Meet the New Boss
It’s been a year of regime change at some Venture 100 stalwarts. Here’s what to expect from the new guy at the top
by Tom Keyser
President & CEO
#64 The Venture 100
Revenues 2006: $970 million
It always feels great to go out a winner. And 61-year-old Bob Normand was whistling a happy tune when the retiring CEO took his final bow from the executive suite of ATB Financial last May.
It was a celebration in green and there were plenty of witnesses. After six years as president and CEO of the provincial Crown corporation, Normand bid farewell at ATB’s annual public meeting, toasting the gathering by announcing record yearly earnings in excess of $274 million.
Small wonder Normand was grinning from ear to ear. So how does his successor follow a crowd-pleasing act like that?
“My dad always told me you should walk around and just listen for a while,” responds Dave Mowat, contacted during his first week on the job. “That’s my first priority. Getting to know our customers and learning all I can about the roots of our provincial economy, what makes it tick.”
An environmentalist – he’s trained with Al Gore to spread the message on climate change – as well as a busy blogger (www.changeeverything.ca), Mowat returns to his hometown of Edmonton from Vancouver, where he drew positive reviews during seven years as chief executive of Vancity, Canada’s largest credit union. When Mowat moved on, his board chair praised him for improving Vancity’s profit margins, for building an asset base which peaked at $12.3 billion and for engineering a record membership payout of almost $14 million in 2006.
But that was then. Mowat acknowledges that he’s moving up in the world, taking over a financial institution which boasts a much larger asset base (about $20 billion) and which serves more than 600,000 customers. So far, he’s impressed by what he sees.
“The entrepreneurial attitude is immediately evident when you walk into ATB,” he enthuses. “Everywhere I’ve gone, I’ve seen that culture is in the DNA of the place.”
It wasn’t always that way. When Normand joined what was then known as Alberta Treasury Branches as an executive vice-president in 1997, the company was labouring under the weight of a negative equity position. After Normand graduated to CEO four years later, however, good things began to happen:
• ATB Financial beefed up its presence in Edmonton and Calgary by building 25 new branches, most situated in the province’s two major cities;
• A re-branding campaign helped Albertans get acquainted with a “new” ATB, offering an expanded range of banking, financial and investment services;
• ATB added fresh business lines, including an investor services division and a corporate financial service, which represented a fairly radical departure. For the first time in its history, ATB began luring large corporate clients through the door.
In stark contrast to 1997, ATB Financial now enjoys a positive equity position of about $1.6 billion and Mowat believes sticking to fundamentally sound principles will be the key as the province rides
out an unprecendented economic whirlwind.
“Loaning money simply means putting it in the hands of strong business people who work hard and pay their debts,” Mowat shrugs. “In an overheated economy, we just have to make sure we continue to cross our Ts and dot our Is.”
President & CEO
Talisman Energy Inc.
#10 The Venture 100
Revenues 2006: $7.8 billion
When longtime chief executive Jim Buckee told the board of Talisman Energy Inc. he was ready to call it quits, the company directors’ initial impulse was to hire a recruiting company. Then they went themselves one better.
They tapped a headhunter to find a headhunter, hiring U.S. consultants to scope out a global executive search team that wouldn’t fail to bring home the bacon. After due deliberation, the consultant suggested Egon Zehnder International, a blue-chip, London-based recruiter whose CEO sits on the board of the Oxford Business School.
Zehnder scrutinized a galaxy of star talent, both internal and external, during interviews in London, California, Vancouver and Calgary. And when the industry’s brightest names bobbed to the surface, Talisman skimmed off the cream: John Manzoni, a 47-year-old industry superstar who walked away from BP PLC after he was passed over for the global giant’s top job, in the wake of Sir John Browne’s resignation.
It was an intensive, exhaustive, top-secret search, launched shortly after Buckee served notice last fall. It also had its tricky side, particularly when Manzoni emerged as the elite candidate on a short list of three.
Talisman directors were well aware that Manzoni, formerly BP’s global chief of refining and marketing, had taken his share of flak in the wake of a 2005 Texas refinery explosion and fire which killed 15 workers. Internal investigators subsequently recommended that two senior VPs, the refinery manager and a plant supervisor be fired. They also took aim at Manzoni, criticizing his safety-management style.
“There were four of us on the hiring committee and we talked about this extensively,” confides Talisman board chair Douglas Baldwin. “We asked ourselves whether this was something we could live with.”
They answered their own question by hiring Manzoni.
“This may haunt us for a while but we believe this individual is the right person. He’s strong enough to deal with these issues effectively and so are we,” Baldwin adds. “Manzoni is a very strong presence with a straightforward style. He just seemed to us to represent the perfect mix of [leadership] qualities.”
