Entrepreneurship and Innovation in Québec : How the Province Became a World-Class Player 9780313084089, 9781567204797

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Entrepreneurship and Innovation in Quebec

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Entrepreneurship and Innovation in Quebec How the Province Became a World-Class Player RANDALL CAPPS AND PAUL CLERMONT

PRAEGER

Westport, Connecticut

London London

Library of Congress Cataloging-in-Publication Data Capps, Randall. Entrepreneurship and innovation in Quebec : how the province became a world-class player / Randall Capps and Paul Clermont. p. cm. Includes bibliographical references and index. ISBN 1-56720-479-1 (alk. paper) I. Entrepreneurship. 2. Industrial management—Mathematical models. 3. Organizational change. 4. Entrepreneurship—Quabec (Province) I. Clermont, Paul. II. Title. HB615.C283 2004 338'.04'09714—dc22 2003058153 British Library Cataloguing in Publication Data is available. Copyright © 2004 by Randall Capps and Paul Clermont All rights reserved. No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher. Library of Congress Catalog Card Number: 2003058153 ISBN: 1-56720-479-1 First published in 2004 Praeger Publishers, 88 Post Road West, Westport, CT 06881 An imprint of Greenwood Publishing Group, Inc. www.praeger.com Printed in the United States of America

The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48-1984). 10

9 8 7 6 5 4 3 2 1

Copyright Acknowledgment Excerpt from The Change Masters by Rosabeth Moss Kanter. Copyright © 1983 by Rosabeth Moss Kanter. Reprinted by permission of Simon & Schuster.

Contents

Acknowledgments Chapter 1: Introduction

vii 1

Chapter 2: The Challenge

15

Chapter 3: Leadership

37

Chapter 4: Entrepreneurship

61

Chapter 5: Productivity

87

Chapter 6: Innovation

101

Chapter 7: Global Growth and Technology

119

Chapter 8: The Revolution of the New Economy

137

Index

161

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Acknowledgments

We did not start out to write a book, but when we began to research developments in the Quebec economy, we decided that there are many lessons to be learned. Our research began in 1991, when the government of Quebec was offering faculty research grants to American professors to acquaint them with the province and to encourage those professors to include units on Quebec in their classes. The research carried forward for a decade, and we became convinced that American managers and students could learn from the transformation that has occurred in Quebec in the last 50 years. There are lessons to be learned in history, economics, politics, and marketing, as well as in the broad field of management and leadership. As we conducted our research in Quebec, we encountered cooperation in every single organization we approached, ranging from small local organizations to multinational business organizations. The Ministry of Commerce was extremely helpful in assisting us in making contacts for interviews. When we began to research successful Quebec companies, patterns began to emerge that we thought would be useful for managers and students of management to know about. Upon further investigation, it became clear that the government had successfully supported these companies and assisted in their success. This was another lesson that we believe those in economic development will find useful. There are many exciting success stories to be found in Quebec. We found a population who realized that if they were to successfully compete in a

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Acknowledgments

world economy, they would have to commit to hard work and the relentless pursuit of their goals. As we pursued the research, we were blessed with much good assistance. In the early stages, Jamie Froedge became interested in the project and did a great deal of organizing and drafting of the introductory part and conceptualized the entrepreneurial model. Later Donna Kirwan took the entire manuscript and reduced the wordy parts while seeking ways to enhance other sections. Finally Catalin Rajiu became interested in Quebec and did a great deal to help with the final phases. These three were graduate students at Western Kentucky University, and we owe them a great deal for their help. In Quebec, we had the assistance of Caroline Columbe. We owe a big thanks to Dr. Myrna Delson-Karan, who served for several years as education attache at the Quebec House in New York. She is responsible for introducing the two of us, and while the book was in its embryonic stage, she invited us to serve as panelists at numerous academic meetings. It was she who helped us conceptualize a plan for the book. We hope the book will be useful to readers as they search for ways to improve their own organizations. Randall Capps Bowling Green, Kentucky Paul Clermont Montreal

CHAPTER 1

Introduction

Anyone who knows the daily life of managers and executives in corporate America is well aware of the magnitude of change that has happened in the past 10 years. The relatively stable economy has disappeared, and doing "business as usual" is a dream of the past. We read articles from many specialists in the management field who announce the beginning of a new era consisting of a new economy characterized by complexity, speed of change, and—some say—chaos. Many of these changes are the result of the arrival of information technology and the globalization of the economy and appear at first glance to primarily affect the way we work. However, if you analyze the situation more carefully, you will discover that change affects the nature of the work of managers and executives in a more profound way. Change affects perception of environment, definition of success, level of competition, time frame to react, and relationships with customers, employees, suppliers, bosses, shareholders, competitors, and other interest groups. Organizations both public and private are struggling today to adapt or create change within their fields of expertise. Public speeches from leading executives in America are filled with promises or demands to change the ways their organizations are performing. These leaders want to be winners and to be seen as major actors in some well-designed change strategy. They feel that as "bosses," "leaders," "partners," "coaches," "preachers," "cheerleaders," and "communicators," they all have one huge responsibility: to bring significant changes. Leaders often see their work as a set of well-designed operations by which they establish a vision of the change they want to see. They then

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Entrepreneurship and Innovation in Quebec

design a change strategy, convince people to act, give them rewards and encouragement, and adjust their work plans as they proceed. However, a majority of them find that success is not always waiting at the finish line and that things are not easily done in a sequential way. Leaders find themselves immersed in a changing environment where they have difficulty getting an objective perspective on where they are. They are submerged in detailed information. They often feel drowned in information that has a short-lived validity span. This helps to explain why we often hear about the need for "real-time" information systems. As the scope of leaders' jobs and the corresponding level of complexity have grown, the usual management tools have been losing effectiveness. Many ponder this dilemma when they say, "There must be a better way of doing my job—a way that will give me success at less of a personal cost in time, energy, and resources, and one that will give me much more satisfaction." With the globalization of the economy, answers become even more important to managers and executives. If the market becomes more open, it follows that it will become more competitive, more complex, and that the task of managing a global venture will take a higher physical and mental toll. The notion of a real-time system in a global market means that the flow of information will be constant and without interruption. Few executives or managers feel prepared for such challenges. The feeling of not being prepared, or of not having control of one's environment, job, or future, contributes to increases in stress and the resulting potential for mental and physical illnesses. To enable society to take advantage of the full benefits offered by the new economy, we must look for new ways to help people, corporations, and public institutions change obsolete ways of doing things. The view of the manager as the "captain on the deck" will force leaders to stay in alert mode while multiple battles rage concurrently. OUR A I M S : D E F I N I N G TOOLS TO M A N A G E CHANGE With this book, we have decided to examine what could be the next generation of tools to help the new executives and managers in their mission. These new tools should also become the focus of attention for the people responsible for training and supporting the new leaders, such as academics, human resources specialists, senior executives, consultants, and government officials. To identify these new tools, we decided to study techniques used by successful companies in their quest for success, adaptation, and, more important, their management of change. Company behavior mimics human behavior in the respect that although companies are a product of

Introduction

3

their environment, they also respond differently as a result of leaders' attitudes toward them. These leaders are using some know-how to infuse their view of reality and to bring that special vision to others. As entrepreneurs, they sense the opportunities, foster the resources needed, organize action, and modify their structures. The question, then, is "What is the essence of that know-how?" Much of what has been taught in business schools and by professional advisers regarding change implementation has been influenced by views that define change in a dynamic context, and in a process of linear actionsreactions principle. The latest tools of the reengineering process are still guided by those perceptions. The success of implementing an effective process is, for many of the supporters of those schools of thought, merely a question of quantity and quality of logical analysis. One must acknowledge the effectiveness of that approach, especially when physical objects are involved. In activities such as organizing production and distribution, deciding and controlling finance and budget, managing inventories and supplies, doing consumer research and other types of inquiries, and even designing job descriptions, it is possible to achieve relatively good success. These fields have definite sets of rules and causalities that make predictions and probabilities work. However, in other areas, such as designing a useful strategic plan, profiting from opportunities, adapting to changing needs, staying close to or surprising the customers, innovating, creating new markets, or operating at the world level, the rational scientific approach has not delivered an impressive list of successful methods or tools. Because there is a growing concern about the inefficiencies of the usual or traditional tools for managing those types of changes, one should perhaps look for another type of paradigm by which to evaluate the successful executive. Doing more of what seems to be inefficient would probably create the same results in the lives of the executives and managers, resulting in missed targets, failure, frustration, stress, disillusionment, and a sense of being out of control. L O O K I N G FOR A N O T H E R MODEL FOR MANAGING CHANGE Rather than suppose that all changes are of a dynamic nature and thus manageable by tools developed with a single model, the rational one, we looked for a larger conceptual framework that would take into account all types of changes. That framework would then help in developing another model of change creation and of change management. That model could then be tested and used in the observation of executives and managers of successful companies to see what they are doing to achieve their results and

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Entrepreneurship and Innovation in Quebec

what could be some of the roots of their successes and failures. Next we could list and define the tools that they are using to manage or adapt to changes. To develop such a framework, we have extracted the essentials from research done in studies of the evolution of organic life, and in work done in the attempt to develop artificial intelligence for humanoid robots. To begin to visualize, one can draw a line linking two extreme points in a continuum. The first extreme would be a totally predictable, stable, and controlled phenomenon, such as a program in a computer. Nothing happens without the application of a rigid succession of stimuli and actions. If it is not programmed, it will not happen. At the other end of the continuum exists what one would call total chaos, where nothing happens in a definite set of predictable ways. The complexity of life-forms in the world and the way they have developed since their appearance on earth suggest that they originated and evolved at the boundaries just before total chaos. Next look at the line of evolution of living organisms and see that it travels from a single cell to different types of groupings of those cells in a continuum of growing complexities. For example, the brain's capacity to interact with the environment emerges only after a long succession of living organisms. In their efforts to create a humanoid robot, scientists have discovered that the human brain is not a computer making millions of mathematical operations but a complex organization of numerous "computers" and "networks" exchanging information instantly without any specific order or command. Everything can flow everywhere anytime, each part independent of the other but in constant connection with it. To better comprehend this phenomenon, envision a flock of birds flying in a group, or schools of fish traveling in the ocean. Both consist of thouFigure 1.1 New Model for Managing Change

Introduction

5

sands and thousands of individuals reacting instantly to the behaviors of all their neighbors. There are no leaders in such groups, which explains how flocks of birds can change direction completely without moving the leader's position. Changes in those systems are done automatically, in real time, without any advanced programming, central system, or authority. Each individual retains total autonomy and liberty. A dream for any modern executive is instant adjustment without any centralized decision process. In addition, a dream for any modern employee is to have control of his or her destiny and life, combined with the benefit and protection of a group. The old paradigm views change management in a way that emphasizes the decision process, planning method, control system, and evaluation process, all needing a centralized operations center. This process adds delays because one has to report information, then wait to receive permission to act. Change management postulates that people who are at the lower level do not have enough knowledge or information to competently analyze the situation. Only the higher echelon and the staff performing analyses for leaders can ensure a coherent action response to strategic and operational questions. One effect of that view is the tendency to push organizations to add increasing layers of management to ensure control and appropriate use of information. Added layers of actors (intermediaries) may misinterpret the information, analyze it in another context, take considerations into account that have nothing to do with the facts (politicking), and ponder or procrastinate before giving an answer. Thus response time is delayed and unpredictability increased because anyone, for the sole purpose of demonstrating his or her brilliance, can add information, preoccupations, and complex analytical methods and can even create complexity. Furthermore, this view can bring "paralysis by analysis," whereby executives, hoping to reduce business risk, present staff members with endless strings of questions and what-if scenarios. The new paradigm we propose emphasizes personal autonomy, group commitment, and individual contribution to the total pattern of flight. This paradigm provides immediate adjustment both to threatening situations (predators) and to opportunities (grainfields). This paradigm applies even if some of the individual birds in the flock do not see the dangers or the benefits. Instead of adding a "control valve," an "analytical station," an "authorization process," or a "concentrated decision power," this model pushes for an immediate and more complete transmission of information and the corresponding spread of corporate decision power. The leader's tasks are defined differently in these two views. In the classical paradigm, the leader remains ultimately responsible for all decisions undertaken by the organization. He or she is the chief operator of the control tower (vision and mission), the total authority (no one can

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Entrepreneurship and Innovation in Quebec

move without authorization), and the decision maker who will receive the resources at hand. The captain will advise the crew of the weather conditions in the environment only after making a decision. The image of the conductor of an orchestra often serves as a way to emphasize the notion of teamwork (everyone must play the tune in harmony). In this scenario, total responsibility for definition and control of the symphony falls to the conductor's hand. If all the responsibility lies with the conductor, then it is not surprising that one would expect him or her to receive a bonus as an important part of the economic performance of the total organization. In our new paradigm, the leader must perform other types of tasks. The leader must ensure that the group for which he or she is responsible feels committed to the result pursued, to each other, and that all information is made available in real time. Each member must feel that he or she has power to react effectively to threats and opportunities. Members receive recognition for positive results, and the rewards of success spread to each individual in the group. Some managers argue that to be fully effective, especially in highly competitive situations, they must have a chain of command that can control the exact execution of the business plan. For many of them, this view is unquestionable and an essential part of their thinking paradigm. People may participate and propose actions, but any organization should know its chain of command to ensure cohesion and efficiency. Pascale, Millemann, and Gioja (2000) wrote that even the United States Army has moved away from such a view. For many, the juxtaposition of the U.S. Army with self-organization and transformation amounts to a contradiction in terms. Our stereotypes warrant reexamination. The paradox of war in the Information Age is one of managing massive amounts of information and resisting the temptation to over-control it. The competitive advantage is nullified when you try to run decisions up and down the chain of command. All platoons and tank crews have real time information on what is going on around them, the location of the enemy, and the nature and targeting of the enemy's weapons system. Once the commander's intent is understood, decisions must be developed to the lowest possible level to allow these frontline soldiers to exploit the opportunities that develop. . . . To focus the lens of complexity, the Army invented an important managerial distinction called "Commander's Intent" (p. 136). We see that a new context is emerging within the greatest competitive arena of all: war, where the lives of the soldiers are at stake. New information technologies are pushing toward a new paradigm in leadership and management. Necessary changes in behaviors are not obvious and pose difficulty for most managers trained under the old paradigm. Some

Introduction

7

would further suggest that such a shift might occur only during times of crisis. A MODEL FOR ENTREPRENEURSHIP BEHAVIORS The focuses of these two models are very different. The first one places its focus on decision making, control, level of authority, and the content of the work flow. The other puts its emphasis on the flow and the capacities of each part of the organization to adjust. The second model integrates the entrepreneurial capacities of the organization along with those of the executives and managers. For instance, we see how the cultural divide between bureaucracy (government/corporate) and small business (entrepreneurial) conforms to our two models, as described by Professor Allan Gibb (2001) of the University of Durham in England. This link with the entrepreneurship model shows the tools used by entrepreneurs. We see how entrepreneurs take changes happening in their environment and turn them into opportunities, how they adapt to some unforeseen changes, or how they themselves become change agents and create the changes that they want.

Table 1.1 The Cultural Divide The Bureaucratic-Corporate-Entrepreneurial Dilemma Government/corporate (looking for)

Entrepreneurial small business (as being)

order formal accountability information clear demarcation planning corporate strategy control measures formal standards transparency functional expertise systems positional authority formal performance appraisal customer/network exposed

untidy informal trusting observing overlapping intuitive "tactically strategic" "I do it my way" personally observed ambiguous holistic "feely" owner managed

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Entrepreneurship and Innovation in Quebec

These two models may be characterized by the task that they give to the highest executive. One model describes an entrepreneur who tries to gain control over the organization, while the other shows a leader who helps each employee to behave in an entrepreneuring way. The notion of leadership becomes defined in nearly diametrically opposed terms. One controls behavior for precise tasks, the other liberates the power of its employees to behave as entrepreneurs and thus decide how to attain desired objectives. THE LEADERSHIP CHALLENGE The focus on the task of the leader is a shift away from putting emphasis on organizing things and processes toward interacting with people in a way that ensures the overall success of the organization. In the past few decades, various researchers focused attention on the soft side of management, also known as the human resources side. It was called "soft" because much of what was written sounded like motherly statements providing moral advice to the manager on behavior, with few articulated tools to work with or to teach. Organizations often emphasize in their annual reports that "our human resources are our most important assets," without having a real system to measure them. When times become difficult, those "important assets" are the first to go. The usual way of managing people will not work anymore at a time when the knowledge economy is placing emphasis on the brain capacities of the corporation. The difficulty increases because employees, especially the best ones, will change their expectations and react differently to the usual corporate stimuli and reward systems. When compared to the preceding generation, the new workforce has new values and is composed of fewer people who want to stay with the same corporation for their entire life under any condition. This new generation will try to be as mobile as possible, going from one challenge to another. Organizations will be competing like never before to attract and keep the best people. The work of Michael Maccoby (1995) in his book Why Work? Motivating the New Workforce helps us understand the fundamental forces at work. The future pressure to outsource functions previously located within the corporation, the desire of some employees to telecommute, and the attractiveness of entrepreneurship and autonomy will force many managers and executives to change their behaviors. Leaders will learn to develop customer-oriented communication skills rather than using raw authority to communicate with their employees. We have known for a relatively long time that some of our organizations are structured in ways that foster inefficiency, unhappiness, and sickness at both corporate and individual levels. In their book The Addictive Or-

Introduction

9

ganization, Diane Fassel and Anne Wilson Schaef (1990) discuss the ways that corporations can develop bad habits. According to the authors' analysis, these habits become addictive and foster other addictive behaviors, reinforcing a system that needs more fixes to keep its addiction until—as happens to drunks—corporations bottom out. The challenge to today's and tomorrow's leaders will be to build healthy corporations that need and keep people healthy within a healthy work environment. They will also have to explore and identify corrosive and abusive behaviors by themselves. Gibb (2001) presents the same challenge to leaders when he observes that it is possible to design an organization to constrain or exclude entrepreneurial behavior or, alternatively, to maximize it. It is also possible to design an organization in such a way that entrepreneurial behavior becomes ineffective (in terms of contribution to organizational goals) or deviant. Gibb's report echoes some of the ideas introduced by Rosabeth Moss Kanter (1985) in The Change Masters: Innovation and Entrepreneurship in the American Corporation, concerning the conditions by which a leader can truly empower members of his or her team. Kanter wrote: "A requirement for empowering people to reach for a future different from the past is respect for the individuals in the organization. For people to trust one another in areas of uncertainty where outcomes are not yet known, they need to respect the competence of others. In segmentalist companies, the system is trusted more than the individual. Indeed, the system is often designed to protect against individual actions" (p. 34). The challenges given to leaders who are responsible for the survival and growth of their organizations and businesses are more than ever on the "soft" side of the leadership domain. Gibb's entrepreneuring model places responsibility within the affective arena rather than the cognitive. Tools used by leaders to implement change must target both the affective and the cognitive domains involved when empowering people to react with minimum delays to situations. Is it possible for those tools to be effective in all types of change implementation? If there is a specific know-how used by corporations to manage and create effective change, is it possible that some of it might also be present in successful actions of governments trying to get involved in economic growth? Could the same essence or the same know-how be applied to government actions? Leaders of public and private organizations are now looking to each other to find new ways of attaining sustainable growth. Both groups are trying to cope with the effect of the pressures that they have put on each other. Private business leaders have been pushing for more efficient and less interventionist governments. They have declared that governments could run many of their social ventures and services in a businesslike way,

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Entrepreneurship and Innovation in Quebec

and that the liberalization of commerce activities should be done with a globalized perspective. Government leaders have asked the private sector companies to behave in the global economy with more social consciousness and to stay attuned to the public's demands. In an ironic twist of fate, both entities have been asked to behave like the other. Government should act like businesses, and companies like social bodies, responsible not only for the well-being of the citizens they serve or employ but also for the cultural and moral system in which they operate. In other words, successful societies in the future global market should have an entrepreneurial government, supported by socially correct companies involved in servicing social needs as well as satisfying the expectations of their numerous stakeholders. Even now, government decision makers responsible for designing economic development policies are creating tools to help the business sector adapt and change to ensure increased growth and job creation. The more dynamic leaders understand that to do so, they must first understand how change happens and how to manage it. Obsessed with the economic development of corporations in their territories, they are trying to find tools to push their region to the front of the site locators' "best" lists. Successful companies know that with the different treaties existing, or the need to be negotiated in the globalization process, their governments have decided not to use the traditional tools of economic development, such as barriers, tariffs, subsidies, and buying preferences based on national origin. Consequently, the government's focus will be targeted toward providing favorable macroconditions for doing business while directly supporting other competitive factors influencing business success. Other competitive factors include employee retention, favorable working conditions, and, more important, knowledge creation and access. The tools used by entrepreneurs within business or government organizations are probably of like natures, and the challenges that face their leaders are similar. If this is the case, a number of basic tools exist that can be used by any leader to create or manage changes in an organization, independent of the type of environment or of goals pursued by it. In this book, we will define the tasks and tools that seem to be capable of accomplishing these changes. We will define with more precision the challenges that face leaders, and more that will face them in the future. We will look at factors affecting the economy, and the tools or ways of doing things that have been described as being effective to manage change and explain how to be an entrepreneur in the private or public domain. We will integrate the ideas of authors such as Burt Nanus, Allan Gibb, Stephen R. Covey, T. J. Neff, and J. M. Citrin with our own experiences and discussions with corporate leaders. We will show that these tools have passed the test of reality by showing how executives of winning organizations in business and in government used them.

Introduction

11

TWO D O M A I N S OF OBSERVATION: B U S I N E S S E S A N D G O V E R N M E N T S IN QUEBEC We decided to look at businesses operating in different industrial sectors that have made important changes and were successful in making those changes. We looked at corporations that have handled growth and changed successfully to instill their own brand of know-how. Examining these successful organizations enabled us to find some themes that were present almost everywhere. We say "almost" because no corporation is perfect, and if they had used the total toolbox, they would have done even better. We also decided not only to work at the level of the corporation but to expand our inquiry into the field of government policies and actions as these leaders made changes impacting the economic future. We thus set out to find a government that had used these tools in attempting to create a more successful approach. We wanted a society that was able to achieve impressive results while facing tough challenges. We also wanted the target of the study to have a relatively long period of success, along with many changes and many generations of governmental leaders. Quebec is a society that was forced to face great challenges in the past 50 years. It is the second largest province of Canada, and although Quebec has a majority of French-speaking people, they are a minority in Canada. Quebec has achieved a great number of successes not only in its economic growth but also in its integration of the French-speaking Quebeckers into the business life. The society went from being mainly agricultural and controlled by the Catholic Church to an economic system capable of managing its own growth, exporting more than 52 percent of its gross domestic product (GDP), and leading at the forefront of the revolution in technology. We will show the evolution of the interventions of different leaders who have held power since the 1980s to determine how those leaders reacted to and created change. A N A P P R O A C H : A HISTORICAL ANALYSIS As we begin the new millennium, this transformation is testimony to the power that a human society can have on its future. Quebec's success is evidence of the possibility of applying a formula, a plan, or a set of tools, as imperfect as they are, to create economic and social progress in a society, state, or region. However, the actual day-to-day life in the global village has raised doubts about the possibility of planning interventions or strategies to create long-term economic development. Many people in decision-making positions in both private and public sectors of planning believe that predicting the future will be almost im-

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Entrepreneurship and Innovation in Quebec

possible over the next few years. Their efforts to define the future are concentrated on what will happen at the beginning of the new millennium. These bureaucrats are faced with a continuous flow of microevents that appear to be putting their survival on the line. That explains why many business studies today tend to describe the arrival of revolutions and new eras in the business world as the main forces driving growth, both economically and socially. In such a context, it is no wonder that some of them are feeling that the study of the past is irrelevant. For them, the environment has become as unpredictable as it can possibly be. The speed and depth of the changes that have been happening are so great that just surviving takes a lot of energy. There is a Quebec saying, "When you are desperately trying to keep the boat afloat by stopping the water that is coming in, you don't look very far to where you are heading." The great leap in technology, the rise of international competition, the death of the communist economic planning system, and the attack on the strategic planning method used by big corporations have put leaders and managers in a state of permanent imbalance. Many entrepreneurs and politicians behave as if everything is in a state of chaos and that there are no more links between yesterday and today. We think otherwise. Even during periods of great change (for example, the French Revolution), some of the forces of change were tied to old, unresolved problems, and the changes themselves were creating new dynamics that would foster other revolutions or counterrevolutions. For the people who live through change, change seems unpredictable and radical. However, in most cases, changes are not unpredictable; the driving forces of change can often be observed. In the midst of change, when leaders are trying to survive and adapt to new realities, they have great difficulty observing the change clearly and in an objective manner. Observing change requires some distance (or, as the French say, distanciation) and a lot of thinking to see clearly what is at play during these times. This is especially true now that everything seems to be more complex. A fish would need to do a lot of clever thinking to understand that it is living in a humid environment. The capacity to look toward the future and to envision a challenge, a trend, or an opportunity is probably the most important asset of a senior executive today. Planning with a 25-year scope rather than a one-year, one-budget scope will help leaders prepare for the truly deep changes in their environmental and corporate structures. Junior officers in the corporation, like junior officers in the army, have a time frame of a few months, while a four-star general or a CEO may have a time frame longer than his or her own existence. The capacity to look forward may be linked to the capacity to analyze the past. As marketing and business development specialists know, it is

Introduction

13

crucial to recognize different wave patterns in a market, for example, what is in a phasing-out process, what is rising fast, and what major external factors are influencing these modifications. In addition, such waves are rarely sequential; they are phenomena that cross each other more like the waves in a pot of boiling water. Each has its own origin, its own dynamic, and its own life span. Just like any living organism, governments have been adapting to their own growth and trying not only to ensure their survival but also to develop in reality the image they have of themselves. To demonstrate, the authors decided to map the evolution (or at least the succession of strategies used over time) by one government and to identify the changing forces that were behind those strategies.

SOME M E T H O D O L O G I C A L LIMITS Characterizing each decade by its dominant waves of change is always an act of subjectivity, especially when dealing with huge phenomena such as the economic development of a society and the politics of deciding government actions. There might be other ways of drawing lines of evolution. Would they explain more? Would they take into account more credibility for actions from the government in their explanations and causalities? Would they permit more accurate predictions of where we are going from here? When we, for the purpose of simplicity, describe major forces of change operating in a decade, we know that all the phenomena related to those forces do not exist only in that decade. It is possible to find the existence of some attitudes and actions in each decade or period representative of the past. Some smaller changes could signal the major changes to come in the next decade. This is even truer when studying relationships between the economic, political, and sociological makeup of a society. Changes in any economic system are not necessarily successions of events with a precise breaking point. These changes appear more like waves crisscrossing in a nonsynchronized pattern. However, over a long period of time, their effects become obvious.

REFERENCES Fassel, D., & Schaef, A. W. (1990). The addictive organization: Why we overwork, up, pick up the pieces, please the boss, and perpetuate sick organizations Francisco: Harper. Gibb, A. (2001, May). Annual Conference of the Administrative Sciences Associati Canada, London, and Ontario. Symposium conducted at the Annual Conf ence of the Administrative Sciences Association, Ontario, Canada.

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Kanter, R. M. (1985). The change masters: Innovation and entrepreneurship in the American corporation. New York: Simon and Schuster. Maccoby, M. (1995). Why work? Motivating the new workforce. New York: Simon and Schuster. Pascale, R. T, Millemann, M., & Gioja, L. (2000). Surfing the edge of chaos: The laws of nature and the new laws of business. New York: Crown Business.

CHAPTER 2

The Challenge

THE PRESSURE FOR C H A N G E The new economy that evolved as a result of the explosion in information technology and the general acceptance of globalization is putting executives and managers in an almost constant frenzy, both physically and mentally. They receive tons of information and stimuli from a network of sources that cover the entire planet. Sometimes the Web appears as sticky as the web of a real spider; the more they try to move on it, the more tangled and confused they get. Many business leaders seem to be trapped in a race to stay in tune with a market that has become global, constantly out of balance, unpredictable, and more organic than dynamic. Forces seem to come from inside the market rather than from the outside. Few executives or managers have the feeling that they will be able to lead the market for a long-term period. Not knowing what will happen next and what could be a real threat is a significant source of stress and can create real sickness such as burnout, anxiety attack, depression, and heart attack. In the near future, the waves of change will come at faster and faster speeds. The magnitude of these changes will grow to the point where what is unbelievable today will become tomorrow's norm. Future managers must have considerable skill to cope. Technology will not only change the ways we produce, distribute, and consume products but also change the ways we live and see life. Technology is transforming the way we do business, the way we interact with people, and the way we live.

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Entrepreneurship and Innovation in Quebec

For instance, based on what has happened in the second half of the twentieth century, experts say that people who were born in the year 2000 can expect to live an average of 135 years. If they retire at age 65, they will live longer in retirement than during their work. We have difficulty envisioning the magnitude of changes that could happen over a long period. For example, consider the situation in the United States in 1900: • • • • •

• • • • • •

The average life expectancy was 47. More than 95 percent of all births took place at home. Only 6 percent of all Americans graduated from high school. Eighteen percent of households had at least one full-time servant or domestic. The average wage was 22 cents per hour. The average worker made between $200 and $400 per year. A dentist could expect an annual revenue of $2,500, a competent accountant $2,000, and a mechanical engineer about $5,000. Ninety percent of all U.S. physicians had no college education. Only 14 percent of homes had a bathtub; 8 percent had a telephone. There were only 8,000 cars in the United States and 144 miles of paved roads. The maximum speed limit in most cities was 10 miles per hour. The American flag had only 45 stars. California had a population of 1.4 million residents and was the 21st most populous state of the Union. The population of Las Vegas was 30. There were about 230 murders reported in all the United States. Coca-Cola contained cocaine instead of caffeine, and one could purchase marijuana, heroin, and morphine over the counter at the local drugstore.

Managers and executives often feel overwhelmed by the speed and frequency of changes in their business environment. At a time when they finally have access to a myriad of information, statistics, and other data, they have less and less success in efforts to take control of their businesses. The world may be appearing to shrink because of new information technology, but it is also growing increasingly complex. Managers are flooded with intelligence reports, strategic analyses, and prognostics, to name a few. Now the job seems to be to flush out the irrelevant information rather than try to find information sources and analyze them in detail. M. Alain Sieryex, speaking to a conference in Quebec City in 1993, said, "Managers who have lost their vision and don't know what to do are turning out massive outputs of graphs and tables, very well done (information technologies have done miracles in that field), but insignificant." To make things worse, corporations must work internationally and be competitive everywhere at the lowest possible cost. The executive now has operations in different time zones, employees from different cultures and with different work ethics, legal systems that don't deal with issues

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in the same way, customer expectations that define quality by different standards, and partners who have values and business behaviors that are difficult to grasp. Managers read that in the new global business game they must be a leader of change, capable of describing with precision the vision and objectives that every part of the organization should seek. They have to be proactive and in tune to what is happening in the market, in the technology field, and, yes, even in the boardrooms of their competitors. There is so much to do in so little time, regardless of company size and resources. To better understand the scope of the pressure to perform that is driven by the outside environment, let's look more closely at the changes that have happened with the arrival of new technologies and the global economy. Next we will consider the pressure that is growing inside the executive who works in that type of environment. SGDL is one example of a company that understood the changes in technology and transformed them into its driving force. Bombardier Inc. is another example of a company that integrated technology into its process and became more successful at implementing change. SGDL Systems SGDL (Solid Geometry Design Logic) Systems Inc. is a company that pioneers in innovative 3-D technology. Based in Montreal, Quebec, the company currently employs 40 people, a number that is expected to double over the next two years. The company was established in 1997 with the main purpose of developing and marketing a unique universal programming environment for modeling, visualizing, and transmitting complex three-dimensional scenes and objects. This distinctive technology features solid 3-D models with exact geometry, extremely compact file sizes, and multiplatform portability. SGDL Systems offers a unified solution across the entire 3-D production management process and communication flexibility, thus facilitating collaborative work in any business environment. The founders of the company believed that their technology would offer extraordinary opportunities for the 3-D representation market. They also trusted that the product would be unique and revolutionary in the field and that these characteristics would likely attract investors who look for strong, winning companies led by entrepreneurs driven by a clear vision and a desire to grow. In accordance with their desire to grow and in an attempt to keep up with the essence of their mandate of continual creation of employment, SGDL plans to increase the staff through direct hiring over the next two years. The application of SGDL's products will eventually extend to all segments of the 3-D industry, such as telecommunications and 3-D software,

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gaming and simulation, research and education, and CAD/CAM/CAE market segments, all of which have huge potential. The products will be designed in conformity with the requirements in the field so that they can be executed on almost every platform, which will give SGDL a favorable competitive position. With respect to the most recent developments, at this point, SGDL has become almost synonymous with the development and marketing of high-quality, innovative solid 3-D technology. Not coincidentally, the company was founded after 15 years of research. The vision of the founders is to provide a unified solution to anyone involved in modeling, simulating, visualizing, sharing, and communicating 3-D information in any business environment. Through applied research and an experienced development team of mathematicians, computer scientists, computer graphics designers, engineers, and architects, SGDL promotes the use of 3-D technology in cooperation with strategic partners. The company's major strength is the development of technology. All efforts since its foundation have been directed toward developing competitive products for the market. In doing so, SGDL strives to become the best in the field of 3-D graphic technology through active strategies aimed toward innovation. SGDL offers a powerful, high-quality 3-D solution to anyone involved at any point or phase of the 3-D production process in any business environment. Current 3-D standards use different technologies in designing, modeling, and viewing their 3-D information. SGDL's proprietary technology platform unifies the entire process and offers an end-to-end solution by adding the capability of communicating, collaborating, and distributing interactive 3-D information. SGDL develops products and applications that enable fast, realistic, and accurate rendering of 3-D graphical images in real time, on virtually any platform, from the most ordinary PC to the smallest, most sophisticated device. For financial rationale, in developing its products and technologies, SGDL relies mainly on partnerships with strong investors. For this reason, the company recorded a major step forward in the first half of 2002, when it secured $6 million in investments granted by the Solidarity Fund QFL ($3 million), Innovatech of Greater Montreal ($1.5 million), and a group of private investors ($1.5 million). "Winning the support and confidence of major investors as well as valued partners is crucial to the development of SGDL, and we are quite pleased," says SGDL executive vice president and chief operating officer Bernard Casiez. "This second round of financing will allow SGDL to support its marketing activities in Europe, Southeast Asia, and North America and to pursue research and development of its innovative technology."

