The Long Road Ahead

There are two types of people in the world. Those who drain their gas tanks almost to empty before they refill, and those that keep their tanks topped up in case they run into an emergency.

Much discussion has occurred about how long the COVID-19 Coronavirus will last, and how we should prepare as companies or as households.  Although no one knows for certain, it would be wise to expect a long road ahead, with once reliable gas stations often closed along the way.

Fill up your tank, a couple of jerrycans, and fill them up at every opportunity you see. This is going to be a long road trip through the desert of despair, and you don’t want to run out of staying power before the trip is over.

At BGE, we are lucky to be in the air filtration business which is considered an essential product/service to maintain healthy indoor air environments in everything from hospitals to commercial buildings to pharmaceutical labs and oil sands plants. We have watched the erosion of consumer activity and demand across all industries in Q1 and, despite the grit shown by our customers, we expect the onslaught to continue. We have prepared for a Q2 (April, May, June) where the overall economy will be down -24% and we have extended our scenario models through to August 31st and December 31st, as we want to ensure we always have gas in the tank.

These timelines are very different than President Trump’s declaration that this will be over by Easter or April 30th.

What will be interesting is how consumers and industries come out of this. It is hard to imagine a declaration stating that “COVID is now over, please go back outside and resume your lives.” Rather, like restarting a manufacturing plant, the economy will likely return to full production in gradual phases. For that, we may want to draw on an augmented version of Maslow’s Hierarchy of Needs and apply it to industry sectors.  Starting at the bottom with the most basic economic needs and working our way up is an interesting view to how to rebuild or reopen the economy. Also of interest are the questions surrounding which industries or human activities simply do not return – a topic of many subsequent posts.

 

 

Governments will need to slow the spread of the virus before opening up parts of the economy. By the end of Q2 we should see a movement away from the mandatory lockdown measures to a slow economic reopening based on expanded capacity within the healthcare industry. This may be done by region, or more presumably by a phased approach based on necessity. This may take months, as recurrence of the virus will become the high-risk topic through the summer months.

Regardless, what we know to be true is that many businesses out there have spent the past two months rapidly digitizing every available part of their business model, and are now implementing creative partnerships, processes, technologies, forecasting tools, channels, pricing & terms, and supply chains. These are all overdue improvements to productivity out of necessity, but they also all suggest that when the economy does come back, employment may not return to its original form.

Government support programs, rent & mortgage holidays, utility & tax deferrals, credit & loan facilities are all critical jerrycans to be filled. Debt levels were at all time highs before this all started, and no one is calculating the collective impact of the programs that have been announced.

So, whether you are a business, a non-profit, a household, or an individual, it is important that you keep your tank filled, get your jerrycans before they run out, and prepare yourself for the long, long road ahead.

Calling All Leaders!!

Our system is broken, and we know it’s broken. Our public service – those bureaucracies, institutions, universities and healthcare systems – who once gave our country a massive advantage over others, are fast becoming the Achilles heel of our competitiveness.

We are not getting major projects approved. We are not reducing wait times for surgeries. We are not improving our education rankings. We are not helping the middle class. We are not improving workplace productivity. We are not attracting the smartest people to public service. And we are not building the next generation of public service leaders.

In fact, we are getting worse.

An intervention is needed. And I’m resurrecting this blog to start the conversation.

The root cause of the problem is that we have become complacent about our expectations of these institutions, our bureaucratic leaders are leading with antiquated management philosophies, and the good people that work in the public service are surrendering to a system that perpetuates and rewards mediocrity.

Most have given up on the topic, shake their heads and say that things will never change.

I disagree. It will change. Slowly. It may only change one ministry, institution or agency at a time, but it will change for three reasons:

  • The next generation of public service leaders – Gen Xs and Millennials – are far too altruistic, connected and impatient to settle for continued non-performance;
  • The next generation of public service employees – Millennials and Gen Zs – will not tolerate antediluvian leadership models, will not suffer in uninspiring work environments, and will not accept the eventual erosion of their aspirational goals and their human spirit; and
  • The next generation of the general public – the private sector and private citizens – can no longer afford the cost of government and will no longer sit quietly and politely when they see poor performance in exchange for their tax dollars.

Change requires leadership, and it is time for a new generation of leaders to be properly armed with the strategies and courage needed to make change in our public service.

I look forward to the discussion ahead.  I promise to be provocative, as it is too important of a topic to be left not discussed.

Let’s Talk Brand & Reputation

What are the first images that come to mind when people think of the word Edmonton? Are they images of festivals and events? Images of young entrepreneurs? Images of blue skies and river valleys? Images of Rogers Place and PCL cranes in the sky? Or are they images of a cold, isolated city? Images of an industrial town? Images of Gretzky crying while being traded? Images of big shopping malls?

Whatever images come to mind shape the Brand of our city.

What are the words that people use to describe Edmonton when you are not in the room? Are they words like young and energetic? Progressive and compassionate? Open and tolerant? A city of opportunity? Or are they words like tough and unsafe? Boring and uneventful? Dirty and slow? Unwalkable and unapproachable?

