THREE PUBLISHED ARTICLES by Fred Desjardins
ATLANTIC BUSINESS MAGAZINE: JANUARY/FEBRUARY 2008
ALBERTA BUST SENDS WORKERS
RUNNING FOR HOME
by Fred Desjardins
It's been 150 years since the clarion call to seek riches and adventure in the West spilled forth from the pen of New York Times Editor, Horace Greely. And to a large extent that advice rang true as the West was an untapped reservoir of potential riches and opportunity. For generations this dictum has been a guide for Atlantic Canadians seeking a better life.
However, it appears that the winds of change are threatening the western oil boom. Economic projections are showing that the boom is about to bust, perhaps as soon as next year. And that's good news for labour-starved Atlantic Canada. According to Statscan, for the period July 1, 2006 through June 30, 2007, Newfoundland and Labrador lost 3,786 workers to western migration while Nova Scotia recorded a loss of 2,401. New Brunswick showed a net deficit of 1,144 workers while P.E.I. lost 266.
The buzz for the past five years has been that only a fool would remain in Atlantic Canada if your goal is to enrich both yourself and your family. Letters to home abound with unrelenting tales of streets paved with gold. But letters to Mom and reality seldom find a common ground and so it is with those who have foresaken their roots to seek glory in the economic Valhalla of Alberta.
All signs point to the fact that the great fiscal honeymoon is coming to an end. On the surface, thirty dollar an hour paycheques still boggle the mind but "junior" never seems to mention that the cost of a chocolate bar is three bucks. Even for the math-challenged there is something very wrong with this picture. And the latest fiscal projections paint an even grimmer scene.
A November report from CBC News noted that: “Wages for non-union workers in Canada are expected to climb by an average of 3.9 percent in 2008, with the highest raises inn labour-starved, oil-driven Alberta. In terms of industry, oil and gas workers are expected to receive the highest wage hike, 5.7 percent, next year.
The rosy numbers come amid a gloomy forecast for the Alberta oilpatch. Two energy service groups predicted Tuesday a dramatic drop in oilfield production in 2008.
The Canadian Association of Oilwell Drilling Contractors said drilling activity is expected to fall, with an average of only 34 per cent of rigs in use, its lowest level since 1992.
Blaming weak natural gas prices, high operating costs and a strong Canadian dollar, the group also said uncertainty over Alberta's royalty review has slowed the normally busy winter drillingseason to 445 active rigs out of a fleet of 890.
The Conference Board predicts an even tighter labour market in Alberta, with fewer people moving there in the face of high costs of living and more attractive opportunities in neighbouring provinces."
The bottom line is that the Alberta dream is folding like a house of cards and those who choose to stick it out will soon discover that their paycheques can no longer compete with staggering inflation. Coupled with proactive recruiting initiatives such as the New Brunswick government's production of the magazine "Come Home to a Career in Atlantic Canada," it appears that a winning combination is on the near horizon. The 40-page glossy which is distributed in Calgary, Edmonton, Fort McMurray and Grand Prairie describes an eastern economic boom and cites lower living costs for everything from soup to nuts.
"We've lost way too many people and we need to get them back," said Business New Brunswick Minister Greg Byrne, who leads a province-wide campaign to repatriate skilled workers.
If Horace Greely were alive today, his headlines would undoubtedly be an exhortation for the westward exodus to reverse directions: Go home, Atlantic Canadians, go home.
-Fred Desjardins
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ATLANTIC BUSINESS MAGAZINE: MAY/JUNE 2008
EXECUTECH
by Fred Desjardins
Two men sit in a restaurant amid a frenetic lunch time crowd. One man is calmly pecking away on his PDA while his harried friend, greatly disturbed by having to wait for his meal, irritably asks him if he’s playing a game. The laid-back PDA user tells him that he’s just fine-tuning some corporate work from the morning. Sound familiar? That’s because it’s the thrust of a ubiquitous TV ad promoting the benefits of a technological surge that’s putting more power and freedom into the hands of the worker.
Countless scientific studies show that the principal complaint today is that the demands of work have left many of us suffering from red-line stress levels and chronic sleep deprivation. And so the message of the ad strikes at the heart of this universal malaise: Embracing the new technology is the means to tipping the balance back towards quality of life. But until recently, the thrust of managerial pushback has been that information overload has slowed decision-making and impeded business efforts.