Due to report for work Sept. 1, Manzoni distinguished himself on every conceivable front (exploration, downstream markets, refining, investor relations) as he put together one of the most rounded resumes in the energy business during 25 years with BP.
Described as enormously charming with a “proven focus on generating results,” he’ll have a hard time erasing Buckee from the public memory, however. After helping to spin off Talisman from BP in 1991 (he became CEO two years later), Buckee brought an individualistic style to the job, earning respect by stubbornly following his own nose. Respected as a contrarian, Buckee, the son of a lieutenant-commander in England’s Royal Navy, put together a mixed bag of international assets that currently produce 485,000 barrels of oil (equivalent) a day, making Talisman one of the most successful and dynamic independents in the country. Praised by insiders for its uncluttered chain of command, Talisman inevitably took its cues from the ex-astrophysicist who charted the company’s destiny.
Manzoni could do worse than to follow his predecessor’s formula, poking around in well-explored global regions and finding ways to make them pay. Many analysts are betting he’ll do just that.
#22 The Venture 100
Revenues 2006: $3.5 billion
All of a sudden, ConocoPhillips Canada seems to be everywhere at once, producing 1.4 billion cubic feet of natural gas a day, actively cranking up oilsands production and anxiously seeking a resolution to chronic heel-dragging on the Mackenzie Valley pipeline project.
After years as a fairly low-key player north of the border, ConocoPhillips has dramatically changed its act, aggressively stirring up action on multiple fronts.
Oops, hold on a moment. That word doesn’t sit well with Kevin Meyers, the forthright Pennsylvanian who’s now running the show.
“Agressive is the wrong word to describe us,” counters Meyers, who assumed command of Canadian operations last December. “When we talk about our vision, we say we want to be the leading oil, gas and bitumen producer in the country: the most respected, the most profitable and the safest.”
OK, maybe “ambitious” is the more appropriate term.
As an undergraduate, Meyers thought he’d like to teach elementary school, until an internship convinced him he was too impatient to coach the kiddies. Since then, his horizons have broadened.
After nailing a PhD in chemical engineering from the prestigious Massachusetts Institute of Technology, Meyers was actively recruited by the Atlantic Richfield Company (Arco). Before long, he streamed into senior management and eventually emerged as an important decision-maker at ConocoPhillips. Most recently, Meyers set up shop in Moscow, where he spent two years supervising joint ventures, keeping an eye on the corporation’s regional investments while boning up on conversational Russian.
He landed in Canada in the wake of two watershed deals which significantly bulked up the northern asset base of ConocoPhillips: the company absorbed Burlington Resources Inc., an American exporation and
production giant with significant Canadian holdings, and subsequently became equal partners with EnCana Corp. on the latter’s oilsands projects at Foster Creek and Christina Lake.
As a 9% partner in Syncrude and 50% joint-venture partner with Total SA in a steam-assisted gravity drainage (SAGD) project at Surmont, ConocoPhillips takes its place among the big boys in bitumen.
“We fired up Surmont’s generators in late June and started pushing steam into the ground. This is our first phase and production is still perhaps six months away,” says Meyers, who anticipates production of 300 barrels a day in the early going.
But the company’s prestige line is natural gas and Meyers doesn’t hide the frustration that stems from the high price of doing business in Western Canada. After a busy 2006 ConocoPhillips slashed capital spending on natural gas by $1 billion going forward.
“The Western Canada Sedimentary Basin is an incredible resource. But we cut back because of the cost environment and foreign-exchange costs,” he explains.
Speaking of frustrations, the Mackenzie Valley pipeline represents another burr under the saddle of a major stakeholder in Arctic gas. “I won’t say the project is dying,” Meyers says. “But if we can’t find some solution to get us over the goal line, to make it economical, I worry that we’ll lose an opportunity here.”
As for the regulatory process, he chooses his words carefully: “Would I like the process to be more efficient? Yes, I’m not happy about that but that’s the reality. But our focus is on what we can do to keep this project moving forward. We’re working with the partners to make it happen.”
President & CEO
WestJet Airlines Ltd.
#36 The Venture 100
Revenues 2006: $1.8 billion
Everybody’s favourite arriviste airline was poised to welcome a new chief executive in early September and industry insiders predicted a smooth transition, with a minimum of turbulence. WestJet heir apparent Sean Durfy graduated to pilot from co-pilot, fulfilling a carefully scripted succession plan which has been taking shape for a year or more.
A former president of Enmax Corporation who was recruited by the airline as an executive vice-president in 2004, the Maritimer rapidly emerged as outgoing CEO Clive Beddoe’s protege-in-waiting and has served as the company’s de facto front man for several months. And the fact his promotion was made official at a particularly propitious moment in late July could be interpreted as an encouraging omen for the future.
