Martin Cleaver, masterfully.

According to the Toronto Star, M&A has reached a new high. Canada is being sold off to foreign investment, and no-one cares. I argue that Canada’s corporate culture of subservience can be transformed using Social Media tools, and that Canada’s leaders have a responsibility to their country to empower staff.

The Toronto Star ran an article this morning:

Canadian merger and acquisition activity (M&A) has soared by 64 per cent in the first nine months of this year. In the third quarter alone, according to data compiled by Toronto investment firm Crosbie & Co. released last week, M&A deals worth $90.3 billion were consummated, shattering the previous record set six years ago at the top of the dot-com and telecom booms.

This has been a blockbuster year for the foreign takeover of iconic Canadian firms.

As Sharon Geraghty, a Toronto M&A lawyer with Torys LLP, told the Star last week, “If someone makes a [takeover] proposal to the company at an attractive premium, it’s very difficult for a board to just sit on that proposal.” That’s the mentality of board directors in Canada, increasingly under pressure from institutional investors and corporate governance activists to extract the highest price for their company on behalf of shareholders, in the process subordinating all other considerations.

The article continues about how the United States, China, India, Japan and Russia readily defend against hostile takeovers, but somehow Canada just lies there and takes it. Then out of the blue, the article gives the following observation:

It is to say that Canada, contrary to your local Chamber of Commerce’s claptrap about unsupportable tax burdens and stifling bureaucracy, is viewed by outsiders as a great place to do business.

This last statement particularly intrigues me as I’ve been very much under the impression that Canada’s over-regulation would make it an unattractive place to do business.

Its Cultural

So if its not taxation and incentives, what else is driving limiting behaviours? It strikes me that this is a cultural issue. Do Canada’s firms not know how to compete? Are they so entrained from thought-patterns driven by hierarchical command, and pre-set by staid business strategies and business processes, that the voices of workers in this country have little effect?

Being British, I’ve learnt to not joke too much about Canada being a colony: it offends and of course its not true. Yet, with all these sell-outs, how long before Canada will be an economic colony to all the other nations in the world?

Are the leaders in this country at dire risk of selling out to the detriment of younger Canadian generations? Have the very government regulations intended to ensure Canadian company survival bred an attitude of subservience in the workforce? Has a lack of competition within Canadian firms and this “evaluation by numbers” festered too quick an attitude to jump to sell?

Canada’s aging workforce is typical of many World War II countries:

Source: http://www.isuma.net/v02n02/legare/legare_e.shtml

Statistics Canada outlines the shifting demographics, and that the workforce is shrinking:

(note: this graph is 5 years old, so read each bar +5years, with the widest bulk at 45-54)

Leaders of Canadian firms, typically in the 50-65 age range, will likely retire within the next 10 years. What will be their legacy? An independent Canada, or one where most companies are foreign owned?

Canada needs to reinvigorate its cultural competitiveness. Hierarchies and centrally-driven strategies don’t serve this country. Canada must use every means to get productivity from existing workers and to surface resilient strategies from its workforce.

Its in this realm that Social Media, typified by Blogs and Wikis, can help. Such collaborative tools enable and promote conversation between staff, helping everyone see beyond current processes and seeding an ecosystem of emergence that generates its own internal efficiency. By shifting from central planning to dispersed planning responsibility, as a core competency, will drive firm competitiveness, aid renewal to combat the drain of retirement and help the firm to think as one and holistically within the ever-more-quickly morphing external environment

Todays corporate leaders can serve both their companies and this country by embracing the tools offering a social dial tone. Technology is just one step, it has to be balanced by Governance, Strategy, People, Process and Measurement.

We have to start soon.

Technorati : Canadian Competitiveness, Culture, Innovation, M&A, Social Media

This entry was posted on Sunday, November 26th, 2006 at 3:34 pm and is filed under Innovation, Canadian Competitiveness, Government Deregulation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.