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Bombardier Inc. The world's third largest civil aircraft maker and top manufacturer of passenger trains, Bombardier is known today as a diversified corporation composed of several autonomous operating groups. Each group has been invested with the necessary authority to perform its specific operations, and each group is thus expected to take the necessary measures that would bring increased performance levels. These will, in turn, find consistency with the mission, code of ethics, policies, and internal governance of the corporation. In addition to that, the corporation was organized in such a way that the operating groups are expected to adopt a decentralized management structure. Consequently, the operating groups are able to take quick action and reaction in face of events. This strategy is believed to have had stimulated entrepreneurship among the corporation's employees. Also, Bombardier's strategy includes specific measures aimed at optimizing the tactical benefits derived from cooperation, coordination, and transfer of information between its operating groups, as it is supposed to happen in a lucrative alliance. Joseph-Armand Bombardier founded the company in Valcourt, Quebec, in 1942. Bombardier initially manufactured tracked vehicles capable of transporting passengers on snow-covered terrain. B-12 is the name of the company's first commercial vehicle, which was mainly designed to haul wood, carry mail, and transport students in rural areas. Some years later, the government of Quebec adopted a law that called for plowing snow off the roads. This event set the business behind, as the sales dramatically decreased, so the inventor found himself having to design a new series of industrial vehicles. Based on previous personal experiences that involved the death of a son because timely transportation had not been available, Joseph-Armand Bombardier wanted to create a small personal snow vehicle. As a consequence, he invented and designed a new vehicle that was introduced into mass production in 1959. The outcome is considered today to be the true forerunner of the Ski-Doo snowmobile. Between 1959 and 1973, Bombardier produced close to one million SkiDoo snowmobiles on its assembly lines. However, the energy crisis of 1973 initiated and hastened a decline in the snowmobile market, which forced the company to scout for different fields of activity that would allow it to keep and use its highly qualified workforce. As a result, when the city of Montreal announced an expansion program for its subway system in early 1974, Bombardier decided to become a manufacturer of rolling stock. As part of its expansion strategy, over the next few years, Bombardier ventured to conquer the North American rail transit equipment market, which offered excellent growth prospects. However, what proved to be a

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decisive breakthrough in this attempt was a contract for 825 subway cars awarded in 1981 by the Metropolitan Transit Authority of New York. To date, Bombardier has conquered the field of rolling stock in markets all over the world, including large cities such as Toronto, Vancouver, Boston, Mexico City, London, Paris, Berlin, Ankara, Djakarta, and Kuala Lumpur. The transportation division of Bombardier also manufactures a full range of suburban and intercity vehicles, complete rail transit systems, and freight cars. Not only that, but in their wish to render full customer support, the company also provides operations and maintenance services for all products manufactured in their facilities. Bombardier prides itself on being a customer-oriented company that keeps abreast of market trends to provide top-quality products and services at the best price/ quality ratio. Additionally, Bombardier distinguishes itself by technical and administrative innovation, constantly striving toward new products and services and high productivity. In 1986 Bombardier entered yet another promising sector when it bought the leading Canadian aircraft manufacturer, Canadair, which had been state owned up to that point and underwent a privatization process. With the subsequent acquisition of Learjet in the United States, Short Brothers in Northern Ireland, and Canada's de Havilland, Bombardier became the third largest civil aircraft manufacturer worldwide. It is currently the sole aircraft manufacturer with production facilities on two continents. In 1991 Bombardier launched the 50-seat Canadair Regional Jet. At the time, this product was regarded as having reinvented the concept of regional aircraft transportation. The company now offers complete families of turboprop and regional jet aircraft and has the industry's widest range of business jets, offered both in full and fractional ownership. The Canadair 415 amphibious aircraft is the only purpose-built fire-fighting aircraft, which can be adapted to a variety of specialized maritime missions. Along with manufacturing snowmobiles, Bombardier has always been active in the field of recreational products. While having produced more than two million snowmobiles since its creation, the company also added several other vehicles to its line of recreational products. Pursuing JosephArmand Bombardier's creative mind, the company launched the Sea-Doo personal watercraft in 1988, then a line of jet-powered boats, both of which are powered by Bombardier-Rotax engines. In the recent years, a successful entry into the all-terrain vehicle market extended the reach of Bombardier Recreational Products. Bombardier's success has been built on different elements, out of which most important would be uniting its world-leadership attitude with a clear focus on product lines that have high-growth projections. The snowmobile invented by the founder of the company set its upcoming strategy.

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"We've always identified niche markets," says Bombardier's son-in-law and the corporation's current CEO, Laurent Beaudoin. Following the strategy of Joseph-Armand Bombardier, but at a larger scale, Beaudoin led the company during the 1970s into mass transit, first in Montreal, then with a $700 million contract in New York City. Since then the company has moved on to railways, joining in a consortium to win a $600 million Amtrak contract to build a high-speed train for the Boston-Washington run. Another bid, for a $4.8 billion high-speed train line, is in process in Florida, and Bombardier has won orders in five European countries. It supplied passenger shuttle trains for the Eurotunnel between France and the United Kingdom and built parts for the highspeed train Eurostar. Over the years, Bombardier has become a diversified global corporation, leading the business jet and regional aircraft markets worldwide, as well as being the global leader in passenger railcar manufacturing. It is also recognized as the benchmark for the introduction of innovative recreational products. It has a total workforce of more than 56,000 employees located in 12 countries in North America, Europe, and Asia. For the fiscal year 2002-2003, Bombardier expects revenues to top Can$25 billion (US$16 billion). This would mean an increase of 15 percent compared to the previous year. It is expected that the overall increase will be influenced in part by the acquisition from Daimler Chrysler AG of train maker Adtranz. A large majority of Bombardier's revenues, estimated at around 90 percent, is generated in markets outside Canada. THE IMPACT OF THE T E C H N O L O G I E S EXPLOSION With the beginning of the mobile revolution, a tremendous flow of information will be available to every business leader 24 hours a day, seven days a week. With new communications technologies, businesspeople will be available to their companies all the time. Your only choice will be to refuse your messages, but those messages will still be waiting for your attention, even if you are scuba diving in the Caribbean. The messages will be on the surface, waiting for you to read them on your latest PDA. Today many business leaders receive more than a hundred e-mails daily. That is an overwhelming amount of information to transform into actions and decisions. Senders are expecting immediate answers because they know that the message has been delivered, that you have read it, and that you can answer immediately if you choose. No more excuses will be possible. The number of people receiving instant copies of a communication between two individuals is rising with the ease of sending electronic messages. Some have organized groups of people on their e-mail address lists,

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and with the push of a button, hundreds of people can receive copies of any message sent. What would have taken days of work in the past now happens immediately and automatically. Interrelations are spreading with the same acceleration as the Internet itself. Some consumers are also receiving large amounts of unwanted information through fax and electronic-sending robots. Some are beginning to complain in court. A first-level judge accepted a collective case against Hooter's for sending those types of solicitations and awarded the plaintiffs several million dollars in damages. There is a paradox involved in the creation of new tools to help business leaders. As these tools become available, the expectations of everyone grow and adjust to the new definition of effectiveness. People who refuse to use these tools are labeled old managers from an old economy. Rather than helping do the job, these tools are redesigning the job in a way that elevates the standards of execution. Rather than relieving pressure, they are increasing it. Business leaders know that their jobs are becoming increasingly complex and stressful. Since the world has begun to shrink, and the number of data coming in is constantly rising, these conditions automatically raise the level of pressure and the "heat" that pressure produces physically. For some, the pressure has already become almost unbearable. THE IMPACT OF GLOBALIZATION At the same time that the new information technologies are transforming the tools and the jobs of the business leaders throughout the world, there is another major revolution happening. Countries are deciding to let the competition become more and more global. They accept that the market should become global and that production factors should be able to move freely in response to the dynamics of the market. Technology has changed the way the game is played, while globalization is changing the game board. Suddenly every player is playing the new game on the same board and is playing against every other player. There is no order in which one has to play; you move when you think it is good for you. Now that everybody is playing in real time, there is no more playing by mail, no more time to wait and see, to get advice, or to stop the game. If your partner can do three moves while you are still pondering, that is acceptable by the new rule book. Corporations that thought they were operating in local markets because they were operating only in small and medium towns are now discovering that they are, in fact, in the global market. As a result of the speed of communication and globalization, events and competitors from around the globe affect corporations. No one now can rely on the constancy of the "way we do business here" as the foundation for success and growth.

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Examine the stores of rural Americans and look at the origin of the product being sold, and you will see that the planet, at least in the business world, has become a vast mass of interrelations. About 12 years ago, one of the authors was giving a conference in a small city between Montreal and Quebec City called Cap de la Madeleine. After arriving a little early before the actual conference, he went into one of the local stores and browsed up and down the aisles, realizing that the world had discovered that small market. In that tiny shop, he found more than 40 countries represented, including Denmark, Thailand, China, Turkey, South Africa, Peru, England, Norway, Egypt, Germany, Poland, Brazil, India, Pakistan, Australia, Mexico, and Morocco. People attending the conference were surprised to see that the internationalization of their own market (economy) was already a matter of fact. Local manufacturers realized that they would have to compete in their own market with the best in the world. Would they be capable of selling their own products in these foreign markets? That challenge will remain for years to come. The logic of the new economy is that if you can compete in your own markets against international competition, it follows that you can probably sell in some other national market than your own. One could say that in the years to come, a hologram effect will emerge in the markets, and all competitors will be in every part of the planet. We already see that happening in large international cities where the offering of products and brands are increasingly similar. Managers and executives are seeing themselves thrown into a worldwide market that is changing daily. They are trying to adapt to these dramatic changes. Now they have to think globally even if they act only locally. In fact, not only does one have to adapt to change, but if one wants to have real growth, one must be a force driving those changes. The job for senior executives now seems to be to question everything around him or her, rather than to ensure the stability of the process and policies of the corporation. Leaders move from guarding cohesion to encouraging adaptation and leadership changes. The way one views the competitive game, including the scope of the field of play, the time to respond or to execute, the available resources, and the number of players or partners on or off the field, will determine the paradigm by which the executive plays the game. With what is happening now, we must invent new game plans and new playbooks if we are not to be the losers. THE PRESSURE FROM W I T H I N OURSELVES The notion that to be in the game, you must be a winner, has been ingrained in the minds of many executives and managers in corporate

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America. They feel that to be somebody, you have to be a winner, and to be a winner, you have to play and work hard. In discussions with corporate leaders, we asked them how they would define success in their life, and we were surprised to see them struggling to give an answer that satisfied them. The participants defined two different views of success. One view involved success in business life, and the other view concerned success in personal life. The majority of them found it difficult to talk in a way that expressed an integration of their total being. They appeared to be fragmented and to live separate lives. In some cases, we could perceive contradictions and discrepancies between what was important in the long run and what they were trying to achieve in their business lives. The career, originally intended to sustain life objectives, seemed to become the objective itself. During a two-day seminar on management that we created, we asked executives, leaders in public organizations, entrepreneurs, and managers to begin their first day by working on the issue of what constitutes their most important value. It took some time before they felt sufficiently at ease to talk about what they really felt was important in their private lives. Their first answers usually focused on the job, the working environment, and their career plans. This is partly explained by the context of the seminar, because if the subject is management, then answering questions of value must be related only to the job. It is evident that some of them felt that they lived separate lives. We continued to help them define more precisely what might constitute a successful life for them. As we discussed what objectives they could pursue, they became much more emotional. Those who were more expressive talked about their families, about the tremendous quality of life they hoped to be living after retirement, about the passion they have for some projects, and of their love for their families. We felt energy flowing in the room and the excitement created when they shared their visions of the future. We saw them expose another expectation, the hope that because of their hard work, they will finally experience a feeling of success and the enjoyment of "being there." They enjoyed the moment when they could express their own visions of happiness. During that time, the least expressive of them opened up and gave some very personal details about their lives and dreams. As the scope of the exchanges widened between them, we saw that many had fantasies about what was really happening to them. Some seemed to be talking about someone completely different from themselves; others seemed to be waiting to live and feel happiness when all of their hard work was finished. Few of them were connected to who they really were and to the "here and now" experience. Their life objectives seemed to the observer to be disconnected from their daily activities. To help them adopt a more conscious and realistic view of what they

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really do, at the beginning of the second day, we asked them to do one exercise from their past year's agenda. (We asked them to bring these documents when they confirmed their attendance of the seminar without telling them what we would do with them.) Randomly, we took a day, a week, and then a few more weeks and asked them to look at what they did in relationship to what they said the day before concerning the most important objectives of their life. How many activities related to those priorities? How much time and other resources were given to those objectives? Which types of tools did they use to ensure that they were on track with their views of their own objectives and ideas about success? Who in their life knows very well what those objectives are? Who is giving conscious support to them? If their priorities in life were their families, what were they really doing for it? If they named their spouse as the most important partner in life, did they build an organized life plan together that was very intimate? With this information, they could plot a graph or pie chart to visualize what they were really doing about success in their life. The vast majority of the participants were struck by the fragmentation of their life. The difficulties were inherent to self-awareness, along with what they wanted, where they were, whom they were with, and what they were doing. The ability to organize one's life for success has always been difficult, but today the new environment is elevating the level of difficulty. While a good number of executives and managers are quite at ease, authentic, and in touch with themselves, the vast majority seem to face some degree of difficulty in attaining such a state of mind and heart. The common values that people held in the first half of the twentieth century have been replaced by a multitude of possibilities. Now more than ever, it is possible to exercise our own liberty and free will. We can choose our personal values, religion, ethics, and models of behavior. We are in touch with the diversities that exist in each of these domains, and we are free to travel almost anywhere on the planet. Those choices bring with them responsibilities and the stress that goes with it. As we are more and more mobile geographically, people seem to pass more quickly through our lives. Even our spouses are, in many cases, passing by, and some are living in what we call "restructured families," where children come from different sets of biological parents. Many women try to juggle different roles (wife, mother, manager, best friend), with hopes of being perfect in all of them, because that's what they think success is all about. As the saying goes, we are always doing more with less. We all know that there are only so many hours in a day and in a week and that one would definitely need more of that precious resource to be a winner in all categories. That's why we invented the notion of "quality time." You don't have to be there all the time, just when the need is suf-

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ficient to justify quality time. Although the concept of quality time may sound good, it does not really match with other concepts such as commitment, love, and building lifelong partnerships with our spouses. The shortening life cycle of products, technologies, and corporations has also created a new dynamic in the business environment. Even the life cycle of a senior executive in the same corporation has been shortened because of the extreme competition and the heat coming from the market, the competitors, and the other players in the corporation. Executives and managers are trying to adjust to the new "human resources" model of dealing with people. If the corporation or organization does not have a real commitment to its employees as people, then they will likely not have a commitment going beyond their short-term performance. Today we see more and more executives and managers who feel that they are "hired guns" to do a specific job. After they finish that job, they may need to move to another corporation. Some define themselves as entrepreneurs, selling their products on medium- to long-term contracts. Others change jobs frequently as a precautionary method to protect themselves from the next wave of recession, reorganization, restructuring, or plain "we don't need you here anymore." Still others feel that they like to live the life of a mercenary, going from one challenge (one could say fix) to another to keep the pleasure and the adrenaline moving. The desire to be totally responsible for one's life in a constantly changing economy puts a lot of stress on everyone. This is especially true if one has family, commitment, and a mortgage. In its uncontrollable form, the will to show how successful you can be pushes you to expect higher levels of performance from yourself, as well as from your subordinates. Success calls for success, they say. So what will be your next battle? Defining one's life objectives today is often a real source of stress. This is primarily due to the fragmentation of our own activities, our conscious awareness of the multitude of possibilities, models that are offered to us, and from our often unconscious fantasies about what we should be doing as derived from our early childhood experiences. Stress can create behavioral problems that, in their worst form, cause severe mental problems. Surely the vast majority of executives and managers have learned to deal with stress and find ways to keep an equilibrium between all their activities and aspirations. However, we believe that the integration of these different selves is not as strong as it seems, and that the relative ignorance of that phenomenon is putting a lot of corporations at risk of not developing healthy employees and a healthy environment conducive to change and adaptation. THE PRESSURE FROM W I T H I N C O R P O R A T I O N S The changes that we have briefly described about the arrival of new information technologies and the globalization of markets are at the origin

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of a new level of stress in the day-to-day lives of corporations. New tools of management, such as benchmarking, are aimed at measuring performance and comparing it to that of others worldwide while raising the standard by which success is measured. Much like Olympic standards, minute differences in performance will give either the greatest rewards or the agony of defeat. A high possibility exists that in a majority of big organizations there are some people at the executive and management levels who are struggling with a sense of dissatisfaction about the way they are perceived and used. Some of them have probably developed some dysfunctional behaviors. On any given day in most organizations, there are probably one or two decision makers who are stressed to the point of exhibiting compulsive behaviors, depression, exasperation, and intolerance. A real issue is that we do not always understand that their sickness affects all the functions and normal processes of the organization. In The Addictive Organization, Fassel and Schaef (1990) describe the four major forms of addiction in organizations, and the processes that are usually involved. These include the creation of the promise, the action of the pseudopodic ego, the external referencing, the fabricating of personality conflicts, and the reduction of reality to a succession of dualistic choices. We are convinced that in many instances, the average contemporary organization is often constructed with some built-in diseases that reflect the environment in which it operates, or which is in the behavior of its builders. The predominant fight for power and control in our personal and family life is often described in the literature as the prime source not only of corrosive family environments but also of corrosive work environments where abusive people can thrive and manipulate at ease. One only needs to read some of the work of John Bradshaw, such as Homecoming, Family Secrets, and Creating Love, to see how easy it is to create a corrosive family life and, by extension, a corrosive business life. People adopt different strategies and reflexes in early childhood to deal with authority, such as submission, revolt, negotiation, self-affirmation, and manipulation. As they become the bearers of such power themselves, they expect people to use these strategies on them, and they tend to organize their behaviors according to these predictions. If they have been manipulating their bosses, they expect their employees to manipulate them; if they have always been in submission, they expect others to submit to them only because they have the authority. The transactional school of psychology has demonstrated the importance of the perception of self and others and its influence on the ways we interact with people. If we think, "They are okay and we are not," we will probably play and replay a number of games that will have the result of reinforcing that perception of self and others. Being an executive or a

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manager doesn't change the types of games played; it just changes the board where the games are being played. Attention is focusing on the health problems of executives and managers in corporate America. Almost like Olympic athletes, they have advisers and coaches to help take care of their physical and emotional health. Eating well, exercising, relaxing, visualizing, getting emotional energy, sleeping well, and coping with jet lag are among the personal responsibilities for leaders. Having meaningful personal relationships, giving quality time to family, and having a spiritual life enter the mix of the reality of today's performers. IN SEARCH OF SUCCESS A great number of executives in corporate America are now trying to get an edge on their competitors by learning new ways of managing their organizations. They are searching to find a book, a study, a Web site, a mentor, a personal trainer, or even a management guru who can describe new tools that will provide immediate and long-term success. Executives feel that what they learned in their academic training and in the working world is not producing the results due to them. When they do achieve success, they try to identify the most important factor in attaining it. Sometimes they are not sure and think that it was due to chance, good timing, errors from their competitors, or simply the fact that they worked harder. Increasing numbers of workers and managers feel that they don't control what is happening to them, to their unit, to their corporation, or to the market. The difficulties of high-tech stocks on Wall Street since 1999 are good examples of the unpredictability of the market. While the majority of corporations have difficulty obtaining the standard of results set by their owners, the ones who are able to do so with constancy are becoming superstars. How do they do it? What's their secret? What could we copy to achieve the same success? Perhaps doing what they are doing (or, more often, what they've been doing in the recent past) could give us the same results. That idea explains why we see an increase in offerings of books, seminars, videos, and training sessions aimed at supplying new tools and methods to managers and executives. Publicity documents provide a means to observe and study corporate superstars. Managers are then empowered to instill the essence of the power to achieve by writing recipes for success, packaging knowledge in easy routines, and preparing a kit of bring-home tools that are unique and efficient. It is evident that the market for quick-fix solutions to problems related to underperformance is growing. The attractiveness of instantaneous universal solutions is very strong. Unfortunately, like the weight reduction market, promises do not always materialize, especially in the long term.

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THE D A N G E R S OF THE U S U A L STRATEGIES FOR A D A P T I N G TO A PRESSURE E N V I R O N M E N T In an environment becoming increasingly unpredictable, where change is accelerating and competition for resources is stiff, difficulties coping with stress levels will increase. In the animal kingdom, animals faced with high levels of stress and danger must adopt, in general, one of the three following strategies: • They become paralyzed by their fear and hope that the danger will go away. • They flee in any direction, trying to put distance between themselves and the sources of danger. • If they feel that there is no way out, or that they should protect their territories or young, they attack with all their energy. Managers may also use these strategies. Some have stopped looking for a way out, and they just hope that time will make the imminent dangers to their career and the corporations they work for disappear. Nevertheless, we know that pressure from the market and the workplace will not go away, and to survive, we must adapt. Hoping that the pressure will go away is only a delaying tactic that will shrink the time available before change becomes a survival necessity. Sometimes the distance between one and the beast will be too short to ensure survival. Other managers try to mingle with what seems to be the winning approach. They learn the new vocabulary, which gives others the impression that they are applying it while they fly the corporation by the seat of their pants. Trying to be a lion when you are really a sheep disguised as a lion creates a life-threatening situation. Being a wolf in a pack of wild dogs is not an easy approach, because at some point they will know that you are not one of them and they will band against you, so you had better be prepared to fight. Some managers are nostalgic for the predictability of the old "business as usual" economy They hope that the discoveries and tools of the last new trend will be the one to ensure their personal survival and the growth of their corporation. The lure of the immediate fix or the perfect recipe for success is very strong. These managers are willing to run in the same direction that the head of the herd has identified, hoping that it's the right one. However, being a follower without much knowledge and with a false sense of security can cause one to be sacrificed for the benefit of the herd. More important, it will never put one in the leadership position needed to achieve long-term success. Still other aggressive managers plunge into fighting anything that looks like a threat to their territory or survival. They will implement any business solution just in case a problem might arise. They appear to their team

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to be "running all over with no head." In their energetic attempts to compete, they devote more time and energy to their work, hoping that the added "human power" will make the difference. Conversely, we know that doing more of the same will only produce the same result: stress. To cope with the added stress, they turn to tools such as stress management, personal growth techniques, and holistic approaches to the lives of executives, which lower personal stress but will probably not help the general performance of the corporation. Before responding with old reflexes, a manager should look quickly at the situation, analyze it to find the real dangers and opportunities, identify possible trends and outcomes, and then act accordingly. This is even truer if one expects to be a leader of a corporation or industry. As the saying goes, "Begin by looking the tiger in the eye." We'll return to that challenge shortly. THE I L L U S I O N OF THE P E R M A N E N T S O L U T I O N Most of the new management recipes work for a while and can achieve some success. However, since the business world is not dynamic but organic, these recipes will all become outdated, and their efficiency will drop significantly. When examining follow-up studies conducted after the publication of In Search of Excellence by Tom Peters and Bob Waterman (1988), one finds few champions of excellence who stay successful. In an organic world, it is easy to become sick or to lose skills. Keeping a business organization at the top of the game for a long period is just as tough as maintaining a championship title in the professional sporting arena. Tools are defined by their capacities to fix specialized problems. If used in a specific way and under the same conditions as originally designed, a tool usually works. However, in management, the situations, contexts, and specifics of the problems usually change with time and space. The organic characteristics of organizations imply that forces exist that are capable of adaptation and innovation. These forces will then change the ways that problems or opportunities are defined, and the process one should take to act on them. Soon after the publication and success of The One Minute Manager, by Spencer Johnson and Kenneth H. Blanchard, a book called The 59-Second Employee, by Rae Andre and Peter D. Ward, was published. A hockey saying is "There is always a second and third period to adapt and change the rhythm, and therefore the result of the first period." If today's managers accept that only change is permanent, a few have accepted its corollary that stability is only short-term. We are destined to witness increasing changes in things, situations, and organizations. The ideal of one career for life is already outdated. Most solutions, tools, and approaches are dated and will soon become

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useless. Whether or not we perceive the changes in our world, change will affect us. Can you remember the day when there were no cellular phones, no portable computers, no PowerPoint, no local network of computers, and few microwaves? If there is no permanent solution, must we continue to search for successions of quick fixes? Should we stop all planning because we know that we can not efficiently predict what tomorrow will bring? If there is no ultimate tool, then one must have all the tools available, just in case a situation requiring one of them appears suddenly. THE NEW CHALLENGE: I N T E G R A T I N G In management, as in physics, if there are a few good tools and valid theories, the search for the unified theory continues. Science is a work in progress and is moving closer to finding a common principle. Insecurity, doubt, a sense of urgency, and the pressure for better performance and results have given many managers and executives a new type of tunnel vision. This vision shrinks images, blurs edges, turns colors into black and white, and flattens the perspective, thus greatly impairing one's capacity to see the big picture. The time has come for managers and executives to look into the eye of the tiger and find the courage to define organizational reality. The journey to tame the tiger is long, but it represents the real mission given to our organizations. We should all work toward integration in creating a better and happier world. This integration must take place alongside other powers, including the government. The problems that the executives of public institutions and private companies will face will be increasingly of the same nature. Charles M. Savage (1996) addressed integration when he wrote: "The integrative process puts us in touch with the whole, with one another, with customers, customer's customers, and with suppliers in everchanging patterns of relationships. It also puts us in touch with our own wills, emotions, and knowledge. The integrative process is a process of human networking: networking our visions and knowledge so that we can take decisive action in response to concrete opportunities" (p. 105).1 For example, corporate America is already investing more in the education and training field than the U.S. federal government, and it is now indirectly managing a significant amount of the nation's health care system. However, governments from all continents are increasingly discovering ways to help the development of corporations working within their territories. This development assistance takes a variety of shapes, such as training, financing start-up, expansion, research and development, or by supplying good economic conditions or infrastructures. As business and government become more complex and interrelated,

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the skills needed to lead will become more important. The obvious answer in one environment will not necessarily be the best in another. New leaders will need to help others acquire new ways of perceiving, thinking, communicating, rewarding, and learning. A SOCIETY THAT TOOK THE CHALLENGE: QUEBEC There was great symbolism in the decision to hold the Summit of the Americas in Quebec City. The summit management design was also symbolic in many ways. • First, without the endorsement of Quebec, the Canadian government under Brian Mulroney would not have been able to sign the U.S.-Canada Free Trade Agreement. Quebec was the driving force behind the free trade agreement and was the first provincial government to open a trade office in Latin America. In 1999 the prime minister Lucien Bouchard announced a 10-year action plan later dubbed the "Latin American decade/7 • One of the most popular spokespersons for the free trade agreement in the 1980s was the prime minister of Quebec, M. Bernard Landry. During the debate, he traversed the province, promoting the free trade accord through public appearances and speeches. Landry did not receive an invitation to address the Quebec delegation, primarily owing to Canada's viewpoint regarding the sovereignty of Quebec. Nevertheless, Mr. Landry has maintained numerous contacts with other governments of the Americas. • Since the election of a conservative government in Ontario, Quebec is most likely the most socially progressive government of the Americas, and it has one of the best economic growth rates. Quebec remains torn by the same question confronting decision makers at the summit: how do we link social and economical growth? • Quebec has come a long way since the beginning of the second half of the twentieth century. In less than 40 years, the province has transformed from a society based on an economy of agriculture and natural resources to a society moving toward the forefront of the service and technological revolution. This new openness presents the same challenge to a majority of the governments represented at the summit. GLOBALIZATION: INTEGRATING BUSINESS A N D POLITICAL LIFE A few days before the opening of the Summit of the Americas in Quebec City in April 2001, one essential economic and political question captured the attention of many debaters: "Would the globalization of the economy be followed by the development of a culture that accepts and follows the new rules?"

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Some proponents of globalization argued that economic growth would occur only if goods and capital moved in symbiosis with the demands of the market. Any restrictions could impair movement of the invisible hand and bring dysfunction. Following the creation of the European market, the signing of the North American Free Trade Agreement (NAFTA), and the World Trade Organization's decision to shrink barriers and tariffs, it seemed nearly impossible for a small state to refuse to globalize its economy. Doing so would isolate the state and impair its capacity for trade and growth. Conversely, people who opposed globalization did so because they didn't believe that the "free hand" would develop a social climate that would value education, health, equality, environmental quality, and workers' and democratic rights. They likened globalization to a plot intended to control the interventions of governments that protected such values. This was the case with the sudden coalition of protesters at the Seattle meeting in 2000. People with very different causes united their efforts to fight against globalization. Government officials met to discuss issues in a controlled and protected environment, while police officers by the thousands built a human wall encircling a vast part of the old city. Oddly enough, a meeting of people who opposed globalization led to the naming of the "people summit." The elected representatives of the governments of the Americas were forced to hold meetings behind huge fences and lines of police officers. They were depicted as being against democracy, human rights, and social development. Issues became blurred, and the general sentiment was that there was a deep opposition between economic and human development. For example, if you were for human rights, you had to protest and try to stop the official delegates from talking. If you were for globalization, you had to be against the interventions of states and their governments in the business world. One could find many concrete examples supporting some of the extremist views. Some state governments have tried to control their economies and in the process have impaired the development that they so desperately wanted. Some companies have, with the help of politicians, exploited the miseries of other human beings. Social players have emphasized the possibility of paradox between private needs and the needs of society. Each protester has an individual explanation to support his or her cause and to prove the wickedness of others. As Julien Freund (1985) observed in L'essence du politique, politics is the world of opinions: One could decide for many reasons why he or she is for or against globalization. One possible reason is distrust of the powerful. There is another way of looking at globalization. This way unites what seem to be opposing views. It takes the perspective that the human ex-

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perience is a very long process in which humankind is trying to build a better life for generations to come. A decade is a long period of time for an individual, but a blink of an eye for humanity. Events such as the Summit of the Americas provide an opportunity for players on both sides of the fence to express their viewpoints. By doing so, they all take part in and can influence the result. This process may yield unforeseen results, as it often has in the past. The human race can be viewed by some as being in its infancy or by others as in its final days. As we go forward into the new millennium with its free flow of information, we will become increasingly aware of our past achievements and failures. We produce more and have financial success, but we have an increase in poor and sick people. We send people to outer space, but we cannot stop our neighbors from fighting. Change is all around us, just as in the past. What is new about change is its speed and our consciousness of it. We will become more conscious of the impact of our actions on others. As in our physical environment, matter is in constant relationship with other matter. Possibly it is time for a new form of ecology, one aimed at increasing our understanding of the links between our human activities. These links include the production of goods, the distribution of work and goods, the development of cultures, the organization of societies, the creation of arts, education (transmitting knowledge, feeling, spiritual experiences), the treatment of others, and the empowerment of every human individual. Before any government can tax an asset, that asset must be created. For an entrepreneur to operate a business, that business must benefit from a minimum set of laws creating some structural certainties, for example, a currency and a justice system for contracts. Government leaders know that to distribute the wealth, entrepreneurs must create wealth, and every entrepreneur knows that he or she needs a form of government to ensure proper market behavior. Hence one could conclude that a society that wants to develop to its fullest potential needs businesspeople who are socially conscious and a government that knows, respects, and assists its entrepreneurs. Each would then create the optimum conditions for the maximum development of the other. THE ESSENTIAL PARTNERSHIP BETWEEN STATE A N D BUSINESS Many observers have difficulty understanding the nature of the dialogue that flows between governments of different countries and the business leaders in those countries. This situation exists because the observers see that in the global economy, forces push for new kinds of partnerships. When national governments decided to lift trade barriers, they relin-

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quished their ability to protect home-based markets and used those markets as magnets to attract foreign investments. In the new economy, one can produce from anywhere and distribute to the rest of the world. If the cost or other conditions change, and it appears to be useful to move the production plan to another part of the world, the move can easily be made without a government-imposed penalty. In the situation of business relocation, a government must do all it can to support its home-based businesses and help them to compete internationally To attract new investors, especially those who do not depend on the availability of specific natural resources, the government must ensure that its economic system and the specific industry clusters concerned are the most competitive possible. Furthermore, the competitive level of a company depends largely on the level of competitiveness in the geographic area where the company operates. If, for instance, the level of education and social services offered within a location is too low, the company will experience difficulty convincing talented prospective employees to move there. The availability of free public services serves to lower the cost to the company of supplying benefits to the workforce. The company and the political system of the government become partners in a fight against foreign competitors that are attempting to be more productive and profitable. Governments will soon attempt to hire senior managers who possess knowledge of their economy, understand the production system, and are familiar with the culture. These new managers will offer a vision of what steps to take to modify and achieve a superior level of competition. We will also experience an increase in the number of senior executives of private companies who are developing better understandings of the culture and social issues while improving guidelines to help explain the values sustained by their corporations. By all accounts, these executives will be held increasingly accountable for what the corporation does in support of social issues such as the workforce, the community, the environment, and poverty. New corporations of the twenty-first century will develop an internal locus of control to assure them of a level of moral maturity independent of the pressures that the corporation will receive from the outside. The shared values of the shareholders (many of whom will be pension plan managers responding to the moral concerns among their members) and other pressure groups will push corporations in the direction of assuming social responsibility. This phenomenon could push the evolution of the corporation to what Stephen Covey (1990) defined as the "maturity continuum" (p. 48). This evolution would grow away from dependence on the state for the regulation of economic life toward an independence from the state, to the extent that the corporation could choose any state for relocation and possibly dictate the environment it wishes to see.

