President and CEO of Toronto Region Board of Trade, Janet De Silva discusses the limited availability of resources and supplies available for SME owners and what it means for business in Toronto. And her advice on how leaders can overcome the biggest mistakes to avoid jeopardizing their business.
As President & CEO of the Toronto Region Board of Trade, Jan is spearheading efforts to make Toronto one of the most competitive and sought-after business regions in the world.
Prior to joining the Board, Jan spent 14 years in leadership roles in Asia. She served as CEO of Sun Life Financial’s Hong Kong subsidiary and Mainland China joint venture. She co-founded and was CEO of Retail China Limited, which was acquired in 2010. She later served as Dean of Ivey Asia, leading the Hong Kong campus and Asia operations of Ivey Business School of Western University.
The Toronto Region Board of Trade has recently released a report titled Defying Gravity: Building a Scaleup Ecosystem. Can you tell us what brought on this study? What was the inspiration behind it?
The inspiration for it is the work we’ve been doing through our World Trade Centre Toronto called the Trade Accelerator Program (TAP). This was a program we highlighted in 2015 and went live within 2016. It was designed to help our small and medium export-ready companies get active in exports. They go through the program and develop an export strategy, propriety to their company. We then take them to high potential growth markets aligned to their sector and then we thought we’d be off to the races. And here’s what happened. You are a really successful company in Canada manufacturing 200,000 units per year for the Canadian market, you go through TAP, and we take you to China. Your first order from China is for 2,000,000 units and it’s going to be triple that in a couple of months. So, all of a sudden, companies who were trying to get active in exports are getting a scale-up wall. We said let’s sit down and take a look at what’s happening in the scale-up ecosystem and what we can be doing to help support our Canadian companies both those domestically who can benefit from support in scaling up, as well as those we are already working with the export side.
How would you explain the fact that there is a limited supply of resources and support available to SME owners in the region? What do you believe is the main cause?
I would say the main cause for that is a couple of things. Number one, the strength of our Trade Accelerator Program is that it’s both the government and private sector working together. So, in the case of the Trade Accelerator, organizations like RBC, for whom there is tremendous value in them helping their commercial clients grow, are at the table. Just as EDC [Export Development Canada] is. And so, we reflected on the situation in Canada right now, historically there have been some well-intended government programs around, but there hasn’t been a full-court press akin to what we’ve done with the Trade Accelerator. What our report identified is there is a definite need for a scaled-up version of the Trade Accelerator, where we’re bringing government and private sector expertise together. Where we’re using these joint resources to identify companies who have the potential or what we define as high growth and would benefit from more formal exposure to different financial models, different technology tools, how to build leadership and executive teams, and how to look for growth markets for their businesses both in Canada and beyond.
Toronto has always been considered as Canada’s tech hub and one of the best places to start and grow a business. However, because of the lack of resources, it’s falling behind global competitors. Do you believe that if it wasn’t for the lack of resources, Toronto would have the potential of being at the top internationally?
As a tech hub, I would put a counter-point to that question. I was just speaking in London, England a couple of weeks ago; we are being globally defined right now as a leading innovation center. We are being recognized for the research and for the innovation palate that we have in the market. Two things that have enabled that, is number one, the Global Talent Stream that was introduced in 2017 was been instrumental in attracting more talent to Toronto. And the fact that we’ve established such a global profile for AI, quantum computing, those types of things that are really deep in terms of where our researchers and universities are. With that said, our belief is that the coming few years for us to keep this global stature, in addition to the research capability, is how do we commercialize the developments our innovators are coming up with. That is where programs, like our scale-up program, are going to be critical to help these innovators get access to market and also, look at how do they grow their business beyond.
In your opinion, what are the main resources that the region is lacking when it comes to supporting Canadian SMEs in their growth journey?
I think the main gap at the moment is what we’re working on next following this report. The report was to level set for us how we’re doing and what it is that other jurisdictions are effectively doing to help grow their firms. What we are now doing is saying in the absence of anything else that exists in the market right now, we are going to be working on working with government and large private sector companies to put together a program that is going to help our companies get access to the tools they need to scale up. I would say it’s just pulling things together the way we did with the Trade Accelerator, but making that applicable to how do we help companies grow.
What would you say are the top 3 business sectors that are lacking support and how would you explain that?
The interesting thing is across all of our sectors there are high growth firms that would benefit from support. In our report on p. 7 we’ve broken down some examples of high growth firms and the type of industries that range from construction to ICT. what’s been missing is a formalized approach to identifying companies that are high growth and making a practical program available for them so they can start working through scaling up their business to the next level.
How do you believe the lack of support and resources for Toronto SMEs is affecting Canada’s business industry?
