Best Managed Companies

Secrets of Canada’s Best Managed Companies

What is it about these companies that sets them above the rest? Fearless leadership, a culture of teamwork, and a relentless focus on innovation

Canada’s Best Managed Companies

The current Edmonton headquarters of Fluid Life are a pretty slick upgrade from its old home. The 35-year-old company, which helps industrial clients keep their equipment running through a mix of lab testing, consulting and training services, outgrew the space it had occupied for the better part of two decades. Clad in glass, the new three-storey building features a state-of-the-art laboratory, along with a gym, cafeteria and rooftop patio. It is also kitted out with plenty of TV screens that have already proven themselves useful.

In the summer of 2015, president Heather Hunt and her leadership team set what she calls an “ambitious but achievable” target for Fluid Life: to help its customers save $250 million by 2025. When the company moved into its latest digs this past fall, Hunt took it as an opportunity to make that aspiration a little more tangible. Each of the TV screens displays a crawl of text tracking the company’s efforts to hit its goal. So when a client says Fluid Life saved it $100,000, that milestone gets announced in the crawler. It’s an unobtrusive but omnipresent reminder to everyone that what they are working toward is more than the completion of their daily to-do lists. “We can’t forget about it. It’s always there,” Hunt explains. “That’s important, because I want someone who works in our warehouse to be aware of it in the same way a sales executive is, because it will take all of us to get there.” Indeed, the fact that Fluid Life has designed its offices to keep everyone thinking big is just one reason the firm—along with 44 others—joined the ranks of Canada’s Best Managed Companies for the first time this year.

These firms display all the hallmarks you might expect of high-performing businesses in 2017: smart strategies, strong processes, great corporate cultures, solvency. But underpinning such tried-and-true pillars of success is a trait most Canadian enterprises lack: This year’s winning companies are, unquestionably and sometimes unexpectedly, bold. A 2016 study of some 1,200 executives across the country—coincidentally also produced by Deloitte—concluded that only 11% of Canadian firms could be classified as “courageous.” They are led by people who set high expectations; who fight inertia; who consider it an opportunity, not an obligation, to invest in promising people and projects. They innovate relentlessly, even when it costs money or seems risky. “They are open to change. They want to be faster at navigating the turns in the road,” explains Peter Brown, a Deloitte Canada partner who is the co-leader of the Canada’s Best Managed Companies program. “And they’re willing to invest, disproportionately, in the people and the innovations that allow for those things.”

It is that bravery that helps these companies thrive: Most of this year’s graduating class have “significantly” grown revenue or EBITDA, or both, according to Brown. And this kind of chutzpah manifests in unexpected ways.

Boldness starts at the top, with leaders who have an insatiable determination to achieve excellence. Brown says this “animal spirit” can imbue an entire organization with a sense that the status quo will never be enough. Some of these leaders have the brash, take-charge attitude you might expect; others pursue their mandates in more quiet, subtle ways. Take Alan Lechem, the president of Weston Wood Solutions, headquartered in Brampton, Ont. His company sells specialty mouldings and trim for construction and industrial uses; it’s not a business traditionally associated with dynamism. Yet the measured and thoughtful Lechem is unequivocal about his organization’s status as an agent of change. “We may not be in an industry that has been totally disrupted—like, say, the taxi business,” he acknowledges. “But we are constantly striving to do things differently.” He believes his firm can and should grow (indeed, it has—the company’s sales spiked 167% between 2010 and 2015), and he considers it his job to encourage employees to actively seek out and contemplate new ideas. (Such thinking has resulted in significant changes to the company’s sourcing procedures, its dealings with manufacturers and customers, and other practices.) “I have to lead by example,” Lechem says. “If I don’t believe it, implement it and practice it, how can I possibly expect my people to?”

Indeed, being daring is easier when employees are both excited and equipped to do boundary-pushing work. This year’s Best Managed Companies tend to obsess over finding the right workers. “If you don’t have the right people in the business to accomplish what you want to accomplish, you won’t be able to get there from here,” Brown says. These companies also spend serious time and cash to hone the skills of their existing staff. For example, Tap & Barrel, a five-year-old chain of five restaurants in the Vancouver area, pays for its employees’ sommelier and Cicerone training, and regularly sends teams on field trips to learn more about beer and wine. (One case in point: In late January, 20 employees travelled to Victoria for two nights to create a custom “collabobeer” for the restaurants with Phillips Brewing & Malting Co.) This all works toward CEO Daniel Frankel and his management’s goal of offering locally produced beverages and, increasingly, food. Frankel is emphatic that the expenses associated with these efforts—which are not trivial—lead to exponential returns. “We hire people who are passionate,” he explains. “They want to learn everything, so we turn the tap on and let them learn as much as they want. That has defined our success. It’s a massive differentiator.”

Finally, boldness requires continual investment in innovation in the widest possible sense. It necessitates the pursuit of new markets, products, services, processes, technologies and, yes, whiz-bang inventions. “These companies are adapting and innovating quicker than their competition,” Brown explains. That’s an apt description of Fluid Life, which in the past eight years has changed its core offering (moving from increasingly commoditized testing services to include a suite of consulting activities), expanded its Brampton, Ont. office, and opened the brand new Edmonton headquarters. All of this required a lot of money at times when it would have been easier to save. The Edmonton building, for example, was constructed during a period when the wider Alberta economy was in disarray. But Hunt is a big believer in fortune favouring proactive companies. “I’m not going to lie—it has been tough at times,” she admits. “But we have a vision: We want to revolutionize our industry. So, in the face of everything, we soldier on.” Hunt, like so many other leaders on this year’s Best Managed list, is committed. Progressive. Bold.