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Entrepreneurship and Innovation in Quebec

This partnership will seem suspect to those who believe that evil comes from bureaucratic governments. Some say that governments are by definition inefficiencies organized into a system that tangles the invisible hand of the free market. Nevertheless, remember what was said about unions, consumer advocates, minority leagues, environmentalists, and human rights activists. As information speeds up, as the level of consciousness in the new workforce expands, and as new coalitions form with members from every corner of the world, moral values will be reinforced. Corporations must prepare for this increased responsibility if they are to remain successful. SOME D I S C O V E R I E S We discovered models describing entrepreneurial behavior in ways that applied to the actions of the successive governments of Quebec during the past half century. We observed that business games played by corporations as described by Lant and Milliken (1991) were also played by these governments. Like successful entrepreneurs, they abandoned the simple exchange model and adopted a highly aggressive factor intensity model. NOTE 1. Reprinted from Savage, Fifth Generation Management, Dynamic Teaming, Virtual Enterprising, and Knowledge Networking, 105,113,119-121, Copyright © 1996, with permission from Elsevier Science. REFERENCES Covey, S. R. (1990). Seven habits of highly effective people. New York: Fireside. Fassel, D., & Schaef, A. W. (1990). The addictive organization: Why we overwork, cover up, pick up the pieces, please the boss, and perpetuate sick organizations. San Francisco: Harper. Freund, J. (1985). Vessence du politique. Paris: Sirey. Kanter, R. M. (1985). The change masters: Innovation and entrepreneurship in the American corporation. New York: Simon and Schuster. Lant, T. K., & Milliken, F. J. (1991). The impact of an organization's recent performance history on strategic persistence and change. Advances in Strategic Management, 7, 129-156. Peters, T. & Waterman, B. (1998). In search of excellence. CITY: Warner Books. Savage, C. M. (1996). Fifth generation management, dynamic teaming, virtual enterprising, and knowledge networking. Boston: Butterworth-Heinemann. Sieryex, M. A. (1993). Speech given in Quebec City.

CHAPTER 3

Leadership

L E A R N I N G TO LEAD O U T S I D E THE BOX The organization is above all, social. It is people. Its purpose must therefore be to make the strengths of people effective and their weaknesses irrelevant. In fact, that is the one thing only the organization can do—the one reason why we have it and need to have it. —Peter Drucker, The Organization of the Future Any single great act or period of change can be closely associated with leadership. Leadership has many definitions, but it should not be confused as a pop culture slang term. Leadership is real and is in constant high demand. Quebec could not have had such a rapid economic turnaround if it were not for example after example of effective leadership. From ministers in the Quebec government all the way to plant supervisors, leadership has been the fuel in Quebec's engine of evolution. We feel it is important to explore leadership in this macro/micro focus. It would be inaccurate and unfair to discuss only the leadership that the government has provided in the last half century and equally ignorant to ignore it as a driving factor. As a complement to the hard work of the government throughout these decades of change, many hardworking individual companies in Quebec and their leaders need to be recognized as the building blocks for what appears to be a bright future. Therefore this chapter will discuss leadership with two main focuses in mind: 1. The Quebec government as a model of leadership: how the government has given direction, support, resources, information, recognition, and a vision to lead its people forthrightly into the new millennium.

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Entrepreneurship and Innovation in Quebec

2. Micromodels of leadership: how Quebec companies have used direction and support from the government and, as a result, maximized the use of government resources through effective leadership.

The government administrations that effected change in the last half century shared one common thing that Stephen Covey (1989) lists as a habit of highly effective people: "begin with the end in mind/' Leadership must begin with a vision for the future and a desired state. Each administration had its own vision of what the desired future state should be, and although this vision differed slightly from decade to decade, the overall goal was to be better. A leader must see that a more desirable condition is achievable in order to motivate others to follow him or her toward that objective or set of objectives. Each administration had a different end in mind when it was responsible for policy and decision making; however, each government felt that it had the best interests of the province in mind when making decisions for the future. This is an important concept. Leadership and acceptance from the government in Quebec are essential for economic success within the different industries in existence as well as in emerging industries. It is important to point out that during major changes made by leadership, hardships occurred frequently. Quebec's Quiet Revolution (1960-1970) is an important piece of the success puzzle, but it is usually thought of as a positive time. This may not do justice to the nature of the situation. The Quiet Revolution challenged a group of people to question their own values and belief systems and make serious behavioral changes to their way of life. Leadership must constantly be aware of what their values and beliefs are in order to make decisions congruent with these deep-seated feelings. During the Quiet Revolution, a group of intellectuals decided to question their values, beliefs, and the ways they did things. As a result, the new slogan became "maitres chez nous/' which could be translated as "masters of our destiny." This changed Quebec's locus of control from external to internal. No longer would the society rely on fate or the destiny of God's will for success; they would depend on their own actions. Leaders have internal loci of control. They realize that although outside forces can affect their ability to effect positive change, their individual and group actions are the true drivers of success. When Quebec's government decided to adopt an internal locus of control, many things began to change. The companies that we use in this chapter as vivid examples of mastering their own destinies also chose to adopt an internal locus of control to compete provincially and, in many cases, globally. In their book Lessons from the Top, Thomas Neff and James Citrin (1999) outlined six principles that successful leaders follow. Principle 2 advises leaders to develop a winning strategy or a "big idea." In order to achieve

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this step, the authors argue that a successful leader will have to go to the roots of the company and build on the things the organization does best. Because the government was and continues to be so influential in major decisions in Quebec, it was important for leaders in government to identify what they do best and come up with a "big idea" of their own. This concept took an interesting twist in Quebec because what the Quebec government did best was not what it was doing some 50 years ago. However, when Quebec leaders realized that certain economic factors were highly conducive for them to flourish as a society, their big idea began to form. The government began to use abundant resources to its advantage. Instead of allowing foreigners to use Quebec's resources for their own financial gain, Quebec would teach its own citizens how to take advantage of what was all around them. Money spent on government-funded research and development as a result of this big idea is beginning to pay huge dividends. As is all too often the case, the answer to a problem is right before our eyes, or right beneath our feet, in Quebec's case. Leaders are good at grabbing hold of the solution and making it a reality. Neff and Citrin's fourth leadership principle advises leaders to inspire employees to greatness. In order to achieve this, the leader is counciled to communicate continuously, listen carefully, and tolerate failure as a learning experience. Part of mobilizing the government's resources into a feasible, tangible plan was to communicate this idea to its people and gain buy-in. In an organizational setting, leaders who can gain buy-in on ideas from their employees are very influential and often very successful. The government needed its people to believe in a new way of living. These beliefs were encouraged through the continuous and consistent communication of ideas designed by the government to foster the people's inspiration. The government learned early on in Quebec's evolution that not listening carefully to its citizens would not be tolerated. When they felt like they were not heard, the Quebec people had a revolution and put individuals in power who would listen carefully. When the government did begin to listen, it found out that its people were tired of living outside an environment of economic affluence. They were tired of not using their resources to their full advantage because of political or religious differences of opinion. It was time to work together as a team to become more successful. When Quebeckers said they needed electricity to go to all parts of the province, the government listened carefully. When Quebeckers said they wanted better roads, better schools, and better health care, the government listened carefully. When Quebeckers said they wanted to own their own businesses, employ their own people, and be competitive, the government listened.

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Entrepreneurship and Innovation in Quebec

In the same respect, the people of Quebec were leaders when they listened carefully to what their government had to say. The government told Quebeckers that to get better schools, roads, health care, and competitive businesses, they would have to make sacrifices initially. The government also told Quebeckers that one of their best competitive advantages was the ability to compete globally. Therefore, Quebeckers as well as their government listened carefully to the issues at hand and mobilized resources to effect change. As part of inspiring employees to greatness, Neff and Citrin advise the successful leader to tolerate failure as a learning experience. Quebec's evolution over the last 50 years has been an experience of great joys and great growing pains. During that time, people lost jobs, entire communities disappeared, and sometimes the individual suffered for the good of the whole. Many companies that the government supported suffered failures, and this continues to occur. It is safe to say that every dollar spent on research and development has not resulted in a positive outcome. However, the Quebec government knew that if it was going to allow its people to adopt a new way of living and working, instant success was not feasible. By allowing some room for failure and being supportive during those times, the government was serving as a leader. In The Seven Habits of Highly Effective People, Covey (1989) talks about the "maturity continuum" (p. 48). This continuum ranges from dependence to independence to interdependence. Although Covey is speaking specifically about individuals, the model or continuum also applies to organizations or systems, since they are organic and consist of individuals who will experience the changes to this continuum. Covey states that in the beginning, we are "totally dependent on others. We are directed, nurtured, and sustained by others. Without this nurturing, we only live for a few hours or a few days at the most" (p. 49). Following the Quiet Revolution, Quebec decided to undergo an economic evolution. The province changed its infrastructure, management styles, and theory of operations. Quebec entered the first stage of Covey's maturity continuum, dependence. The province, in one sense, was beginning anew. Quebec was in an infant stage economically Companies in this province needed constant nurturing, direction, and sustenance from the government. Much as an infant would die without nurturing, so would Quebec's economy if the government had not adopted this style of leadership. In many ways, being a leader is like being a parent. When one's children are young or in their infant years, constant nurturing and forgiveness are necessary. In addition, close supervision and direction are necessary. As the child develops, he or she begins to establish a sense of independence and self-preservation. When this occurs, the parent must adapt his or her leadership style to the child's newfound independence. The government

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of Quebec recognized this phenomenon with its economy and began to adapt its leadership style. The second stage of the continuum is independence. This is an appropriate point to begin discussion of the successes that individual companies have achieved. To this point, we have talked a great deal about the government's role as leader. It was important to understand the role that the government played in establishing infrastructure and developing an environment conducive to company operation. Once those infrastructures were in place, it became the independent company's responsibility to become a master of its own destiny. N A T I O N A L BANK OF C A N A D A Increasingly, companies, even quite small ones, have to be run as "transnational" businesses. Their market may still be local or regional, but their competition is global. Their strategy also has to be global, in respect to technology and finance, products and markets, information and people. —Peter Drucker, The Organization of the Future National Bank of Canada is displaying some vivid examples of leadership. In 1999 the bank had the best return on equity of any large bank in Canada. Although the National Bank is progressive in its marketing and business practices, evidence of deep-seated cultural influences still exist. For example, National Bank of Canada is still Francophone in many of its operations (meaning that significant amounts of business dealings, both internal and external, are conducted in French). The corporate structure of the National Bank is a conglomerate, and so is its culture. It is a blending of the old and new styles of leadership among businesses in Quebec. National Bank of Canada is an integrated group that provides comprehensive financial services to consumers, small and medium-sized enterprises, and large corporations in its core market while offering specialized services to its clients elsewhere in the world. The National Bank offers a full array of banking services, including retail, corporate, and investment banking. At the same time, it has become an active player on the international capital market, and through its subsidiaries, the group is involved in securities brokerage, insurance, and wealth management, as well as mutual fund and retirement plan management. Internationally, the bank engages in trade-related financial services, correspondent banking, and cooperation agreements with small and medium-sized businesses. Interest and fees on loans accounted for 53 percent of 2000 revenues; other interest income, 15 percent, and noninterest income, 32 percent. National Bank of Canada has assets of more than Can$75 billion and, together

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Entrepreneurship and Innovation in Quebec

with its subsidiaries, employs more than 17,000 people. The bank's shares are listed on the Toronto Stock Exchange. An active social and economic force for more than 140 years, National Bank of Canada is the sixth largest chartered bank in Canada. The National Bank's head office is located in Montreal, and its Canadian network is comprised of more than 655 branches, with at least 450 of them activating in Quebec. The National Bank is also increasingly active on the international scene, with offices all around the world. National Bank of Canada strives constantly to realize its vision. In doing so, the bank undertakes various initiatives designed to achieve its strategic objectives and carry out its business plan. For instance, in August 2002, the bank concluded its acquisition of mutual fund manager and distributor Altamira. This move will enable the National Bank to strengthen its position in the strategic wealth management niche. This is coherent with one of the bank's main growth targets. As indicated by the bank's president Real Raymond when the deal was announced, "this acquisition significantly expands the National Bank's presence in wealth management outside Quebec, doubles its mutual funds under management which now amount to over $10 billion, broadens its range of products and services, and increases its profitability." The bank is also continuously concerned with promoting, enriching, and deploying its new wealth management business line. A specialized team promotes customer loyalty by offering personalized service adapted to the specific needs of wealthy and upscale clients, thereby further consolidating the bank's position in the key niche of portfolio management. In keeping with its strategy of providing superior customer service, the bank further enhanced its product offering by becoming the first financial institution in Quebec to offer person-to-person payment through its Internet Banking Solutions service. Additionally, the bank has been among the first in the industry to commit to the promising sector of electronic commerce. As a result, it performed a series of acquisitions aimed at developing the electronic division. One such business venture, known until recently as ClicCommerce, a subsidiary of National Bank of Canada, changed its name to the National Bank eCommerce. Through new partnerships, National Bank eCommerce has redefined and expanded its offering of e-commerce solutions that are customized to companies' needs. Over the last several years, the Internet has played an important role in enhancing National Bank of Canada's position as a leader in asset-based lending and commercial banking businesses, improving customer service and generating significant cost savings across the enterprise. As customer service levels increase, customer retention and customer referrals will most likely increase as well. National Bank of Canada values its team of professionals and understands that each employee is critical in providing

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a broad knowledge and depth of experience to every customer relationship. In many cases, human capital plays an even more important role than technology. National Bank of Canada understands that excellence will best be achieved by having professionals with the right skills in place and leveraging the best technology throughout the organization. Currently, National Bank of Canada's initiatives are focused on enhancing its brand and positioning itself as an employer of choice. Also, the company plans to continue to work to optimize the entire staffing process. Innovation and dynamism are some of the main characteristics of the National Bank's business habits. The bank is committed to being, above all, a partner worth discovering, with a comprehensive range of products and services for individuals and large and small businesses alike. The bank has also implemented a rather nontraditional network of supermarket and off-site branches. National Bank of Canada has been in existence in some form or fashion since 1859, when it was called the National Bank (Quebec). Through a wide array of acquisitions and mergers, the bank has achieved its current status. With approximately 17,000 employees and 33,000 shareholders, the National Bank ranks 6th in capitalization in Canada and 153rd in the world. Although the National Bank is the smallest of the six national banks in Canada, its leadership in the industry is comparable in stature to any of its counterparts. The National Bank is truly a global company. With 23 offices in the United States, 16 international centers in Quebec and abroad, and international cooperation agreements with Austria, France, Portugal, Belgium, Germany, Spain, Chile, and Italy, the bank is taking full advantage of the global market. A motto in the bank's International Products and Services brochure is 'The National Bank of Canada—Wherever Your Business Leads You." Part of the National Bank's leadership is its awareness of the changing marketplace and its ability to adapt quickly. The bank will go wherever your business leads you. If other industries are becoming global, the banking industry should lead this transition instead of following. The National Bank is penetrating the volatile Asian market and is constantly looking for emerging markets. JeanLouis Samure (personal communication, June 10,1999), a senior manager at the bank, states that the company is more adaptable and flexible because of its management philosophies. In addition, he feels that being smaller than some of the other national banks allows the company to make decisions quicker, which is an advantage to global expansion. Covey's number one habit of highly effective people is "be proactive" (p. 65). By identifying growth markets before they emerge as cash cow markets, the National Bank is being extremely proactive in its business efforts. One great example of this proactive leadership is the bank's relationship with the Catalonia region of Spain. Catalonia has a lot in common

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Entrepreneurship and Innovation in Quebec

with the province of Quebec. The Catalans are very independent people and are somewhat the underdogs in Spain. The particular bank that National Bank of Canada works closely with also happens to be the sixth largest bank in Catalonia. The National Bank is using cultural and demographic similarities to cultivate a relationship with a global partner. Understanding diversity and the benefits it can bestow will be a huge facet of leadership in the twenty-first century. This understanding of diversity helps drive the National Bank's operating procedures with global customers. For example, when the company ventures into a South American market, it is more likely to indoctrinate more of its own management philosophies because banking is a relatively undeveloped industry in South America. However, if the National Bank is dealing with a partner in Germany, it is much smarter to let the Germans apply their management principles, since they have operated in a system with a great deal of banking tradition and are more in tune with the markets there. National Bank of Canada is maximizing its return on equity because of its leadership principles. The company is being proactive, maximizing its competitive advantage of being smaller and quicker, and making a concerted effort to be culturally sensitive when dealing with global partners. Certain situations in the Canadian banking industry are also more conducive to leadership in global expansion. For ease of comparison, we will use the U.S. banking structure as an example. Because the United States has a state-regulated banking system, it has two or three times as much regulation as Canada, according to Jean-Louis Samure. Canada is a national system and has real-time banking. These two factors, provided by the government, serve as competitive advantages over other countries. This is a good example of the factor intensity model at work. The factor intensity model reveals that a heavy focus on marketing and research and development instead of simply focusing on natural resources is a key to success in the global marketplace. Money is not a natural resource. The banking industry of Quebec has found ways to succeed because of management principles, deregulation, and a propensity for global expansion. CULINAR Another facet of leadership is refusing to become complacent. Leadership, like communication, is a systematic process. Although both of these words are often related with soft skills or isolated moments in which someone does one of these things well, they are both actually systematic processes. The process of leadership must be consistent and must be relevant to the production or service goals of the organization. With more than $350 million in sales in 1998, Culinar is the leading snack cake manufacturer in Canada. The company has 90 percent of the snack cake market

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in Canada and 95 percent of the market in Quebec. Complete domination is a good explanation of the market position that the business possesses. Although the quality of Culinar's product is a major reason for the company's success, we would only be investigating and explaining surface issues if we did not discuss the organizational structure that makes the company a powerhouse in the industry. Culinar Inc. is a Quebec company that specializes in manufacturing a wide range of snack cakes, cookies, soups, and dry bread products. The company currently employs more than 2,500 individuals. Its main brand name products are being produced in five plants: Vachon and Hostess in Sainte Marie, Viau in Montreal, Lido in Saint Lambert, Grissol in Sainte Martine, and Granny's in Aurora, Ontario. The company known today as Culinar began as a bakery in Sainte Marie in 1923. Two years later, Rose-Anna Vachon, the owner of the bakery, wanted to increase sales and decided to market other baked goods in the shop, including donuts, sweet buns, shortbread, cakes, and pies. She also started to sell baked beans, which she made in the wood oven of her own kitchen. In 1932 Vachon created its most popular and best-sold cake, the Jos. Louis, named after two of the Vachon sons. Confirming that good cakes are appreciated even in bad times, the company not only survived the depression years but also experienced considerable growth. Around 1937 the sales territory was further expanded into Ontario and the Maritimes, and one year later the bakery was moved into an 8,000-foot facility, with modern production equipment installed, including a continuous cooking oven and conveyor belts. Proving to have great innovative abilities and open-mindedness, the Vachon brothers designed 80 percent of the machinery that was to be used in the plants. They did so because the market was not able to meet their equipment and machinery needs. In 1964 the plant was expanded again, and production lines were put in place. The company's current offices were also built at that time. Shortly afterward an important Quebec investor, Le Mouvement des Caisses populaires Desjardins, acquired 83 percent of the Vachon shares, leaving the family with 17 percent of the company's shares. The company changed its name to Culinar Inc. in 1977. This event coincided with the retirement of the two Vachon brothers, Paul and Benoit. Culinar not only changed name; it also dramatically changed its strategy, as it soon started a series of acquisitions. The first was that of longtime competitor Stuart, a company founded in Montreal in 1896. In 1980 Culinar Inc. set up the world's most impressive flaky-pastry line, which was designed to turn out 30,000 flaky pastries every hour. Additionally, a bulk-handling system for flour and sugar was installed in the bakery one year later.

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In keeping up with its constant growth strategy, the company expanded its production to include Granny's Country-Oven Bakery. Founded in 1970, this Aurora-based company produces mainly butter and lemon tarts. Correspondingly, in keeping with its product diversification strategy, the company created a puffed rice and marshmallow square called Crispy Snack in 1991. In 1993 Culinar bought the Hostess brand name in Canada. Some of the key factors that brought Culinar Inc. its current success can be found in how the company created and used its mission and strategies in day-to-day activities. Culinar devoted its efforts to bring overall production efficiency to a world-class level while also striving to maintain the flexibility required to meet internal and external client needs throughout its distribution network. In doing so, Culinar's management believed that leadership was very important and that the power of being role models for their employees would help implement the mission of the company. Additionally, after top management came up with the vision, the mission, and the strategic plan, they made sure these were clearly defined so that no ambiguity would prevent them from being implemented. Culinar has constantly valued its employees, and this is shown through the support and commitment that the company receives from them. The company believes that training and people development is important for both the production process and the morale of the workers. Also, in its efforts to decrease the effects of strikes and other forms of protest, Culinar made partnerships with unions. In this way, conflicts can be prevented from happening, and issues related to the work environment can be settled amicably. Some of the strategies that the management of Culinar used are improving the manufacturing process to reduce costs, implementing continuous quality improvement programs, developing a safe working environment, and maintaining a high customer service level. In this way, they regulated the company's external relationships that secured an enviable position in the industry. Nevertheless, being strong believers that the employees are the ones who make it happen, Culinar's strategy directed toward the employees includes creating a working environment that will stimulate responsibility and ownership, thus contributing to the achievement of the company's objectives. In Culinar's Arc-en-ciel, or Rainbow Project, the company attempts to clarify its major principles, visions, ambitions, values, and objectives. Arcen-ciel is defined as "supplying all our employees with the resources and skills required to significantly increase decision making, in order to proceed to improvements and recommendations concerning their daily and medium-term business activities" (Arc-en-ciel leaders, personal communication, June 14,1999). Notice that the focus of the transformation of this new program is on the employees and on making their job easier.

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Leadership realizes that the people who do jobs day in and day out affect the bottom line and need to be part of the decision-making process. In many cases, these individuals understand quality improvements in production and service better than directors, engineers, or executives. Culinar knows this and involves its employees in quality improvement and other major business decisions. One aspect of Arc-en-ciel's employee involvement allows employees to develop the training guides for each workstation or line unit. Working with a team leader, one team member is chosen to not work his or her regular position for a week in order to help write the training material. This employee is very familiar with the process and has a good relationship with others who do as well. Therefore he or she will be able to explain the process in a manner most effective to the incoming skill level. This method of training is highly effective. Culinar is also giving its employees a great deal of power by handing over decision-making responsibilities. With this power and responsibility, the employees feel more like their individual efforts affect the overall success of their corporation. For example, when employees realize that a process could be done more effectively or efficiently, they feel confident going to a supervisor and voicing suggestions. If a suggestion has merit, the production employees will then work closely with an engineering team to construct new equipment and make adjustments to current equipment for higher quality and efficiency. This book is not about quality improvement, and neither is this chapter. However, it does deal with the leadership that it takes to relinquish some authority and power to one's employees for the overall good of the company. Sainte Marie Beauce's plant philosophy on leadership is "assess to constantly do better/ 7 Much as the government had a vision to make the province as a whole better, Culinar knows that it must continually improve, even during a time when it held more than 90 percent of market share, to survive in a global economy. This proactive stance to leadership provides a prime example of how one company is ahead of its time in its industry. The factors that prompted Culinar to undergo this transformation in 1985 are interesting. There are two major reasons why Arc-en-ciel began. First, Culinar recognized that complacency would reap no benefits. Business, in many ways, is like sports; one is only as good as one's last game. Past success does not ensure future success in the business world. This is especially true in today's global market. In fact, due to rapid change and technology, you may only be as good as your last week, day, or minute of production or service in the near future. There must be a system in the workplace to ensure continuous quality improvement and internal customer satisfaction. Second, Arc-en-ciel needed to ease the tensions in union and company

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relations. Making a concerted effort to value the employee at one point in time was not an option but a necessity. The employee strike in 1994 stressed the imminent importance to Culinar leadership of effective unionmanagement relations. Culinar now reaps the benefits of its leadership's decision not to be stubborn in dealings with the union but rather to be cooperative and work in harmony with the union. Unions in Quebec operate somewhat differently than in the United States in general, and comments made concerning relations between union and management should be considered within that context. We must admit that we were impressed with the Sainte Marie Beauce plant and especially with Patricia Lemay, director of manufacturing operations. Her cooperation, her dedication to her employees, and her realization that training, development, and relationship building are important tools of leadership make her a very effective leader. Behind every great company or system there are always great individual leaders, and she is one of them. The third way that this particular plant exhibits leadership is through its value of diversity. The Sainte Marie Beauce plant is located north of Quebec City in a mostly rural region with a majority of French-speaking citizens. Lemay realizes that bilingualism is important for functions within Quebec, as well as with the American market, which is close geographically. Culinar recognizes that expansion into the United States could be important in the near future for them to remain a dominant player in their industry. With this in mind, they are training their employees to improve their English skills. With a conglomerate of French, English, and bilingual speakers within the plant itself, leadership must constantly attempt to increase cultural understanding. This situation can be a problem if not addressed but can also be a huge competitive advantage if seen as such. A bilingual workforce could be a powerful asset in years to come. CASCADES Three brothers established Cascades in 1964. Since the initial public offering in 1982, Cascades has continued to grow and now consists of five corporate groups, 13 individual sectors, and 16 joint ventures in Canada, the United States, France, and Sweden. Beginning as a pulp and paper manufacturing and recycling company, Cascades now provides a wide array of paper and packaging products and services. In 1995, Cascades became the second largest hygiene product producer in Canada, and the eighth largest in North America. Cascades Inc. started off as a family business based in Kingsey Falls, Quebec. Three brothers founded the company in 1964. The company held its initial public offering in 1982. Today Cascades Inc. is a North American

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leader in the production, conversion, and marketing of packaging products, fine papers, and tissue papers. Internationally, the Cascades Group employs more than 14,000 people and operates some 160 modern and versatile operating units located in Canada, the United States, Mexico, France, England, Germany, and Sweden. The Cascades Group is made of five corporate groups specializing in specific yet complementary market niches, covering 13 industrial sectors. Currently, the Group is an integrated industrial entity of more than 75 companies. Cascades Inc. produces an assortment of more than 400 products, ranging from paper to building materials. The production materials come from 11 recovery centers for recycled materials and eight de-inking units, located in Canada, the United States, and France. Cascades recycles more than 2 million tons of paper and board annually, supplying the majority of its fiber requirements. Advanced de-inking technology, sustained research and development, and more than 35 years of experience in recycling enable Cascades Inc. to manufacture innovative products. In addition to these, Cascades Inc. has become one of Quebec's largest private producers of electricity. Recycling activities also include plastic products for the manufacturing sector. The company has been recognized for its dynamic investment policy, being one of the most productive and efficient companies in the industry, with an exceptional track record in acquiring, modernizing, and turning around facilities in financial difficulty. At the same time, Cascades Inc. has shown great respect for environmental protection measures through constant care in developing ecologically friendly products and manufacturing processes. The central values of the Cascades culture and philosophy are respect and commitment. The company believes in respecting and promoting personal development and quality of life, not just for the 14,000 employees whose daily work fuels the growth of the Cascades Group, but also for the communities around the business. Of all the elements that have contributed to the company's history of success, the two that have undoubtedly done the most to differentiate Cascades from the rest of the pulp and paper industry are its approach to doing business and its corporate culture. This culture, based on workforce respect and commitment as well as social responsibility and preservation of resources, has been a constant source of innovation and advancement for the Cascades Group. In fact, in many ways Cascades has become a pioneer and leader largely because of its innovative vision in terms of human resources management, but also because of its commitment to quality, technological development, and environmental protection. The Cascades philosophy has also been an important engine for growth and financial performance. In keeping with its tradition as a pioneer and innovator, Cascades op-

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erates one of the most highly productive and technologically innovative research and development centers in the Canadian paper industry. The Cascades Research and Development Center (RDC) team has proved its abilities in many areas such as satisfying market requirements, developing products and manufacturing processes, and protecting the environment. While working to improve current products, the RDC also creates new lines to accommodate the changing realities of the pulp and paper industry. It looks at the specific needs of each customer to highlight new challenges and works closely with the other units of the Cascades Group to develop appropriate solutions. The RDC is also active in implementing projects that reduce raw materials consumption to a minimum. Its unwavering commitment to environmental protection is particularly evident in its ongoing development of efficient, environmentally friendly de-inking processes and its major innovations in the area of bleaching recycled and virgin pulp. The RDC has driven the technological evolution of the Cascades Group since 1985. It continues to provide Cascades with one of its strongest competitive advantages while developing a valuable pool of specialized scientific employees for the future. Because environmental protection is an integral part of the mission, the environmental management program of Cascades Inc. is one of the most comprehensive, stringent, and innovative in the pulp and paper industries. The management and employees of Cascades Inc. are constantly working to improve environmental friendliness and sustainable development by implementing programs to reduce water consumption and effluent discharge, decrease the amount of waste going to landfill sites, and reduce energy consumption and greenhouse gas emissions. Some of the ways to achieve these goals are progressive implementation of ISO 14001 environmental management systems and continuing training for employees and managers. In fact, to ensure that each mill complies with current standards and to increase the awareness and active participation of all employees, Cascades has established an environmental organization to deal with all facets of environmental management. The Environment Department is the heart of the company's environmental organization. With qualified people and the equipment needed to perform environmental audits, the Environment Department can monitor operations to ensure that mills are consistently complying not only with current government standards but also with the precepts of the company's own environmental mission. The Environment Department provides technical support for all Cascades business units and helps plant managers develop and implement environmental programs. Additionally, the department represents Cascades in its dealings with governments, associations, and environmental organizations. Finally, the Environment Department plays a role in edu-

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cation and awareness by offering employee training programs and by disseminating environment-related information both within the company and to citizens, clients, suppliers, shareholders, and government authorities. Cascades has always been distinguished as an innovative company with a strong vision. Its growth has consistently been based on values that now, some 30 years after the company's founding, are a major preoccupation of the modern industrial world. Among the first Canadian papermakers to become involved in recovering, recycling, and de-inking waste paper, today Cascades occupies a frontline position in this high-growth industry. Cascades was one of the first Canadian manufacturing companies to introduce an employee profit-sharing plan to advocate a philosophy of open communication and mutual respect in the workplace in all its activities. This philosophy remains the cornerstone of the company's competitiveness and profitability. The organizational structure, with its inherent flexibility and rich synergy, has contributed to the remarkable rate of financial growth and outstanding strategic diversification. Who would have known that when the Lemaire family bought an old paper mill in Kingsey Falls, it was the beginning of wonderfully successful corporation? The Lemaire family started a philosophy at Cascades that turned out to be the birthplace of a management style based on "a spirit of enterprise, consultation and collaboration, respect for people and the environment as well as innovation" (Cascades, 1996). Cascades became a leader in the industry by acquiring companies that held valuable resources but were not operating successfully on their own. However, in most cases, Cascades did not attempt to dominate control of these acquired companies. Many of them operate as separate business units, but one thing they have adopted is the Cascades philosophy. Cascades places great emphasis on employee training and has a "very decentralized approach to administration and financial management" (Cascades, 1996, p. 2). Their business philosophy is based on openness, simplicity, and tolerance: tolerance of error, because it is part of the learning experience, and simplicity and openness in interpersonal relations to avoid hierarchy and bureaucracy. When Cascades acquires a company in financial difficulty, Cascades realizes it is taking on a challenge. However, Cascades is confident in its leadership principles to the point that it feels they will provide a new light and newfound success for many of these companies. Cascades believes in its people and believes that its people need something to believe in. The leaders of Cascades will be quick to tell you that their sustained success is due to the power of their leadership principles. The vision and mission statements at the Cascades companies are not simply space fillers on the walls but meaningful expressions of their true

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values and beliefs. This is the real reason that vision and mission statements were created. Leaders must not create a vision just to keep up with the competitors who have one. The vision and mission of a company are its rallying cry, its true nature of existence, and the foundation for future business objectives. All too often, when working with companies from a consulting standpoint, the organization's leadership fails to understand or believe in its vision. It is impossible for a leader to incorporate a vision for which he or she has no buy-in. Another characteristic of leadership is doing the right thing before it's the most popular thing to do. Cascades is one of the most environmentally sensitive companies in the world. One of the major reasons for this sensitivity lies in the nature of the company's roots. Cascades originated with recycling as one of its main business objectives. Of course, it was a smart business practice in that particular industry, but this business practice was way ahead of its time. The Lemaire family had a vision that a corporation could be prosperous financially without being destructive environmentally. Because of this vision, Cascades now stands at the forefront of environmentally conscious corporations. Obvious similarities begin to emerge by comparing the government, National Bank of Canada, Culinar, and1 Cascades as models of leadership. We carefully chose the infinitive "to emerge" because it is important to note that we did not go into these companies specifically looking for certain characteristics that would fit a model already constructed in our minds. We asked a variety of questions and searched only to understand, not for specific answers to predetermined topics of discovery. The commonalties of success emerged as we investigated and listened closely to what leaders had to say about leadership. The major leadership themes that could allow a company to behave as a transnational company are the following: 1. 2. 3. 4. 5. 6.

construct and communicate a vision provide resources for your people to get the job done truly value people as your most effective resource be proactive value diversity tolerate failures in order to stimulate an open environment of communication and innovation 7. mobilize followers Construct and Communicate a Vision The government, National Bank of Canada, Culinar, and Cascades all share the ability to construct and communicate a vision that they feel

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passionate about and are eager to communicate and share with others. If you search history books and research events with records of extraordinary or important contributions to the development of society, you will find that all such contributions began with such a vision. You may try, mistakenly, to use Columbus and his voyages as a counter example. If so, you are ignoring the fact that Columbus had a vision and a passion for his vision that was so strong that he was imprisoned and eventually died in his quest for discovery. The fact that when he discovered North America he was actually searching for something else is simply another example to support how important a vision is. It is often the case in life that we do not always gain the intended result we are searching for when we construct a vision. Describing an effective vision, mission, and objectives is important because leadership is a system or a process, not a project. Companies that believe there is a measurable beginning and end to success often fail. It is important to continually examine internal and external environments and constantly adapt operations and management principles to stay one step ahead of the competition. This type of leadership breeds innovation. Leadership outside the box requires that an organization construct a vision that is flexible and conveys continuous development and progress. The events surrounding the success of Apple and the continued success of Microsoft provide a good example of this idea. Steve Jobs felt that his innovation signaled the end point of a successful mission. Bill Gates realized that it was only the beginning of a systematic process of adaptation, learning, and innovation that would, in turn, change an entire industry. It was not the product that made Steve Jobs less successful; in fact, one could argue that Bill Gates's first product was Steve Jobs's. Gates's vision for the future made him successful. Gates's ability to get others to buy into his vision and believe in its power has made Microsoft a dominant force. Jobs had a vision that he was extremely passionate about as well, but he did not adapt to his environment or innovate on the same scale as Gates. Remember that in business, yesterday's success is meaningless. People only want to know what you have to offer today and in the future. This is only achievable by cultivating and maintaining a powerful vision and instilling it in the hearts and minds of the organization's employees. Provide Resources for Your People to Get the Job Done If you truly embrace the principle that people are your most valued resource, then you must provide them with the necessary resources to operate at a maximum level. The types of resources needed will vary depending on the organization, industry, and current organizational conditions. This is why effective leadership is so necessary. Organizations that have individuals or systems that are constantly monitoring the internal

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and external environment to identify resource needs and availability can be very successful. When Quebec first attempted to change its economic makeup, it looked at what companies needed to operate at a world-class level. It did not take long for the province to realize that the same basic human needs would have to be met before Quebec could even begin to worry about the business bottom line. Major advancements in health care, education, and utilities needed to be made. The government began by providing electricity to places that were in great need of this resource. Money was poured into the education system, and a relationship was developed between universities and government-owned companies to provide skills training for Quebec's future. Notice that during this economic evolution, Quebec did not put the cart before the horse. Basic physiological needs had to be satisfied before Quebec could worry about being a global competitor. Once a foundation was in place, Quebec began to provide additional resources. Centers for research and development were created, and the government began to provide capital to industries it felt had the opportunity for expansion and profitability. Much of Quebec's success in the past 50 years is a direct result of the government's leadership in providing the right resources at the right time. Once the government established environments conducive to success, individual companies reclaimed their responsibility to provide resources to their employees. National Bank of Canada has done an excellent job of knowing when and where it should place its resources. In South America, the bank provides capital and management expertise in a relatively untouched area for banking. In Germany, however, the National Bank mostly provides capital in a partnership where the company trusts its counterparts' ability to manage. The bank does not provide the same resources across the board. It is a systematic process of analyzing and decision making. An organization must use its resources wisely to compete. This is a macroexample of providing resources to one's people in order to be successful. The National Bank is creating global partnerships and providing resources to new internal customers in order to maximize its return on equity. Providing resources to an organization's employees is also a crucial way to ensure success. When employees at Culinar voice the need for cross training or different equipment designs, leadership listens and makes calculated decisions about the resources its employees need most to be successful. When employees at Culinar discover that a process could be done more efficiently, leadership moves quickly to analyze the validity of this claim in order to change if necessary. If a proposed new design would be more effective, a team of engineers works closely with the frontline employees to make changes. This occurs quite frequently at Culinar.

