The Codfathers: Lessons from the Atlantic Business Elite by Gordon Pitts: Summary & Notes

Rated: 7/10

Available at: Amazon

ISBN: 1552637182

Related: ReWork, The Hard Thing About Hard Things

Summary

A fascinating look at some of the top business leaders from Atlantic Canada, and their reach throughout Canadian business and politics.

The book is a bit dated now (published in 2005), and so some references may be dated as well, but on the whole, it is the most comprehensive look inside Atlantic Canadian business I’ve ever read. 

A great jumping-off point for further learning and research.

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Notes

Introduction - Frank’s Party

  • It shows that being poor and thinly populated can actually be a competitive advantage, giving this area the highest and most influential business network in the country.
  • The fierce loyalty is, in fact, the Maritimes’ single biggest competitive advantage, the one characteristic that gives this region a fighting chance in the global economic wars.
  • This is the age of the maritime Mafia, when the ranks of Canadian business are replete with folks who frankly would prefer to be sailing off Lunenburg or Digby or Saint John rather than fighting the morning rush hour traffic in Toronto.
  • They tend to be strong in operations, in running manufacturing and processing functions, in watching their income statements with the sharp eyes of a swooping seagull. They are not financial engineers who play with balance sheets and asset numbers, and they leave the marketing to others. They believe if you build a sound company, watch your pennies, and keep your people happy, the other stuff will look after itself.
  • Maritimers are often blunt, no-nonsense communicators who despise what they call the “bullshit” of Toronto’s Bay Street.
  • There is another aspect to this openness and candour–most of these tycoons cuss like the sailors they often are on the weekends.
  • In the world economy, Canadians are known to be adaptable, practical, no-nonsense, meritocratic, and possessing the ability to adapt gracefully to public and private enterprise.

Chapter 1 - One World, One Fry

  • McCains
  • These two aspects–hard-nosed entrepreneurial instinct and caring social ethic–represent two deep strains in the Maritimes psyche.
  • He (Michael McCain) lists the objectives: doing what is right; treating people with respect; being doers, not talkers; and candid, direct communications.

Chapter 2 - K.C. and the Sunshine Band

  • Irvings
  • The Irvings are perhaps classic Maritimers–they are very good managers and operators in a strictly technical sense but they are not gifted in new product development, new technology, or new ideas.
  • “One reason they are more insular is once you get out into Montreal or Toronto or New York or London, you get into people who do creative things either in marketing or finance."

Chapter 3 - Donuts to Dollars

  • Ron Joyce, Tim Hortons

Chapter 4 - The Ambassador from Apohaqui

  • Frank McKenna

Chapter 5 - The King of Economy

  • Purdy Crawford
  • He uses his immense credibility to challenge the accepted wisdom in Atlantic Canada that governments need to pour their money into job-creation schemes. He can attack that orthodoxy because he is a Maritimer, not some Stephen Harper outsider who gets his jollies by dumping on the Atlantic Canadian work ethic. He is very harsh on the political leadership, which has been obsessed with being elected rather than making the hard choices. He wants to see the four Atlantic provinces working together on economic development. To get it going, he wants a full study on the competitive advantages of Nova Scotia–not some pricey consultant’s report but a committee of government, public service, and business.

Chapter 6 - On Blueberry Hills

  • John Bragg, Oxford Frozen Foods
  • In John’s view, the province was simply filling a void in rural Nova Scotia, where lending institutions failed to provide adequate financing for budding entrepreneurs. The province never lost a penny lending to John Bragg. It helped form his view about the need for government to stimulate rural development. “I don’t think there is anything wrong with the province lending money to an entrepreneur,” he says.
  • For one thing, he is not big on five-year strategic plans. “We’ve had all kinds of people, including our banks, say what are you going to do in the next five years? And we always say we don’t know. If we look back five years, we’ve done a lot more than we anticipated and that’s been true in every five years."
  • “Frank [Sobey] said, ‘Always leave the back door open,” and we believe in that."
  • Being somewhat isolated in rural Nova Scotia also taught Bragg a sense of initiative and can-do improvising that has served him in all the businesses. That too is a McCain and Irving characteristic: If you are isolated in the Maritimes, you have to create your own supporting technology and your own service industries. If you process potatoes, you build harvesting and processing equipment, as the McCains have. You buy trucking companies, as the Irvings and McCains have done. The Irvings have taken this all the way to a rigid vertical integration in which they control the entire supply chain, from refinery to gas pumps, forests to tissue paper. The Braggs are not that extreme, but they are unusually self-sufficient.
  • John Bragg feels this flair for improvisation is part of the Maritime management tradition. Atlantic Canadians, he says, are often terrific operators, but with some exceptions, “we are not the greatest marketers, salesmen, and pizzazz people in the world. We start with the rubber boots on; we are all operators. Raising the money is secondary–you have to run the business right first. That’s where companies like GM lost their way: They became marketers, and they started turning out crap for a few years."
  • Technology is a means to an end, not an end in itself. 
  • A lot of innovation occurs on the farm, not in a lab.
  • Bragg is a zealot about rural development, pushing the argument that governments have to be activist pump-primers for rural communities in Nova Scotia and other provinces. What good does it do the country, he asks, if all the development takes place in a tiny band of territory along the St. Lawrence River, with the money concentrated in the Greater Toronto Area?
  • [Purdy] Crawford argues that the top-down grants, from agencies such as the Atlantic Canada Opportunities Agency, have created a “look after us attitude” in eastern Canada. Crawford keeps coming back home to Atlantic Canada and hearing about families where the mother or father is working just long enough to qualify for employment insurance.
  • He [Bragg] sees his own company as a model of what can be done with progressive government support, in providing investment capital when private institutions fail to step forward. It happens in other provinces, he says, pointing to the role of the cause de dépôt pension fund in Quebec and the Heritage Fund in Alberta.

