An electronic newsletter for a quasi-public organization

Managing in the new economy

"You cannot compel enthusiasm and commitment from knowledge workers."

-- John Seely Brown, vice-president of Xerox

Making the same mistake twice

"The reason lightning doesn't strike twice in the same place is that the same place isn't there the second time."

-- Willie Tyler

Bad attitudes

"The problem is not so much that we build bad cars as that customers are so bad."

-- Charles Kettering, director of research at General Motors.

Conference clears the air

For the first time in roughly five years, operations managers, salespeople and senior management gathered in one place to trade ideas and insights.

The CORCAN National Meeting, held in Montreal from September 27-30, produced an environment that Acting CEO Andre Martel said would "lead to a lot more sharing of information and more communication so that we understand each other better." Don Despins, the operations manager at the Edmonton Institution, agrees. "It opened a lot of doors."

The meeting was facilitated by Groupe Innovation, which conducted a multimedia seminar over three days that encouraged participants to think about general business trends and to apply them to CORCAN's specific situation.

Moderator David Hurst, a business writer and former steel executive, compared the world of business to the world of the Kalahari Bushmen, who grew from being nomadic hunters to hierarchical herders. Whereas the hunters were flexible entrepreneurs, the herders "settled into rigid roles and stopped communicating." He then compared this to the tendency of businesses to ossify as they get bigger and older.

The growth that comes with success can trap an organization when the environment changes. Whereas hunters can move on, herders are connected to specific villages. Likewise, as the automakers became giant multinational corporations, it became harder for them to respond to high gas prices and foreign imports. As Hurst sees it, "this is the most dangerous time for a business," and with changes in technology over the past few years, all businesses now find themselves in similar straits.

The trick is to renew yourself. Hurst talked about the way fire can both destroy a forest and give it a chance to start over fresh. In fact, when humans tried to stop small fires from destroying parts of forest, they only made it more likely that big fires would consume the whole thing. Organziations occasionally have to engage in a little "creative destruction" to stay ahead.

However, many businesses instead engage in management fads, like total quality management and re-engineering, that as Hurst says, "lead to whirlpools as they try to rebuild existing structures." Returning to his creative destruction analogy, Hurst said that for these organizations, "the fires never stop."

Hurst broke this process down, from the beginning of a business to the crisis that threatens it, and on to the recovery that follows. The three-day seminar gave participants a chance to vote electronically, and one of these votes showed that 57% of participants felt that CORCAN was in a stage called "confusion."

Despite the connotations behind a word like "confusion," Hurst says that this is actually a period just after the crisis and just before the rebound. Hurst says that there are three possible responses. You can manage strategy, meaning that you "pursue the current logic, extend the recipe and reduce your costs." You can lead renewal, meaning that you "create a crisis and build communities inside your organization." Or you can create alliances, meaning that you "add value, protect your core, regain flexibility and learn from others."

"Confusion," then, is actually a time of great opportunity, one that awaits leadership and initiative.

Leadership was a persistent sub-theme of the conference, and many of the attendees said they were frustrated with what they saw as a lack of direction from Ottawa. But as Martel said in his closing notes, leadership comes from everybody, not just from Ottawa. "You have the talent and the knowledge." In an October 6 memo, he added that "we are seriously examining our management team's structure and function to improve our ability to make good business decisions."

The voting machines did show some surprising fissures. One question asked if there was any contradiction between CORCAN's correctional and commercial mandates. While 66% of the management team saw little or no problem, 44% of the salespeople felt otherwise. As Hurst interpreted the results, "the further you are from the field, the less contradiction you sense."

Much of the anxiety about leadership was often paired with concern about organizational communication. Martel noted that communication is essential to trust, and that trust is important to success. "When there are dozens of rumours flying over your head, you get to the point where you are paranoid," says Martel. "You protect your rear instead of looking forward." His memo later added, "We want to improve the ability of our employees to get the information they need to do their jobs."

Other issues that arose concerned policy development, the business line structure, and marketing CORCAN to the CSC.

Hurst ended his portion of the conference by breaking the participants up into groups, each of which pretended to be senior managers looking at particular problems facing CORCAN. A number of ideas arose out of the process. Some suggested creating a chief operating officer and a flatter organization chart, for example.

Martel was pleased with much of the input, saying that "candor and openness are essential to our continued success as an organization" and promising to "do what I can to ensure we act on our discussions." In fact, a follow-up strategic planning conference was planned for November 18-20, with professional facilitator Tony Nash at the helm. This sort of follow-up will be crucial to participants like Despins. "It's easy to get a lot of people talking in a room," he says. "But it is harder to make things happen out of that."

What is the secret of our success?

During the CORCAN National Conference, moderator David Hurst asked participants to vote on where they think our organizational strength lies. He took his model from The Discipline of Market Leaders, by Michael Treacy and Fred Wiersema, in which three possibilities are presented. Here's the results for CORCAN:

· 17% said that operational excellence is our strength;

· 5% voted for product leadership;

· 40% believed that we excel in customer intimacy; and

· 38% thought we had no particular strength.