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When it does, a number of advantages come to fruition. First, employees receive recognition for their discovery. The sense of decision-making power is an influential motivator in an organization. In addition, productivity increases, and more resources are available to reward employees. This proactive system of resource identification and change is difficult to achieve but is worth the hard work in the end. For many successful organizations, providing resources does not immediately appear to be productivity driven. For example, providing inhouse day care, workout facilities, or employee assistance programs are other ways to provide needed resources that will enhance employees' chances of buying into a corporate vision and consequently being more productive. It is all right to show your employees that you care about them. There are ways to do this without appearing soft, which many managers and leaders fear. By simply providing development plans, training, or resources such as child care or a gym, you are communicating to your employees that you care enough to provide them with the resources they need to be successful. Truly Value People as Your Most Effective Resource Having a human resources department is not the equivalent of valuing your people as your most effective resource. Although this is an obvious concept to some, others are learning the hard way that simply putting systems in place will not ensure a feeling of value. The management philosophy of Cascades builds on "a spirit of enterprise, consultation, and collaboration, respect for people and the environment, as well as innovation" (Cascades, 1996). Respect seems like an easy thing to put in a mission statement, yet it is much harder to give and receive respect in an organizational setting. Trust is another crucial concept to foster before employees will feel that they are your most valued resource. Leadership is responsible for creating a culture in which trust, respect, and open communication can flourish. It is important to note the power the individual leader has in an organization. Managers and frontline employees alike will model the actions of the organization's CEO or president. Power issues will be discussed in more detail later in the book. At any rate, understand that your employees will respond to leadership behavior. If leaders treat others with respect and give employees reason to trust them, a culture will develop that will help maintain these actions. Every time a company publishes material, speaks to its employees, or allows certain behaviors to take place that probably shouldn't, it is communicating a message to its employees. To make sure that your employees feel like the most valued resource in the company, you need to develop a culture through effective communication and follow-through.

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Be Proactive If the leadership of the organization is reactive, you can expect its employees to act in the same manner. If proactive, innovative behavior is not rewarded, it will be difficult to propagate new ideas and be a driver in your market. The government and National Bank of Canada provide vivid examples of the rewards of proactive leadership. The government and the National Bank know that they are the masters of their own destiny. They know that if change takes place, it will come through their actions, not luck of the draw or fate. No company is destined for success or failure. Certain environmental constraints may hinder a company's ability to be profitable, but in many cases, that is factored into the equation. Organizations in the new millennium must be watchdogs for the future. They must anticipate change and take calculated risks. Leadership is going to be the driving force behind whether one company succeeds or fails. Proactive behavior almost always involves risk and sometimes involves loss. However, the old cliche "Nothing ventured, nothing gained" has never been more true than in the twenty-first century. Value Diversity Another major issue that will affect an organization's success is its ability to value diversity, both internally and externally, in day-to-day practices. One of the reasons that Quebec has had such great success globally is the inhabitants' ability to understand and value diversity as a people. Coming from a heritage that shares French and British traditions, Quebeckers live in a bilingual environment, filled with different crafts, values, and subcultures. Because diversity is a way of life to Quebeckers, it is much easier for them to value it in others. Quebec exported close to 50 percent of its gross domestic product in 1998. As so much of the province's success depends on international relationships, Quebeckers provide the perfect case study in the transference of their heritage of valuing diversity to achieving global business success. Whether it is National Bank of Canada's valuing the diversity of its international partners, or Culinar's valuing the need to teach English to its employees, Quebec is doing a good job of maximizing profits by understanding and valuing diversity. Tolerate Failures in Order to Stimulate an Open Environment of Communication and Innovation This book discusses leadership as a concept to drive innovation and an entrepreneurial spirit. Hodgetts, Luthans, and Slocum Jr. (1999, pp. 7-20)

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provide an interesting model in their article "Redefining Roles and Boundaries, Linking Competencies and Resources." They differentiate the basic ways in which traditional and entrepreneurial managers behave (see Table 3.1). Notice that the entrepreneurial manager "is willing to make mistakes in order to learn." Effective leadership in global companies requires a willingness to adapt to this entrepreneurial management style. It is important to create a learning culture in which discovery comes from a willingness to accept failure when it happens and to try again until successful. The traditional manager tries to avoid mistakes. By avoiding mistakes, one is also avoiding potential innovations. By "postponing recognition of failures," one only compounds the failure and causes it to become a habitual occurrence, because silence implies consent. If the leader does not voice concern over a failure or provide positive feedback, the employee is led to believe that the action in question is not a failure at all. Remember the foundation of the business philosophy of Cascades— openness, simplicity, and tolerance: tolerance of error because this is part of the learning experience, the simplicity and openness in interpersonal relations in order to avoid hierarchy and bureaucracy. According to Hodgetts, Luthans, and Slocum Jr. (1999), Cascades is doing a lot of things right. Companies must adopt this organizational culture. Employees love to work in this kind of environment, and the rate of learning and progress within these organizations is phenomenal. To create a learning culture, organizations need strong individual leadership.

Table 3.1 Comparison of Traditional and Entrepreneurial Managers Traditional Manager

Entrepreneurial Manager

Tries to avoid mistakes.

Is willing to make mistakes in order to learn. Admits mistakes and moves on. Wants to please customers, sponsor, and self. Dislikes the system and learns how to bypass the system. Uses the hierarchy as only a tool for getting things done more efficiently.

Postpones recognizing failure. Wants to please top management. Likes the system and sees it as nurturing and protective. Utilizes the hierarchy as a basic power differentiation between levels.

Source: R. Hodgetts, F. Luthans, and J. W. Slocum Jr., (1999, Autumn), Redefining roles and boundaries, linking competencies and resources, Organizational Dynamics, 28(2), 7-20.

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Mobilize Followers Although leadership for the twenty-first century must pay closer attention to flexibility, its people as resources, diversity, and developing a learning culture, one entity of leadership has remained constant throughout recorded history. That entity is the ability of an individual to mobilize followers. Sometimes this ability is misused (e.g., Hitler and Mussolini). However, when an individual uses his or her ability to lead in a positive fashion, the results are truly limitless. This ability makes it possible to end slavery, win wars, put astronauts on the moon, and cure diseases. Leadership in its simplest form, the ability to motivate followers, is a beautiful and elusive quality that we will attempt to shed some light on in the context of business and government. Garda World Security Corp. Stephan Cretier, the president of Garda World Security Corp., has been known to call his company "the Wal-Mart of security." The Montrealbased company is clearly striving to become a leader in the field of security services, security guards, and related services. The company provides a wide array of services, from pass cards to security cameras to investigation services and store detectives. Although rather young in this field, the company, founded in 1994, has quickly become a leader in the province of Quebec in most of the services provided. Garda has become the largest investigation services firm in Eastern Canada. Moreover, the company services various departments of government where recent cutbacks called for outsourcing the security divisions. As Quebec and Canada have positioned themselves toward constant growth in the new economic sector, Garda has gained a solid reputation based on its leadership capacity. In addition, Garda ranks as a major team player among the leaders in the security and protection industry. Hightech companies as well as real estate and numerous industrial sectors in the country have benefited from Garda's high-quality services. Garda of Canada has also gained full recognition for its ability to deal with the most complex security-related problems. As a measure of its success, Garda recently ranked at 31st on a list of Canada's hottest startups. The company's sales have gone up 4,709 percent from a little over $1.5 million (Can.) in 1996 to $73 million in 2001. The company credits much of its success to the one-stop-shopping model it successfully employs and good management. Conversely, most security firms allow many layers between the client and the product or service, but Garda uses account managers as the sole source of client contact to personalize relationships and minimize bureaucracy.

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In the same period, the company has grown from 100 employees to 3,500 people. The company currently employs more than 4,000 highly trained people from coast to coast. In the attempt to reach its goals, the company understands the importance of experience in the field; therefore some of its specialized staff bring to Garda more than 25 years of experience. The company's proven expertise, undeniable know-how, and constant leadership are key elements that enable Garda of Canada to provide its customers complete integrated solutions to all security-related problems. Based on some of these facts and on the company's constant growth at tremendous rates, Garda has been ranked as one of the leaders among Canada's security companies. From the beginning of its operations, the mission of the company was adjusted to accommodate steady expansion of the scope of security services. Another aspect that Garda is well known for in the industry is the way the company combines traditional techniques and state-of-the-art technology in providing unequaled professional service. Additionally, as proof of its well-stated mission, and as proof of the quality the company set forth to provide, the sales at Garda of Canada have kept an uphill pace since the first day of operations. Subsequently the company has experienced remarkable economic growth and has concluded numerous strategic transactions. The names of prominent corporations are constantly being added to an already impressive list of customers. Another aspect that contributes to the success of this company, besides its commitment and dedication, is the state of the industry in which it operates. The growth potential of the security services market is enormous. Wall Street has recently named the security industry "the silent giant," because in 2001 the industry topped $100 billion in the United States. In the same fashion, there has been a tremendous growth in Canada as well, with revenues conservatively estimated at $4 billion. Considering Garda's leading market presence in Canada and its service offering, the company is ideally positioned to take full advantage of this growing opportunity. The company has devised a plan in which it expects to grow in two major sectors. First, Garda plans to intensify its geographic expansion throughout Canada by emphasizing the company's presence in Ontario and the western provinces. This expansion comes as a natural next step in the evolution of a company that has already established itself in its own province and cannot expect the same rate of growth for an extended period of time. Second, the company's strategy includes plans to develop the highermargin services such as electronic security, specialized investigations, consultation and specialized services, and armed transportation. So far, by

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insightfully combining a policy for strategic acquisitions and internal growth initiatives, Garda has gained competitive advantage in all of the business segments that it serves. To top that, the company has built a strong platform from which it can achieve a leadership position in the growing market for value-added security services. Garda is a company that has had enormous success from the start, which can be attributed to an inspired, knowledgeable, and experienced leadership. Along with these qualities, Garda has also secured its leadership position through innovative and adaptable solutions. The booming market trends that favor strategic partnerships through organic growth processes have also played an important role in the company's success. Ultimately Garda has always had an aggressive expansion policy, which was actually the key component of its success. Garda's acquisitions, companies known for their unmatched reputations in their respective regions, have become valuable partners and have ultimately allowed Garda of Canada to build a solid network endowed with long-standing professionals in the field. REFERENCES Cascades Inc. (1997, July). The Cascades Groups directory of companies and services. Kingsey Falls, Quebec: Author. Covey, S. (1989). The seven habits of highly effective people. New York: Fireside. Drucker, P. F. (1997). The organization of the future. San Francisco: Jossey-Bass. Hodgetts, R., Luthans, R, & Slocum, J. W., Jr. (1999, Autumn). Redefining roles and boundaries, linking competencies and resources. Organizational Dynamics, 28(2), 7-20. Neff, T. J., & Citrin, J. M. (1999). Lessons from the top: The search for Americas best business leaders. New York: Doubleday.

CHAPTER 4

Entrepreneurship

ENTREPRENEURSHIP IN QUEBEC'S NEW ECONOMY Quebec businesses have become some of the world's best entrepreneurs in the global marketplace by adopting innovation as a means of organizational practice. The inevitability of global competition demands that companies become entrepreneurs in their respective industries in order to become successful. In The Innovation Formula, Michael Robert and Alan Weiss (1988) define an entrepreneur as someone who redeploys assets and resources from areas of low productivity and yield to areas of high productivity and yield. Canada proves to be an excellent location for an entrepreneur to start a new business because of low start-up costs and a minimum of red tape. The World Bank-Harvard University joint study (Djankov, La Porta, Lopez-de-Silanes, & Shleiler, 2000) examined start-up costs and regulations for 75 developed and developing countries. The study ranked Canada first, as it requires only two entry procedures and a processing requirement of two days. The average country requires 10 entry procedures and takes 63 days. The required application fee for small start-ups in Canada is approximately US$280. Following the terrorist attacks of September 11, 2001, and their effect on the world economy, Quebec entrepreneurs have found ways to adapt effectively in an environment increasingly fraught with uncertainty. After 9/11 entrepreneurs must adopt new strategies to compete and ride the wave of success. An entrepreneurial organization model introduced in

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this chapter breaks down entrepreneurship and provides an understanding of the factors involved in successfully increasing productivity. Many Quebec companies have redeployed their resources globally and are reaping the benefits of their innovations. Entrepreneurs are not blind gamblers or careless risk takers. Entrepreneurs rely on innovation, which represents the systematic anticipation, recognition, and exploitation of change, where change provides the basic fuel of innovation, its source, and its raw material (Robert & Weiss, 1988, p. 2). Entrepreneurship in the business world appears in many different contexts. Mosakowski (1998) details a distinction between individual and team entrepreneurs. The significance of this distinction results from the theory that the movement of resources and the assumption of risk vary between the groups, affecting outcomes. Mosakowski lists four entrepreneurial resources: 1. 2. 3. 4.

creativity foresight intuition alertness

Creativity involves the propensity of an individual to spend time considering variations on existing processes or themes. Such individuals tend to spend more creative time when given the opportunity. In foresight, an individual considers future prospects and events and reflects on his or her involvement. Intuition is the ability to make decisions in ambiguous situations. This ability becomes more important in times of uncertainty and complexity. Finally, alertness involves an individual's tendency to continually collect information and search for opportunities. All these intangible resources combine to propel entrepreneurial resources. Each of these behaviors helps to explain the willingness of entrepreneurs to take risks in spite of unpredictable outcomes. Mosakowski (1998) suggests that an organizational framework could stifle entrepreneurial resources. Conversely, entrepreneurial resources do not always produce positive results. The strength of these resources lies in the production of unique variations that could produce superior results when compared to decisions made without their benefit. In the case of individual entrepreneurs, a few individuals hold the locus of resources. Team entrepreneurship refers to the industrialization of entrepreneurs, where resources and decision making disperse throughout a company. It is possible for different forms of entrepreneurship to coexist at different levels within a firm. Entrepreneurial resources such as creativity and foresight become more important in the initial stages of decision initiation and ratification and less important in implementation and eval-

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uation (Mosakowski, 1998). In the case of team entrepreneurship, certain individuals who possess specialized abilities could be involved in isolated decisions, dispersing resources throughout the organization. In a team entrepreneurial organization, a taller hierarchy exists, with the decision monitor at the top and the decision initiator in the middle, while innovations emerge from the lower levels (Mosakowski, 1998). Different situations may involve temporary horizontal combinations, affecting different persons according to the resources needed. The team entrepreneurial organization differs from an individual entrepreneur in that while decisions and idea initiation occur at lower levels, the monitor at the apex bears the risk. Both independent and team entrepreneurs exist on opposite ends of a continuum. Corporations which develop innovation units may be trying to move their firms toward the individual form to capture more resources and encourage innovation. Strategic combinations offer the best of both worlds. Successful companies in the global market are all relying on some system of change. We will take a snapshot of three of Quebec's fastestgrowing companies and examine how their understanding of change, combined with commitment, rockets them at lightning speed toward remarkable success in Quebec's new economy. These Montreal-based businesses represent three different sectors where entrepreneurs acted on a vision and are realizing the benefits in terms of astounding growth. Garda World Security Corp., based in Montreal, is ranked 7th out of the top 100 growth companies for 2001, according to Profitguide magazine (Myers, 2002). Garda provides security services along with alarm systems and emergency-management software. BCE Emergis Inc., an e-commerce system, is ranked 16th and provides a full range of Internet support services to companies. Peak Investment Services is ranked 61st and provides financial planning services and mutual fund sales to clients. Garda World Security Corp. Stephan Cretier, formerly a property management executive, is now president and CEO of Garda World Security Corp. When Cretier was hired to run a Montreal security firm in 1989, he had a vision for consolidation of the security business. Many small, family-owned security firms existed that were poorly managed. Cretier consolidated in 1994 and realized a revenue increase from a little over $1.5 million (Can.) in 1996 to $73 million in 2001 (Gordon, 2000). This represents a five-year growth of 9,552 percent. The number of employees during this time went from 100 in 1996 to 3,500 in 2001. Garda is known on Wall Street as "the silent giant." The company is evaluated in the United States alone at $100 billion. Garda's high-profile clients include companies such as Bell Helicopter and CAE. Cretier is not

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satisfied yet. He wants to be Canada's number one security firm within 24 months. With his formidable track record, his chances for success are high. To what does Cretier attribute Garda's tremendous success? He offers his customers one-stop shopping for security with an emphasis on customer service (Gordon, 2000). Garda assigns to each client a specific account manager who assumes responsibility for all client contact. Because Garda keeps transactions simple and the overhead low, clients receive the highest quality of personalized service geared toward their changing needs. Expanding on the self-proclaimed "Wal-Mart of security" theme, Garda continues to acquire complementary businesses with products such as surveillance cameras and card access. The company's goal is to offer the highest quality services in every area of security and surveillance. BCE Emergis Inc. BCE Emergis is a high-growth company that is celebrating its seventh year in a row on Profitguide magazine's "Profit 100" list (Myers, 2002). This 16th-ranked company provides e-commerce systems to companies that conduct business transactions over the Internet. BCE realized a fiveyear growth rate of 5,853 percent and an increase in revenues from $11,025,479 in 1996 (Can.) to $656,400,000 in 2001. The company's clientele includes companies such as Bell Canada, Grand and Toy, Kodak, and all the large Canadian banks. The company's posted revenues rose from $3 million in 1995 to $476 million in 2000. W. Brian Edwards, president and CEO of BCE, says the focus of the company is to help businesses generate revenue, reduce costs, and be more competitive through Internet commerce. One reason for the success of BCE involves the convenience of using the infrastructure provided. No in-house installation is needed, and the customer uses services on the network and pays on a usage basis. The four areas of service include ebusiness, e-payment, security, and connectivity. This company has operations in the United States, including clients such as Freddie Mac and a consumer on-line mortgage search site. IPL Inc. Since 1939, IPL Inc. of Saint-Damien, Quebec, has been designing and manufacturing innovative, high-quality products. These products and the care taken in manufacturing them have enabled the company to obtain international recognition. Moreover, IPL Inc. was the first North American enterprise in its field to obtain ISO 9001 certification, international recognition in the realm of quality. IPL Inc. is a leader in North America in the injection- and extrusion-

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molding plastics products sector. The company's clients include industrial leaders. Its subsidiaries IPL Plastics Ltd. and IPL Products Ltd. are located in Edmundston, New Brunswick, and Northboro, Massachusetts, respectively. IPL Inc. manufactures more than 400 products at its main plant in SaintDamien-de-Buckland and in its subsidiaries' plants. Specifically, it designs and manufactures packaging and handling containers for agrifood, chemical, forestry, petrochemical, telecommunications, construction, and integrated waste management industries. It also manufactures custom-made molded products for the automobile, transportation, defense, and maple syrup industries. Approximately 35 percent of its annual sales of $114 million (Can.) is generated through accounts based in the United States. Today IPL employs more than 1,100 people in five manufacturing plants. The anticipated sales for the year 2002 are in excess of $200 million. IPL is focused on several specific market segments, including the packaging industry, where they supply well-known customers such as Kroger Foods and Kraft Foods Inc. The specific packaging segment is mainly focused on thin-wall containers, which are used to package ice cream, margarine, and salads. In custom molding IPL produces specific applications for the automotive industry, where the company's customers include Ford Motor of Canada, Ford U.S., and numerous other Tier I customers. Inventory turnover is close to 10 times per year. In terms of profitability, IPL typically generates 8 to 10 percent profits pretax on an annual basis while growing at about 15 percent and is among the top 5 percent in terms of profitability in North America. From 1993 to 2000, IPL averaged about 15 percent top- and bottom-line growth and net income in the 8 to 10 percent range. Such high levels of profitability were achieved because of IPL's focus on innovative business as opposed to volume-driven commodity business. IPL Inc. has worked hard over the years to set itself apart from the competition through the optimal quality of its products. To offer its clients the best-possible service, IPL Inc. has established in Canada and the United States a network of regional offices and warehouses to ensure efficient marketing. This network enables the company to stay attuned and respond promptly to its clients' needs. From a historical perspective, IPL initially started in a slightly different field. Shortly after its founding in 1939, the company became a primary supplier of straw brooms. In the early 1950s, a decision was made to expand the business and begin supplying plastic components used in the manufacture of toothbrushes. At the time, the plastic components used in toothbrushes were imported from the United Kingdom, since the plastics industry was primarily a European-based industry. Consequently, in 1952, IPL was one of the first companies to import a

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plastic injection machine, and that was the company's first foray into the plastics industry. At the time, IPL characterized itself as having an extremely high emphasis on quality; in 1955, the motto of the IPL manufacturing plant was "Quality attracts and retains customers." Quality has always been part of the IPL culture and continues to be just as important today. Because the company was still distant from the large Canadian and American markets, its immediate focus was on developing innovative products. The management team understood that the only way to gain market share in new markets was to bring value-added, innovative products to market. When the company began expanding its activities in the plastics industry in the late 1960s, it was also one of the first companies to develop plastic containers to replace steel pails. As a matter of fact, IPL was the first company in North America to produce four- and five-gallon plastic-injection pails as well as to develop the first plastic resin garden furniture chairs and tables in the 1960s. IPL has always been at the forefront in developing innovative products and, over the past 40 years, has developed a strong research and development department. Research and development activities have been at the heart of IPL's strategic orientation from the beginning. The company invests between 2 percent and 3 percent of total revenues in R & D each year. The company claims that its R & D department is the most advanced in Canada's plastic molding industry, with 35 highly qualified experts in thermoplastic resin molding. The work methods used promote continuous communication and contacts with customers during various stages of product development. Also, the members of the R & D department are far from isolated. They work closely with people in the marketing, sales, and customer service departments. This dynamic environment evolves constantly, greatly stimulating innovation in all its forms. PEAK I N V E S T M E N T SERVICES, I N C . Peak's CEO Robert Francis describes this financial planning company as a "one-stop shop" for clients' financial needs (Myers, 2002). A former investment planner, Francis saw the need for simple and understandable solutions for clients. Peak has streamlined a variety of services in the areas of financial planning, investments, insurance, and trusts into a unique, allencompassing package. No other company offers a range of services like Peak. Francis sees value in sharing strategic and financial management information with his employees, as he understands that all members need information to enable them to change quickly (Wright, 2000). Following employee education and their resulting understanding of the big picture,

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Peak received employee buy-in when sacrifices were needed to meet company goals. Although these three companies offer a diverse array of services, they have several things in common. All of them redeployed areas of low productivity and yield to areas of high productivity and yield, as in the classic definition of entrepreneurship. As entrepreneurs, each company saw a need for change and innovation in existing companies. They all took risks by acting on their visions. The three companies promote programs that are adaptable and responsive to their customers' needs. Each company strives to provide the highest quality of service and continues to reengineer itself in anticipation of future change. By staying ahead of the curve, these companies have realized phenomenal growth and maintained a high level of entrepreneurship. Now that we have looked at three examples of relatively new and successful entrepreneurship at work in three individual companies, let's look at entrepreneurship within an organizational framework. Figure 4.1 presents a schematic layout of the communication processes necessary in a smoothly functioning entrepreneurial organization. The major components of leadership, innovation, and entrepreneurship, combined with the subcomponents of creativity, technology, power, and reengineering, all interact in the final result: productivity. The model further shows the interplay of each component and how the flow affects the outcome. Any missing or nonfunctioning aspect creates a flawed system and suboptimal results. THE ENTREPRENEURIAL O R G A N I Z A T I O N A L MODEL | [ The rectangle stands for a main or central entity of the entrepreneurial organizational model (EOM). These entities include leadership, innovation, entrepreneurship, and productivity. They are the foundations or central principles of the model, with leadership being the catalyst or beginning of the process, and productivity being the essential goal of any organization. Innovation and entrepreneurship are interconnected entities. Notice that the arrows that connect innovation and entrepreneurship go both north and south. The model shows that innovation does not necessarily occur before entrepreneurship. For example, the beginning of entrepreneurial organization is leadership. Leadership assumes many forms: a group, a committee, a government, or an individual business leader. The leader or group establishes a vision for the future. The leader then begins to establish what types of actions, processes, and policies are necessary to achieve the ultimate goal of productivity. Entrepreneurial organizations are more likely to have a great understanding of traditional processes and models, yet

Figure 4.1 Entrepreneurial O r g a n i z a t i o n M o d e l

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they will use this understanding as a means to do things differently, more creatively, more efficiently, and more productively. Entrepreneurship is not a temporary state. True entrepreneurship is the proven ability to remain consistently innovative in one's business or organizational practices. Innovation is therefore the central tool of any entrepreneur. A consistent, proven ability to be innovative in productive ways (capitalization, R & D , services, growth, new products) is a characteristic of an entrepreneur. Therefore north and south arrows connect innovation and entrepreneurship as entities on the model because they are reciprocal in nature, and one entity truly propagates the other. / \ The triangle represents an important relationship when understanding a component or subcomponent of the model. Therefore, looking at the model, one must understand power within any given organization to understand effectively how the leadership will go about effecting change. The type or types of power that an administration or individual uses to lead will have monumental effects on everything within the organization. For example, does the leader rely on legitimate or coercive power? Certain leadership styles are more conducive to developing and maintaining a culture of innovation, just as certain uses of power by the leaders are more conducive to establishing that same culture. In the same way, it is important to understand the relationship between reengineering and work redesign to the subcomponent of technology. Technology is a tool of innovation. Whether it is Culinar making its snack cake line more automated and efficient or the Bank of Canada connecting to its customers all over the world via on-line banking infrastructures, technology is definitely an imperative substrate of innovation. One can not discuss entrepreneurship without discussing "risk-taking propensity/' Entrepreneurs seek to do things differently. They do not gamble; they take calculated, informed risks. Quebec's culture and religion for the first half of the twentieth century affected its role as an established rural economy. The leaders of Quebec who led this remarkable economic evolution had to display a high level of risk-taking propensity in order to change. Q A circle is a subset or component in the model that independently or in conjunction with other subsets allows that component to function. Technology and creativity are subsets of innovation. In other words, they are enablers of innovation. To innovate, one must do things in creative ways and sometimes use technology as a means to induce change. One of the main points of this model is that innovation is not a single act. It is a systematic process. Creativity is not a single act either; rather, it is a way of thinking. Notice that technology and creativity are attached to each other, and both are attached to innovation and the ability to adapt or preferably be proactive regarding change. This reciprocal circle in the center of the model (innovation, technology, creativity, and proactivity regarding .

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change) is the engine that drives the machine we call entrepreneurship. Leadership is the catalyst, and productivity is the ultimate goal, which you could call motion. Nevertheless, just as in an automobile, many things must happen before you achieve motion. The reason that entrepreneurship lies below this center and before productivity is important. This symbolically represents the fact that the engine must operate consistently and repeatedly before true entrepreneurship begins. Just as we have defined innovation and creativity as systematic processes and not single acts, so do we define entrepreneurship. When this state of entrepreneurship is achieved, true prolonged productivity can take place. / \ The circle inside the triangle represents a combination of the meanings of the circle and the triangle. It is important to understand the relationship between components and subcomponents attached. In addition, the circle inside the triangle is an enabler of that component or subcomponent. The ability to adapt or be proactive regarding change represents this symbol on the model. It relates to innovation, entrepreneurship, technology, and creativity It contains the core or lifeblood of the engine in the center of the model. Without this core concept or attitude, entrepreneurship will not occur. Change exists as a central belief of any truly entrepreneurial company. Such companies do not believe in change for change's sake but rather see it as a competitive advantage. By being proactive and driving change, entrepreneurs can find opportunities first and reap benefits before market saturation. Canada has a long history of prominence in the aviation and aeronautics industry. Quebec's aerospace sector represents half of Canada's aeronautics industry and two-thirds of its R & D funds. Greater Montreal is home to approximately 230 companies that have exceeded $7 billion (Can.) in sales since 1998. Some of the companies represented in Montreal include Bombardier Aerospace, CAE Electronics, Pratt and Whitney Canada, and Bell Helicopter Textron Canada. Each of these companies has developed a niche market following changes in consumer demands. Bombardier Aerospace produces civil aircraft and is ranked third in the world, and CAE Electronics supplies 70 percent of the world market with commercial flight simulators. Pratt and Whitney Canada manufactures 30 percent of the world market for aircraft engines, and Bell Helicopter Textron of Canada produces between 40 and 50 percent of the world's civil helicopters. Well-developed research institutions in universities across Canada spur the development of new technologies in the industry. Canada's proximity to the United States promotes global information exchange as well as a cross flow of people with advanced skills and expertise. The dynamic growth of the aerospace industry also relates to entrepreneurial activities within these corporations. Bell Helicopter Textron

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Canada provides an excellent example of entrepreneurship within a longterm established company. Bell Helicopter Textron Canada Leonardo da Vinci invented the helical air screw 500 years ago, the forerunner of what we today call a helicopter (Bell Helicopter Textron, 2002). The concept of vertical flight then progressed through another inventor's work in the 1930s. Arthur Young built and successfully demonstrated a viable helicopter model. Entrepreneur Larry Bell, founder of Bell Aircraft Corporation, was impressed with Young's work and hired him to develop a model for production. After 10 years of design, the first helicopter certification was awarded to Bell Helicopter by the Civil Aeronautics Board in 1946. Bell Helicopter Textron Inc. Bell Helicopter Textron, a division of Textron Canada Limited (BHTC), is the world's leading helicopter manufacturer. The main facility is a unique complex built near Mirabel airport and consists of a highly diversified plant with advanced technology services. As a result of its efforts, the final products have been recognized as being among the world's bestbuilt helicopters, and Bell Helicopter Textron has become one of the world's most productive manufacturer of rotary-winged aircraft. After being selected in 1983 by the federal and Quebec's provincial governments to establish a Canadian-based helicopter industry, Bell Helicopter Textron started construction on-site in Mirabel, Quebec, near the Mirabel International Airport. The construction was completed in 1986, which enabled Bell Helicopter to move the production of its entire line from the plant located in Fort Worth, Texas. After the official inauguration, the company started manufacturing more than seven different models in its plant, which occupied an area of some 16,000 square feet on a 152-acre site. However, to meet the demands related to designing, developing, and manufacturing the entire product line of commercial aircraft, the facility went through several expansions and improvement processes. In fact, the plant's production capacity has been expanded four times in the last seven years. The year 1992 corresponds to the completion of the first commercial helicopter designed entirely at the plant in Quebec. Ten years after transferring and commencing production in the new facility, Bell Helicopter had shipped more than 1,500 helicopters. To date, the facility at Mirabel has produced well above 2,000 units. This number represents more than half of the total production of commercial turbo-shaft-engine helicopters in the world, and Bell Helicopter's products are used in more than 120 countries.

