Spring Convocation - Donald Lang - June 18, 2019

Well, good morning. A warm welcome to Chancellor Jack Cohen, President Dr. Chochmah, Ivy Dean Sharon Hodgson, former Acting Dean Mark Van der Bosch. Thank you for the intro and what appears to be a sea of supportive friends and family. And of course, the real star is here today: the 2019 Ivy School business graduates. It's quite humbling to receive this honorary degree and speak with you today. Well, it's been a few years. I vividly remember sitting in your chair when I graduated from Ivy like today. There was the requisite boring speaker, but it was an exciting day of transition. It would seem like an eternity in school. I was finally set to start my full-time job and go about changing my corner of the world. When I thought about what to focus on today, the topic that stood up for me the most was just that: change. So by giving you a brief tour through my business career, I hope to leave you with some ideas and concepts to help you navigate through change that will certainly be part of your professional lives. This is author Alan Dortmund popularized the saying 'change or die,' which sounds like something Cersei Lannister would say in Game of Thrones, but 'change or lose market share' just doesn't have the same ring to it. To be honest, from my years in business, I can attest that surviving business is very much about anticipating and effecting change. Charles Darwin discovered years ago that it wasn't necessarily the strongest or the fastest to survive, but those that could adapt to change. Throw your ears here at Ivy, I'm sure you pored over many case studies of businesses that incorrectly read the changing landscape and were left in the dust, and others that transformed and thrived. I know the education I received here has served me well. A study in the Journal of the American Medical Association followed 7,500 heart attack survivors who knew they needed to stop smoking, eat better, and get more exercise to prevent a subsequent attack, yet the research found that only 4% of participants improved their habits in all crucial areas. Humans resist change even when it's essential to survival. It wouldn't surprise me if the percentages were similar in business. If you walk away with anything today, it's this: you need to embrace change and be that 4%. When I graduated, I took a job as a financial analyst at Nabisco. It wasn't my dream job, but it was a start, and I was able to utilize the skills I gained here at Ivy. But I soon discovered that I liked the hands-on dimension of operations. Two years later, I took a person job at CCL Industries. It was at best a lateral move, but offered far more opportunities. As a result, I've now been there for 37 years. When I began, CCL only had a handful of Canadian factories, worth a few million dollars, so very small business. By the time I became CEO 15 years later, it had grown to 45 manufacturing locations and a market value of about 350. Today, we now have 170 worldwide manufacturing locations, a market cap over 11 billion dollars, and employ 21,000 people around the world. As Mark mentioned, we're part of the TSX 60, one of the 60 largest publicly traded companies in Canada. I don't tell this to brag, but to illustrate the change of scope that has happened just over the last 20 years of a company that has been in business for 67. Back to the beginning, where I first arrived at CCL, I started in operations, which I loved. Then a stint in sales, followed by a promotion to operations manager. When that went well, I was given a big opportunity to run a non-performing paint making operation. I initially saw this off promotion as an exciting first chance to have bottom-line responsibilities, but it didn't take long for me to wonder if the challenge was a big mistake for my young career. When you arrive at a business for the first time, you have a fresh set of eyes. It's invaluable. Trust what you see. Spend time on the factory floor with customers and suppliers to get a good sense of what is actually happening. A well-run business tends to have a clean, safe environment with engaged employees and happy customers. If not, there's invariably a lot more going on below the surface. This paint company had that. The promoted general manager had problems everywhere. After some analysis and interviews, it was clear that leadership was needed. So unfortunately, I had to let go the entire senior operating management team, with the exception of one older gentleman who I knew the business basics and had confidence in the staff on the factory floor. I promoted him to plant manager. The challenges persisted. It was so bad that one day we discovered an employee had thrown a chair into one of the vats of paint. I shut down the plant immediately and brought all 125 employees into the cafeteria. I started by saying that I believed everyone there was trying to make a living and do the best job they could. I then recommended that anybody who wasn't part of this group should just leave the building. Almost all the employees stood up and applauded. It was the turning point for me. The majority was now working toward a common goal. The malcontents were essentially isolated and morale improved. We worked to harness the ingenuity of the team to improve operations and share information freely. I believe that people who have the same information you have will more likely reach the same conclusion. The process can be scary, as people tend to hold information for power, but sharing requires trust. As we know, people are the most important component of any organization. As many others have said, the secret is putting the right people in the right positions and then get out of the way. It seems obvious but is often forgotten. Small businesses are kept small when owners don't trust others and try to do everything themselves. If you can find, motivate, train, and retain good people, people who are willing and capable of adapting to changing requirements, then you solve the biggest hurdle of turning around or advancing any business. In a sense, it's essential to keep innovating as well, adapt to new technologies, new market conditions. I believe in a philosophy that if you're coasting, you're probably going downhill. Okay, together we took the paint factory from the least profitable business at CCL to the most profitable operation. That transformation