Chapter 7 - Food Fights

  • Sobeys (originally Frank, now Frank Jr., others) & Richard Currie (Loblaws)
  • Saint John’s south end is one of those legendary poor neighborhoods that seem to spawn an inordinate number of ambitious, successful people, as does North Winnipeg and Montreal’s St. Urbain.
  • He [Currie] hopes that ego doesn’t add up to arrogance, and he is right–it is more innocent than arrogant, and it seems to stand out more in a Maritime setting than among non-Atlantic business types. In Toronto, where monumental egos are on display constantly, Currie seems almost modest and self-effacing. In the Maritimes, where you are expected to hide your light under a bushel, he is viewed as inordinately pleased with himself, alien to the Atlantic style of modesty and restraint. 
  • Currie: I think pragmatism means that once you know the answer, you don’t need three decimal places after it.
  • “It’s probably a Maritime trait that once you got the answer, you quit fucking around and get on with it,” Currie says.
  • When you get outside the Maritimes and travel with the international crowd, you need to tap other skills, in marketing, merchandising, and finance.

Chapter 8 - Fresh Crop at Sobeys

  • Rob Sobey
  • Maritimers adhere to a version of the Australian “tall poppies” complex–if you look too big, someone will cut you down to size. Rob’s grandfather, the legendary Frank Sobey, used to say it was very smart to be seen as a bit of a hayseed so you could fly under the radar.
  • Frank: “It’s hard to read people from our area, we are not demonstrative,” he explained. “We’re unfailingly polite."
  • It is another facet of doing business in the Maritimes: There is always a grant or forgivable loan available to encourage you to do something that you would probably do anyway.
  • Even with the gravitational pull toward Toronto, Paul Sobey is adamant that the company should never move to the large Ontario city because it is too much of a distraction.

Chapter 9 - Clearwater Runs Deep

  • “Over the long term, if you own coal or oil and gas, or forests, these are wonderful assets, because you’re not going to wake up some morning and find that some guy in Silicon Valley has made them obsolete. Or some guy in China has stolen your business out from under you because he has figured out how to do it at a much lower cost. These are assets that are going to have value 50 to 100 years from now. They’re all renewable assets that have been there 100 years and will be there 100 years from now."
  • He [Risley] finds that it is not that the ideas are bad, the problem is that the people behind those ideas have never learned how to fight.
  • There is no time for hobbies in George Armoyan’s world. There is only work and family. He works 16 two 17 hours a day, six to seven days a week.
  • “I think immigrants are hungrier for success than people who were born here,” he says, adding that he doubts his own children will be as hungry as he is. Immigrants are risk-takers who come to Canada and figure they have nothing more to lose. “You start with nothing and you know it’s hard to go worse than zero."

Chapter 10 - The Maritimization of Ken Rowe

  • “Down here in the Maritimes, when you are building a business and become successful at it, you run out of market share to acquire,” Rowe says.

Chapter 11 - Casting the Newfie Net

  • Mark & Craig Dobbin
  • As a young man, Craig got work as a professional diver, then branched into house-building, making money through the time-honoured pattern of erecting a house, living in it, then selling it quickly and moving on before it was finished. In his first two years of marriage, he and his first wife lived in 13 places.