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Bell Helicopter Textron Canada's plant has grown continuously at a well-paced rate, thus creating a significant place for itself within the Canadian aerospace industry. The company holds more than 60 percent of the worldwide market share for commercial helicopters. In terms of export, at least 90 percent of the products manufactured at the Quebec plant are being shipped outside Canada, to more than 40 countries. The company has adopted a participative management approach. To implement this approach, the production management system has been structured according to a model based on sectors of activity into which semiautonomous teams have been integrated. Teamwork is one of the main organizational trends that govern the structure of Bell Helicopter. As a consequence, the main factors that contribute to productivity are team efficiency, synergy, cohesiveness, and team building. Bell Helicopter is also committed to the tradition of innovation that has always characterized Bell products. The Mirabel plant, presently the international production center for Bell Helicopter Textron's commercial products, is the first and only manufacturer of completely integrated helicopters in Canada. To this point, the company has kept consistent with its commitment to manufacture technologically superior aircraft of unequaled quality in the industry. The military saw the possibilities for the value of rotary flight, and the U.S. Army purchased Bell's first production-line helicopter. Bell Aircraft Corporation had a reputation for devising ingenious solutions in special design requirements. The U.S. Army contracted with Bell to develop the first jet fighter and, later, the world's first supersonic airplane (Godfrey, 2002). Bell supplied more helicopters to the U.S. Army than any other company during World War II (Bell Helicopter Textron, 2002). As the helicopter became a huge success, it began to rival the reputation of Bell Aircraft Corporation as the maker of conventional aircraft. Bell Aircraft Corporation then created a separate subsidiary in 1951 called Bell Helicopter Corporation, located in Fort Worth, Texas. Textron purchased Bell Helicopter Corporation in 1961, and by 1976 Bell Helicopter Textron, Inc., was Textron's largest division. Bell Helicopter Textron Canada was established in 1983 in Mirabel, Quebec. Production of the entire commercial product line of Bell Helicopter was moved from Fort Worth, Texas, establishing Mirabel as the world's leading helicopter manufacturer. Since 1986, Mirabel has produced more than 2,000 helicopters, representing 50 percent of production for commercial turboshaft. These helicopters fly in more than 120 countries today. Bell Helicopter Textron president Robert MacDonald cites support from federal and provincial governments in helping market the company's product worldwide. MacDonald, Bell Canada's first Canadian president, relates Bell's success to principles established early on. He feels that responsiveness to the customer, teamed with a return on investment for the product, has spurred the company's innovative ability.

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Executive vice president Paul Constanzo cites the concept of "evolution" as opposed to "revolution" in Bell Helicopter's constantly evolving product. Engineering heads up technical developments, while training keeps manufacturing informed in order to speed up changes and guarantee a reliable product (Bell Helicopter Textron, 2002). Bell Helicopter's ability to adapt and be proactive to change fuels innovation. Bell Helicopter Textron Canada has adopted a participative management approach. This model builds on sectors of activity, using semiautonomous teams. The team concept enables Bell Helicopter to promote common goals, active involvement, a sense of belonging, and a genuine interest in the company. Consequently, team members can more easily adapt to the constantly changing environment. Bell Helicopter has been able to create new enterprise within its existing framework. A prime example is the company's ability to create and improve helicopter styles and capabilities for the military. Bell capitalizes on unique and valuable combinations of resources provided in an uncertain and ambiguous environment (Amit & Glosten, 1993). Amit and Glosten discuss the problems of fostering entrepreneurship in a corporate setting. Innovation becomes more difficult in corporations because of the idea that an aversion to uncertainty caused by a diversity of opinions might hinder entrepreneurs' initiative. Consensus could become more difficult to obtain. One recommendation is that corporations should not centralize their innovative function in the hands of a few decision makers but rather spread it over several individuals. Alcan, Inc. Alcan, Inc., represents another long-established company that has managed to keep its entrepreneurial spirit alive. Originally a subsidiary of Aluminum Company of America (ALCOA), Alcan produced its first primary aluminum ingot in 1901. In 1925 the company acquired rights to develop power sites on the Saguenay River. By harnessing the littleutilized hydroelectric power, Alcan positioned itself to start a second aluminum smelter in 1926. Throughout the 1930s, Alcan spread operations throughout Canada, the United Kingdom, and Europe. Those efforts expanded into India, Australia, China, and Japan. Responding to increased demand for aluminum during World War II, Alcan rapidly expanded its smelter production fivefold. Following the war, civilian demand coupled with aggressive product development resulted in further expansion in Alcan's power and smelting capacity. Throughout the 1970s and 1980s, Alcan continued to grow through increased production and global mergers. The 1990s brought a period of restructuring to Alcan, serving to streamline and focus company efficiency. Decentralization promoted flexibility, simplicity, entrepreneurship,

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and innovation within the company. Alcan's team-based environment supported and encouraged an environment of creativity and entrepreneurship among its employees. Today Alcan, Inc., remains a global leader in aluminum and specialty packaging with revenues of US$12.6 billion in 2001. Alcan employs 48,000 people with operating facilities in 38 countries. In February 2002, Alcan formed an alliance with Hydro-Quebec, Quebec's largest power producer. Travis Engen (2001), president and CEO of Alcan, Inc., reported to the 99th annual general meeting of shareholders in Montreal that Alcan has reorganized its structure to accommodate the changed composition of the company. Alcan continues to hold on to its value-based approach and its commitment to developing innovative products. M. A. Thellier (1999) suggests that a new entrepreneurial culture with additional responsibilities exists today. Not only must an entrepreneur constantly innovate; he or she must also contribute to the wealth and healthy change within society. Entrepreneurs maintain a competitive edge through sensitivity toward natural resources and social fabric. Retention and attraction of good employees rests on company values. The cooperative, team-based approach has replaced an individualistic view in terms of sharing and concern for the common good. Whether in a start-up business or an established corporation, entrepreneurship requires passion and creativity combined with vision. Those companies lucky enough to hold the winning combination will reap their successes.

THE DIALECTIC OF THE E V O L U T I O N OF THE QUEBEC E C O N O M I C POLICIES Some of the actions and policies that the various governments used to solve these challenges have opened new opportunities and exposed other problems that had to be solved. To stay on track with their mission of economic growth, they had to change constantly to adapt to new situations that they had sometimes created themselves. We will demonstrate that the succession of actions from the governments in the economic development field, while independent of their ideologies and their party affiliations, was the result of a specific initiative that had originated in the structure of the Quebec society of the 1950s. The identification of the challenges and the types of solutions used created a succession of events that, we will argue, responded to a specific logic or initiative. In this case, it was the deployment of a goal or the construction of a dream in the sense of the Greek philosophers of antiquity in the constantly changing world of the second half of the twentieth century. To find that specific dialectic, we identified problems relating to economic developments that occurred between 1950 and 1999. We studied

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the ways these problems were perceived by succeeding governments, what actions they took, and the results achieved. We analyzed the annual reports of the Ministry of Industry and Commerce from 1945 to 1998. The annual budget and throne speeches, which in the parliamentary system represent the enunciation of the views and intentions of the government, provided additional data for the same period. The data provided a method to trace the evolutionary line throughout the reports. The researcher could see how the governments identified a problem, postulated a way of solving the problem, organized resources to apply the solution, and measured the change in the situation that was at the origin of the identified problem. After tracing the lines, it was possible to see how some of them were connected. The applied solution to one problem, although modifying the original situation, often created a new one that was seen by the following government (or minister of the same government) as a situation to be acted upon. These successions of actions, often having themes that continued through different government periods, are the real policy and economic development strategies that were used in Quebec. These actions go beyond the ideology used by the politicians of each government to that government's actual intervention to attack the problem. These real policies and economic strategies identify a period. They define the ways and the means that the Quebec society used to attain its objectives, not only during that era but also today. After describing each of these periods, economic strategies, and policies, we analyzed them in the same manner that we used for analyzing the actions of each respective government. We were then able to identify commonalties as well as differences for each government. It seems that each strategy employed in modifying a situation created the conditions necessary for the birth of the initiative of the following period. Thus the period became filled with one initiative flowing into the next. Using that perspective, we could see that beneath the apparent relationship between one strategy and the one that followed was a dialectic that deployed itself. The relationship ruptures became turning points or adapting moments of a work in progress. That work was already identified at the beginning of the 1950s. The dialectic process is only the redefinition of goals to adapt them to the world arena and the restructuring of the tools that Quebec is using to attain its goals in a new competitive environment. For the purpose of demonstration, we will describe the dominant forces behind the economic policies, synthesize them, and describe how a necessity or causality linked them. In other words, the actions of each preceding government created the conditions necessary for the future development of strategy. Without oversimplification, we can identify a dominant strategy of economic development for each decade since the

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1950s and predict the major focus of the Quebec economic development in the first 10 years of the new millennium. THE FIRST D I S C O V E R I E S : THE G O V E R N M E N T AS ENTREPRENEUR Quebec was able to construct itself because a succession of leaders from both public and private sectors responded to the will of the people to progress beyond mere survival. Quebec attained its present state of development because it found tools to use in problem solving. Those tools were modified or even abandoned as soon as they changed the situation that rendered them useful. In one way, their own success rendered them obsolete. Quebec decided near the end of the 1950s to abruptly change a script that it had been following for the first 200 years following the end of the French regime in North America (1760-1960). That script put religion, language, and agricultural life at the center of a strategy aimed at ensuring the survival of the French society under British rule. But that surviving society was feeling isolated and underdeveloped. Those feelings coupled with the new consciousness of its own identity, where the driving force became a new dream and a new deal between different parts of Quebec society. The government does not create economic value alone but is a function between people and companies. However, like the individual entrepreneur who serves the role of leader in an organization, the government provides direction, support, resources, information, and recognition, and it proposes a vision that can either promote or undermine opportunities. The past 50 years, economic developmental policies and strategies of the Quebec governments were modified and adapted to address opportunities and threats created both inside and outside its economic borders. In order to accomplish that, the governments had to be flexible, proactive, and innovative in the allocation of all resources. As in the business games played by corporations described by Lant and Milliken (1991), the governments of Quebec experimented frequently with new strategies for organizing themselves in order to stay in the economic development game. We will also demonstrate that the governments, like the successful entrepreneurial companies in Quebec, abandoned the simple exchange model and adopted an aggressive factor intensity model. A WILL TO DEVELOP CAPACITIES TO THEIR FULLNESS In the 1950s it was obvious to many that the future of Quebec depended on the continued exploitation by foreigners of the province's natural re-

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sources in forestry, mining, and fishing. Water was needed for electricity production, and the Saint Lawrence River provided a natural route to the center of the continent. Quebec possessed vast natural resources that seemed to be limitless in the 1950s, and there were many foreign investors willing to exploit those resources. If the succession of governments in Quebec had continued this view and adopted development policies on the exchange model, Quebec would have an underdeveloped economy today and a crisis in social problems. Instead the government decided to channel all its energies and efforts toward one goal: to develop the Quebec economy to its maximum capacity. It even went further with the vision of some leaders, who predicted that Quebec had the ability to achieve first in world-class competition. From the 1950s to the present, the desire in Quebec to change and adapt is present in all spheres of economic and social structures. Politicians, businesspeople, labor unions, artists, and intellectuals have all decided to adopt new strategies to create competitive economic advantages. For instance, the government allowed individuals to subtract, for income tax purposes, twice the amount that they would normally have invested in a capital fund created and managed by a union (the Quebec Federation of Labor). That fund is now worth more than $1 billion. When one looks at the economic performance and structure of Quebec in 2000, one must admit that the achievements are tremendous. A R E C O G N I T I O N OF HUGE BARRIERS TO ECONOMIC DEVELOPMENT The changes in the economy are more of an achievement than one might think, because Quebec did not appear to possess the conditions necessary for that type of evolution. In the 1940s, Quebec faced huge barriers if it wanted to develop its economy from the inside rather than hoping foreigners would do it. As we will see later in this chapter, the majority of Quebec's population, the French-speaking community, did not value entrepreneurship. Private business owners were not well educated, did not speak the language of the majority, and lived in a small society controlled by a pact between the political class and the Catholic Church. For the entrepreneurs of the private sector to be successful, the government had to find ways to reduce these barriers, to go around them, or to find a clever way to use them to their competitive advantage. As with successful companies, government leaders had to address several issues. First, they needed to clearly identify the environment. After identification, they selected a change process, knowing that it would not be accepted unanimously. To implement the change process, leadership developed persuasive communication designed to inspire people to act in

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that direction. The government followed up with support for people and their innovations. Finally, the government accepted that economic development was a work in progress that would never end. THE ROLE OF THE QUEBEC G O V E R N M E N T : O R G A N I Z A T I O N A L STRUCTURE TO PROMOTE INNOVATION At the beginning of the evolution process in the 1960s, the scope of the changes that were happening was enormous, touching every sphere of society. People began to speak of a "quiet revolution." It was a revolution in the respect that a rapid and dramatic change occurred in the paradigm that had historically defined the daily lives of French-speaking Quebeckers. Quebec's Quiet Revolution not only changed the type of link that had existed between the state and the Catholic Church but also transformed the vision that French Quebeckers had of themselves. Furthermore, it gave the Quebeckers a new project (un projet desociete) and organized a large public debate on the ways and means necessary to attain new objectives for economic development. Some observers from abroad, especially those having an absolute free market view of the world, have criticized the Quebec government's role in the economy. For such observers, Quebec is a society overly dominated by questions of social values and state interventions. The social policies of the government of Quebec (and, in some ways, the government of Canada and its social net) have greatly exceeded the tremendous impact of its economic development policies. Beyond simplistic criticisms aimed at the role of the state in the economy, one must see the successes attained by the Quebec government as huge steps toward a new partnership between the state and the private sector. The fall of the majority of the communist regimes has seen the end of the view accepting an economy controlled and planned by government bureaucrats. But the world has also witnessed the difficulties of a totally free market in which the government is totally absent. The beginning of the industrial revolution in England, and the chaos of some Eastern countries entering the free market economy without the minimum structures guaranteed by the state, are well-known examples of the limits of an unregulated market. With the current level of sophistication of our economies and the unevenness in the distribution of wealth, it is difficult to imagine an economic system without any type of state intervention. For instance, imagine a structure without currency, forms of contracts, arbitration of conflicts, definitions of propriety, and definitions of social standards such as the age of workers and the standard working week.

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In that respect, the evolution of the Quebec economy and its impact on society is partly the result of bold actions on the part of the people, the private sector, and the government. Those actions were the result of systematic plans with the government as the major leader. In the middle of its change process, the Quebec economic system had an important decision to make. Would it remain within the security of trade barriers, or would it embark on a free trade adventure aimed at putting its economy in the world game? As said earlier, Quebec decided unanimously at the National Assembly to accept the challenge of international competition. That decision forced the government to adapt its policies and behaviors to the worldwide economic forces. To do that, the government had to recognize the enormous potential of doing business globally. After recognition, the government embarked on an aggressive economic plan of action to create and develop businesses operating worldwide. The decision to go global was adopted by both private and public authorities at the same time, and in a collaborative way. The ability of Quebec's policy makers to see that the world's economic environment was changing, and that those changes presented opportunities for the Quebec economy, showed evidence of a systematic approach to economic development. The policy makers organized change in a proactive way to help the companies to achieve it. Furthermore, the province's approach showed that although the visions and dreams of the 1960s was still the main force behind policy decisions, the government structure was able to adapt flexibly to the constantly evolving competitive markets of the world. Issues remain for Quebeckers to tackle in order to maintain the social equilibrium. Those issues include unemployment, the economic cost of social programs, the level and structure of taxes, the elimination of poverty, and the limit of the intervention of the state in private contracts. Nevertheless, a social contract exists providing objectives and guidelines to guide the economic actions of all parties involved in the development of the economy. We will show that this economic and social evolution is neither the result of chaos nor the fruition of a succession of unrelated events. It is the result of the development of a specific dialectic in which all the successive governments of Quebec during the past 50 years played the role of entrepreneurs. In the past, executives and managers were able to read the market, see opportunities, and then prepare a strategy and plan of action to profit from those opportunities. Because the rhythm of change in the market was slower, they had time to separate the planning process from their operations and could take more time to ensure that the corporation would conform to the plan and behave accordingly. Because things stayed the

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same for longer periods, a lot of energy was directed toward working and executing the plan. Today's leaders must predict the direction of the market, convince people inside the organization to create new opportunities, and stimulate "thinking out of the box" behaviors. NEW TOOLS FOR T O M O R R O W ' S CHALLENGES It is easy to gather from the choice of verbs in the preceding paragraph that the new executive must become increasingly proactive. He or she must not only create change but, more importantly, foster and take care of the change capacities of the organization. The change from a scientific manager who learns the laws of the market, tests, and applies them, to the behaviors of an entrepreneur who creates new products that will change with the market is very demanding. Some observers will say that these types of change would not happen without the force of crisis. The phenomenon is so powerful that sometimes observers have the feeling that they must scrap all the rational theories that were at the center of scientific management. Tom Peters (1994), one of those researchers, wrote: "There's little doubt that times are crazy, and getting crazier— whether you're a banker, software producer, restaurateur, or public official. And if times are crazy, well, then, what makes more sense than crazy organizations? But if you grant me that premise, then you have to conclude that our principal problem today is the lack of craziness" (p. 5). In meetings with managers and executives from the United States, Canada, and Europe, we have heard similar comments. Many leaders believe that they live in a world that is crazy and that what they learned in their formal training and at the beginning of their careers appears to be obsolete. They see their work expanding and their private life suffering from their exposure. They remain wired to the office and unsure of what is next. The strategies of downsizing, reengineering, mergers, aggressive acquisitions, and globalization have shaken their lives. Leaders feel like hired guns who offer their services to the corporation for relatively short periods. The "corporate man" seems like a fantasy to them, for the vast majority of corporations will break their commitments to their people if the strategy, the benefit, or the slowing of the market demands it. Some leaders are nostalgic about the olden days and would like to work in a stable environment at a stable corporation. Others think that they should not stay too long in the same corporation. They do not want to stay too long because every corporation, at one time or another, is on the losing end of the game. In situations like this, it is difficult for people to commit to long-term goals and develop a sense of purpose linked to the success of the corporation. If the corporation will not take care of me in bad times, why should

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I remain loyal to them? The purpose of work in that context is not to participate in the creation of something of significant but rather to exchange work for something that is important to the worker, such as money, power, prestige, and immediate security. The "me" generation is probably only an adjustment of workers to a new environment where they will have four or five careers and many employers. Even if employees stay and progress within a corporation, they know that their lives could change suddenly. In the near future, staying with one corporation will be the exception rather than the norm. Better to be prepared to move on at the first sight of a downturn. Like mercenaries, many executives feel their duty is to take care of themselves (and their families) first. There have been many stories about leaders who try to get the maximum profit or market value in the short term and then leave the corporation when it gets hit by the negative results of their myopic vision. Again, these executives are only adapting their perceptions of their missions to the new fundamental rules of competition: Be with the winning team and negotiate the maximum from that team. It is not surprising that many executives acknowledge that they are increasingly less prone to read long studies or books that don't seem to have practical managerial techniques explained in them. Their focus on short-term goals and the numerous day-to-day problems in front of them encourage a quick fix. Some are even trying to develop a rapid and simple technique for long-term forecasting and creating vision. Furthermore, they expect to be entertained as they learn the new recipes for success. Attacks made on the "scientific approach" to management have taken their toll on many managers. If the tools and techniques learned with that approach don't prove effective, what is? In these types of situations, people are scrambling to find new tools that will help them prosper, or at least survive. We see it everywhere with promises of the perfect tool, the one thing that will solve everything. The new management gurus offer new ways to be effective, manage your time, work on your emotional IQ, be creative, and be a team player, to name a few. Many of these techniques are useful and do work. But they don't work all of the time in all situations. Changes are accelerating, and now the name of the game is move as quickly as you can. Our "organic" market is multiplying the interrelations between its parts at an almost instantaneous speed globally. Market segments and consumers adapt rapidly. Each move on the board has the power to change the rules of the game. Like some virus in the human body, players in the competitive market have the power to adapt themselves to threatening substances. Smart leaders also learn, and they learn quickly. Those who don't learn, disappear. Dislocated events and unlinked changes could cause one to surmise that the world market is guided by chaos. If this is so, it is impossible to create

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theories and adopt a vision to explain and predict where our economies, countries, corporations, and jobs are going to be in the future. To survive and even prosper, you would have to adopt every fad. But we think that there are underlying challenges that have been misread by some of today's business leaders. First, there is a lot of research on chaos, and sometimes it's our inability to understand the phenomenon that forces us to label it that way. Second, what Wayne Gretsky's father told him about success in hockey, "Don't go where the puck is, go where the puck is going to be," is probably true about business today. Third, taking care of one's needs is not necessarily the opposite of taking care of the needs of others; one can be in tune with the aspirations or causes of an organization. One could argue that deciding about a company's aspirations and goals, focusing on the degree of preparedness of its resources, and giving almost absolute power to the people on the front line are the conditions necessary to act rapidly in the organization with maximum impact. How do you keep operational flexibility without losing sight of your long-term goals? In the next decade, corporations in the Americas must create new types of tools to manage organizations that will be flexible enough to re-create themselves almost daily without losing their mission. The decision process of these organizations must be redefined as well. Organizations must move from placing an emphasis on equilibrium and conformity to one of flexibility, openness, speed, and a paradigm shift. These challenges emphasize the way we organize work and make decisions. It's not the way we fabricate or distribute things that constitutes the main challenge; it's the way we help workers be as efficient as possible while participating in the life of the soul of the corporation. The development of analytical tools and computers in the past few years delivers major impacts on the types of organizations we can create. These tools impact the speed of the decision-making process as well. That will be even more evident in the near future, because the real question behind the hardware of information technologies has always been "How do I give more operational efficiency to our decision makers, and how do I integrate the information in a network where every need is satisfied?" In his book Fifth Generation Management, Dynamic Teaming, Virtual Enterprising, and Knowledge Networking, Charles Savage (1996) demonstrates the similarities between the evolution of computer technologies and management processes. He describes the next step for managers: Fifth-generation computing and networking makes possible new ways of working together, but organizational assumptions too often block effective use of this technology. We are still wedded to the organizational forms that evolved to meet the needs of the industrial revolution, (p. 113) We are witnessing the beginning of another era, the early knowledge era. It is again a time of discontinuity, although we do not really recognize the need to

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unlearn industrial-era, and it is hard to break through the bottleneck. The transition into the early knowledge era is not necessarily a simple or cumulative process. There are many new principles to be learned, while some of the older principles must be unlearned, (p. 119) The knowledge era's source of wealth is not just accumulated knowledge but also our human ability to recognize new patterns and interrelate them with the old pattern that flow with us. . . . Knowledge is not something that is possessed like a commodity. Instead it represents a capability to see broad new patterns among fuzzy old ideas and new impressions and relate them in a larger context, (pp. 120-121) The new paradigm changes the quest for knowledge as a commodity to the quest for ways of creating new knowledge. It's the movement from the creation of tools to the creation of tools to create tools. The same challenge faces electronic research, creating machines that would then create machines. As humans and human activities become more interrelated, the same interconnectivity will shrink or blur the traditional boundaries that have existed between them.1 For instance, the job of managing an organization, whether public or private, is becoming increasingly similar. Today's leaders face the same task: to organize change in ways that will optimize the adaptation and growth of their organization. If they are very good at it, they can put their organizations in a commanding position in their sectors or markets. CREATIVITY A N D KNOWLEDGE The revolution in management suggests that the focus of managers should turn toward managing knowledge and creativity The main emphasis should be on strengthening the power to adapt and take control of the market by staying one step ahead of the competition—to always be prepared, as Tom Peters recommends, to "surprise your customers." Helix Hearing Care of America Corp. Helix Hearing Care of America manages, owns, and operates hearing care clinics across North America and provides professional service to individuals with hearing care needs. The hearing care industry in North America is represented by more than 11,000 clinics, which combine revenues of more that $2 billion (Can.). Under these conditions, the management of Helix Hearing Care believes that this industry has great potential for consolidation. Into the bargain, more than 86 percent of the company's client base consists of people age 50 or older. Consequently, under the circumstances of an increased aging population, documented by demographic data, the company expects that the number of hearing-impaired patients will also increase over the next two decades.

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In its efforts to illustrate the growth potential of the hearing care industry, the company's research shows that only 2 out of 10 hearingimpaired people are using aids to improve their condition. The company anticipates that this rate of penetration is subject to significant increases in the near future. This too will benefit the company as it strives to become a leader in the industry of hearing care. The company was founded in 1985 and has since been located in Montreal, Quebec. Helix Hearing Care owns 200 hearing clinics in Canada and the United States and provides services to more than 1,800. The company's revenues increased 825 percent from $5,100,386 (Can.) in 1996 to $47,198,866 in 2001. As the company intensified its activities, it also strengthened its employee base from a mere 40 people in 1996 to 240 in 2001. According to the company's publications (Helix, 2001), its mission is to promote a multidisciplinary clinical approach in the treatment and rehabilitation of disorders of the auditory system. To attain this goal, Helix Hearing Care employs the most advanced technologies and the skills of highly trained professionals. Moreover, the founders of the company are all hearing health care professionals with extensive experience in the field. As a result, the company prides itself in having offered efficient and personalized services that translated into more than 97 percent of satisfied customers. The company takes great care in the employment of the professionals who work in hearing health care clinics managed by the company. In doing so, Helix Hearing Care employs professionals with good standing in the hearing health care branch, people who have been known for their expertise and professionalism and are recommended by their results. Subsequently, their expertise and capabilities, together with cutting-edge technology, allow for thorough and precise examinations and evaluations. All the employees working in clinics managed by Helix go through advanced training after they have become fully licensed and have gained all the necessary credentials. Helix is committed to staying ahead of its competitors, especially in the technological aspects of its operations, by keeping its employees updated and by participating at professional venues and conventions in North America and Europe. This enables them to be part of the development of new technologies and to witness the progress in the field of hearing health care. The management of Helix Hearing Care leads the corporation with the strong conviction that a large number of small businesses can be consolidated in an efficient manner if it makes correct estimations of its strengths and weaknesses before it sets forth to acquire. The company is thus concerned not only by what to acquire but also by the integration methods that will later be used. As a result, Helix has grown rapidly for more than 15 years. This is accompanied by an enviable reputation for the company's successes in Quebec, Ontario, and the United States.

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The trend of consolidating the company's competitive advantage through aggressive acquisitions and strategic mergers has begun relatively recently, although Helix has always maintained a strategy open to development. This trend is expected to intensify in the near future following other similar industries such as pharmacy, optical, medical services, and other consumer-oriented businesses. The management of Helix hopes that the consolidation of independent small businesses will soon result in a strong network of hearing clinics offering more products and services and a higher quality of service delivery while increasing the profitability of each operation. Helix Hearing Care hopes to benefit from this growth, as its core beliefs are associated with the measures of success in the hearing health care industry. There is a trend in large corporations to become impersonal, which can potentially turn away both their employees and customers. Helix has recognized that when building a large network of clinics, warm and personal contact with the consumer is essential. For this reason, hearing professionals joining Helix Hearing Care can increase the time they spend dealing with patients by delegating activities such as purchasing to the corporate level. There are obvious benefits that come from integrating many small businesses into a large distribution network, and these are strong economies of scale. These economies can then be used to fund other areas of the business such as professional training, technological improvements, marketing, and business development. Through insightful integration of operations and good geographic coverage, Helix Hearing Care expects to improve its position within the industry in the near future. This organization is characterized by a dynamic and growing environment that is changing the attitudes and delivery systems in the hearing health care marketplace. Helix hopes to reshape the field of hearing health care with new strategies, systems, and a patientbased philosophy that will have a lasting impact on the industry. This company is an example of ambition and forward thinking that demonstrates that such qualities are well rewarded by the global business environment. The company is expected to consolidate its position in the hearing health care industry in the future, as the industry itself is still in an emergent phase. Under these growth conditions, the operational knowledge, financial structure, and size of Helix Hearing Care are expected to play a major role in continuing its advantage. NOTE 1. Reprinted from Savage, Fifth Generation Management, Dynamic Teaming, Virtual Enterprising, and Knowledge Networking, 105,113,119-121, Copyright © 1996, with permission from Elsevier Science.

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REFERENCES Amit, R., & Glosten, L. (1993). Challenges to theory development in entrepreneurship research. Journal of Management Studies, 30, 815-835. Bell Helicopter Textron. (2002). Bell Helicopter Textron company Web site, available on the Internet at http://www.bellhelicopter.textron.com Djankov, S., La Porta, R. L., Lopez-de-Silanes, E, & Shleiler, A. (2000). The regulation of entry (Paper Number 1904). Cambridge: Harvard University, Harvard Institute of Economic Research. Engen, T. (2001, April). Address to shareholders of Alcan, Inc. 99th annual general meeting of shareholders, Montreal, Canada. Godfrey, D. (2002). Bell's 50th. Retrieved August, 2002, from http://www. bellhelicopter.textron.com Gordon, S. (2000). Shakin' up main street. Profitguide. Retrieved February, 2002, from http://www.profitguide.com/magazine/article.jsp7_content = 814 Helix. (2001). Helix company Web site. Accessed October, 2002, at http:// www. helixhca. com Lant, T. K., & Milliken, F. J. (1991). The impact of an organization's recent performance history on strategic persistence and change. Advances in Strategic Management, 7,129-156. Mosakowski, E. (1998). Entrepreneurial resources, organizational choices, and competitive outcomes. Organization Science: A Journal of the Institute of Management Sciences, 9, 625-634. Myers, J. (2002). Fast planet. Profitguide. Retrieved February, 2002, from http:// www.profitguide.com/magazine/issues_article.asp7ID = 822 Peters, T. (1994). The Tom Peters seminar: Crazy times call for crazy organizations. New York: Vintage. Robert, M., & Weiss, A. (1988). The innovation formula: How organizations turn change into opportunity. Cambridge: Ballinger. Savage, C. M. (1996). Fifth generation management, dynamic teaming, virtual enterprising, and knowledge networking. Boston: Butterworth-Heinemann. Thellier, M. A. (1999). The human qualities first. Forces, 123, 25. Wright, R. (2000). 21 ways to build great people. Profitguide. Retrieved February, 2002, from http://www.profitguide.com/magazine/issues_article.asp? ID = 260

CHAPTER 5

Productivity

THE 1 9 5 5 - 1 9 6 5 D E C A D E At the beginning of the 1950s, fewer than five million people lived in Quebec, a territory three times larger than France. They lived mostly in small, isolated towns that were economically weak. The road infrastructure was poor, and the electrification of rural areas was unfinished. Most towns had monoindustries or were one-company towns. The majority of the population was culturally isolated from the rest of the United States and Canada. The vast majority of Quebec's people spoke French, were Catholic, had a law system based on the civil code, and had low educational levels. Furthermore, very few had any real business experience, and almost none were owners of mid-size manufacturing businesses. The Dalton Favreau Commission conducted a study and found that the French-speaking population was absent in the economic power structure of Quebec. The political system was tied to the Catholic Church, and discussions revolved around conservative values and the necessity to protect the nation and traditional rural life. The elite of the French society worked in two arenas. They either worked in the church hierarchy or were doctors, lawyers, or politicians. The economy was organized around the exploitation of natural resources such as farming, fishing, mining, forestry, and hydroelectricity. Foreign-owned companies owned most of the large-scale corporations, and their top management was foreign. In most cases, the social values of the Quebec Francophone society did not support the accumulation of physical wealth or the concept of entrepreneurial spirit.