The question becomes what is going to turn the CEO’s frown upside down? According to IT gurus, the answer is at our fingertips. It has been almost 600 years since the invention of the Gutenberg press changed the world from illiterate to literate virtually overnight. The same can be said of the sudden appearance and dominance of the internet. In business terms, the computer revolution has forced the CEO into becoming the mobile nerve centre of corporate operations, a task not for the faint of heart.
However, redemption is here according to Tim Austin, VP of the technology research firm, Gartner Inc. Austin's message is that the latest IT advancements are designed to “untie the knot” created by the tech tsunami. “Investment in a high performance workplace can increase competitiveness, add value, and make the most of their largest asset, employees,” he says. “High-performance strategies raise the impact of skilled people.”
Austin cites the example of Zurich International Airport which has 1,300 partners and about 20,000 employees who must manage hundreds of flights and thousands of passengers each day. If any link in the airport system breaks down, the entire enterprise can fall behind. But to the rescue comes the powerful software program known as “Zeus,” which monitors every detail from flight data to baggage handling. As Josef Felder, CEO of “Unique,” the company that runs the airport says, “I love the system because beside the usual facts and figures, it also shows a lot of diagrams. Within two or three minutes I have a full picture of what is happening at the airport.”
And it's this sort of macro-managed outsourcing that is dispersing responsibilty throughout the ranks. Improved IT allows companies to empower employees to use their knowledge and experience to act on a situation. As Felder says, “...this is true for dealing with an airplane stuck at a boarding gate, a request by bank customers for a clear picture of mortgage offerings or a building manager who wants to reduce heating, cooling and parking costs.”
The benefits don't stop there. A surgeon fighting to save a life is no longer alone. Now he or she has instant access to the best medical minds through video-conferencing. Financial services CEOs can give agents access to head office databases through wireless laptops and PDAs to quickly analyse customer portfolios. And companies are reaping massive savings by encouraging customers to conduct their transactions themselves on websites instead of waiting in endless line-ups to deal with customer service reps.
Indeed, the self-service movement has been a tremendous windfall to business. The development of ATMs not only saves the banking community billions but it allows them to charge fees for such a service. Need gas? Pump it yourself or take the bus. Gas stations operate on a three percent margin. That means three cents on every dollar spent. A business can't survive with those numbers. The same goes for parking. No longer do we deal with parking booth attendants who spend their working day reading War and Peace.
Doug Cooper, Country Manager of Intel Canada, is concerned that Canadian businesses don't take enough advantage of the business opportunities that the new technology offers: “IT investment in Canada is only 40% of the investment of American companies,” he says. The result, according to him, is that individual annual Canadian income is $12,000 less than a U.S. counterpart. His point is that Canadian executives fail to see how much more responsive the Internet is to business opportunities. He believes that Canadians are less inclined to share and trade information that would allow them to “share the load,” which would reduce the amount of time and work we waste trying to create everything from scratch instead of building upon research that has already been tried and tested.
National proclivities aside, one of the more fascinating aspects of the Web is its direct interactive power with the consumer. For example, the Korean manufacturer, “Threadless,” uses its website to petition consumers to offer suggestions about what it should put on its T-shirts. An estimated 700,000 people contribute daily. The company then asks the people to vote on their favourite concepts. The winning designs are then printed and sold. The genius of this corporate strategy is that advertising overhead is virtually eliminated and it removes the guess work from what they believe the consumer will buy.
On the other hand, economic blueprints from a radically different society cannot be easily transposed onto our own system. For example, there is a mitigating factor in Western nations that must be taken into account. And that is the “Green Revolution.”
Highlighted by Al Gore's Nobel Prize, North American industry is under tremendous pressure to be “environmentally friendly.” Shooting for profit is much more difficult under such demanding conditions. Bob Tarzey of the research and analysis group “Quocirca” states that trying to reduce data-centre power usage is no longer enough to meet the growing “Green” demands. Rather, he urges companies to relocate near “clean” power sources like wind farms in low population centres. The “Quocirca” argument is that such relocation would benefit business for two reasons: Lower land prices and typically lower rural wages for employees.