Whatever words are spoken form the Reputation of our city.

Many words and images have been used in the past to describe our city – words and images often left to others to contrive. And many have had negative associations because we never managed our brand, our reputation, our story with intention.

And we know now that if we don’t tell our story, someone else will … their own way.

So, we set out to change that. To take control of our brand and reputation. It started four years ago, under Mayor Stephen Mandel and has since been championed by Mayor Don Iveson. We needed to change the brand and reputation of Edmonton, and we needed to do it by telling our story … which is the summation of all our individual stories, past and present.

In fact, the Master Story goes back thousands of years, well before European settlers arrived. As the ice receded, this particular bend on this particular river is where various indigenous peoples gathered to trap, to trade, to learn, to heal and to celebrate. An isolated community, open to the elements, where people had to support one another in order to survive, to grow, to be entertained and to get ahead. It was a community with characteristics of being open, inventive, courageous and cooperative – the very brand characteristics that describe our city today.

Todd Babiak of Story Engine began doing the research into the Master Story. He was inundated with examples of how people came to our city, were welcomed here, took a risk and tried something new, only to find that they had the support of the entire community and that their journeys were filled with an unusual level of success. The Master Story was filled with anecdotes from Edmonton building the first Mosque in North America, to starting the first Food Bank when times were tough, to starting the first Fringe Festival in North America where theatre groups could test their productions before launching them across the globe. Stories of my alma matter, Procter & Gamble, using Edmonton as their test market for new products, to the PCL story, the Running Room story, the Booster Juice story, the Henry Marshall Tory story, the Cal Nichols story, the Karl Clark story and the Sandy MacTaggart story. Everyone he interviewed was filled with anecdotes that reinforced our Master Story and our brand promise that “If you have the courage to take an idea to reality, to make something, Edmonton is your city.”

And it’s a beautiful story. One that is unique to Edmonton. And one that we can sell around the world.

And we are all in the selling business. We need to constantly be communicating and positioning our city to attract the seven (7) drivers of economic wealth –investment, business, visitors, conferences & conventions, major events, talent/students and direct flights. These are the things that generate wealth, expand prosperity, provide jobs for our kids and improve our standard of living.

Each of the seven drivers has a different kind of target customer, each with different reasons for taking an interest in Edmonton.  From our same Master Story, we shape images and stories and value propositions into targeted campaigns to: (1) Create awareness about our city; (2) Allow them to experience our city; (3) Help them see the opportunity in our city; and hopefully (4) Encourage them to make a decision to invest in our city.

That’s the goal … whether it be an investor, an entrepreneur, a tourist, a meeting planner, a student, a professor, a family or an airline.

To shape those campaigns, we create a series of digital assets, stories, value propositions, presentations, wordmarks, brochures, trade show booths, promotions, advertisements, meeting agendas, introductions, blogs, tweets, Instagram photos, WeChats and Snapchats that are unique to each target audience and can also be used across different campaigns, and can be used by organizations, institutions and businesses in the region. That’s why you see the Edmonton Original campaign when you arrive at the Edmonton International Airport or the FIFA Women’s World Cup images in our international investor presentations or high-resolution photos of the ITU World Triathlon in the Stantec Annual Report. Unlike consumer product companies, we don’t have $100 million to build a brand, so we need to work as one and get more leverage for each marketing dollar spent.

And externally, the Finnish wood home manufacturer that we are trying to attract to set up North American operations in Edmonton becomes interested in our brand through various mediums. She gets familiar with our embracement of winter through our Explore Edmonton winter tourism campaign. She is interested in exploring Jasper because we’ve linked Beaver Hills Dark Skies with Jasper’s Dark Skies. She has an employee that graduated from the University of Alberta’s Faculty of Engineering, and loves Connor McDavid because she remembers Jari Kurri was once with the Oilers. Our images and stories all come together, self reinforcing, to build our brand and our reputation – consistently and with intention.

At EEDC, we have responsibility for telling the Edmonton story, globally. We do so with key partners like the City of Edmonton, our Regional counterparts, our Post-Secondary Institutions, Edmonton International Airport, Northlands, the Edmonton Chamber of Commerce Oilers Entertainment Group and others to attract those seven economic drivers. That’s why we spend $1.5 million per year of taxpayer dollars on brand and reputation assets, stories and campaigns, leveraged 1:1 with industry funds, and work to generate between a 7x and 10x return on every dollar spent.

Sometimes we use wordmarks with a little Maple Leaf (see image at top of page) to help foreign customers make the connection between Edmonton and Canada. As Canada is currently the #1 Nation Brand in the world and our Prime Minister is out aggressively marketing our country for foreign investment, we would be crazy not to connect ourselves closely with it.

I’m not a fan of city logos and taglines. They are typically uninspiring, overpriced and look like they are done by committee.  And, at the end of the day 1/3rd of the people will love it, 1/3rd will hate it and 1/3rd don’t care, so I question the undertaking.