The announcement came as WestJet was wrapping up a sixth successive month of record passenger loads. Meanwhile, the 11-year-old carrier had recently firmed up plans to chase the burgeoning business-travel market by adding flights to midwestern U.S. business hubs such as Houston, Dallas and Chicago. Shortly thereafter, the company reported a 19% rise in second-quarter revenues, though profits took a licking after a new electronic reservations system crashed and burned.
Generally favourable prevailing winds seem to indicate cloud-free sailing ahead for the new skipper, at least in the immediate short term.
“You can call it a moderately aggressive growth strategy but we consider it the right growth strategy. We build our fleet plan around the opportunities that we see,” says Durfy, who recently announced his intention to add 20 Boeing 737s to the WestJet fleet within six years.
Durfy joined the company after a mutual friend suggested to Beddoe that the up-and-comer, now 40, would be a good fit at WestJet. After a preliminary get-acquainted session, Durfy quickly bought in. “I was convinced from Day One this was a very special place. People here have a lot of fun. I felt it. It was real,” he says.
Today the WestJet name rolls off northern tongues as readily as those of Canadian Tire or CP Rail. Hard to believe that as recently as 1995, this growth-oriented upstart was nothing more than a dream percolating in the minds of four ambitious, audacious men. Co-founder Beddoe and his associates acted on their conviction that they could score big by adapting the customer-friendly business plan introduced by Texas-based Southwest Airlines and tailor it to the Canadian market. Since first dazzling the marketplace in 1996, WestJet has become virtually an automatic first choice for Western travellers while carving out an enduring place for itself in the nation’s transportation history.
Although he has won awards for marketing, meanwhile, Durfy claims he’s far from the best salesman in the organization. He lays those honours at the feet of executive vice-president Bob Cummings. “I’m not a natural marketer. I think of myself as more of an all-around business guy,” notes Durfy.
The new boss is more excited about the high priority WestJet places on employee relations, citing the company’s generous stock purchase option and a twice-a-year profit-sharing program, which has paid out more than $90 million over 11 years. Durfy believes that happy workers (6,500 at last count) equate to happy travellers and happy shareholders.
As for Beddoe, he’ll stick around as executive chairman-cum-mentor. “When you have his kind of ability and support at your fingertips, you’d be crazy not to take advantage of it,” Durfy says.
President & CEO
Syncrude Canada Ltd.
#11 The Venture 100
Revenues 2006: $7.5 billion
A well-travelled refinery administrator with a reputation for getting things done, Syncrude CEO Tom Katinas spent the summer acquainting himself with the Fort McMurray-based consortium’s systems and procedures. Hired to tighten efficiencies, Katinas declined requests for interviews before the fall (including one for this story), saying he had his hands full until then, getting to know his people and scrutinizing operational details.
Katinas came over last May as part of a management services agreement with original partner Imperial Oil Ltd., enabling Syncrude to “access Imperial’s downstream expertise in refining and through their association with ExxonMobil [Imperial’s majority owner], global expertise, leading-edge technologies and management and operating best practices.”
As a consortium spokesman put it, “There’s a world of experience in ExxonMobil and part of his role is to bring that experience and expertise to Syncrude, help us to continue to improve.”
Based on those terms, Katinas fits the task to the letter. His official bio refers to him as a “champion of change” and most recently he brought his managerial skills to bear on ExxonMobil’s Fawley Refinery on the saltmarsh shores of southern England. According to corporate blurbs, it’s the United Kingdom’s largest, as well as “one of the most complex in Europe.”
But that was merely a four-year whistle stop on the career path of a master fixer. Prior to his English posting, the chemical engineer (MSc.) from Penn State underscored his reputation as a guy who could handle the big jobs by supervising the amalgamation of Exxon and Mobil refineries in Singapore after the merger of the two global players. Clearly, he did his job well; the conjoined Singapore plant continues to run more capacity than any other ExxonMobil refinery.
A prodigy from the Mobil side, Katinas is a 30-year pro who also rang up major successes while posted in various refineries in the United States. During the 1990s, he spent five years managing Saudi Arabia’s SAMREF refinery, a Mobil joint venture with the national oil company Saudi Aramco.
But one challenge remains that Katinas, for all his achievements, has yet to run up against: the high cost of doing business in Western Canada. He will need every arrow in his quiver to discover ways to overcome escalating costs that continue to frustrate the number-crunchers.
He needn’t look far for an example. As Katinas is well aware, the price of Syncrude’s Stage 3 expansion in the Athabasca oilsands clocked in at $8.2 billion, more than double the original estimate. Two more expansion stages are in the works (estimated cost: $8 billion-plus) and long-term aims are to boost daily production to 500,000 barrels.
Will Syncrude stick to budget? Maybe. But there’s no fix in sight for a cost situation that’s muddled by numerous and vexing contributing factors. They range from stratospheric labour costs and a depleted supply of skilled help to rising prices for construction materials as well as a universally overtaxed infrastructure.