The Conference Board of Canada Performance and Potential The Changing Face of Leadership Charles A. Barrett Vice-President, The Conference Board of Canada

The Conference Board of CanadaThe Conference Board of Canada

Performance and Potential The Changing Face of Leadership

Charles A. BarrettVice-President, The Conference Board of Canada

September 18, 2001


The Conference Board of Canada


5th Report


ECONOMICSOCIALEconomic

& Social Systemsfit together

The Conference Board Believes That….

. . . our social and economic systems are synergistic


The Conference Board Said That . . .

“By any measure of socio-economic prosperity—economic wealth, material possessions, natural

resources, health, education, or strong standing in the global marketplace—Canadians are among the richest,

most comfortable people in the world.”

Performance & Potential 1996


The Conference Board Also Believes That

We can not sustain what we now have unless we change, and that actions by leaders can

affect our prospects—“this privileged position is not guaranteed”



A Society’s Goal:A High andSustainable

Quality of Life

Health & society

EnvironmentEducation

Innovation

EconomyLabour markets

these are the fundamental underpinnings


Benchmarking Shows Us the “Possible”

Six of the Best


• some where we do very well, some poor so we can learn from others

• this is not just for countries; it applies equally to organizations

Benchmarking Indicators Shows Us What is Possible


Performance & Potential 2000The Top 40 Record

On the Top 40 indicators compared to 6 of the best, we are a . . .

Top performer on 10Average performer on 14

Poor performer on 16


Canada’s Performance—The Top 40 Record

Socio-Econ. No. of Current The Overall TopCategories Ind’trs Performance Performer

Source: The Conference Board of Canada

Economy 6 Average U.S.

Labour Markets 4 Top Norway

Innovation 6 Poor Sweden

Environment 4 Poor Sweden

Education/skills 8 Average U.S.

Health/society 12 Average Japan


Canada—The Top 40 Record by Category

Socio-Economic Top Average PoorCategories Performer Performer Performer

Source: The Conference Board of Canada

Economic 2 1 3Labour 2 2 0Innovation 1 0 5Environment 0 2 2Education/skills 3 1 4Health/society 2 8 2

Total Indicators 10 14 16


How is Canada Doing?

Sample benchmark indicators of labour, education/skills and

innovation


0123456789

Canada U.S. Germany Japan Australia Sweden Norway

Standardized Unemployment Rate, 2000Q1

(per cent of labour force)

Source: OECD Internet release.


0

10

20

30

40

50

60

Canada U.S. Germany Japan Australia Sweden Norway(1997)

Per Cent of the Population Attaining Post-Secondary Education, 1998

Source: Education at a Glance: OECD Indicators, 2000.


0

1

2

3

4

5

6

Canada U.S. Germany Australia Sweden Norway(1997)

Unemployment Rates of University-Educated 25–to–29 Year-Olds in 1998

Source: Education at a Glance: OECD Indicators, 2000.


0

1

2

3

4

5

Canada(1998)

U.S. (1998)

Germany(1998)

Japan(1997)

Australia(1996)

Sweden(1997)

Norway(1997)

Total Expenditures on R&Das a Percentage of GDP

Source: OECD, Main Science and Technology Indicators.


0

2

4

6

8

10

Canada(1995)

U.S. (1993)

Germany(1997)

Japan(1997)

Australia(1996)

Sweden(1997)

Norway(1997)

Researchers or University Graduates Performing R&D per 1,000 Labour Force

Source: OECD, Main Science and Technology Indicators, 1999: 2.


Boosting Your Performance & Potential is About Leadership

Leaders can choose to make a positive difference in whether organizations prosper

—they carry much of the burden.


FIVE Areas for

Improvement

Calling Leaders to Action


Education and developing a learning culture must be a higher priority

1



CTA 1—Building Learning Culture Firms must boost spending on training Ensure every youth graduates from H.S. Raise math and science skills All schools must have access to the Net Improve apprenticeship programs Enhance business to work partnerships


Focus attention on Canada’s foreign investment performance

2



Be more innovative3



CTA 3—Boosting Innovation

Tax policy must reward innovation Firms must boost R&D spending Companies must better assess competition Better processes needed to assess projects Education must boost innovation skills


Social policy must be sustainable4



Serious public debate about sustainability of the health care system

5



Canada’s weakest driver . . .

