As the Russia-Ukraine war continues to hamper supply chains, Canada may be in a prime position to circumvent those disruptions.
Speaking from the G20 Summit last month, Canadian Prime Minister Justin Trudeau touted the country as a critical player in shifting supply chains, adding that the ongoing geopolitical conflicts make it imperative to find new channels of transport with a better focus on environmental issues.
Chief executives of Canada’s top companies agree — and say technology is key to shaping that change.
“Companies with the most successful supply chains are the ones challenging the old, slow, siloed, and sequential way of supply chain planning and instead embracing a new era of concurrency, where every function, every person, and every piece of data is continuously aligned in real-time,” said John Sicard of Kinaxis, a software company specializing in the industry. “That is how companies will gain the supply chain agility and resilience they need to not just survive but thrive in the face of whatever the future holds.”
Sicard is among the six chief executives who ranked No. 1 in their sector in Institutional Investor’s 2023 All-Canada Executive Team, based on a June survey of 210 money managers and 39 sell-side researchers. This year the participants nominated a total of 134 companies across several key sectors.
Keith Creel, chief executive of Canadian Pacific Railway, took the top spot in the capital good and industrials sector and has been overseeing the $31 billion acquisition of Kansas City Southern to create a single rail system extending from Canada through the U.S. and Mexico.
“The railway industry has an important role to play as we transition to a less carbon intensive economy,” said Creel. “From locomotives to rail cars to track infrastructure, CP continues to invest in new technology and data analytics to improve safety and reliability while enhancing the overall supply chain.”
For Intact Financial Corp. CEO Charles Brindamour, who came in at No. 3 in the financial institutions category, environmental issues are likewise at the forefront. He said natural disasters have risen significantly over the past 30 years and will only continue to increase in the next ten years.
“As a sector, we must move from defense to offense on climate,” Brindamour said. “With the challenges of reducing emissions and adapting to a changing environment come new opportunities to both help society and win in the marketplace.”
Charles Brindamour, Intact Financial Corp.
How has your sector evolved over the past year?
The sector is working through inflationary pressures and supply chain constraints, as well as changing weather patterns leading to an increased frequency of natural catastrophe losses. On inflation and supply chain, we are cautiously optimistic that this may have peaked in the third quarter. At Intact we’ve been anticipating and proactively managing cost pressures in claims for some time now. We have been focused on pricing for inflation but more importantly using our supply chain to improve customer service and reduce costs. All these factors are driving upward pressure on prices for consumers in the markets where we operate, in particular, in commercial segments. Our job is to do our utmost to help keep those costs in check for our customers and ensure we put options in front of them.
What is the biggest challenge facing your industry right now?
Intact exists to help people, businesses, and society prosper in good times and to be resilient in bad times. The biggest challenge for our industry for the next few decades is the increase in natural disasters because of climate change and the need to transition to net zero as a society. We’ve been on the front lines helping our customers deal with the impacts of climate change for more than a decade. Building on our work in climate adaptation, we are focused on a five-part climate strategy to help de-risk the transition towards a sustainable future. Our plan aims to capitalize on our products and services and the depth of relationships we have with our personal and commercial customers. While it will be hard for society to manage this transition and continue to prosper, we see a big role for our industry and a sizeable opportunity for our organization.
Where do you see your sector headed in the next five to 10 years?
Rapidly evolving customer expectations will drive change around both digital and in-person interactions. People want simplicity, transparency, and value for money at every step of the process. Technology is a major enabler. This rapid evolution is driving a massive increase in data while storage and processing are getting cheaper and democratized. To capitalize on this change, we have invested heavily in AI and digital experience to build an edge on our peers. Another by-product of this will be a big pool of opportunity around de-risking and supporting cyber defense.
What traits do you look for in your management team?
The most important thing at Intact is for leaders to lead by example on living our values — this matters more than results. Beyond values, we expect our leaders to be caring, open and honest, highly accountable and driving change. And our leaders form a winning team. One that sets the bar very high and relentlessly challenges the status quo. My team owns the outcome no matter the circumstances. A sign that this is a strong combination is that they trust each other and genuinely have fun doing what they do.
Are there any memorable anecdotes you could share from the past year?
In 2022, I had the opportunity to spend time with a good friend of mine, General Romeo Dallaire. A true Canadian hero and my role model when it comes to leadership. In watching him in action, I am reminded that leadership is not about the leader, it’s about the cause. Together, our team at Intact has built an organization with incredible spirit. One that aims to help society while winning in the marketplace. In watching General Dallaire, he reminds me that no obstacles are big enough and no mountains are high enough when the cause is just and right. That gets me out of bed every day.
Keith Creel, Canadian Pacific Railway
How has your sector evolved over the past year?
The pandemic years put a focus on the importance of the global supply chain and the essential services the North American transportation industry provides. They also highlighted the limitations of those networks. Canadian Pacific has an opportunity to be a part of the long-term solution through our proposed merger with Kansas City Southern, now under regulatory review by the Surface Transportation Board. If approved, the combination of these two railroads will create new capacity and open competitive markets for rail customers across North America. These new transportation options and the capacity that comes with them are examples of how the supply chain can become more resilient going forward. The potential is already being embraced by customers wanting to have an alternative source of truck-like service via railroad and new competition in transportation. We want to be part of the solution to a congested and fragile supply chain.
What is the biggest challenge facing your industry right now?