We know, again if we look at p. 7 in the report, that high growth firms, these are the ones that are growing quickly, make up 1.2 per cent of all Canadian businesses, yet they represent 63 per cent of net job growth. If we could take instead of 1.2, 2.5 or 5 per cent of our total firms to fall into that high growth category, the job growth, the job gain would be instrumental and very significant. That’s the goal we’re trying to move towards as we develop a scale-up program.
Can you tell us about some of the strategies that you believe should be put in place to improve the support and increase the resources that can contribute towards the growth of SMEs?
We’re at work right now; we’re at the drawing board looking at the program. I think the scale of success factors we identify in the report – which are looking at everything from talent to growing sales, accessing capital, looking at process improvement, protecting IP and helping executive leadership – all of those are elements of what we need to put in place. Our starting point is very much going to be working with high growth companies or companies we feel have the potential to be high growth to do some diagnostics to understand where they are strong in these categories right now and where they need to do some deeper work to try to figure things out. Earlier I mentioned a company that manufactures 200,000 units a year for the Canadian market, [70 employee business] and very successful in [their] category. [The company owner was] with us in China and he needs to think about what he is going to do to in order to start fulfilling these opportunities that he started with China. He doesn’t want to just add ten times the amount of staff to [create] ten times the amount of output. What he would like to do is double staff, but look at how he can use technology and different processes differently. For him, scale-up is a program that will need to be putting in place a deep dive into analytics around his current production methodology and insights into what things can be done for its improvement. It’s going to require us to bring together expert problem-solvers in each of those areas.
Sticking with that example on improving processes, Siemens is a very large, global, multi-national manufacturing firm, very active in Canada and they are very much focused on working with the smaller member of their local supply chain here to help them be more efficient. They’ve got very interesting tools they can use and we’ll be talking to them about potentially being subject matter expert on improving processes so we can connect companies, where that’s their pain point, to organizations, such as Siemens, that can help them unpack their processes and look at simple things such as sensors that can help improve productivity.
The report Defying Gravity: Building a Scaleup Ecosystem talks about six scales up success factors. Can you further explain how these factors will improve the lack of resources and support for SME owners in Toronto?
The pieces around executive leadership and attracting talent can be problematic for our smaller firms because the founder tends to start it. When the founder starts she or he is usually one person that tends to do everything. As [the company] grows, it’s that ability to delegate and trade and have things done the way you like to, but get things done through others. So, that will be critical for certain participants. For others, they may be very smart engineers or researchers, but they just don’t know how to sell. They know their product inside out, they are product experts, and it’s just that ability to develop sales training and understanding of how to do market identification and market access to help grow the business. Capital is sometimes about getting the right working capital financing so that you can get new equipment as required and expand. It’s about understanding how to do financial planning for your business and getting access to capital. Protecting IP [deals with] if you [have] propriety techniques you’ve developed, both within your product or process, it’s making sure your putting protection in there so you can achieve growth through IP you’ve developed. Those are the critical success factors we have identified through our research using a business advisory council of experts doing research in the market with companies in Canada and also looking at best practices globally.
One of the success factors is Executive Leadership. You personally have several years of experience in leadership roles where you have excelled. What would you say is the most challenging part of being in a leadership role?
There are a couple of things from my experience. Number one is having a clear definition of what strategy is. Where do you want to go? If you are here today, where do you want the business to be in five years from now? What are the key initiatives you need to undertake? For example, at the Board of Trade, we now are a year and a half into executing a five-year strategic plan. There are four initiatives we are developing. The scale-up process is one of them in terms of how do we help more of our members grow. It’s having a clear idea of what success looks like five years out and what are the key, new deliverables you need. What you then need to be able to do is an excellent job of recruiting and retaining great talent. It’s really making sure you have the right people run the organization who are buying in and excited about the strategy and moving things forward. To me, those are always the key pieces: know where you want to go so you can measure it and make sure you have the right people running right beside you to get you across the finish line.
In your opinion, can you tell us what is the biggest mistake that leaders make which can significantly jeopardize the success of their business?
The biggest mistake potentially is a reality check on the business and its potential for success. We quite often see companies that don’t succeed to their potential either simply because the founder isn’t looking for what’s next for the business and gets comfortable in a certain position, or the founder may not be the right person to take it to the next level and has difficulty letting someone else drive the business forward and playing a different role in the organization. The most important thing we want to do with the program is to help those companies who are high growth get all the access to resources and expertise to help them understand who they are, who their business is and what success looks like for the next. I think we can create a lot of ambition out of that and we can help a lot of Canadian businesses do much more impactful things for the country in the global market.
On a final note, what advice can you give to SME owners when it comes to the success of their business?
It’s understanding the strategic potential of your business, having a robust network of other SME leaders you can bounce ideas off of, and having access to company founders who started at the same size your business might be right now and have gone on to great success, so you can learn from their lessons. It’s creating an ecosystem that is accessible for SMEs to fully unlock the full potential of their company.