Chapter 12 - Beer and Chocolate

  • Bernard Imbeault (Pizza Delight), Derek Oland (Moosehead, Olands), Bryana  & David Ganong
  • He [Oland] says Moosehead, in recent years, has been blissfully free of this kind of top-down subsidy, the kind that flows regularly from the federal Atlantic Canada Opportunities Agency. “I think the money could be better used creating more entrepreneurs than dumping it down, whether it’s worth it or not. What happens in ACOA is there is someone doing reasonably well and someone else comes along with an idea directly on top of it and they’ll fund it, putting the first person out of business, which will disturb the market."
  • He says he can hire high-quality people in Saint John because of the relaxed family lifestyle, although it is a challenge to attract couples who are both professionals. It may sound sexist but it is a fact of life: The best candidates are couples with full-time mothers looking after the kids. “There is nothing like the Maritimes for finding the ideal place to live–fresh water, salt water, mountains,” he says. 
  • For one thing, he says universities are stuck in a traditional approach to business training. “They are not really looking at how businesses are formed, how you need enough guts and intelligence to make it work.” He would like to see courses in, for example, how to go to a bank for financing and present your business plan. “I’m frustrated with universities that they continue to teach the same way as when I went to school–generally by professors who have never run their own businesses, turning out good technicians but not putting it all together."
  • Imbeault quickly learned there was something special about doing business in the Maritimes, a kind of connectedness in a culture where everybody tends to know everyone else. These connections are not formal and they don’t really change the final business decisions. But it is much easier to get information when you know the other party’s family.
  • Imbeault has watched a lively coterie of francophone entrepreneurs develop in the Maritimes–particularly in construction, forest products, and fishing. But except for Pizza Delight, there have been few breakout companies that have grown beyond the small to medium size and taken on a national market. He has trouble figuring out why, because there is no shortage of entrepreneurial spirit. It may be that it is too early in the process. But it could also be an Acadian mindset that a medium-sized company is big enough. The tendency is to sell out, rather than build for future generations. He also is concerned that many founders get too big for their britches; they feel their success is attributable entirely to themselves and not to their workers or community.

Chapter 13 - Fellowship of the Ring

  • St. FX alumni and community

Chapter 14 - Life Among the Up-Alongs

  • [Geoff] Flood is part of a new twist on an ancient theme, the Atlantic Canada brigade of long-distance Maritimes commuters, who are Air Canada’s best customers and most knowledgable critics. In the most extreme example, they commute weekly from Halifax, Saint John, or St. John’s; others grab bits and pieces of time at home in Atlantic Canada, where their work schedules allow. In summer, the flow of airplane commuters swells to a torrent–one spouse and the children go to the ocean home and the other visits on weekends. The reasons for this movement centre on the family: to allow their children to grow up in the saner confines of small towns and cities, or to really know their cousins, grandmas, and grandpas. Often, there is the assumption that the move to Toronto, Ottawa, or Montreal is a short-term career-boosting move and they will get a posting back in Atlantic Canada. Sometimes they do, but most often they don’t. Also, there is simply the pull of the sea, the land, or the forests, the kind of thing that has pulled Maritimers back home for a hundred years from the Boston states or Toronto.
  • There is another factor that burns brightly in their motivation: They don’t want to give up on the Maritimes, as so many Central Canadian critics have done. They believe that the Maritimes will return to the mythic past glory of the 19th century–and when it does, they will return for good. Like parts of the Prairies, this is Tomorrow Country, where tomorrow never seems to come.
  • The sad irony is that any bright tomorrow will be hard to achieve as long as Atlantic Canada suffers a continuing migration of these same professionals, managers, and entrepreneurs to Central Canada, the West, and the United States.
  • To make matters worse, people with a university education are the most likely to leave their home provinces and seek opportunities elsewhere. 
  • The reason he [Dean MacDonald] did it, he said, was to learn that he could operate in the flash and intensity of a big Toronto corporate job in a publicly traded company. It was his way of answering the question “Can you play in the big leagues?” He points out that Atlantic Canadians have that chip on their shoulders–that embedded self-doubt, the sense that what they do back home in Halifax or St. John’s is not really that important or meaningful. “But once you do the Toronto thing, you kinda go ‘It’s not the brass ring.’"
  • “There is a lot more bullshit in Toronto, a lot more sense that the wheels of the corporation seem to be the driver, rather than the wheels of pragmatic decision-makers."
  • Rod Bryden’s story shows it is hard to generalize about regions and the kinds of people and managers that they produce. There is no rigid “Atlantic Canada type,” but from my conversations with dozens of present and past East Coasters, I can certainly describe a collection of characteristics that apply in many, many cases. Maritime managers do tend to be straight-talking, non-political (in an office-politics sense), and strong in running things. They are creative about finding less expensive solutions that require a bit of improvisation. They often exhibit a rural Canadian lack of pretence and show. They are what they are. In a corporate world beset by greed and ostentation, these are positive qualities. The Maritime style is well suited to a post-enrol era, where there is revulsion toward the image of wealthy CEOs being led away to jail. The Maritime way suggests a simpler time, when a family ran the local mill and all the people in the town worked there. But the Atlantic method should not be mistakes for a lack of sophistication.