I believe that 2023 will be the year that we collectively apply what we learned during the pandemic and set a course for something better. I know my counterparts at railroads and trucking companies across North America are thinking as hard as I am about what that means, and about the many opportunities in front of us. We need resiliency and service reliability in our transportation networks. Resiliency also means offering customers options and letting their business decisions guide our investments.
Where do you see your sector headed in the next five to 10 years?
Integrating technology and sustainability into our business is critical to our industry’s growth and long-term success, from safety to diversity to environmental impact. Rail already is the most environmentally friendly surface transportation option and we’re getting better. At CP we are proud to be a sustainability leader in the rail industry and a company of action. We’re making significant progress in developing North America’s first freight locomotive powered by hydrogen. This pioneering pilot program shows what’s possible and is providing critical industry knowledge and experience. It has the potential to be transformational for our industry and the environment as a whole and is just one example of our focus on innovation and technology.
What traits do you look for in your management team?
CP is in a strong position today because of our people. The determination of our world-class railroaders enables us to withstand and overcome the many challenges we face day after day. I believe our leaders set the example. You don’t ask your people to do anything you are not willing to do yourself. And leaders do the right thing even if it’s not the comfortable thing to do. Fundamental in our leaders is a desire to treat people with respect and create a safe work environment.
Are there any memorable anecdotes you could share from the past year?
As we prepare for our proposed combination with the KCS, pending regulatory approval, I’ve had the privilege of connecting with railroaders across the CP and KCS networks. It’s been terrific to see the excitement for the future coming from employees across these organizations in Canada, the United States and Mexico. The enthusiasm is over the top when we talk about bringing the two railroads together. It’s about being a part of history and being part of something that will create value for our families, our communities and these three nations. That excitement from employees is inspiring and I am proud to be on this journey with these outstanding railroaders.
John Sicard, Kinaxis
How has your sector evolved over the past year?
The last several years have been challenging ones for the supply chain sector. 2022 was no exception. Every industry, every region, and every level of the supply chain has been tested by the near-constant stream of disruptions we’ve been facing. Every single one of us in the supply chain field has been forced to reconsider historical beliefs and recognize that the supply chain techniques that carried us through the past three decades won’t help us survive the next three years. That’s ushered in a supply chain renaissance as old beliefs about supply chains being only an operational function focused on cost control give way to the understanding that supply chains play a strategic role within the business. Supply chains are now at the center of strategic priorities like cash preservation, risk management, sustainability, customer growth, corporate efficiency, and more.
What is the biggest challenge facing your industry right now?
While the longtail effects of Covid-19 are finally starting to subside, the next year threatens a new yet disturbingly familiar risk for supply chain leaders — the emergence of financial disruptions. Inflation rates are skyrocketing. Currency values are plummeting. Discretionary spending is slowing. Consumer and business confidence is struggling. We are once again on the precipice of a global recession that could have a major and lasting impact on businesses and their supply chains. This time around however the risk is even greater as supply chains are already in a precarious position. Availability of supply continues to dimmish, severely constrained by disruptions like Covid-19, the Suez Canal blockage, and the Russian-Ukraine conflict. Many companies have depleted their safety stock to stay afloat. Bottlenecks continue to persist throughout freight and transport networks globally. All that adds up to an incredibly supply-constrained market — meaning a much greater chance of stockouts and lost revenue. While that may seem daunting, there’s also a powerful opportunity nested in these times of financial disruption to join the supply chain renaissance and focus on agility as a core competence.
Where do you see your sector headed in the next five to 10 years?
In the next 5 to 10 years, I expect to continue to see a rapid increase in overall supply chain maturity across industries as companies move away from siloed functionality to a concurrent multi-enterprise approach — a necessity to protect against future disruptions. Collaboration with suppliers and customers will become more prevalent and more important as businesses look to seamlessly connect planning with execution. Organizations will continue to pursue autonomous supply chains, not just on the operational side but within supply chain planning as well. That won’t however lead to diminishing roles for the people who manage our global supply chains. Rather, the opposite. Supply chain professionals will become more empowered and more valuable, supported in their roles by automation and machine learning to augment their abilities and free up their time to focus on higher value, more strategic activities. Environment, social and governance initiatives will become more firmly ingrained within the day-to-day decision-making process with supply chains taking a leading role. While continued disruption at a global scale is a given, the future remains bright for the supply chain sector and those working within it.
What traits do you look for in your management team?
I’m lucky to work with some of the best in our industry. The traits I look for are the ones I can see in my team today. As a team, we are collaborative, we hold each other accountable, and work hard; these behaviors are a reflection of our Kinaxis values. We have a phrase we use at Kinaxis, that is also a common belief we hold — “People matter here.” This belief is core to everything we do, both in what we do and how we do it. By keeping [this phrase] at our core, our leadership team continues to inspire trust throughout Kinaxis which shapes and defines our shared culture as we continue to grow. How we lead the organization is just as valuable for building trust as how we work together as a cohesive team.
Are there any memorable anecdotes you could share from the past year?
We’ve experienced exciting growth this year and I never cease to be amazed at the talent we continue to recruit and the ability of our people — old and new — to galvanize around the Kinaxis purpose. With two years of the pandemic behind us, in 2022 we really embraced the opportunity to reconnect in person again — many for the very first time. For me personally, two of the most exciting activities were the grand opening of our beautiful new office locations in Kanata, Canada and in Chennai, India. We’re proud of our investment in these spaces and we’ve already witnessed the positive energy that’s been created between our employees as a result of having these world-class collaborative spaces available to us.