opened doors for me. I was given the reins to other facilities, eventually running our large division out of Chicago for five years before returning to Toronto to become the chief operating officer and then the chief executive officer in 2000. I would add that in the global economy we are in today, international experience is a must and a prerequisite in our business if you want to attain any type of senior operating management role. The opportunity to become CEO in 2000 was presented when the board fired my predecessor. The economy had tanked, somewhat precipitated by the burst of the technology bubble, and a lot of industries were hurting. Our company was not spared. At the time, banks no longer considered us strategic and suggested we look elsewhere. Six months into the job as CEO, I remember my wife asked me how my day was. I said 'great.' She looked at me in surprise. I said it was a rare day: nothing significantly happened, no major accounts were lost, no suppliers went under, and nobody gave me yet one more piece of advice on what I must do to improve the business. At that point, I realized I had to be more reactive rather than proactive. I had to take a deep breath and do what I thought was best to move forward with substantial changes. On a side note, I want to say that having belief in yourself is crucial. Once you get through trial by fire, you realize that you have the capability to do it again in the next crisis, and there will be others. There are hard calls to make. Do your homework, listen to key advisors, then trust in your ability to lead. Confidence is infectious, and if you have it, it will help your entire team to get on board with the direction despite the challenges at hand. I would also add that reputation will open doors throughout your life. Motivate those who work for you and for you. Your reputation isn't based on what you say; it's through your day-to-day actions, what you do. Treat everyone with respect, value their opinion even when you may disagree, make well-researched decisions, and conduct yourself in your business with integrity. Given the state of political leadership in this world, there has been a lot of discussion about ethics. When I was here in class, I vividly remember the professor Sam Martin stopping mid-lecture as he spoke passionately about how our careers would be irreparable if we ever use confidential information for our personal gain. Your reputation is everything. It speaks to your character. It's a cornerstone of trust, and both your business and your personal life will fall apart without it. With it, the possibilities are endless. Now back to 2000 when I became CEO. The challenge was to turn around a company. After those six months of study and analysis, we made some significant and bold changes. We sold off businesses that had less future potential and used the cash flow to pay down debt and get the banks off our back. We invested in those businesses that had the potential to grow into leadership positions. So at this time on a global basis, one of the businesses that was sold was the founding and largest business unit that had been part of CCL from the beginning. It was a very difficult decision, but the right one. Within the following two years of focusing on what we do best globally, the shareholders were happy, the banks were again supporting us. We divested seven or eight different packaging businesses that were presented by prior management as strategic but were clearly underperforming, to one focused business built around a core competency. That core competency was only 20% of the business when I arrived as CEO; today it is over 90% of our business. What we lost in width we made up in depth, and the market value grew along with it by a multiple of 38 times. We changed and we thrived. Now virtually all we do is make film, print on film from polymers, using currency around the world to adhesive labels and adhesive applications. In short, we focused on what we really do well globally. With 170 factories around the world, no other competitor is close to our scale and our margins. When competing globally, you have to benchmark against the best. To achieve this at CCL, we provided full financial and operational transparency to each general manager around the world so they can benchmark their operations against the best of CCL. We also encourage management and key operators to visit CCL facilities around the world to work collaboratively on projects. The world challenges never seem to diminish. With effort, experts predicting up to 40% of all jobs will be affected in the near future by artificial intelligence. It's a certainty. As I progressed through my career at CCL to now Executive Chairman of the Board, I look back at the scope of phenomenal change during my years and the many good people I was fortunate enough to work with. Some would say I was lucky, and some of that is always in play. But for the most part, as we know, we make our own luck. I believe the recipe for luck starts with assembling the best team and having supportive and understanding family that helps you. In my case, my incredible wife Karen, also a University of Western Ontario graduate, and her four children, including talented Erin and Robin who are here today, and my brother Stuart and his wife Kim. I want to thank you for your ongoing support and your love. Then to a rich mixture: a foundation mix in hard work, one constantly open for opportunity, a healthy dash of that clear strategy, and enough bravery to leap when necessary. The roasting temperature and the time vary across industries, but the recipe is the same. Most of you are just at the start of your careers. Today is your turn for an exciting transition as you step out to change your corners of the world. Trust in the education you received here at Ivy and put the ingredients in place to create your own luck. George Bernard Shaw said, 'Those who cannot change their minds cannot change anything.' In other words, don't get stuck in one way of thinking about the direction of your business or your career. Again, be that small 4% of humans who take advantage of all the change needed to thrive in a threatening environment. Embrace today with pride for what you have accomplished, and optimism for the future, a future that you have the awesome power to change and make the world a better place. Thank you and Godspeed.