still time for the gov- ernment to put the brakes on this." Pension plan has many critics ORPP < pg. 1 Credit: Mark Blinch (Reuters) Prime Minister Justin Trudeau meets with Ontario Premier Kathleen Wynne in Toronto.

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