The need to boost our innovation capacity is challenging old ways. Organizations must be able to get additional economic value

from knowledge if they are to prosper.


Innovation is about . . .

. . . more than R&D, computers and AMTs. It’s also about leadership, management,

incentives and a will to change.


Innovation is About Building a Learning Organization by

promoting idea generation supporting the “idea to market” process having values around innovation & people building skills & flexibility among workers organizing work as the work demands


Key findings from CBoC Research Strong innovators perform better Most large Canadian firms innovate to some

extent But only 2/3 innovate in all three areas

(products, processes, organization) 10-12% of revenue from new products Not good enough


0.0

0.2

0.4

0.6

0.8

1.0

1.2

Canada--Quebec**

Italy** Canada--Ontario**

Korea** U.S.--California

Australia France Japan** Mexico UnitedKingdom

Sweden Germany

Price of $1 of R&D for Small Companies*

Source: Jacek Warda, Rating R&D Tax Incentives, (Ottawa: CBoC, 1999).

* “After-tax cost” is the net cost of spending $1 more on R&D-related activities.The lower thevalue of after-tax cost, the better is the ranking of the jurisdiction in the provision of R&D benefits.

** These jurisdictions have special R&D tax treatment for small companies.


0.00.51.01.52.02.53.03.54.04.5

Strong innovators

Weak innovators

Strong Innovators OutperformWeak Innovators

Source: The Conference Board of Canada.

Profitability

Canadian market share

Global market share

Employment

Sales


0

20

40

60

80

100

Strong innovators

Weak innovators

Strong Innovators Use More Tools for Idea Generation


Use of competitor info

Business environment scanning

Idea generation

Use of customer info

R&D


0

20

40

60

80

100

Strong innovators

Weak innovators

Strong Innovators Use More Tools for Building Innovation Capacity


Partnerships & alliances

Organization & structure

Recruitment & assignment

T&D

Adoption of outside tech


0

20

40

60

80

100

Strong innovators

Weak innovators

Strong innovators Have Stronger Project Management and Decision-making Capabilities


Delegation of decision making

Use of market analysis information

Project selection & evaluation tools

Cost-benefit analysis

Involvement of all depts. From the beginning


0

20

40

60

80

100

Strong innovators

Weak innovators

Strong Innovators Are Better at Creating an Environment that Supports Innovation


Vision development

Change promoting

Innovation

Idea friendliness

Rewards & promo policies


Canada Compared to 9 Others

Rank 1981 Rank 1997

R&D intensity 7 9 Industry-funded R&D 8 8 Government outlays for R&D 6 10 Researchers in R&D 6 8 National patent applications 6 8 External patent applications 8 8 Tech’gy bal’nc of payments 6 4



Building a learning culture is necessary to ensure that people can change fast enough. Acquiring the wrong skills, dropping out or having poor literacy skills will serve no one

well in the 21st century.

The Conference Board of CanadaThe Conference Board of Canada Sources: The Conference Board of Canada; Statistics Canada.

Total Public Spending on Education per Student aged 5—24 (real 1992 $)


0

5

10

15

20

25

Canada Nfld. PEI NS NB Que Ont Man Sas Alt BC

High School Dropout Rates of the Population Aged 19 to 20, Canada and Provinces, 1995 to 1998

Source: Statistics Canada, Education and Indicators in Canada, 2000.


Document Literacy Skills(per cent by Literacy Level 1 to 5)

Sources: The Conference Board of Canada; International Adult Literacy Survey

0

1020

3040

50

6070

80

Poor Average Good

Overall Economy Manufacturing

Level 1,2

Level 3

Level 4, 5


Reality versus Perception(per cent among Level 1 and 2)

Sources: The Conference Board of Canada; International Adult Literacy Survey.