Whether that's a viable strategy remains to be seen but business is attempting to address major societal factors at present. Print management has become the norm and consumers must go to the web to view detailed billing, thus dramatically reducing paper usage. In addition, in the wake of 9/11, companies no longer house IT infrastructure, power sources, and employees in the same building in an effort to provide greater security from threats of terrorism and natural disasters.
Perhaps the most stunning example of the success of the new and improved IT advances is Customer Relationship Management technology (CRM). Companies can now synch an employee's PDA with the firm's telephony system. This means that by the second ring from an existing customer the agent has every detail about the client's needs, wants, and preferences. Consumer retention is the cornerstone of every business and nothing builds loyalty more than the personalized attention to detail that can only come from an executive who is completely plugged in.
-Fred Desjardins
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ATLANTIC BUSINESS MAGAZINE: JANUARY/FEBRUARY 2008
Game Over for Commonwealth Bid
by Fred Desjardins
In the aftermath of the March 2007 decision by the Province of Nova Scotia and Halifax Regional Council to abruptly pull the plug on Halifax’s bid to host the Commonwealth Games in 2014, there continue to be more questions than answers about the move.
In December of 2005, Halifax won the right to be Canada’s candidate city for the 2014 Games. “Bringing the Games to Halifax will mean more than just 10 days of spectacular sport in 2014,” said Scott Logan, Halifax 2014 CEO. “It means improved infrastructure, capacity and experience to become a world-class training centre for summer sports in Canada.”
It’s no secret that Halifax desperately wants to establish itself as a “big” city. There is constant pressure to create a CFL franchise here but the league requires a stadium with a minimum capacity of 25,000 and the city doesn’t have one. Winning the right to hold the 2014 Games would mean that such a stadium would be built.
The “up” side didn’t end there. Winning the 2014 bid would also have meant creating a new coliseum to replace the 10,000 seat Halifax Metro Centre. The city has been home to AHL hockey teams but the NHL has been a pipe dream due to seating capacity demands. A much larger venue would also entice “hot” entertainment acts to come to Halifax. Finally, it had been projected by planners for Halifax 2014 that a massive apartment complex would be created that would further increase the municipality’s allure to workers thinking about moving to the area.
The potential benefits weren’t restricted to Halifax or even Nova Scotia. A feasibility study by Canmac Economics Ltd. projected that not only would the immediate region experience a massive economic boom before, during and after the event but that there would be major spillover for all of Atlantic Canada in terms of a generally more vibrant economy, increased tourism to all four provinces and the benefits of a world-class sporting centre.
So what happened? The Province and the City said that the Games’ price-tag of $1.7 billion was too rich for them to manage. But Logan stressed that his group was told to cap expenditures at under $1.2 billion and they had managed to do that. Nevertheless, one day after meeting those budget demands, the municipal and provincial government partners walked away. Halifax Regional Municipality Mayor Peter Kelly told reporters that it was a difficult decision but a necessary one in order to protect the financial interests of his taxpayers. A consultant’s report had indicated that 92 per cent of the cost of the Games would have to be provided by taxpayers, a significantly higher level than was originally projected.
Still, municipal councilor and mayoral contender Sheila Fougere insists that the lost infrastructure improvements will have dire consequences, “For the provincial and federal governments, this would have generated GST and PST, and at the municipal level we would have seen property tax benefits. There are likely business opportunities that have been lost as a result of this.”
One that was immediately lost was the chance to capitalize on an unusually high level of corporate support and enthusiasm for what was primarily a public sector initiative. From the financial pledges of major industry sponsors to the advocacy efforts of the Bring on the Games committee (a third party group of local businesses), the business community was visibly onside with the idea of hosting the Commonwealth Games. Apparently, it wasn’t enough.
A November 21, 2007 article by Michael Lightstone in The Chronicle Herald quotes a bid society report as saying that public support for the Games was noticeably weak. That reported lack of general enthusiasm, combined with an overly tight time frame and increasingly cold fiscal feet, was enough to knock Halifax out of the Games.
One thing is certain, even nine months on, the proverbial bright side of this controversial issue is definitely muted.
– Fred Desjardins
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