The consequences of customer service

According to the Technical Assistance Research Program, the average person who has had a bad business experience will tell nine other people about it, while one in five will tell 20 people about it. On the other hand, a satisfied person will tell three others about the experience. Meanwhile, the Canadian Federation of Food Producers found that only 10% of people who have a problem with your business will report it to the manager, while 76% will simply never do business with you again.

Lubricating the exchange of ideas

The MIT School of Management studied how employees communicate ideas, and found that 80% of them prefer to exchange information face to face. The average employee will walk no more than 100 feet for an idea, would rather not use a telephone to do so and is not at all likely to use an elevator to share ideas. In other words, if you want employees to share insights, give them lots of opportunity for direct visual contact.

How to make money from sleepy cows

Everybody has to sleep somewhere. Even cows.

In 1996, an Alberta company called Champagne Edition turned to the Edmonton Institution for a machine that would manufacture cow mattresses. The company had been having trouble finding someone to build the machine, but Don Despins, the operations manager, says that "the CORCAN team sat down, took a look at it and gave it a shot."

The first machine worked so well that Champagne Edition asked for another, which the Edmonton Institution shipped in September. "It used to take him 15 to 20 minutes to make a bed," says Despins. "Now with the machine it takes him 45 seconds."

For Despins, the R&D behind this project shows the need for CORCAN to take some risks. Says Despins, "CORCAN has to be willing to take on new challenges to get into the private sector."

Made of recycled rubber crumb inside tough synthetic fabric, the mattresses are designed to reduce slipping, swollen hocks and injured front knees. The mattress has a strong, thick, liquid-repellent, protective top cover. It won't rot or promote bacterial growth. Because farmers spend less on bedding, labour and animal health care, they usually recoup the cost of the mattresses in the first year, especially since the mattresses increase the productivity of the cows.

Opportunities in National Defense for CORCAN products

At its grand opening in September, the HMCS Star was launched with a gala that included Minister of Defense Art Eggleton. And $110 thousand worth of brand new CORCAN furniture filled the brand new building. (The HMCS Star is actually a naval reserve armoury; these buildings are always named as though they were ships.)

Dan Miller, the sales representative serving much of southern Ontario, says that the reserves are a promising opportunity for CORCAN. "The reserves are where the action is. The number of reserves is going up as the number of bases is going down." Moreover, a lot of naval reserves are being renovated or built, so "if you can get 40 of these [$110-thousand] orders, it would amount to a lot of business."

Miller says he got the sale thanks to persistence. He attended the sod turning of the HMCS Star and made a half dozen follow-up calls to keep his foot in the door. "I doubt if any other furniture company did that." By keeping his ear to the ground, he knows who is looking for quotes and picks up leads.

They Don't Shoot Horses, Do They?

With the help of local animal rights activist Shari Borneman, inmates at Ferndale Institution, in British Columbia, are rescuing horses that have been abused or abandoned. "They bring the horses to Ferndale, we take care of them and return them," says Operations Manager Janet-Sue Hamilton.

The unusual program also equips the inmates with unusual work skills, including shoeing horses, trimming their hooves and taking care of their teeth. They also learn to train horses and to take care of blankets, saddles and bridles. "Not many people know these skills," says Hamilton. Already, one former inmate is working on a horse ranch, and at least one another is on his way to becoming a ferrier (a person who takes care of horses).

In addition to learning how to care for horses, offenders also learn how to keep accounting records and budget for expenses.

Furthermore, the program builds links between the inmates and the community. Inmates have contact with possible employers. And inmates help re-integrate the horses with families and have started to provide horse blankets, which local charities use when teaching mentally disadvantaged children to ride horses.

Hamilton says that there have been "dramatic changes in offenders' attitudes and self-esteem" as they learn "tolerance and compassion for sick helpless animals."

Since its introduction, the program has grown to include up to 17 horses. The next step may be to start breeding foals, which will offset some of the costs of the program. Ferndale may also buy horses which, in an ironic technological twist, could be used to replace machinery to haul wood and handle internal transportation needs. This low-tech use of horses would also be more environmentally sound.

Record year in the offing at Warkworth

The shops at the Warkworth Institution have produced $2.1 million of product at sales value after the first two quarters. Warkworth primarily makes computer work stations. According to Operations Manager Bill Raven, this pace means that the shops are "well on the way to an all-time record year." Chief of Industry Phillip Martin attributes the success to everybody, "right down to the inmates." It also helps, says Martin, that consumer confidence is rising and that the sales force is performing well.

CORCAN hits the Web

CORCAN has taken its first steps on to the World Wide Web. Our electronic home is <http://www.corcan.ca>. Bob Le Drew, who works in the corporate marketing office, says that the site is meant to "sell the idea of CORCAN to the outside world." Rather than sell products, per se, the site will be "selling" the whole mission of CORCAN, including the social aspects of that mission.

Le Drew worked with Ingenia, a Web design company, to produce the site. Particular highlights include a trivia quiz about CORCAN, as well as a gallery of Tony Fouhse's photographs from last year's annual report.

The site also includes the following:

· a catalogue, a summary of what we do,

· a map to the CORCAN facilities,

· information on our services,

· resources (such as our annual report),

· links to related Web sites,

· answers to frequently asked questions, and

· information on our alliances with the private sector.

The numbers

[For confidentiality reasons, this column on financial data is not reproduced in this file.]

(613) 799-6165