. . . but few believe they have a problem (self rating of job-related reading skills, low document literacy-

skilled manufacturing workers)

0

10

20

30

40

Poor Moderate Good Excellent


Reality versus Perception(per cent of Level 1 and 2)

Sources: The Conference Board of Canada; International Adult Literacy Survey

0

10

20

30

40

50

60

Greatly limiting Somewhat limiting Not at all limiting

. . . and even fewer believe that it matters(perceived impact of reading skills on job opportunities of poor

document literacy-skilled workers)


Trying to Get and Keep Top Talent

Most companies do not even know what talents their staff actually have . . . and the

staff don’t know either.

The Conference Board of CanadaThe Conference Board of Canada Source: The World Competitiveness Yearbook, 1998.

0

1

2

3

4

5

6

7

8

Japan Germany Sweden Norway Australia U.S. Canada

Companies Invest Sufficiently inIn-Company Training (1 = Do Not; 10 = Do)


5.0

5.5

6.0

6.5

7.0

7.5

8.0

Canada U.S. Germany Japan Australia Sweden Norway

Employee Training a High Priority?(1=not a high priority, 10=a high priority)

Source: The World Competitiveness Yearbook 2000.


Raising the Bar

Educational Requirements for Employment Have Changed


Employment by Level of Education(Thousands of persons)

Sources: Statistics Canada.

0

1,000

2,000

3,000

4,000

5,000

No highschool

diploma

High schooldiploma

Some post-secondary

Post-secondarycertificate

Universitydegree

1990 1999


Employment in Sales Occupations(Thousands of persons)


0

50

100

150

200

250

300

350

400

No high schooldiploma

High schooldiploma

Some post-secondary


Universitydegree

1990

1999


Employment in Clerical Occupations(Thousands of persons)


0

100

200

300

400

500


High schooldiploma

Some post-secondary


1990 1999


Employment of Motor Vehicleand Transit Drivers

(Thousands of persons)


0

50

100

150

200


High school diploma Post-secondarycertificate

1990 1999


Wanted: Skilled Workers

The Upcoming Skills Shortage


0.6

0.8

1.0

1.2

1.4

1.6

1981–85 1986–90 1991–95 1996–00 2001–05 2006–10 2011–15 2016–20

Five-Year Average CompoundGrowth Rates in Source Population

(per cent change)

Sources: Statistics Canada; The Conference Board of Canada.


11

12

13

14

15

16

17

18

1999 2002 2005 2008 2011 2014 2017 2020

Proportion of Population Aged 65+ (per cent)



62

63

64

65

66

67

68

1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019

Overall Labour Force Participation Rate (per cent)



0.00.20.40.60.81.01.21.41.61.82.0

1981–85 1986–90 1991–95 1996–00 2001–05 2006–10 2011–15 2016–20

Five-Year Average Compound Growth Rates in Labour Force

(per cent change)



Statistically Significant Predictorsof Recruitment Success

1. Augmenting student programs

2. Providing a learning environment (increased T&D expenditures)

3. Using anticipatory hiring practices

4. Seeking recruits from outside Canada

5. Involving employees in therecruitment process


Report Card on Leadership

From Leadership for Tomorrow:Playing Catch-up with Change


Report on Leadership, 2001 Comparison of 1999 and 2001 Results

Change… 1999 2001 %

Rate of change in businessenvironment is increasing…

90.2 87.1 -3.1

Change is highly unpredictable 57.2 59.3 2.1Excellent capacity and potential ofleaders to implement major change

5.4 2.2 -3.2

% of respondents who ranked themselves as highly effective or strong (depending on scale)


Report on Leadership, 2001 Comparison of 1999 and 2001 Results

Leadership… 1999 2001 %

Highly effective at building leadershipcapability

21.4 26.1 4.7

Strong leadership culture 32.1 36.2 4.1Highly effective leadership 27.2 29.0 1.8Highly effective processes, systems,and practices for anticipating andresponding to change

27.3 34.3 7.0



Report on Leadership, 2001Comparison of 1999 and 2001 Results

Orientation… 1999 2001 %

People orientation 29.1 34.7 5.6Change orientation 37.8 43.7 5.9Innovation orientation 25.0 24.7 -0.3



The Conference Board of CanadaInformation for Sound Decisions Since 1954

The Conference Board of CanadaInformation for Sound Decisions Since 1954

Documents

The Conference Board of Canada Performance and Potential The Changing Face of Leadership Charles A. Barrett Vice-President, The Conference Board of Canada