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All-star companies.

ALL-STAR COMPANIES

This is Manitoba BUSINESS Magazine's eighth listing of Top 100 companies in the province. Over the past seven years only 41 companies have consistently appeared on the list. Are there some similar corporate characteristics or consistent management and business strategies that these perennial favorites are following?

To try and answer these questions we identified a sample of seven of these 41 companies and interviewed their presidents. During our discussion with each, we explored their "success strategies" and corporate factors which they felt contributed to their company's success. The companies and executives interviewed were: Investors Group Inc. - Arthur Mauro, president and CEO; Gendis Inc. - Allan MacKenzie, president and COO; The Wawanesa Mutual Insurance Company - I.M. Montgomery, president and CEO;. Winpak Ltd. - J. Robert Lavery, president and CEO; E.H. Price Limited - Gerry Price, president and CEO; Fort Garry Industries Ltd. - Richard Spitzke, president; The Princess Group, Inc. - Robert Tallman, president.

Upon completion of all interviews, we looked for common corporate themes or characteristics. What we found is not going to revolutionize business in Manitoba, however we were somewhat surprised and a little disappointed with what we did and did not discover. Let's first look at some of the common elements among these successful companies.

One theme that is very apparent is the consistency of leadership and senior level management in all the companies we surveyed. In every company, the senior executive that we talked to had been either leading the company or in a senior management position for all of the 1980s. The average length of time in their current role was just under seven years and these executives had been with their current company for an average of 17 years.

Beyond this, we discovered that the balance of the senior management team at each of these companies was also very stable and of long tenure. While some companies had a few changes or newly created positions, most of the senior management team has been in place for the last decade or longer. The interviewees all identified, and there is evidence to support, consistency of leadership and management direction is important in developing a successful track record.

A footnote to this issue, and perhaps an indicator of the future success of these organizations, is the high degree of employee loyalty that each company indicated was apparent in its organization. Without exception, each company indicated that it has a high proportion of long-standing employees with 10, 20 or more years of service.

All of the companies interviewed were at or near the top of their industry in terms of competitive positioning. While some of the companies represent a variety of different businesses, each placed high within its industry sector. While all companies have undertaken some geographic expansion, none have ventured into completely new lines of business within the last several years. These findings are consistent with recent business observations stating that the more successful businesses find their market niche, focus on it and eventually dominate it.

As already mentioned, each of the seven companies has had geographic expansion and growth over the last several years. On average, these companies' sales performance increased by 167 per cent over the period 1984 to 1991, representing an average annual growth rate of 24 per cent. While we did not calculate the growth rates for the remainder of the 41 companies or others in the Top 100, it is evident that these successful companies experience year over year, double-digit sales growth which outstrips the rate of inflation.

Of equal interest is the growth in numbers of employees over the same period. This was less than half of the growth in sales. While some of this difference can be explained by normal inflationary increases, there is a net increase in the average sales per employee (productivity) over this period. While the average total employee growth was 63 per cent, the rate of growth in Manitoba-based employees was significantly less than the overall corporate growth. Indeed, two companies reported a net decrease in Manitoba employees over this period and one had no increase at all. Gendis reported a significant increase in Manitoba-based employees. The good news is that these companies are continuing their growth and success, albeit primarily outside Manitoba.

Most companies identified that a focus on people was fundamental to their success. This focus on people is reinforced in a variety of ways throughout the different companies. All have regular internal employee newsletters, all have employee anniversary recognition programs, most have rigorous training programs and several have instituted employee-driven, self-managing teams and problem-solving teams.

It's probably not surprising to find that all companies stated that a key to their success is ensuring they keep the customers needs and interests at the centre of their attention. As one CEO said, "We must get into the customers' heads and understand their needs." Another attributes their success to the ability to service the customers' needs throughout the entire life of the company. Still another will go to almost any length to ensure the customer is satisfied. At Winpak, each department treats each of the other departments as its customer. Al MacKenzie at Gendis says, "The customer has to be the focus - all else derives from this."

There were a number of other factors raised by each of the companies which they felt contributed to their success. All referred to the quality of product and service, but that high quality was becoming more and more expected and not necessarily a competitive advantage.

Several identified technology as a key to their success. Winpak consistently reinvests in the development of manufacturing technology and other companies rely on technology to provide them with consistent and timely information.

It is worth noting that there were a number of factors most management textbooks will tell you should be in place in successful companies and that we did not find to be the case. As an example, we did not find that all companies had a mission statement and long-term corporate goals or core values. As one of the presidents put it, "We got together to talk about a mission statement, but I thought we should just be doing it rather than saying it." While a formal documented mission statement did not exist at all companies, none of the presidents had difficulty in articulating the general mission or direction of their company. As a related item, not all companies had developed a long-term strategy or direction. While this did exist in a number of cases, there were several who run on an annual operating plan.

Given the recent business focus on total quality management and other quality-related initiatives, we explored whether there were specific quality programs or initiatives in place within the successful organizations. While a number of companies have started TQM-type initiatives, not all had embraced this issue through specific programs. However, all recognized the need for quality and felt that they were moving in the right direction on this issue.

When asked about success factors for the future, we received a variety of responses from CEOs. Several said future success would require a continuation of current business practices, but better and faster. A number identified the need to refine products and services, and all stated that technology will increase in importance.
COPYRIGHT 1991 Manitoba Business Ltd.
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:interview of Manitoba-based companies and executives
Author:Cooper, Richard
Publication:Manitoba Business
Date:Aug 1, 1991
Words:1209
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