The wordmark used in my presentation this week is the one I use when overseas, typically in Europe, where target businesses have a growing interest in investing in Canada. I realized the power of the city/nation connection a couple of years ago, and had our internal graphic designer do up something I could put on my slides. The cost was nothing, and if it looks like the MacLean’s Magazine logo – oops, I didn’t realize they had a trademark on our country’s Maple Leaf.

Top-tier cities in the world are all one-word brands – Tokyo, Sydney, Paris, Berlin, New York, London, etc. – while second-tier cities need the nation name beside it – Melbourne, Australia or Manchester, England or Helsinki, Finland. If you introduce a third word, you have lost your customer. So, instead of Edmonton, Alberta, Canada as we have talked about ourselves for years, I use one-word which is Edmonton and simply connect it with the Maple Leaf. It works well for our foreign investment customers.

Our job is to get Edmonton on people’s radar as Canada’s 5th largest city, Canada’s youngest, fastest growing city, and Canada’s best city for their investment opportunity. That’s what we are, and will continue to be, focused on. While I appreciate all the range of comments on the Maple Leaf wordmark, we know it works for our target customers, so we will continue to use it as part of our overall story.

Talk to the Customer

When sales were down and anxiety was rising, my ol’ boss George Goeders at Procter & Gamble used to say to me, “You can’t solve it by sitting in here, get out there and go talk to the customer.”

Words to remember. Thank you, George.

That is why this past week was so refreshing. During continued decline of the stock market and energy prices, our two Edmonton Liberal MPs, Randy Boissonnault and Honourable Amarjeet Sohi, were busy out talking with customers – the right thing to do.

Eight roundtables held at the Shaw Conference Centre plus three others exposed the ideas and concerns of business owners, union employees, entrepreneurs, youth, academia, local government and local families. The MPs came well prepared, the attendees came well prepared, and the dialogue was rich, focused and on point for today’s realities.

And these weren’t the “I’m from the government and I’m here to help” kinda consultations. These were well prepared, well facilitated, well organized engagement sessions where there was an openness to new ideas and an understanding that no one knows all the answers.

What was interesting was that although our MPs desperately want to help and roll out some magical program that solves everyone’s economic problems, there was a greater understanding that the real role of government is really to create the environment where entrepreneurship and investment can best flourish.

Keeping taxes low, eliminating unnecessary regulation, opening new markets, promoting the Canadian brand, reducing the size of government and hiring entrepreneurial thinking people into the public service all create that environment where people want to invest and take risks … things that consistently employ people and create wealth.

It is a powerful motivator when government leaders are promoters of economic growth and prosperity, and powerfully concerning when they sit behind closed doors alone trying to figure out how to squeeze more tax from the system.

Getting out and taking to customers always results in better solutions.

Thank you, Randy and Amarjeet for kicking off your leadership with the right approach.

The King is Dead; Long Live the Queen

The grumpiness is deafening. The astonishment is mind-numbing. And the continued entitlement is unbelievable. No different than the morning after Iveson was elected as Mayor, no different than when snowboards were first allowed on ski hills, and no different than when women were finally allowed in the spike bar at the Mayfair.

Gasp! This place is going to hell and these young folks don’t have a clue how to run this place.

Welcome to the new Alberta. Average age, 36.

The new Alberta has come off being the strongest economic region in North America for the past ten years and a lot of people have made a lot of money – which is a good thing. We’ve been the lowest tax jurisdiction in North America, with a royalty structure that has promoted investment and the development of our resources at an unprecedented rate.

But that same policy environment has created a hyper-inflated economy when oil prices are high and a deficit-debilitated budget when prices are low – which has been confirmed through two economic summits as a bad thing. So if citizens, business leaders and economists all want to have a more balanced approach to growth and development going forward, then looking at incremental changes to these taxation and royalty policies is certainly not incomprehensible.

It just really upsets those who are used to getting their way.

Enter Kevin O’Leary, with his made-for-reality-TV personality, shouting fears that Alberta will be dragged into the abyss, will be filled with unions, and will be brought to its knees because it voted in the NDP.

While his blue suit and sharp tongue work on network TV, he embarrassingly proves himself and other crony colleagues out of touch with the fact that our resource assets remain incredibly valuable, our carpenters, electricians, plumbers, nurses, boilermakers and other unions are not invading, and we have a long history of never, ever, being brought to our knees.

The change in government was not some freak event. Over 72% of Alberta voters expressed their desire for change, expressed who they are and expressed what matters most to them – things like good governance, sustainable growth, fiscal management, transparency, and engagement.

Alberta still represents the same abundance of opportunity. And like any good company, the shareholders have expressed their desire to make incremental changes along with a restructuring to the board, in hopes of creating more value. In short, they lost confidence in the King, and they elected the new Queen. The grumpy guys may not like it, but all the rhetoric in the world won’t change a thing. It’s time now to pull together, make the necessary changes, and continue to be the highest performing economic region in North America for the next 20 years.