September 21, 2017 dan@danherman.ca

Does Canada have the (management) talent to scale?

It almost seems trite to say that management skills are key to firm growth, however there’s actually little recent, Canadian research on the topic. Do fill that gap, I’ve led two recent projects on the issue, in the ICT and manufacturing sectors respectively, to see whether and how access to management talent is an issue for Canadian firms.

The results are quite clear.

In a report commissioned by the Lazaridis Institute for the Management of Technology Enterprises, my co-author Sarah Marion and I found that a lack of experienced executive and management talent was viewed as the primary barrier to growth for the CEOs of high-growth Canadian technology firms.  This gap was most pronounced in sales and marketing, as well as organizational design and execution roles. A lack of recently scaled technology companies means there’s a very small pool of the type of talent that other high-growth firms need access to. It’s your proverbial chicken and egg situation. While importing talent is an option, we’re in a competition against every other global innovation system for that same talent. The solution is thus two fold. On one hand, the success of companies like Shopify, HootSuite and PointClickCare will eventually recycle management talent through the system. And in the medium and long-term, initiatives like the Lazaridis Institute will help develop a next generation. Read the full report here.

And in a recent report commissioned for Industry Canada (now Innovation, Science and Economic Development), the DEEP Centre team examined whether access to management talent was an issue for SME manufacturing firms. Here too the conclusions were clear: challenges related to the recruitment of executive and management level talent was keen as the primary barrier to growth for three-quarters of our sample. The impact of this talent gap is equally significant. Fifty-three percent of our sample noted that the inability to access top management talent would led to decreased innovation, while forty-four percent noted it meant decreased sales growth. You can read this report in its entirety here.

Addressing these management talent issues are complex. As noted, importing talent is part of the solution. This means developing far more effective immigration policies for senior talent. But so too is developing a pipeline of domestic talent that will eventually take the helm. In manufacturing this means doing more to support the attractiveness of the sector as a place to tackle complex and innovative challenges.  In ICT it means helping a current generation of high-growth potential firms scale into globally competitive ones, and in so doing help recycle talent through the system. And in both sectors, it means redesigning education at the post-secondary level to move beyond standard models of the MBA to teaching ‘scar tissue’ and the complexity of global markets and dynamic competition.

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