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Alcan, Inc. Alcan is the world's second largest aluminum maker. Nevertheless, even from its leadership position, the company never ceases to see room for growth across its operations, which include the production of primary aluminum, rolling mills, and packaging. Alcan's financial targets for 2002 included the achievement of earnings before interest, taxes, depreciation, and amortization (EBITDA) of $3 billion (Can.) and a free cash flow of $1.25 billion. These targets assumed maintaining annual capital expenditures at $750 million. The first primary aluminum ingot in Canada was produced on October 22, 1901, in Shawinigan, Quebec. On this same location, hydroelectric power had been developed earlier. The aluminum operation was at the time a subsidiary of the Aluminum Company of America. In 1902 it was incorporated as the Northern Aluminum Company, which was later to become the modern Alcan, Inc. In 2001 the company celebrated 100 years of growth and success. What is known as the new Alcan, since its name change in March 2001 from Alcan Aluminum Ltd., is a cutting-edge organization with an inspired mix of talented people, innovative products, advanced technologies, and a customer-focused culture. The company has increasingly become involved in diverse and ambitious projects within and beyond the scope of its day-to-day activities. Such activities include contributing to the design of fuel-efficient and environmentally friendly automobiles, engineering sophisticated new components, and designing innovative packaging concepts for pharmaceutical or food products. Alcan, Inc., is a multinational, market-driven company and a global leader in aluminum and specialty packaging. The annual revenues of the Quebec-based company were reported at US$12.6 billion in 2001. Alcan is well positioned to meet and exceed its customers' needs for innovative solutions and service, having developed world-class operations in primary aluminum, fabricated aluminum, as well as flexible and specialty packaging. Alcan currently employs approximately 48,000 people and has operating facilities in 38 countries. The organization is aimed at serving the interests and needs of global and regional customers in all aspects of the aluminum, fabrication, and packaging markets while delivering maximum value to the company's shareholders. Alcan's structure reflects the company's international scale, with major decision-making centers located both in North America and in Europe. Alcan maintains a corporate head office in Montreal, Canada, which focuses on corporate strategy and growth initiatives, human resources and strategic capital allocation, and corporate governance and compliance functions. The corporation comprises six business groups that are responsible for

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creating value within different business units of each group. The groups provide strategic leadership for growth and operating oversight that are expected to meet the expectations of customers, shareholders, and employees. Alcan leadership is actively involved in setting and enforcing the common values of the company. These values include integrity, accountability, trust, transparency, and teamwork, and they are projected to guide the company and its employees in dealing with customers, suppliers, and other stakeholders. The company understands and applies integrity in operating in all areas of business. Consequently Alcan strives to set itself apart by conducting business in a responsible fashion as outlined in the Worldwide Code of Employee and Business Conduct, which also extends to the company's contractors, consultants, and suppliers. The company also attempts to be openly accountable and willing to align decision-making power with responsibilities at all levels of the organization. The company understands that in the global business environment, where it conducts daily business in many different cultures and languages, accountability demands honoring commitments and accepting responsibility for actions and behaviors. Alcan's leadership made public the belief in leveraging the abilities of the company's employees, suppliers, contractors, and customers through a cooperative team approach to problem solving and project implementation. Accordingly, interaction with other group and team members is a vital part of everyone's job. In the current business environment, where companies have become more concerned with ethical issues concerning their dealings, Alcan prides itself in having always placed ethics and trust at the core of all business dealings. Trust is further described as a two-tailed concept, where others will do as they say and also trust that Alcan will live up to its commitments. The company believes that this can be accomplished if the participants in such dealings are transparent at all times in the way they communicate with each other, providing timely and accurate information. Alcan also holds in high esteem a solid commitment to safety, health, and environmental care. The company has claimed this value as one of the most important since it started operations, considering that aluminum is a high-risk industry, especially for the workers involved in operating machines and working with the metal. The commitment to safety, health, and the environment is nonnegotiable for the managers of Alcan. These are just some of the reasons the new Alcan has become a real force in the global aluminum and packaging industries. The new Alcan has been broadened in scope and scale to provide greater product capabilities, enhanced technology, and market leadership on a global basis. This look at the world of Alcan reveals a company with a global reach

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and exceptional promise for future growth. The company has been restructured with a focus on customers and providing innovative solutions. As a consequence, Alcan understands the importance of being more that just a supplier of material. Instead it has agreed to become what customers worldwide expected of Alcan: a strategic partner providing innovative solutions for increased productivity, competitiveness, and profitability. EARLY STAGES OF E C O N O M I C D E V E L O P M E N T The economic development of Quebec was seen as an easy task. The government owned natural resources in demand by large manufacturing companies. All the government had to do was offer these companies the right to harvest those resources at a very low cost. The companies would then come to Quebec and create opportunities by buying needed products, subcontracting operations to local workers, paying for the construction of new infrastructures, and giving contracts to service industry providers such as lawyers and accountants. Management relocating to Quebec from abroad presented a positive economic development force. Not only would they bring expertise and knowledge, but they would also purchase goods and services. They would demand better services from the government infrastructure for the education and health care of their families. Before 1948, the federal government had no individual income tax. The Quebec government added its individual tax system in 1954. The resources for the operation of these governments came mostly from the revenues of the concessions. Before 1959, the government's vision of economic development existed as part of the Ministry of Municipal Affairs and Industries. Its operations were organized around three initiatives: determining what Quebec had to offer to foreign companies (the bureau of statistics), communicating those opportunities to potential companies (the industrial commissaries), and offering services to sectors of the economy that were seen as local activities. Those sectors included the arts and crafts trade, agriculture and tourism, the Office of Arts and Crafts and Small Business, the agriculture section, and the Office of Tourism. The Ministry of Industry and Commerce was created in 1959 as a sign of the government's intention to be proactive in the economic development field. The exploitation of agriculture, the forest, the mines, and the sea had dispersed a large part of the population throughout isolated towns whose inhabitants could not create and operate the infrastructures needed to attain these goals. For instance, the accessibility to electrical power at a reasonable cost was an issue of the election campaign. It appeared to a lot of citizens that the existence of many small, local electrical producing companies was not cost effective and would not permit the full development of hydroelectric capacities. No company had the financial clout

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to construct and exploit the capacities of the many rivers that could be dammed to produce low-cost renewable energy. The new liberal government of M. Lesage acted quickly on all those domains. It nationalized the small electric-producing companies into one utility called Hydro-Quebec, developed a postsecondary education system, and established a state system to provide hospitalization coverage for each citizen. All the changes involved construction or improvement of physical infrastructures, including roads, schools, hospitals, electric transport lines, and new dams. The government became the chief contractor for enormous projects all over the territory. The government was able to finance those projects because it had revenues from the new income tax, it did not have a significant debt, the citizens had sizable savings, and the economy of North America was in a growth period. The amount and diversity of the public works offered to the private sector were responsible for the growth and creation of many companies in almost every sector of the economy. Similar to the New Deal for the United States during the depression years, the actions of the Quebec government in the 1960s provided strategies to jump-start growth of the private sector. With the same philosophy aimed at mastering its destiny by creating infrastructures, the government established a financial institution in 1965 called the Caisse de Depots et de Placement du Quebec to manage a portfolio of public sector pension and insurance plans. Halfway through the decade, a specific project galvanized the essence of the spirit of la revolution tranquille: the 1967 world exhibition in Montreal called Expo 67. That project created artificial islands in the middle of the Saint Lawrence River, built a world-class site with pavilions from nations representing every continent, constructed a subway system in Montreal, and provided for rapid growth of the private tourism infrastructures. Expo 67 became the symbol of the capacity of Quebeckers to manage huge projects and gave them a positive image of their potential to compete anywhere on earth. Furthermore, activities on the exhibition grounds and the presence of diverse residents in a region of Montreal that had traditionally only attracted tourists made Quebeckers more conscious of the diversity of the value systems existing around the world. They became more open to pluralism. This had a tremendous impact on the value system of the French Quebeckers and contributed to the final separation between the church, government, and society. Following governments would not promote the values and policies of the Catholic Church and would be forced to define for themselves the project de societe (society to be) and the benefit of such a society. During this time, many French-speaking Quebeckers made contacts with people arriving from small, underdeveloped nations. Political inde-

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pendence from Canada became an issue and sparked a debate on the "essence of Quebec." Was Quebec a distinct society in Canada, a single nation, or only another province? These events set up political debates for the following decades. From that point onward, governments would have to define the type of society Quebec should become and what type of political institutions would have the responsibility and authority to create and manage that society. Hydro-Quebec Hydro-Quebec prides itself on being one of the major providers of environmentally friendly energy solutions in the North American territory. The company was created in 1944 by the government of Quebec. Today Hydro-Quebec supplies electricity to more than 3.5 million customers in the Canadian province. The company is also a devoted partner to dozens of power companies in the northeastern United States and participates in energy-related infrastructure projects on several continents. The company accounts for assets of nearly $60 billion (Can.), annual sales of $11.4 billion and a workforce of 20,676 employees. This information is sufficient to rank Hydro-Quebec among the leaders of the North American energy industry. In a recent ranking of utilities at the forefront of the industry positioned for competitive advantage in the new century, Hydro-Quebec was chosen as one of the favorites. Hydro-Quebec is a utility that goes against global trends and takes on the world. The reason for this assertion is HydroQuebec's decision not to break up the company and sell the enterprise in parts and pieces. Instead, the government drafted a new energy policy to keep Hydro-Quebec the exclusive property of the Quebec government. Those involved in decision making in the province of Quebec weighed the opportunity of selling the company in pieces to indigenous and external investors. They decided that Hydro-Quebec is more valuable and has more potential as a whole, under the current leadership, with the government overseeing its activities. Additionally, the company has been invested with the ability to leverage the synergy of this integrated utility in the global marketplace. Moreover, the government empowered the utility to improve its profit margin, thus returning a greater portion of its income to the only shareholder. The government also proposed the utility to become a major energy provider in North America, making the province of Quebec a major energy hub. Hydro-Quebec generates 94 percent of the electricity it produces from 54 hydroelectric generating plants, owned and operated by the corporation. Hydro-Quebec has access to the largest quantity of inexpensive hydroelectric power in North America. For this reason, the company can afford to export large quantities of energy to neighboring countries. These exports make up at least 10 percent of the total yearly production of elec-

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tricity, generating revenues close to $400 million (Can.). The main portion of the company's exports goes to the United States. To maintain customer satisfaction, the company has committed itself to holding rates for the three years preceding 2002, even though the company offers some of the lowest rates in electricity services in North America. In addition to the low rates, the company has reduced the outage levels as a way to improve customer satisfaction. The company prides itself on high levels of investment in innovation, as the leadership of Hydro-Quebec believes technological innovation to be the key to profitability and efficiency. In 2000, the corporation invested more than $100 million (Can.) in technological innovation projects. These investments rank the company 1st among Canadian utilities and 15th in Canada as a whole. Subsequently the company has devised a strategy that will enable it to stay at the forefront of technological advances and to maximize the benefits from research and development. Although owned by the government, Hydro-Quebec realized the need to act like a privately owned company. The global economy imposes a new set of rules that could not be followed by a large, inflexible stateowned corporation. To maintain its leadership position in the international electrical industry, and to remain competitive with private power companies, Hydro-Quebec became more sensitive to the forces that drive the market. This also meant that the corporation could not restrict its operations to the internal, provincial market. Instead the company started to look to international opportunities of investment and expansion. The development strategy has been based on growth and profitability. The leadership of Hydro-Quebec aims at making the company more profitable, more active in energy markets, and more solid financially while ensuring technological development, respecting the environment, and optimizing the company's role within the Quebec economy and in global markets. The leaders of the corporation realized that the U.S. market offers the most attractive business opportunities. They translated this information into a business strategy for Hydro-Quebec to penetrate this market, and other profitable markets in the world, and grow the company globally. Hydro-Quebec possesses a competitive advantage over other utilities located in eastern North America, because the company's hydro-based generating facilities are unique. Another advantage is that the energy is renewable and nonpolluting. Specifically, hydropower from Quebec helps reduce greenhouse gas emissions. A key advantage that the company takes pride in is a solid reputation for quality and reliability in the U.S. market. The company intends to broaden the potential for growth by developing a world-class international activity base. Hydro-Quebec is also active in the field of research, with a long history of successful work at the Institut de Recherche d'Hydro-Quebec. The company intends to continue a steady flow of annual investments for basic

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research. Concurrently, Hydro-Quebec aims to leverage existing technical knowledge by providing products and services throughout the world. Working with partners through alliances and joint ventures, the company is developing products such as a submersible distribution transformer, substation equipment diagnostics technology, and a superconducting current limiter. Hydro-Quebec is a paradigm of how the Quebec government found resources to contribute to reinventing the province for the new millennium. In an environment where other utilities, such as the Ontario-based company that used to be the greatest electrical utility in North America, are being disintegrated and sold pieces, Hydro-Quebec decided to change its strategy and develop even more. Strong leadership and solid followthrough on the completion of its projects have ensured a lasting position for this Quebec-based utility that has what it takes to become an important player in the energy industry. THE 1 9 6 5 - 1 9 7 5 D E C A D E The 1970s began with important modifications in the political, social, and economic domains. The historical context of world events at this time included the Prague Spring in 1968, the student protests in Mexico during the 1968 Olympic Games, and the 1968 student protests in France, Germany, Italy, and the United States. In the same period, the world was witnessing the rise of organized crime alongside flower power. Quebec society faced a protest movement against its power structure. During the late 1960s and the early 1970s, Quebec lived through a succession of social protests. These protests revolved around student strikes and occupations, mailbox bombings, violent labor strikes, and assorted rallies. In October 1970, a group of political activists kidnapped a foreign diplomat, then kidnapped and murdered a minister of the Quebec government, to put pressure on authorities to revolutionize Quebec society. The activists wished to create an independent country. The response of the authorities was to invoke the act of war measures and send the Canadian army into Quebec. New conditions in the labor market led to changes in the environment. The young Quebeckers who entered the labor force were better educated than their parents. A significant number of the French-speaking youth were employed in the civil service, which was growing at a rapid pace. The political debate, the Canadian government policy on bilingualism, and the French consumers' demands to be served in their mother tongue created pressures that helped some French-speaking employees rise to more powerful jobs in the private sector. The natural resources sector of the economy began to have difficulties maintaining profitability. The global market was undergoing structural

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changes, and international competitors were increasingly productive. The oil crisis, along with the rapid growth of inflation, was disastrous to this sector. Some one-company towns were in crisis. If a major employer had to close operations, the majority of the population would have to leave because there was no other employer prepared to hire in large numbers. Some towns would probably die. The local people and authorities turned to the Quebec government for help. As the economic environment worsened in the natural resource sector, pressure rose, and the government repositioned. This was difficult because both positions appeared extreme and unrealistic. The decision not to intervene and leave the situation up to market forces would transfer huge costs to the province for social assistance, relocation, and retraining. It would annihilate previous work done to ensure services in education and health care in all the regions of Quebec. Finally, it would stand as a symbol of the incapacity of the government to ensure the growth and prosperity of the population. The exchange model appeared to some policy decision makers to have faults. In closing these production facilities, they knew that at some point in the future, when a new cycle would render them profitable, these facilities would again be exploitable. Others were suspicious of the reasons behind some of the decisions being made by huge transnational corporations. They were tough, and they used political tactics to crush the national and union worker movements. During those years, an ideological war was being fought at the worldwide level between the capitalist, the communist, and the socialist, which explains why such thinking was possible. In the same context, the possibility existed that the government could intervene directly in the natural resources sector by nationalizing the exploitation facilities in its territories. There was an example of this in the petroleum sector when producing countries monopolized prices through OPEC. However, that would have been against the wishes of most Quebec people, who were trying to open Quebec to the world, not close it. In addition, if the government took that road, it would be forced to nationalize a huge chunk of its economy, which would have tremendous negative economic and political impact. The government would have to nationalize operations owned by the future clients of the raw materials produced. This is not a good way to begin a commercial relationship. It would irreparably damage the relationship that Quebec had with its first trade partners: the United States and Great Britain. Quebec would appear as a supporter of communist ideology in North America, and that perception could pose a security risk for the United States and its allies. Finally, nationalization would put tremendous stress on the relationship between the Quebec government and the Canadian federal government,

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which would try by any means to block a legal nationalization process. In any case, the government could not escape its responsibility. It indicated clearly to the population that it would support employment and local economies. The government also assured its people, as well as its economic and political partners, that it would promote a market economy in which foreign investments would be welcome and protected. Accordingly, the decision makers adopted a strategy that would respect both conditions. A state-owned corporation would be created that could compete in the marketplace. The state would get involved in maintaining production capacities in areas and during times when the economic conditions made them profitable, and it would then resell them to private entities. These corporations would be forced to sell their products on the free market and to compete with other suppliers in Quebec and abroad. But they would work with a different set of expectations from their owner, the government. The corporate goals were to maintain jobs, make the plants appealing to private owners by making operations profitable, and then ensure the long-term survival and development of these operations. The government would pay the cost of the reorganization and waiting period. The funds would come from nonpayment of social security, employment benefits, and retraining programs for very long periods, and by reorganizing services in education and health care in the affected region. The government was forced to act to secure good social conditions and diminish the negative consequences of the adaptation of the marketplace to negative growth conditions. A significant number of intellectuals thought it was necessary to help the free hand of the Adam Smith market. Just as England had had to introduce a law concerning workers' age and working hours, the Quebec government had to act to protect future growth conditions. The Quebec government, in a period of less than 10 years, established Crown corporations in the majority of the natural resource sectors: • the steel industry: Sidbec-Dosco (1964) • the mining sector: Sogem (1965) • the fisheries: Madelipeche • forestry and woodcutting: Rexfor (1969) • the energy sector: Soquip • the food sector: Soquia (1975) Acting in the market as a player rather than a lawmaker or regulator provided the government a way to solve other types of economic problems. For example, let's look at three of them.

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• When faced with the construction of the Baie James hydroelectric project, the government could not give the entire contract to any Quebec firm, as none of them had the capacity to handle it alone. The alternative, giving the entire project to an international firm, was seen as a mistake, because it would mean that the people of Quebec would miss an opportunity to learn and acquire worldwide expertise. Hence the government decided to create a state corporation to act as the main contractor of the infrastructure. The Societe de Developpement de la Baie James was founded in 1971. • In the beginning of the 1970s, as small and medium-size companies increased in size and encountered growth problems, it appeared that some would miss opportunities or close owing to financing difficulties. Private finance companies were unable to assume risks this great. The government created a state-owned corporation to supplement such financing. This corporation would help create better companies and create a new base for customers of the private financing sector. Some said that the corporation should not intervene in any case eligible for private financing. In 1971 the government created the Societe de Developpement Industriel du Quebec, known as the SDL • With essentially the same reasoning, the government saw a lack of industrial and applied research in the private sector. These companies did not have the necessary resources or expertise. Again, substantial development opportunities were missed. In 1969 the creation of the Centre de Recherche Industrielle du Quebec, called the CRIQ, was announced. Decision makers became aware that public economic policies have a cycle of life, just like products and corporations. The challenge would be to constantly adapt government policy to the changing market. Quebecor Inc. Quebecor is known today as the second largest printing company in the United States, and the largest in Canada and Europe. It currently employs more than 27,000 people in 119 facilities worldwide, and the company's annual revenues exceed $3 billion (Can.). Quebecor has become an industry leader in the production of books, magazines, catalogs, direct mail, and other printed products. In the wake of the new trends in the economy, Quebecor is actively involved with serious investments in the field of digitally based printing solutions for its customers around the globe. Since its foundation in 1965, Quebecor has been known as a company of continuous growth. The company's beginnings can be traced to 1950, when its founder, Pierre Peladeau, got involved in the revitalization of a small neighborhood newspaper. In 1965 he founded Quebecor Inc., a communications company primarily engaged in newspaper publishing. Le Journal de Montreal (the Montreal Journal) was launched in 1964, and Quebec Le Journal de Quebec (the Quebec Journal) was launched in 1967.

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Additionally, the company was engaged in wining market share in the publication of weekly magazines, books, and other printing projects. As it reached a point where additional capital was needed to finance growth and further development, the company went public in 1972. The goal of this endeavor submitted to the superior vision of transforming Quebecor Inc. into a fully integrated communications provider. As a direct consequence, the corporation was soon listed on the New York Stock Exchange (NYSE). It was not until several months later that it got listed on the Montreal Exchange. Another important year in the growth curve of Quebecor is 1987, when it acquired the paper maker Donohue, as part of the already expressed goal of creating a vertically integrated operation. This acquisition proved instrumental in giving Quebecor a stake in every stage of the production process. In the late 1980s, Quebecor made a series of major acquisitions that transformed the company into the largest commercial printer in Canada and the second largest in the United States. Also, the merger of Quebecor Printing and World Color in 1999 created the largest commercial printer in the world. Good understanding of the business environment and of current tendencies made Quebecor the second largest newspaper group in Canada. Moreover, the company developed creative synergies among Quebecor's components by acquiring TQS, a private television network, and branching into multimedia and new means of communication. In the 1990s the empire that had grown steadily under the wise and bold direction of Pierre Peladeau attained global stature, establishing facilities all over the world. In addition to being a leader in the printing industry, the company successfully developed branches into new media. At his death in 1997, Peladeau left behind an integrated company that played an important leading role in each of its lines of business. He succeeded in building a vast communications empire that offers cutting-edge technology and constantly evolving business solutions. Presently Quebecor is building on its solid worldwide presence while also remaining greatly attached to its initial vision. The new generation of managers at Quebecor is drawing on the company's traditions to sustain and nourish its growth into the future. In October 2000, Quebecor opened a new chapter in its development with the acquisition of Groupe Videotron Itee, the third largest cable operator in Canada and the largest in Quebec. Videotron is a major Internet service provider, particularly for high-speed access capabilities. The company also has a subsidiary that is an important Web developer, operating numerous Web properties. Additionally, another subsidiary of Videotron, the TVA Group, operates the TVA broadcasting network, which has a

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market share of more than 35 percent in Quebec and also owns magazine publisher Publications TVA. In the process of acquiring these strategic ventures, Quebecor created a new subsidiary, Quebecor Media Inc. Also, the group found it complementary to form an alliance with Capital Communications CDP Inc., an important financial firm. In terms of new developments, Quebecor has been involved in creating advanced printing applications. As a result of a partnership with IBM, the company developed IBM's InfoColor 70 printer and InfoPrint Manager software, which represent the most powerful variable data demand-print system in the world. With this system, Quebecor is able to tap client databases in order to create exclusive, personalized printed products. The countless possibilities offered by this new technology include individualized catalogs featuring the customer's favorite products, even in his or her favorite colors, and business newsletter highlighting companies that are part of an individual's investment portfolio. Quebecor has been known for applying innovation to its processes and products throughout the company's working existence. Consequently, Quebecor has entered into the new economy with the same commitment to be at the forefront of its industry. "We're taking printing into the twentyfirst century," said B. C. Boothby Jr., vice president of market development. "We're entering the era of one-to-one marketing with customized information that gives readers what they want, when they want it, in a form that doesn't waste the reader's time or the marketer's resources. The creative application of this technology is going to produce amazing results in terms of response rates and should revolutionize the way products and services are marketed in tomorrow's world."

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CHAPTER 6

Innovation

THE 1 9 7 5 - 1 9 8 5 D E C A D E What do you think of when you hear the word "innovation"? You may picture a scientific-looking man or woman in a white lab coat diligently seeking a cure to a disease or attempting to invent the world's next great product. You may picture a Broadway show that combines dance and sound in a way that you never knew possible. Innovation is a difficult concept to solidify. Is it an art, or is it a science? It is both. The term "innovation" in a business context has remained ambiguous long enough. It is our intention to illustrate the systems that can propagate innovation, and to show how these same systems, management structures, and leadership styles can bring about organizational art forms. Innovation is a learnable skill. Do not mistakenly think that only a small percentage of the individuals in the general population are innovators and that your organization either has some of these people working for you or doesn't. According to Robert and Weiss, innovation is the "systematic anticipation, recognition, and exploitation of change, where change is the basic fuel of innovation, its source, its raw material" (p. 2). Innovation is not a random, innate skill but rather an organized process to deal with change. Therefore innovation is a learnable skill from which all individuals and organizations can profit. The 1975-1985 decade in Quebec demonstrated that when faced with turbulent times and new problems, a society can find, with the help of good conditions, individuals who would innovate and create new solutions. Many people witnessed the success of local entrepreneurs who

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easily benefited from the booming contracts when building public infrastructures in the health, education, transport, and finance sectors. Some had acquired managerial experiences in private companies and considered themselves potential entrepreneurs. They decided to rise to the challenge and create their own companies. At the same time, responding to global economic pressures, large foreign companies began to downsize and reorganize their operations in Quebec. The effect of these two phenomena became apparent in the economic indicators that guided interventions of government policy makers. For instance, these indicators began to show that small and medium-sized companies created the largest portions of the new jobs. In the emerging markets of microelectronics, software, and business services, small companies were the dominant players in the local markets. They were profiting from the technology explosion and the outsourcing of big corporations. Local entrepreneurs became role models and household names in Quebec. They were the new heroes, replacing clergymen, politicians, and professionals in traditional society. The huge successes of some of the first French Canadian-owned corporations showed others what was possible. These successes served as examples, for instance: • Bombardier: a company that started building snowmobiles in a rural area grew until it was selling subway cars to New York, Mexico, and Japan. • Cascades: a business project conceived by the Lemaire family, again in a rural area, to promote recycling of old paper was later buying paper mills in France. • Quebecor: the dream of a young man to have his own weekly newspaper in a small borough of Montreal became one of the biggest printing businesses in North America. • Videotron: the vision of an entrepreneur involved in the cable industry took a giant leap in the world of cable and communications technologies. • Atrium Biotechnologies, Inc.: a Quebec company that produces ingredients for cosmetics and nutritional supplements experienced a growth rate of 1,487 percent in 2001.

INNOVATING COMPANIES Behind each of these success stories, the entrepreneur responsible used innovation as a primary tool. The companies did this not only by bringing new products to the market but also by using previously unheard strategies. Let's look briefly at some of them. Innovating Economic Policies Discussions regarding the importance of the contributions of entrepreneurs to Quebec society were establishing new paradigms for the French

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Canadians. It became acceptable to make money. The spirit of a free market responding to entrepreneurial spirit became the new board game for policy discussions. The government was not seen as the leader in the development of economic activities. As time passed, some government policy makers began to perceive certain aspects of government interventions as barriers to the economy's development. Not only was the government consuming vast resources, but it was also putting bureaucratic pressure on the business community. The new economic environment and the success of the strategies of the past decade led the way toward the development of a new definition of the government's role. From now on, the government would have to help the private sector by creating conditions favorable to the development of solid and highly competitive local companies. Rather than just looking at the macro level, it would have to address what happened at the micro level of the firm. To do that, the government would need to understand the true problems facing small and medium-sized manufacturing companies. It would also involve the creation of a better means of communication between the government and the firms that it wanted to help. For instance, it would require the creation of regional offices across Quebec. This new way of looking at economic reality led the government to respond more directly to the main problems facing small and mediumsized businesses. In the past, the government had offered consulting services for small companies. The Ministry of Commerce and Industry had given technical support for creating accounting and cost evaluation systems, organizing good marketing and sales management, designing efficient production lines, and managing cash flows and finance. Nevertheless, until that point, it had not tackled the specific structural problems that were hindering the development of small and medium-sized companies. After conducting studies, the decision makers identified some major barriers and acted to solve them. Perhaps the most important barrier was government financing. Many felt that the absence of real working capital was driving successful companies to bankruptcy. Other business owners argued that to sustain growth, especially in times of rapid progression, they had to search for larger amounts of capital, because the banking system would not finance growth without physical or monetary guarantees. The government realized that to help the economic growth of its economy, it would need to disburse significant amounts of working capital. But because of the lessons of the past decades, it did not want to act directly and create a new bureaucratic system to manage the evaluation of the risks involved in investing working capital. It had to find a way to let the mechanisms of the market work.

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It decided to help the private financial institutions in their own efforts to find such capital, and at that time, the market would evaluate the risk involved in financing each company. This was accomplished by means of fiscal measures such the Regime d'Epargne Action, which permitted taxpayers to deduct the money invested from their gross income into publicly owned Quebec-based companies. In certain cases, as with small and medium-sized companies, the amount deductible could be double that of the initial investment. In later years, some adjustments allowed the pooling of money in a fund named Societe de Placements dans 1'Enterprise Quebecoise (SPEQ) that could invest directly in companies without going to the stock market. The government used measures such as these to motivate citizens to decide how they wanted to use their savings. Without interfering in the allocation of working capital, the government created optimal conditions for creating a disposable amount of capital. This was especially important at that time, because few French-speaking Quebeckers invested in the stock market or in small and medium-sized companies. The vast majority did not know how the market worked or that these financial instruments were available to them. The change in the mind-set of the people was so great that a workers union, the FTQ (Workers Federation of Quebec), created and managed a fund. The union invested capital into businesses, putting it somewhat on both sides of the bargaining table. This fund grew rapidly and is now managing more than $1 billion (Can.). In the spirit of the free market, it appeared to policy makers that the government should also respect the principle of sharing profits and losses. The government then decided to modify its system of grants and subsidies programs with a sharing-the-risk approach. This approach had two other forces driving it. First, the money supply of the government for intervening in the economy was shrinking. Second, it appeared that the government bureaucratic system was not doing a better job of evaluating the risks than the institutions of the private sector. Consequently, the major financial help of the government proceeded as if there were de facto working capital or loans without guarantees. In both cases, if the project or companies went well, the financial help would at the least be reimbursed, and in some cases, the government would take its share of the profits. The contract that accompanied the financial help specified the procedure and the amount the company would repay. In those cases, the government became a true financial partner. Another problem related to the absence of working capital was the low level of research and development conducted by Quebec's small and mediumsized firms. When the levels were compared to other industrialized nations, it was clear that there was a huge problem. The government used a holistic approach to the problem and used all the means it could to modify the situation. It did so with the same ap-

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proach used for the capital problem. Within a short period, it reviewed all its policies affecting research and development. Since 1969, with the Centre de Recherche Industrielle du Quebec (CRIQ) and other programs, the government offered some technical assistance to the small and medium-sized companies, but it still needed a total strategy. The result of the review placed Quebec in a prime position to do research in North America and possibly the world, if one looks only at the fiscal advantages. For instance, if the companies did not make profits that year, the income tax deduction would be given in cash. That guaranteed that the government would reimburse the expenses in R & D at a 20 percent ratio. Other incentives followed such as an exemption of income tax in Quebec for two to three years on the personal incomes of new researchers coming to a new research facility in Quebec. During this decade, the government sided with the new entrepreneurs and attempted to create good conditions for solving their growth problems. It also acknowledged that private institutions are better equipped to manage and create economic development. One reason the twenty-first century is crying out for innovation and an entrepreneurial work style is the massive amount and rate of change in so many markets and industries. As Peter Drucker (1997) wrote, "we are rapidly moving away from the belief that there has to be one theory of the organization and one ideal structure" (p. 5). For many years, successful companies depended on market trend analysis and careful examination of past business practices to construct an effective system of their own. It is still necessary to be aware of the past and use it as a learning tool. However, an even more important tool is the ability to forecast or create the future of one's market. Miller, Lant, Milliken, and Korn (1996) state that there are two basic models of strategic simplicity. In environments that are relatively stable, businesses tend to apply the passive model of organizational adaptation in order to tune up their organizations incrementally and maintain a profitable status. Contexts characterized by turbulence, in contrast, may require organizations to experiment with new strategies to stay successful (Lant & Milliken, 1991). In turbulent environments, the opportunistic model of organizational adaptation would encourage organizations to foster entrepreneurial behavior by freeing managers from constraining routines and encouraging them to explore a wide range of strategies, technologies, and operating methods (Miller et al., 1996, p. 866). Research studies such as these are not new in the business field. However, there is an important point resulting from these findings. Think very hard. See if you can name a great number of businesses that are operating in a relatively stable environment. The nature of today's economy is tur-

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bulence. With rapid amounts of information accessible via technology, change is occurring at a rate comparable to that of the industrial boom in the early 1900s in the United States. This information revolution will affect many more individuals and institutions because of the globalization of the world economy. Countries such as China are opening trade pathways. Whether or not your direct competitors appear to be those in closest geographical proximity to you now, do not think for a second that this will not change—or else you are in denial. The globalization of the world economy is not a myth, a legend, or the flavor of the week. It is a real issue facing all major corporations and organizations. The environment we have been describing sounds scary to most. But innovators see times like these as moments of opportunity, not times of despair. Innovators understand that change is a natural part of life and business, and they are ready to confront new challenges. During times of change, innovators see the glass as half full, while the rest of the world sees it as half empty. Change is a scary thing to human beings. We develop comfort zones and are resistant to change. However, individuals who condition themselves to change see it in a whole new light. One way of alleviating some of the fears that some people have in organizations is by creating systems of reward for innovation and change. When systems are in place that reward change and innovation, people become less terrified of it. For example, a company that gives its employees a percentage of the first year's profits from any new invention is rewarding its employees for constantly looking for new and better ways of doing things. On the other hand, an organizational culture that simply punishes employees for doing things the wrong way, and does not acknowledge achievement because it is expected, will not be a driver of innovation. You may realize that an organizational and individual leadership style has a great bearing on that organization's ability to be an innovator. Leadership should tolerate failure as a way of learning. Leadership should truly value its people as its most valuable resource. These two entities of leadership are good beginnings toward establishing an innovative culture. That's right, it is possible to develop a culture of innovation and entrepreneurship. In fact, there are companies in Quebec that are having success because they possess this type of culture. C 0 2 Solution C 0 2 Solution is a young company based in Quebec City's High Tech Park. The company's main activity consists of research in the area of recycling carbon dioxide (C0 2 ), the most important greenhouse gas. Following years of sustained research and development efforts, the company has established strategic partnerships intended to help the company become

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a leader in the design, development, production, and marketing of products and services related to the recycling of C 0 2 in the context of climate change. The company has devised a vision that attempts to keep consistency with a sustainable-growth outlook. An interesting concept that comes directly from C 0 2 Solution's activity is that its vision that does not limit itself to financial profitability. Instead the company hopes to be able to attain social profitability, which can be measured according to the improvement of the quality of life. Some of the players that the company has involved in this vision are its staff, high-end technology, and society, which can contribute in various ways to the success of the concepts promoted by C 0 2 Solution. The company relies on several fundamental principles of sustainable growth. First, the company is committed to providing ecological solutions through research and products that increase the quality of the air, and also to providing solutions for climate change issues through environmentally friendly methods of recycling C0 2 . Second, the company is working toward attaining economic growth that will enable it not only to sustain itself but also to become a world-class firm. Third, the company plans to contribute to social awareness by educating the public about issues related to the company's field of activity. C 0 2 Solution plans to grow socially by encouraging openness to various cultures within the company and by allowing the firm's talents to radiate on the international scene. Fourth, the firm has set ethical barriers that it plans not to cross. The company's strategy includes building its entire approach on the notions of respect, creativity and quality, which are at the very heart of the firm's managerial philosophy. The company's growth culture also provides for international equity. This can be achieved through the dynamics of trade, characteristic of developed countries. Finally, the company intends to provide future generations with the tools and tolerance levels they require to adapt to the climate change. C 0 2 Solution believes that its mission is not only to find and provide solutions for the present but also to provide integrated solutions for the future, thus creating an intergenerational equity. The main contribution of C 0 2 Solution to the field of environmental sciences has been the development of a biological process that transforms carbon dioxide (C0 2 ) into bicarbonate, which is an environmentally safe product. This process takes place inside a bioreactor, with the help of an enzyme that accelerates the transformation of C 0 2 into bicarbonate in an aqueous environment. The enzyme breaks down carbon dioxide through a series of steps into calcium carbonate. The chemical reaction that takes place inside the bioreactor is highly natural. Moreover, the reaction is at the basis of the C 0 2 transportation and removal phenomenon in the human body. In the natural human pro-

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cess, with the help of the enzyme, carbon dioxide is converted into bicarbonate and carried to the lungs, where it is converted back into C 0 2 and exhaled. The process occurs in the same fashion in nature, where the C 0 2 found in the atmosphere dissolves on contact with ocean water and is then precipitated in the form of carbonates, which finally turn into sediments. C 0 2 Solution's process is therefore totally safe for human beings, in addition to being environmentally sound. The company's specialists were involved in research for many years before C 0 2 Solution existed as a business venture. The research work conducted to date has helped demonstrate that the process operates adequately at the laboratory scale. Moreover, the research team, which represents the vast majority of the employees in the company, is currently involved in optimizing and customizing the process for potential business applications. The solutions devoted to confined areas such as enclosed buildings or submarines are the first target of the company, as they are potentially among the most profitable applications. Consequently, C 0 2 Solution has constituted a research consortium with the Centre de Robotique Industrielle, Laval University, the Cegep de Levis-Lauzon, and the GroupeConseil Genivar with the purpose of adapting the technology to the market of enclosed buildings. Being able to recycle C 0 2 in these buildings would help reduce heating and air-conditioning costs related to ventilation, as well as the energy supply needed for these operations. The company also expects that this technology will be developed as a life-support system, which will further enable it to target the market of confined spaces, including space shuttles and orbital stations. This technology, if it proves more cost efficient, can replace the system currently used in these environments, which has several limitations, not least of which is a high environmental risk. The company has already negotiated with the Defense Industrial Research Program of Canada, which has made significant investments to date in C 0 2 Solution, hoping its bioreactors will help the military's fleet of submarines. Presently Canada's submarines can submerge for only two days at a time, mainly owing to lack of fresh air. The company also targets the industrial markets, for which C 0 2 Solution has developed the most complex applications of its technology. The target goes mainly to applications that involve production of energy, primary metals, steel and aluminum, cement works, oil companies, and paper facilities. For this purpose, C 0 2 Solution is developing relationships with potential customers that will later lead to a personalization of the product to serve the needs of each of these companies. Another area in which the company has shown a great amount of innovation is the treatment of enzymes that it needs to feed the bioreactors. For commercial operations that involve the use of bioreactors, C 0 2 Solu-

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tion had to come up with a cost-efficient solution that would make its services competitive. However, the price of the enzyme used in the process is very high on the market, and the company requires very large quantities of enzymes. It appeared obvious that C 0 2 Solution had to find some means of obtaining these enzymes in an economical and reliable manner. For this reason, the company has started to work on cloning the enzymes, which will bring them the competitive advantage of producing their raw material in-house at a much lower cost, and also the benefit of controlling the production parameters of these products. Ultimately the company can develop the enzyme production into a subdivision that would commercialize the cloned enzymes at a price advantage over the market. C 0 2 Solution is certainly a company that benefits from the new thinking in the Quebec business environment. Placed in an industry of high future demand and great potential, the company has set itself to become a leading force, by combining innovation, strategy, and a strong social awareness. The Museum of Civilization The Museum of Civilization in Quebec City, Quebec, provides a vivid example of how innovation can be a part of management's philosophy. The museum is a state-owned and provincially funded museum, yet it is legally independent. It has a board of directors that is appointed by the government, but all tactical and strategic planning is done by the museum's administration. The museum focuses on the human experience. Unlike most large museums, it has a thematic, multidisciplinary, pluralistic approach to its displays. Truth, time, and cultural aspects are themes of the major exhibits rather than the usual historical or scientific phenomena. The museum does include scientific and historical data but shows them in the context of the human experience. One exhibit that we witnessed personally was about space travel. The exhibit blended footage of the first moon walk with scenes from Georges Melies's 1902 science-fantasy Le Voyage a la Lune (A Trip to the Moon). The exhibit was a collection of old movies, books, and historical artifacts, including a real piece of the moon, which made the exhibit absolutely like nothing we had ever seen in previous museum displays. How does the museum consistently produce such remarkable exhibits? Line Ouellet, director of educational services, believes that the management structure and philosophies at the Museum of Civilization breed innovation. The museum operates with a matrix structure. This structure eliminates many vertical hierarchies and makes it necessary for departments to work closely together to complete projects. At the museum, the nature of the exhibit determines who will be on that team and who will

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be its leader. The leader could be an educator, a curator, or the exhibit conceptor. Because the museum is state-owned and provincially funded, it must get approval for exhibits due to the large price tag that accompanies them. For example, a smaller exhibit that may run for a few months may cost between $200,000 and $300,000 (Can.), and the larger exhibits, which are displayed for a year, cost around $1,000,000. However, to avoid stifling creativity, exhibit teams work innovatively within certain parameters to produce a fresh project. Although time, budget, the target audience, and the challenge of the exhibit may be set, how the team goes about achieving those goals is completely up to them. The teams construct the exhibit, which is monitored by department directors, and then seek the approval of the board. To operate in this manner, there must be a great deal of trust between the museum's employees and the board. The board must be willing to allow the museum to make some mistakes along the way, and the museum must trust that the board will be open-minded and receptive to new ideas. Line Ouellet believes that innovation is the driver of the museum's success (personal communication, June 15, 1999). Ouellet thinks that innovation is "a state of mind" in which one looks for challenges at all levels of the organization. Every project team is constantly challenged to come up with new ideas and more attractive exhibits. Every administrator is challenged to be innovative, yet not waste time and money working on projects that do not meet the overall mission and vision of the museum. Every individual in the museum understands how vital his or her role is to the success of the organization. Part of the nature of a matrix management system is how closely individuals and departments must work in order to be effective. Roles constantly change depending on the project, and individuals must be flexible and able to adapt to new situations without ever losing sight of the overall goal. Ouellet also thinks innovation is the ability to accept risk and use one's intuition. Systems and processes do not come up with good ideas on their own. Systems and processes are incapable of being creative. People are truly the most valuable resource that any company has. They are the ones who create, innovate, and develop new ideas into profitable or successful business achievements. The systems and processes in place in an organization must be conducive to risk taking and the use of intuitive capabilities. If individuals are allowed to be free of fear or constraint, the mind is able to think freely, and the organization will become more efficient. For example, the Museum of Civilization's matrix structure allows designers, directors, curators, and others great freedom to create and innovate within certain parameters. In all businesses, certain parameters require careful consideration. However, there is an attitude difference in

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the way innovative organizations view parameters and the way traditional organizations view parameters. INTUITION AND INNOVATION Innovators see parameters as flexible boundaries, which allow room to grow and change. Innovators do not like boundaries and find ways around them or through them—legally, we might add—to change the way things are done. A traditional culture sees parameters as the rules and regulations that guide daily tactics and strategic planning. This is where the use of intuition becomes vitally important. Intuition allows individuals to "think outside the box" and create new parameters based on what they feel and sense to be the best way of doing things. Intuitive people realize that just because something has been done the same way for a long time, it doesn't necessarily make it right. There is an old cliche that states, "If it ain't broke, don't fix it." In many cases in today's markets, "If it ain't broke, break it." Sometimes processes, systems, traditions, and management structures need to break old habits and begin looking at new and different ways of doing things. Sometimes a company's greatest strength is its greatest weakness. By resting on its laurels, an organization could find itself slowly becoming extinct. By allowing your employees to use their intuition, you are forming a constant watchdog within the organization that can prevent extinction and come up with creative ways of doing business. When you allow people to use intuition as a part of business practice, there is a certain sacrifice that must come along with it. Sometimes people's intuitions are wrong. You cannot operate by trying not to fail, however. You must operate with a certain risk, realizing that some failures may occur. The benefits of a successful risk venture certainly outweigh the minor setback that a failure can cause. Management and leadership must see the big picture to understand this concept. Ouellet states that the museum allows for a margin of error. A consistent theme has developed in this book so far, and it says, "You must tolerate failure in order to be successful." Company after company, leader after leader, all the great organizations we visited realize that expecting perfection from employees is not a realistic notion. That is not to say that these organizations do not strive for perfection. By letting people know it is okay to make mistakes if they are trying hard to come up with new ideas that can benefit the company, you are encouraging them to care about the organization and allowing them to take ownership in the company's success. Ouellet put it eloquently when she said, "If you don't change the recipe or the ingredients, you are going to get the same cake." Companies that have been making the same cake for numerous years must stop and see

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if the consumer is going to want that cake tomorrow, a year from now, or five years from now. Even in times where the way you are doing things is working, you should constantly be looking for new avenues in case your cash cow methods fail you. Cirque du Soleil Cirque du Soleil is one of the finest examples of innovation that currently exists in any market. If you are not familiar with Cirque du Soleil, it is a circus like no circus you have ever seen. At the beginning of the 1980s, a group of young street entertainers created the High Heels Club. They used this name because most of the performers would walk on stilts. The group also included some fire blowers and jugglers. All this started in the Canadian province of Quebec, a region that had had no real circus tradition previously. Shortly after these initial performances, the artists decided to organize a festival where all the circus performers and artists in the region could gather to share their talents and ideas. In 1984, during the 450th anniversary of the arrival of Jacques Cartier in Canada, Cirque du Soleil was born. It started traveling around Quebec with a show that included many theatrical elements, which mixed the arts of the circus and the street and featured original music, light effects, and costumes. The concept of this circus was slightly different from that of the traditional circus, as there were no animals to support the acts of the performers. By 1986, the circus had already made longer travels around Canada, including Ontario and Vancouver. The following year, California was another important destination. Good response from the public at that time encouraged the decision makers of the enterprise to organize a tour in the United States. The big top, which had a seating capacity of about 800 people, became too small. Consequently, in 1990, the seating capacity increased to 2,500 seats. At this point, Cirque du Soleil expanded its touring program to travels in Europe, while also pursuing its strategy of constantly developing new shows to keep the audiences interested. In addition to the shows that the circus performs on tours, the company took on a more difficult and ambitious task through which it aimed to conquer the entertainment world of Las Vegas. The program called New Experience was such a hit in Las Vegas in 1992 that the company decided to settle the program for a whole year. In 1998 the circus created yet another permanent show in Las Vegas, on an aquatic theme, and another one was created to entertain the audiences in Disney World in Florida. Cirque du Soleil has four head offices. The main office is currently located in Montreal, Quebec. The secondary office that oversees European

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operations was set up in Amsterdam, the Netherlands, and other offices were set up in Las Vegas and Singapore. In addition to the four head offices, the company also has an office in Tokyo, Japan. The construction of the Montreal Head Office was completed in late 1996. This made it possible for more than 500 permanent Montreal employees to work together under the same roof for the first time in the organization's history. It is in the Quebec location that all Cirque du Soleil's shows are created and produced. The construction of the head office represented an investment of approximately $40 million (Can.). Since 1984, more than 18 million people from around the world have seen one of Cirque du Soleil's productions. Also, since 1992, close to 2 million people have attended a Cirque du Soleil show in Asia. On a typical weekend, some 50,000 people see one of the circus's several shows being staged simultaneously around the world. Throughout the years, the circus has gained international recognition, winning many prestigious prizes including Emmy, Drama Desk, Bambi, and Ace awards, Gemeaux and Felix trophies, and a Rose d'Or de Montreux. Cirque du Soleil's operations are constantly changing. The company is constantly cultivating new markets, building on previous successes, negotiating solid partnerships, and, at the same time, developing and producing new projects. Cirque du Soleil currently employs more than 1,300 people, including 435 performers from several countries. The average age of the company's employees is 32. Cirque du Soleil is currently working on diversifying its commercial activities. For example, projects are under way in the audiovisual, film, publishing, and merchandising fields. In merchandising, for instance, the circus opened its first store on the premises of its permanent theater at Downtown Disney West Side on the property of the Walt Disney World Resort, near Orlando, Florida. Through their strong vision of the new circus, inspired programs, and innovative strategies, the creators of Cirque du Soleil have brought this side of the entertainment industry to high levels of profitability, showing how the circus is not only about jugglers but also about making money. In 1974, the company was a small, loose-knit group of street performers such as jugglers and acrobats. Today Cirque du Soleil performs all over the world, with estimated gross annual revenues of $125 million (Can.). It is the largest show in North America. How did a small group of entertainers, acrobats, and jugglers become one of the largest and most successful performance art groups in the world? Innovation is the answer. By consistently providing a product that is unmatched in any marketplace, Cirque du Soleil has established a stranglehold on a niche market that may never be let go. Copresidents Daniel Gauthier and Guy Laliberte run Cirque du Soleil. Gauthier has a background in the computing and electronics industry and

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is responsible for the financial and business issues related to Cirque. Laliberte is responsible for the artistic side. At the ripe old age of 24, Laliberte decided to organize a festival in Montreal. This festival would allow entertainers and circus performers to share ideas and talents and celebrate their professions. Little did Laliberte know that his festival would turn into a business with projected ticket sales between $300 and $350 million (Can.) in 1999. Laliberte and Gauthier have different strengths, but they share the same dream and vision for their business. They both believe that work can have a familial environment without neglecting effective business practices. Laliberte (1998) was quoted in an article in Changi International Business as saying, "It's all about not being afraid of leaving the old stuff and just trying to experience a new field. It's when you start just trying to capitalize on your previous success, sticking to it and being afraid of changing 100 percent of the content, that you restrain yourself from growing." Laliberte has captured the heart of innovation in this statement. Considering that Cirque du Soleil spends from 18 to 30 months developing a brand new show for upcoming appearances, he is practicing what he preaches. It is very difficult to change the ways things have been done for so long. For decades, sometimes centuries, organizations have operated in a certain way. In order for Quebec to be successful, the government realized that it must be innovative and change the system. Laliberte and Gauthier took a forgotten art, the circus, and brought it to life again with a new flavor and zest. Much of this success and innovation can be attributed to the culture that was created through open communication. The company is known for spending US$1 million every year on improving internal communications." As the organization grows, Laliberte and Gauthier are finding that they must relinquish some decision-making power to other members of the organization in order to maintain the same creative culture. This is a major problem that many of the innovative, entrepreneurial companies we have worked with discuss. The organization usually starts out with an individual or individuals who have a great idea and a passion to make it work. The organization is very collegial at first, and there is a great sense of ownership by those involved. As the dream takes off, the organization becomes more and more successful, and a hierarchy begins to develop. A company can be large and still be innovative, but decision making must remain as decentralized as possible, and the original culture still needs to permeate the organization. Laliberte and Gauthier will both tell you that constantly communicating the culture and vision of Cirque is one of the main contributors to their success. As the organization grows and Cirque brings on more and more new people, leadership is constantly working to bring everyone on board

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to the same dream. Laliberte and Gauthier state, "How do you suggest a vision of the world and entertain, both in the same show? How do you move people and make them think, both in one evening? But we want to do more than just entertain. There is the desire to live that must be talked about. The right to be different that must be asserted and the forgotten people who must be brought back to the fore." What a powerful message to send to the nearly 2,000 employees that Cirque plans to have in the year 2000. Many of the performers speak different languages and come from diverse backgrounds. However, all performers must share the same vision and passion as Laliberte and Gauthier. You may be beginning to see a trend. Leadership and innovation go hand in hand. In both the examples we have given, the Museum of Civilization and Cirque du Soleil, vision and leadership have made it possible for innovative practices to take place. It would be difficult to find an organization that could be classified as innovative and not find that its leadership has an innovative working philosophy. Because innovation is a process or way of thinking, and not just a buzzword or jargon, it is possible to emulate innovative business patterns. Both Cirque du Soleil and the Museum of Civilization have decentralized decision-making structures and always attempt to put the true experts at the heart of every decision. For example, many large organizations tend to look at authority as a means of choosing decision makers. If a manager is leading a team in one of these organizations, chances are that he or she will decide the final outcome, because ultimately he or she is responsible. In a matrix business structure, legitimacy becomes a powerful tool. When Cirque employees are working on a project, there is a collaboration of creativity and planning. The individual with the best perspective or the best knowledge in a particular area (e.g., scenery, costumes, choreography, etc.) is depended upon for valuable input. Laliberte and Gauthier admit that it was difficult for them to relinquish power as the organization grew, but it was necessary to maintain the culture of creativity and innovation. Different individuals make tough decisions, and all the employees on that team share the final decision. The ownership that a matrix structure provides for both these organizations is invaluable. We must be careful to not imply that the matrix management structure is the only business structure that is conducive to innovation. It happens to work well for both of these organizations. It is important to realize that the next great idea can come from anyone in the organization. If the structure of the organization is not one in which individuals feel comfortable participating, one may have to wait for the next great idea to come from top leadership in the organization. One of the central ideas of innovation is that regardless of who you are

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in the organization, a great idea is a great idea. An organization that is open-minded and constantly listening and planning for the next big idea will be more likely to be innovative. You may be wondering whether your organization is innovative. Here are a few questions you may want to ask yourself: How well do we deal with change? Are we leaders in our marketplace, or do we wait until the majority accepts a new way of doing things? How good are we at planning for the future? How long does it take for ideas to be communicated through different channels in the organization? These are good questions to keep in mind as we investigate the innovative business practices of some more organizations. To this point, we have looked at two organizations that are artistically driven. Do not think that these organizations do not have complex business issues simply because they are artistic in nature. However, innovation wears many different suits, so we will examine some different industries to broaden your perspective. IPL Inc. "Innovation through quality" is the motto on the cover of one of IPL Inc.'s brochures. IPL Inc. is "one of the largest manufacturers of molded plastic products through injection and extrusion for different industrial sectors." IPL has a sales growth rate of more than 15 percent over the last five years. This is a phenomenal sales growth rate for this industry. IPL uses technology and effective managing principles to be the leader in quality in the molded plastic products industry. IPL was one of the first businesses in its industry to become ISO certified and is also certified for the automobile industry. The company prides itself in being an innovator in quality. It is important that an organization carefully choose what its competitive advantage should be and then innovate that product, service, technology, or system. This concept may confuse some people who have a definition of innovation in mind before reading our findings. There are some individuals who believe that innovation and invention are synonymous. Although invention is one type of innovation, they are not parallel in all meanings. There are many ways to be innovative. If you view innovation as simply creativity, simply invention, or simply reengineering, you would not be seeing the whole picture. Innovation is a system, a process, and a leadership philosophy that uses creativity, invention, reengineering, open communication, and change as its raw materials. IPL has developed a system that is constantly monitoring the environment, both internally and externally, and changing through invention, reengineering, creativity, and open communication. For example, IPL realized that in its industry, quality was a must. IPL was one of the first

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organizations in its industry to obtain ISO 9001 certification. IPL consistently receives awards for its excellence in quality, including the Ql status for excellence awarded by Ford Motor Company and the 1988 Total Quality Mercure awarded by the Quebec Chamber of Commerce. Although these awards were in the late 1980s and early 1990s, the company's success in quality did not stop there. IPL's sales growth rate and leadership in the marketplace continue to soar. In October 1999, IPL announced that it had a new product that would provide casing around optical fibers. IPL expects this product to gross millions in North America, due to the expansion of fiber optics in technology fields and many others. IPL chooses to set the bar of excellence above what the market expectation is. IPL does not measure itself by the rate of growth and innovation of its competitors but rather chooses to reinvent the definition of excellence. Innovation is the company's tool for success. It would be an injustice to not mention IPL's innovation in technology. Technology for technology's sake is not a formula for success. Simply because an advancement in technology can be made does not mean that it is the right invention for a given system or process. IPL has strategically used advancements in technology to stay one step ahead of its market in quality and product applicability. REFERENCES Cascades Inc. (1997, July). The Cascades Group's directory of companies and services. Kingsey Falls, Quebec: Author. Cirque du Soleil. (1997, July). Cirque du Soleil [Brochure]. Montreal, Quebec: Author. Drucker, P. R (1997). The organization of the future. (F. Hesselbein, M. Goldsmith, & R. Beckhard, Eds.). San Francisco: Jossey-Bass. IPL, Inc. (1996). Rapport Annuel [annual report]. St-Damien, Quebec: Author. Laliberte, Guy. (1998). A balancing act. Changi International Business, pp. B4-B7. Lant, T. K., & Milliken, F. J. (1991). The impact of an organization's recent performance history on strategic persistence and change. Advances in Strategic Management, 7, 129-156. Miller, D., Lant, T. K., Milliken, F. J., & Korn, H. J. (1996). The evolution of strategic simplicity: Exploring two models of organizational adaptation. Journal of Management, 22, 863-887. Robert, M., & Weiss, A. (1988). The age of entrepreneurial management. In The innovation formula: How organizations turn change into opportunity. Cambridge: Harper and Row.

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CHAPTER 7

Global Growth and Technology

THE 1985-1995 DECADE At the beginning of the 1990s, Quebec had the industrial structure it needed to leap forward. This structure was constructed on the natural resources sector, a workforce that was educated and productive, capital resources, top-notch research facilities, and good fiscal incentives for businesses. Its growth was fueled by export activities. Quebec sold newsprint, aluminum, and other raw materials and exported telecommunications equipment, aircraft, food products, and transport materials. If we statistically considered Quebec at that time as a stand-alone country, its per capita exports were greater than those of Japan, Germany, and the United States. Its producing capacities had by far surpassed its own capacity to consume. From that moment on there was no other solution to the economic growth problems than to sell more and more to the world market. If the role of the government in its partnership with the business community was to create good conditions for growth, then it must turn toward the international trade environment. BCE Emergis BCE Emergis is a company that has been focusing for more than a decade on helping organizations to maximize their existing business-tobusiness electronic commerce solutions. Currently BCE Emergis is a leading service provider in the area of electronic commerce, with a strategic focus on gaining market leadership in the services sectors defined by

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health and financial institutions. Among its activities, the company elaborates advanced transaction-based Web applications that help customers transform their business processes, further providing them with a competitive edge in a global market economy. BCE Emergis was founded in 1988 in Montreal and has become a leader in the industry of on-line insurance claim and bank transaction processing. What makes this company a success story from Quebec is the innovative way in which it has adjusted itself to the new wave and the globalization of the economy while at the same time striving to continuously provide customers with improved products and services for their daily operational needs. Between 1996 and 2001, the company experienced a growth in revenue of 5,853 percent, from $11,025,479 in 1996 to $656,400,000 (Can.) in 2001. The company has enjoyed a remarkable success in a short time, growing its business from 100 employees in 1996 to 2,600 in 2001 as operations skyrocketed in the past decade. BCE Emergis concentrates on the sectors of e-finance and e-health. Both of these areas have been known to be paper intensive. The company is focused on providing its customers with solutions that allow them to benefit from the advanced applications that have been developed in recent years in the arena of electronic commerce. Consequently the company supplies customized network-centric solutions to businesses that automate transactions between companies. These solutions allow customers to interact and perform real-time transactions. The solutions provided by BCE Emergis allow companies to transact business and exchange business-related information electronically with their business partners and customers. These exchanges have been designed for optimal performance around the mission-critical business processes of invoicing, claims, and payment. The comprehensive set of applications developed and customized by BCE Emergis includes health claims processing and related solutions, as well as electronic bill and invoice presentments and payment. The company offers its services on a per-transaction basis, billing customers with each use of these services. As a consequence, the company builds a base of transaction revenues, which are recurring in nature. This also enables the company to build a network of interconnected clients, which eventually brings it together with the customers of their clients who are using their services. The target clientele of BCE Emergis is comprised of banks and financial institutions in e-finance, and health insurance companies in e-health. The company also provides a more extensive suite of network-centric solutions for small, medium, and large customers of Bell Canada. The company expects that these large clients will in turn offer their customers the e-commerce services that they benefit from. Ideally, this would create an

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electronic community of users that will use BCE Emergis as an operational hub. The company has also developed itself in the area of point-of-sale transaction-processing services in Canada. The company provides merchants and credit card issuers with a platform to electronically verify and process point-of-sale transactions such as credit and debit card transactions. After collecting transaction data from point-of-sale devices, BCE Emergis performs routing and processing of the data through an internally developed on-line real-time transaction-processing system. The information required to complete the transaction is then returned to the point-of-sale devices. BCE Emergis is also working with Visa to develop a new solution for business-to-business e-commerce payments. The outcome of this association is called Visa Commerce. This solution offers a platform for businessto-business payments that connects stakeholders, processes payments, and delivers transaction-related information. The operations of BCE Emergis have been structured into three strategic business units according to the type of activity and geographic concentration. The company's eHealth Solutions Group addresses the North American health market by enabling the processing of claims handled by health insurance companies, workers' compensation boards, and governmental agencies, as well as providing medical cost containment services. BCE Emergis Canada is the division of BCE Emergis that focuses on offering e-commerce technology services sold primarily through financial institutions and the Bell Canada network. Specifically, this division facilitates the private labeling of its solutions by financial institutions and telecom companies. By doing this, the company aspires to attain enhanced acceptance and accelerated adoption of its services by a large segment of the Canadian market. BCE Emergis U.S.A. is the American division of the company that focuses essentially on the financial services market in the United States. In doing so, the company works with financial institutions to distribute electronic solutions to its business customers. What is believed to have helped this company attain such tremendous growth in the last five years is its willingness to adapt to the changing market. BCE Emergis has been on the market since the late 1980s. However, the company did not experience great success until the late 1990s, when the company's management decided to adopt innovative solutions to keep up with the new developments of the service industry. The early adoption of Web-integrated solutions has proved immensely beneficial for BCE Emergis, and a focused vision helped the company maintain its success, even in times when other Internet-related businesses lost much of their initial enthusiasm. Moreover, the company found strength to com-

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pete and grow internationally, righteously believing that its innovative solutions will find a place on the global market. THE 1 9 9 5 - 2 0 0 5 D E C A D E (TECHNOLOGY) Technology in Quebec is flourishing among its various sectors, including aerospace, biopharmaceutical, information, and telecommunications. Specific companies highlight examples of how specialized services and industries promote entrepreneurship through cutting-edge facilities promoting research and development. Montreal International (2002), a nonprofit economic agency, provides sector information. AEROSPACE The aerospace industry in Greater Montreal represents $10 billion worth of goods manufactured in 2000 and creates over 39,800 jobs. More than 95 percent of aerospace jobs are within Quebec, and over $500 million (Can.) was spent by companies on R & D in 1998. More than 130 companies attribute 50 percent of their business to aerospace, and another 120 companies direct between 30 and 50 percent of their business to this industry. Aerospace in Quebec divides into three subsectors: prime contractors and major repair centers, equipment manufacturers, and subcontractors and suppliers of special products and services. Prime contractors represent the majority (79 percent) of the total jobs, divided over seven companies. Some of the global leaders located in Quebec include Bombardier Aerospace, Pratt and Whitney Canada, CAE, Bell Helicopter Textron, and Rolls-Royce Canada. Bombardier Aerospace Montreal ranks first among North American cities for jobs in the manufacturing and maintenance of aircraft engines. Bombardier Aerospace is the third largest constructor of commercial aircraft in the world, after Boeing and Airbus. The company holds 44 percent of the world market for regional airplanes and 37 percent for commercial aircraft. Bombardier has certified a new aircraft every year from 1992 to 2000, a tribute to the company's excellence in technology (Montreal International, 2002). Pratt and Whitney Canada Another leader in the Quebec aerospace industry is Pratt and Whitney Canada, located in Longueil and Saint-Hubert. This company designs, develops, manufactures, markets, and provides technical support for tur-

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bofans, turboprop aircraft, and turboshaft engines, supplying the demand for regional transport, commercial aviation, helicopters, utility aircraft, auxiliary power sources, and industrial applications. As of March 2001, 802 airlines and 7,735 other customers in 183 countries used Pratt and Whitney Canada's engines. CAE CAE, located in Saint-Laurent, designs and fabricates flight simulation equipment for commercial and military aviation and for flight-training materials. The company provides 80 percent of the world market for flight simulators. CAE ranks in the top 10 Canadian companies in expenditures on R & D. The company employs more than 7,000 people around the world, 4,000 in Quebec (CAE, 2002). The aerospace industry in Montreal receives immense support outside company R & D departments. The Canadian Space Agency in SaintHubert coordinates all elements of the Canadian space program and provides administration of five sectors. The Institut des Materiaux Industriels (IMI) in Boucherville promotes cooperation between industry, universities, and the government through interest or technology groups, consortia, and joint research projects. The Centre de Recherche Appliquee sur les Polymperes (CRASP) in Montreal partners with industrial leaders in conducting specialized research. These represent only a few of the many organizations providing research and support for the aerospace industry. BIOPHARMACEUTICAL INDUSTRY The biopharmaceutical industry in the Greater Montreal region provides more than 14,400 jobs and represents 95 percent of the biopharmaceutical industry in Quebec (Montreal International, 2002). This industry produced $2.3 billion (Can.) of manufacturing shipments in 1999 and spent more than $340.4 million on R & D in the same year. The biopharmaceutical industry heading represents three subsectors: foreign company subsidiaries, local companies, and contract research companies. Some of the key foreign employees include Merck Frosst, Wyeth-Ayerst, Aventis Pharma, Bristol-Myers Squibb, Schering Canada, Pfizer Canada, Novartis Pharma, BioChem Pharma, and Abbott Laboratories. Foreign subsidiaries account for 56 percent of employment. Montreal is internationally renowned for its research infrastructure, particularly in the medical field. Montreal ranks first for its unique database on genetics and the local population among major North American cities. Innovative biopharmaceutical companies in the Greater Montreal area maintain close relationships with local universities and finance research projects. Some of the new products produced as a result include

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3TC and Zeffix, used for the treatment of chronic hepatitis B, one of the major causes of death in the world. Growth of the biopharmaceutical companies advances through venture capital activity. In 2000, 89 investments made in Quebec created companies such as Bio Syntech, Caprion Pharmaceuticals, and Chronogen. Many Montreal companies have gone public and now appear on the stock exchange, such as CunjuChem, Neurochem, and Genomics One. More than 24 percent of the biopharmaceutical companies in Greater Montreal are public. Merck Frosst Canada Merck Frosst Canada, located in Kirkland, is Canada's leading researchbased pharmaceutical company. It provides more than 1,400 jobs in the Montreal region. Merck Frosst manufactures pharmaceutical products, including the medications Singulair, a treatment for asthma, and Vioxx, a treatment for osteoarthritis (Merck Frosst, 2002). Merck Frosst began as Charles E. Frosst and Co. in 1899 and quickly earned a reputation for innovation with new products known as 217 and 222, analgesics still used in Canada today. This family-owned company developed the country's first radioactive pharmaceutical products during the mid-1940s. Frosst merged with Merck and Co. of New Jersey in 1965. Merck represented another innovative company that produced vitamin B and penicillin in the early 1940s. Dohme Canada Limited, a drug manufacturer, was acquired in 1961, and the company restructured in 1982 as Merck Frosst Canada. Andre Marcheterre (personal communication, June 2000), president of Merck Frosst Canada and Co., feels that innovation in pharmaceutical companies hinges on several external factors. Rigorous protection of intellectual property combined with free or accessible markets for innovative pharmaceutical products combine to protect a company's investment in the industry. The average cost for the development of a new drug is $750 million (Can.) over 8 to 12 years. Marcheterre realizes the importance of using new technology when developing new drugs. Merck Frosst has recently received much recognition for its leadership in research and innovation (Merck Frosst, 2002). In June 2000, Merck Frosst received the Prix Galien Canada for both categories of research and innovation. No other Canadian company has ever won both awards in the same year. In June 2001, the Quebec Chamber of Commerce bestowed its Mercure award on Merck Frosst in the category of development and research in technological innovation. Richard Yerema, following his twoyear investigation, named Merck Frosst one of Canada's top 100 employers out of more than 30,000 companies. The company recently in-

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vested $163 million in Kirkland for the construction of a new R & D laboratory and expansion. /Eterna Laboratories Inc. S t e r n a Laboratories Inc. is a biopharmaceutical company focused on the treatment of cancer. The company's lead product, Neovastat, is the focus of a number of clinical trials including pivotal trials for the treatment of lung and kidney cancer, and a type of blood cancer. S t e r n a specializes in a field of medicine called antiangiogenesis. Antiangiogenesis, which literally means "combating blood vessel growth," is a new clinical field. Angiogenesis is implicated in the development of more than 20 diseases, including cancer, psoriasis, and age-related macular degeneration. Neovastat uses an extract from the backbone of the spiny dogfish, a shark species found in both the Atlantic and Pacific Oceans. The product is designed to prevent the formation of new blood vessels needed to nourish tumors. The National Cancer Institute in Bethesda, Maryland, selected Neovastat for trials funded and supervised by the U.S. governmentbacked body to evaluate the effectiveness of shark cartilage extract in treating cancer. Relatively few drugs have reached an advanced stage of testing on humans. However, Neovastat is now in two final-stage Phase III trials for kidney and lung cancer patients and in a Phase II trial in multiple myeloma, a type of blood cancer. These important trials follow years of testing that have shown encouraging results. S t e r n a also owns 64 percent of Atrium Biotechnologies Inc., which specializes in the development and manufacturing of bioactive ingredients for the cosmetics and nutrition markets. Eric Dupont, chief executive officer of S t e r n a Laboratories, is, by formation, a biotechnologist. In the time he spent completing his postdoctoral studies at Laval University, in the field of neuroendocrinology, Dupont understood that science and business are in fact complementary in today's environment. He also decided that to succeed in the competitive world of applied biological research, a company needed constant profit. "The problem with many biotech companies is that they burn their startup capital and close before achieving any interesting results," said Dupont about fellow competitors in the field. Equipped with a strong will and solid knowledge in both sciences and business, Dupont and his brother founded /Eterna Laboratories in Quebec City in 1991. They first established two company divisions to provide an instant cash flow, manufacturing nutritional supplements and cosmetic ingredients. The profits from these divisions were subsequently transferred into a third division. This department was mainly a research and

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development section of the company, committed to discovering therapies for a host of human ailments, particularly cancerous tumors. Currently, S t e r n a is a publicly traded company, worth an estimated $225 million (Can.) on the Toronto stock market, with a line of products that includes a promising treatment for lung, prostate, and breast cancers. "Trying to improve the quality and expectancy of people's lives is what drives me," says Dupont, adding that "if you do good science, business success will follow." MDS Pharma Services MDS Pharma Services provides global contract research for the pharmaceutical and biotechnology industries. Although MDS Pharma ranks as one of the worlds largest, it maintains speed and flexibility through its linked individual business units. MDS Pharma currently operates clinical trial operations across North America, Europe, Israel, Asia, and South Africa. MDS, the parent company, is an international company with revenues of Can$1.44 billion in 2000 and more than 10,000 employees on five continents. MDS Pharma has the capabilities to take a compound from its earliest stages of research through postmarketing. Doug Squires, president and CEO of MDS Pharma Services, describes his company as a service-based operation, both in name and in practice (MDS Pharma Services, 2002). He feels that the true value for clients comes from the combination of scientific capabilities and broad experience with the timely, cost-effective new drug development. Customized service combined with state-of-the-art technology serves to fuel the entrepreneurial success of the organization. ClinTrials BioResearch ClinTrials BioResearch (CTBR) is a company that provides preclinical contract research for pharmaceutical, biopharmaceutical, chemical, and medical device companies. Originally founded as Bio-Research Laboratories in 1965, the company was renamed CTBR in 1996 following its merger with ClinTrials Research of Nashville, Tennessee (ClinTrials BioResearch [CTBR], 2002). It is internationally diverse, working with clients throughout North America, Europe, Australia, and Japan. Included in the Montreal facility are more than 120 custom-designed animal rooms in which animals are kept for research purposes. Technology plays a crucial role at CTBR when reporting scientific data on time, identifying industry trends, and monitoring regulatory changes. CTBR meets those demands by identifying and incorporating new cutting-edge technologies as they become available. Michael F. Ankcorn, president and CEO, reports rapid and successful results since the merger

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with Inveresk Research Group. He attributes this success to commonalties between the cultures of the two groups, and a shared vision. Anapharm Anapharm was founded in 1994 in Quebec City. Drawing on more than 20 years of experience in Phase I clinical trials and bioanalytical research, the company provides the pharmaceutical and biopharmaceutical industries with high-end clinical services. As a consequence of high-quality work performed by Anapharm, many new drugs have been approved in Canada, the United States, and Europe. When it comes to the quality of its products and services, the company counts on a team of professionals made up of more than 500 research specialists. Anapharm still keeps its headquarters in Quebec City; however, it currently operates from two more facilities, based in Montreal and Three-Rivers. The U.S. Food and Drug Administration, together with the Canadian Health Product and Food Branch, constantly audit the procedures, facilities, and research activities of Anapharm. These authorities recognize the quality of the company's work and also the commitment Anapharm professes to rules and regulations. Additionally, the auditing also ensures that the company is bound to high standards of quality at all times, consistent with its mission of being among the best in the industry. Anapharm's desire to climb to the top of the industry is an ambitious proposal, considering the high concentration of pharmaceutical and biopharmaceutical companies in the area. Some of the values that have brought Anapharm success are based on a strong belief in the importance and role of people toward attaining their proposed mission and goals. The company invests in its employees, trusting that the human touch makes all the difference. From the employees to the managers, an extra amount of care goes into every service and product that the company puts its name and brand on. The company has always striven to be the best in the industry, and for this very reason, the company works with its customers to meet their every need and tailor the products for their needs. Anapharm's leadership believes that striving for excellence is the best way to contribute to the success of their customers. One of the ways Anapharm works on attaining its goals is through the use of cutting-edge technology. This has become of crucial importance for any participant in this industry, not only as a strategic weapon but ultimately as a condition of survival. The research in the pharmaceutical and biopharmaceutical industry relies so much on the use of high-end technology that a company would not be able to endure without it. The company also benefits from well-designed protocols that ensure a

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good flow of information within the company, as well as with its customers. The use of information systems has proved beneficial in conjunction with the use of technology to provide customers with the right products and services for their needs. The company works from within to attain its goals by providing flexible operations and high-quality services. The leaders of Anapharm realize that in a global market, where customers come from different corners of the world and each have many different needs, the company will not be able to satisfy them unless it keeps itself flexible and sensitive to the needs of the market. To top that, the company prides itself in having the most worthwhile vocation: the care for the people. The notion encompasses everyone from the volunteers who work with the company, to its dedicated personnel, all the way to the customers. The company expresses its belief that people are at the core of any relationship that the company can build on, and as in any healthy relationship, this too must be built on trust and mutual respect. Beyond any numbers and financial reports, the leadership of the company wants to set an example by showing how the human touch can make a difference, even in the business world. By acquiring Anapharm recently, SFBC International Inc. became the largest independent contract research organization specializing in Phase I and Phase II trials in North America. Also, Anapharm has been named by Arthur Andersen Co., the Financial Post, and the CIBC bank as one of the top 50 best-managed private companies in Canada since 1998. INFORMATION TECHNOLOGY A N D TELECOMMUNICATIONS The two sectors of information technology and telecommunications account for more than 110,000 jobs in more than 2,500 companies in the Montreal area (Montreal International, 2002). In 2000 Montreal ranked ninth in terms of jobs within metropolitan regions in North America. Both sectors comprise three subcategories: manufacturing, development, and services. The largest of these is development (56 percent), which includes 930 companies. Some of the IT industry leaders include CAE, IBM Canada, Cognicase Group, and RBA. Telecommunications leaders include Nortel Networks, Ericsson Canada Research, and BCE. Within IT, manufacturing includes computers, peripherals, electronic components, and measurement and testing instruments. Development includes systems development and implementation, outsourcing, software and applications, and data processing. Services include distribution, repair and maintenance, Internet access, and design. Within telecommunications, manufacturing includes peripherals and communications equipment, wired and wireless equipment, communi-

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cation cables, and wires. Development includes the development and implementation of private networks, and services includes telecommunications services (wired and wireless), telecommunications services resellers, repair and maintenance, and distribution and business call centers whose main activity relates to the information technology and telecommunications industry. EXFO EXFO has become a leading designer and manufacturer of fiber-optic test, measurement, monitoring, and automation solutions for the global telecommunications industry. EXFO's products are marketed from more than 90 product families to 2,000 customers in 70 countries around the world. EXFO and its subsidiaries develop products mainly for the market described by the portable and monitoring division, which provides handheld and modular instruments for the physical-, optical-, and protocollayer testing needs of telecommunications carriers and network service providers. Additionally, the company produces through its industrial and scientific division, which offers an extensive line of high-performance instruments, test systems, and automated manufacturing equipment for optical component and system vendors as well as for research and development laboratories. EXFO was incorporated in 1985, in Quebec City. The original line of products was focused on the needs of installers and operators of fiberoptic networks. The company markets its products to telecommunications carriers and network service providers. In 1996 the company supplemented its product portfolio with an extensive line of industrial and scientific products, mainly dedicated to research and development, but with application to the manufacturing markets in the fiber-optic industry. In 1999 EXFO entered the market of remote fiber test systems, which allow carriers to deploy test equipment through their networks to monitor the integrity of those networks. EXFO's workforce currently numbers at more than 1,150 employees, most of whom work at the company's Quebec facilities. The company leverages its product portfolio through direct and indirect sales channels deployed throughout North America, Europe, Asia and the Pacific Rim, and the rest of the world. More than 2000 customers rely on test instruments and systems developed by EXFO. These enable the world's optical networks to perform flawlessly during their complete life cycles. In recent years, the company has found ways to successfully maintain a steady growth rate through effective management of activities, an increased focus on research and development, and a policy of constant deployment of new and innovative products. Additionally, the company has

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found the international market to be increasingly attracted to its products and has therefore started to expand outside the province. As part of its growth strategy, the company has been seeking and closing important strategic acquisitions while at the same time ensuring the attraction and retention of highly skilled employees. The leadership of EXFO believes that at the core of the company's outstanding growth and success stand the people. These people are the customers who use products and services provided by the company to build the next generation of networks and implement major changes in telecommunications. These people are also the employees of the company, who drive the innovation processes and deliver solutions that are highly customer oriented. EXFO focuses its research on providing solutions that make technology easier to use for people. The company believes that this in turn will enable customers to focus on new solutions for optical networking. This type of cooperation results in integrated and intuitive testing procedures, software packages known for their ease of use, and services aimed at anticipating customer demand. EXFO considers its employees to be the backbone of the company's past growth, as well as any opportunities for future growth. As proof, the company has encouraged a culture that rewards initiative, diversity, and teamwork. The company believes that market leadership is built by the multitude of skills and perspectives that come from its employees. EXFO also encourages global diversity within its workforce, which inculcates at the corporate level an understanding of the different needs of its customers worldwide, enabling the company to respond strategically. The global diversity of EXFO's workforce also enables the company to gain insight into regional markets. In fact, at the core of EXFO's strategy for 2001 stood the diversification of global sales. The company devised a plan to enhance the company's presence on the global market and build on its competitive advantage for even more recognition in the industry. Consequently the company continues to expand its market positioning and sales coverage by opening sales offices in Europe and Asia. The company reported that sales nearly tripled in Asia after opening centers in Singapore and Beijing. As part of its working culture, the company has always placed innovation at the forefront of any business initiatives. The company constantly launches a large number of products to keep up with the most recent developments in the industry. New products also help the company expand its presence in various markets. EXFO's efforts to keep up with industry developments and to promote new products have not gone unrewarded. In fact, the company reported that 46 percent of its sales in 2001 originated from products that have been on the market for less than two years.

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The company has also included an aggressive acquisitions policy as part of its immediate and future growth strategy. In 2001, EXFO announced three strategic acquisitions that are expected to bolster growth in both of the company's product divisions. Nevertheless the company is aware of the risks and uncertainties to which it exposes itself when expanding into international markets. These risks relate to changes in local laws and regulations, multiple technological standards, protective legislation, and pricing pressures exercised by the markets of the specific countries. In congruence with its long-term expansion plans, EXFO has begun to integrate the companies it acquired, as well as their products, technologies, and personnel, understanding that only by working under the same vision will the company increase its competitive advantage in the global economic environment. The company also plans to further strengthen EXFO's brand name recognition in a way that will reflect the reputation it has gained in the industry, by heightening the focus on innovation, quality, and customer satisfaction. The stated mission of EXFO's leaders is to develop the company into a global leader in the fiber-optic test, measurement, and automation industry. Considering its past history of continuous growth and performances, and also taking into account the company's great ambitions, backed up by rigorous strategies, EXFO is a Quebec company that has already joined forces with other global corporations in gaining a full understanding of the requirements of the new economy. CMC Electronics, Inc. CMC, based in Montreal, is a world leader in the design, manufacture, sales, and support of high-technology electronic products for the aviation, communications, infrared-sensing, marine electronics, positioning, and space markets (CMC Electronics, 2002). Although the company has a new name, it has been designing and building systems since 1903 under the names of Canadian Marconi Company and Wireless Telegraph Company of Canada. Some of the historical highlights of CMC include the world's first transoceanic wireless transition and the reception by the Marconi wireless station of the Titanic''s distress signal in 1912. CMC pursues and captures niche markets where the highest quality and reliability are imperative. The company's clients include the aerospace industry, airlines, and military agencies around the world. Subsidiaries of CMC include CMC Electronics in Cincinnati, Northstar Technologies in Massachusetts, and Novatel in Calgary. The capabilities of these subsidiaries include satellite communications, GPS receiver products, calibration and repair services, land- and marine-based communication and electronic systems, and wide-line-of-sight tactical military radio communication systems.

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Nortel An explosive area of technology includes the digital and wireless communications industry. Companies scramble to stay abreast of changing technologies in order to supply today's consumer demand for communication and information exchange. The growth of network terminations, or service points on the network, consisted of a 500 million in the first century of the network's existence. The second 500 million terminations took only roughly six years. Consumers today carry terminations in their pockets with global Internet access at any time. An example of global innovation and leadership is Nortel Networks. Nortel Networks, a telecommunications industry, traces its origins to Alexander Graham Bell and the production of the first telephone in 1874 (Nortel Networks, 2002). Today Nortel Networks is the leading producer of global telecommunications equipment. Formerly known as Northern Electric and Manufacturing Company Limited, in 1895 the company made telephones, windup gramophones, and street call boxes for police and fire departments. In 1976, Northern Telecom Ltd. developed the first full line of digital communications, which have revolutionized the industry. In 2001, Nortel Networks posted US$17.51 billion in revenues, with operations in Canada, Europe, Asia and the Pacific Rim, the Middle East, Africa, and the United States. The company does business in 150 countries and conducts research and development in collaborations involving 17 countries. After the 1998 acquisition of Bay Networks, Nortel Networks has reengineered itself into an Internet powerhouse, thereby expanding its entrepreneurial outreach. Ericsson Canada Research Ericsson is another telecommunications company that has responded to the changing demands of the global communications network. The ability to respond quickly with new technologies positions Ericsson as the leading supplier of the whole range of second- and third-generation mobile systems, including the CDMA (code division multiple access) handset (Ericsson Canada, 2002). The sales of mobile phones in 1999 surpassed the total sales of PCs and televisions. China's and Japan's dramatic increase in mobile uses serves as an example of consumer demand. The mobile Internet is becoming more popular as the means to pay bills, access bank accounts, and interact with other users. Recruitsoft Recruitsoft targets Global 1000 companies that employ more than 5,000 people, with products and services that help them in the hiring process

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with faster and higher-quality hiring at a cost less than that of traditional hiring. A relatively new company, Recruitsoft delivers services and technology that help manage enterprise staffing and optimize talent flow for large global organizations. The service offering of Recruitsoft includes software packages, services, and computing infrastructure that enable large corporations to improve staffing processes in a timely fashion. Recruitsoft has been recognized as the first hiring management system (HMS) that integrates all areas of candidate sourcing. These one-click sourcing services include: job postings on the corporate Web site, the company intranet, job boards, advertising in all print media, and contractassisted candidate sourcing. In recent years, industry awards have recognized the company's Web application, Recruiter WebTop. The awards were given on the basis of depth and breadth of functionality and ease of use. Among the benefits Recruiter WebTop brings to corporations are faster time-to-hire, lower cost-per-hire, and ultimately increased quality of hires. Additionally, the company is considered the best-practice ASP for recruitment management solutions, based on its proprietary ACE Recruiting methodology, designed in collaboration with large corporations to improve the corporate recruiting and internal talent matching and deployment processes through reengineering. Recruitsoft helps clients such as Honeywell, Hewlett-Packard, Dow Chemical, Fortis, Starbucks Corporation, P & G, Thomson, Agilent Technologies, the Gillette Company, Deloitte and Touche, Bombardier Aerospace and Transportation, Anthem Blue Cross and Blue Shield, and UnitedHealth Group, among many others, to handle the entire staffing process. Recruitsoft works with them to define job positions, track applicants, and screen potential job candidates, both internally and externally, through on-line skills-based questionnaires. The company has clients in more than 60 countries and has gained experience working in many different cultures with many languages and regulations. The mission of Recruitsoft is to help global organizations optimize staffing and talent flow processes to create and sustain competitive advantage based on human capital. Consequently, the company fosters a culture of collaboration where the employees are expected and invited to contribute to every function of the business. The core values that guide the company are intended to serve both customers and employees. The company's roots date back to 1996, when founder Martin Ouellet created Viasite. Viasite soon became the most successful job board in Canada. In 1998 Ouellet went on to establish Recruitsoft in Quebec City, taking advantage of the available and well-educated labor force, the high quality of life, and the solid government incentives for technology investment. Soon after its creation, the company set forth to work with Fortune 500

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companies to develop an on-line solution that would best meet worldclass staffing and human capital management needs. Recruitsoft was registered in Delaware and established headquarters in San Francisco. Nevertheless, the company continues to maintain its research and development facility in Quebec City, where the company employs 140 senior-level developers focused solely on the WebTop Suite. There are substantial benefits that come from the geographic positioning of this facility in Quebec City. Because of the high quality of life in Quebec City, the company experiences a 96 percent employee retention rate. This is an obvious advantage for Recruitsoft, when compared to an average of 60 to 70 percent retention rate in Silicon Valley. Additionally, certain benefits from the incentives for technology investment enable the company to employ a development team more than twice the size of any other company in the industry for less than half the cost. Recruitsoft launched the first version of Recruiter WebTop in September 1999 after having spent a full year in the development phase. In the month following Recruiter WebTop's debut, HR Executive Magazine nominated the product as one of the top 10 products of the year. By powering career Web pages for clients, Recruitsoft software can quickly sort through resumes submitted on-line and alert appropriate hiring personnel when a quality candidate has been identified. Shortly after the launch of its new product, Recruitsoft opened offices in New York, Chicago, Montreal, and Toronto. In 2001 the company broke into the European market by opening business operations in Paris and Amsterdam. Recruitsoft has become one of the most financially successful companies in the staffing management solution industry, with significant adoption among Global 1000 corporations. The company also continues to garner the majority of industry accolades, including best overall client satisfaction, as named in the ERE Research Survey of users of staffing management solutions in fall 2001. What is thought to have made Recruitsoft a successful company that survived the rise and fall of the dot-com bubble is dedication to the values that helped the company grow from the beginning. These values include a commitment to excellence in all work performed and a dedication to healthy teamwork, where the company invests in its relationships with clients, alliances, and employees. Not least important, the company has found it crucial to be an innovative force in the industry, challenging its own employees and management constantly to deliver increasing value to customers. Additionally, the employees at every level have been encouraged to embrace a customer delight strategy. A strong part of the commitment to deliver exceptional value is contained in Recruitsoft's investment strategy in research and development, which represents more than twice the in-

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d u s t r y average. The c o m p a n y ' s leadership believes that these values a n d strategies will enable t h e m to meet a n d also anticipate a n d exceed the d y n a m i c n e e d s of their Global 1000 client base. REFERENCES CAE. (2002). CAE company Web site. Accessed May 29, 2002, at http:// www.cae.ca/en/general/index.shtml ClinTrials BioResearch. (2002). ClinTrials BioResearch company Web site. Accessed May 29, 2002, at http://www.ctbr.com/ CMC Electronics. (2002). CMC Electronics company Web site. Accessed May 29, 2002, at http://www.cmcelectronics.ca/main.html Ericsson Canada. (2002). Ericsson Canada company Web site. Accessed May 29, 2002, at http://www.ericsson.ca/en/ MDS Pharma Services. (2002). MDS Pharma Services company Web site. Accessed May 29, 2002, at http://www.mdsps.com/popup.htm Merck Frosst. (2002). Merck Frosst company Web site. Accessed May 29, 2002, at http://www.merckfrosst.ca/e/about-us/corp/news/news_uni.html Montreal International. (2002). Montreal International company Web site. Accessed May 29, 2002, at http://www.montrealinternational.com/ index.html Nortel Networks. (2002). Nortel Networks company Web site. Accessed May 29, 2002, at http://www.nortelnetworks.com/corporate/cm/index.html

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CHAPTER 8

The Revolution of the New Economy

The word that seems to gather enough meaning to encompass what the economic world has been witnessing in the last few decades is "revolution." Most of the changes we have been through were sudden and radical, as well as fundamental. As with any radical change, the key words are "renunciation" and "substitution." The ways of thinking and visualizing the world have been mostly affected by recent changes. They have not just shifted our preference toward how we do certain things; instead, many of these transformations have completely converted our perception and our vision. As we have seen through the history of Quebec, the changes that the province has gone through have been possible because of circumstances that remind us of revolutions. Whether they are revolutions where people are physically involved or revolutions of thoughts, they have proved to be some of the most efficient agents of change. It is difficult to think that the fundamental changes that took place in Quebec over the past 50 years or more would have been possible without such circumstances that eventually triggered a social awareness toward transformation. Kotter (1998) points out that one of the first causes of failure in implementing change is "not establishing a great enough sense of urgency" (p. 3). Accordingly, a revolution is the finest representation of Kotter's first principle for successful implementation of change. This is exactly what happened in Quebec's most recent history. The crisis, however, was not at all manufactured. On the contrary, at the point when Quebec started transforming, it had already been ready for a change. The driving forces were propitious, and the human element, which—as in any endeavor of

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this magnitude—is the most important component, was actively involved in the process. In the case of Quebec, it is fair to say that the change came from within. Throughout history, revolutions have defined and modeled our thinking patterns, whether they were of a cultural or political nature. Through revolutions, change found its most efficient method of implementation, because the maturity of a new and debated ideology would be unanimously embraced by the society through a social outbreak. This is how the word "revolution" in its present form does not imply use of force, as many of the revolutions of the past century have been fought on an ideological, rather than a physical, level. Some of the most dramatic revolutions in world history had to do with science. It comes as no surprise, then, that humanity has recently been revolutionized by technology, which is so closely related to science. In fact, scientists all over the world are continuously seeking to reform, enhance, and transform, and in this age of technology, keeping up with changes can become a difficult task. THE C O P E R N I C A N R E V O L U T I O N A great revolutionary moment in the world's history is associated with the Polish astronomer Nicolaus Copernicus (1473-1543). His radical theory redefined people's perceptions of reality, although his findings did not really affect people's immediate surroundings. Before Copernicus, the European world believed that the earth was placed in the center of the universe, as claimed by the geocentric concept. Copernicus undertook the task of examining the various systems that had been proposed in the past. Becoming dissatisfied with the complexity and improbability he found in the Ptolemaic system, Copernicus revived Aristarchus's heliocentric concept sometime before 1514, placing the sun at the center of the solar system. This new concept created controversy around the scientist because his studies and discoveries were in obvious contradiction with the religious conviction that the earth had been created by God as the center of the cosmos. When a friend inquired about his theory, Copernicus wrote: "Although I know the thoughts of a philosopher do not depend on the judgment of the many, yet when I considered how absurd my doctrine would appear, I long hesitated whether I should publish my book." Today there may still be some theologians who believe in the geocentric theory; however, most of the world recognizes the Copernican revolution as the change in ideology where humanity realized that the universe is infinite and the earth is not the center of it.

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THE I N D U S T R I A L R E V O L U T I O N At times in history, technological innovations have been developed at such a rapid pace that they have changed the way things have been perceived before them and became known as "industrial revolutions." The term originally described developments that transformed Great Britain in the late eighteenth century and the beginning of the nineteenth from a rural population with an economy based mainly on agriculture to an urban society engaged increasingly in factory manufacture. The same process was picked up by other European nations soon after Great Britain, and the nineteenth century saw the expansion of the industrial revolution throughout all of Europe, Russia, and Japan. In some countries, this transformation is only now taking place or still lies in the future. The industrial revolution brought with it an increase in population and urbanization, as well as new social classes. The general population increase was aided by a greater supply of food made available by the agricultural revolution, and by the growth of medical science and public health measures, which decreased the death rate and added to the population base. Until the industrial revolution, most of the world's population was rural. However, by mid-nineteenth century, half of the English people lived in cities, and by the end of the century, the same was true of other European countries. Between 1800 and 1950, most large European cities exhibited spectacular growth. At the beginning of the nineteenth century there were scarcely two dozen cities in Europe with a population of 100,000, but by 1900 there were more than 150 cities of this size. THE QUIET R E V O L U T I O N As recorded in history, revolutions are often marked by violence. Nevertheless, in the 1960s, the Canadian province of Quebec experienced a different kind of revolution. The people of Quebec started a peaceful revolution that began from a unanimous wish for change and continued with a steady flow of creative new ideas. The Quiet Revolution, as it has been called, pointed toward the beginning of a new era. Many things started to change in terms of cultural expression for Quebec's French-speaking population. It also proved to be the most important period of development for the province since its beginning as New France nearly 300 years ago. The Quiet Revolution was planned as an effort to reform the province socially and culturally. The programs elaborated to serve these purposes were carefully planned. The movement was led by the Quebec Liberal government, which came to power in 1960. As it has been pointed out,

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the leaders of the government pushed Quebeckers to become maitres chez nous, "masters of our destiny." The movement was initiated by the provincial government, which attempted to undermine the influence of the Catholic Church in Quebec. This initial task was accomplished when the Liberal government took control of education and social services within the province. At the same time, the provincial government conducted negotiations aimed at diminishing the influence of the federal government in Quebec. As a result of the Quiet Revolution, the province saw great developments in creative expression. Music, art, drama, literature, films, and even cuisine reflected a new sense of pride in Quebec's identity, as French Canadians began to realize their true potential. Likewise, the province started to experience some economic growth, which gave the people of Quebec more incentive to carry on the initiative and bring about more change. We have observed how Expo 67, the world exhibition hosted in Montreal, impacted Quebec, and also how the people of Quebec showed their potential on that occasion. It is thought that the world exhibition provoked the Quebeckers to channel their potential into a project of great importance. The success of the project is also attributed to the spirit of the Quiet Revolution, which made the people very much aware of, as well as responsive to, the existing opportunities and how to take advantage of them. The exhibition was also salutary because it developed a team-mode thinking among the people in the province. The innovative ideas that were implemented for the exhibition could not have come from only one person. They were the result of concentrated teamwork, which turned into strategic planning and showed great results when it was most important. The world exhibition has significance in the bigger picture of the Quiet Revolution, as it was with the occasion of the exhibition that Montreal, and Quebec as province, received unprecedented global coverage. Under the circumstances, the people understood the opportunity they had been given, and they made the best of it. The event was also advantageous to Quebec, as much of the work that was done then benefited the people in the longer run. The infrastructure that had been built before Expo 67 was the basis on which many of the future contributions to the new Quebec were made. Montreal's subway system, the world-class site of the exhibition, and other projects fostered growth in the private infrastructures of the national tourism industry. Today tourism is one of the fastest-growing sectors in Quebec. Currently tourism ranks as the seventh largest product exported by the province, with approximately 20 million tourists coming to Quebec annually. This industry brings annual revenues of about $5.5 billion and provides more than 107,000 Quebeckers with jobs.

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In 1970 the nonviolent reforms of the Quiet Revolution took an unfortunate turn. A terrorist group called the Front de Liberation du Quebec (FLQ), demanding that Quebec secede from Canada, kidnapped and murdered a provincial cabinet minister. The event subsequently became known as the October Crisis and brought international exposure to the separatist movement from Quebec. However, one of the most important achievements of the ideologies behind the Quiet Revolution was a revitalized sense of pride and patriotism, which contributed to the determination with which Quebec started growing. We mentioned the Copernican and the industrial revolution because, although not necessarily the most important revolutions in world history, the two relate very well to what the world has experienced in the second half of the twentieth century and the beginning of the twenty-first. Additionally, they provide learning opportunities for issues that arise from present-day changes in the economy. The importance of these revolutions also comes from their specific characteristics. Although initiated in a particular spot, they eventually attained global exposure. The Copernican revolution started with one man. The industrial revolution started in Great Britain. Eventually both of these impacted the whole world, to a large extent. These events still attract public attention and are considered as points of reference. In this context, the Quiet Revolution in Quebec displayed the attributes of any revolution, except that, for obvious reasons, it did not become a global event. Nevertheless, the consequences of the Quiet Revolution had a global impact, as the Canadian province subsequently started to integrate itself and become a player in the new economy. We have looked at these events with the purpose of creating a big-picture perspective that would enable managers and executives to have a better grasp of the facts and concepts discussed herein. Understanding the dynamics of change will help today's leaders create a vision and set up the goals that will trigger success in their respective organizations. Ultimately, it is the aim of this book to create learning opportunities for managers and executives, as well as for anyone involved in the new economy, to cope with the issues associated with today's everchanging business environment. THE NEW E C O N O M Y When describing the new economy, we see a world where employees are valued for their thinking and decision-making abilities, not only for an aptitude for making good use of their two hands. In the new economy, the new communications technologies make global competition a fact of life. Besides, innovation has become significantly more important than mass production, and entrepreneurs prefer to invest in new concepts or

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the ways to create them rather than in new machines. The new economy is very different from the industrial age, and a world apart from its agricultural predecessor. In the new economy, Quebeckers expect a better quality of work life. The workers of the new economy have also demanded a new status, which puts pressure on companies to renew their emphasis on human-resource development and also provide for economic safety for their employees when confronted with the instability of the labor market. The Quebeckers of the new economy also feel it is important that they have a voice in their work environment. Additionally, they want to work for companies where what they do is interesting and mentally challenging, where they can develop and maximize their potential and make useful contributions through their work. Ultimately, workers of the new economy expect their work to improve the quality of life in their environment. We see a paradigm shift from the worker in the industrial age to the employee of the knowledge economy. For the former, work represented the means to support oneself and one's dependents. Consequently, when negotiating the compensation, the worker was mainly interested in direct, tangible remuneration, represented by the salary. Conversely, the knowledge worker has become more aware of his or her environment, from a global perspective. Therefore he or she will seek work environments where compensation will include, in addition to satisfactory financial remuneration, other, more abstract elements. In turn, these forms of compensation are expected to enhance the quality of life, and ultimately the efficiency, of the employee. We see that job satisfaction in the new economy cannot be measured solely through levels of income. On the contrary, when measuring job satisfaction, one must add social and psychological aspects of work. Lowe (2000) argues that there is a useful distinction to be made between job and work. The author observes that while a job can be defined as an economic entity—a "piece of work" that one performs for the purpose of being compensated—the idea of work is more philosophical, as "our whole being is complexly related to work." The history of philosophy chronicles through many famous studies that work has been viewed as defining a person's purpose in life. Thus a person without work does not have a purpose in life. This circumstance not only means that a person lacks income but also deals with issues of diminishing the human spirit. Lowe closes his argument by challenging his readers to think about the "kind of work we want to create" (p. 64). In Quebec's new economy, we observed that the employers were faced with workers who wanted more from their jobs than income. Job satisfaction for these workers had a far-reaching significance, and the leaders of these organizations, as well as the political leaders, had to adapt to find

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purposeful strategies for the new work environment. The key to adjusting in a very short time comes from understanding that the economy finds strength in its knowledge workers. Additionally, today's global environment requires continuous learning and adaptable skills. The concept of the new economy that has arisen is characterized by a flow of information more complex than ever before. The speed of change is faster than it has ever been imagined, and for many, the chaos is unbearable. The two main factors that contributed to the new economy are information technology and globalization. As it has been pointed out, the technology of information accelerated the pulse of the business life. It has brought to light the need for real-time information systems. In these conditions, decisions are being made more often and more knowledgeably than they have been in the past, as the need for fast responses to the market has tailored the new decision-making process and management layout. OBJECTIVE The objective of this book is to provide managers and executives with a new generation of tools to help them cope with the inherent changes in the new economy. We have defined and discussed the necessity of new tools for new managers. With the dramatic transformations that the world has gone through recently, the old instruments do not respond to the needs of governments and private entities. This is especially true in the economic world, where change seems to govern its very existence. A change in the behavior of many executives and managers has been noticed, as many have found that influence is better exercised through empowerment, not through authority. In the same way, communication with employees finds better ways of access if leaders seek to watch how people behave, listen to their demands and suggestions, and be proactive in responding to their needs. There is an obvious contrast between the expectations of today's executive and what was expected from a manager 50 or more years ago, when communication within an organization was mainly unidirectional. We have given examples of Quebec-located corporations that integrated some of the tools developed for the new economy and have had notable accomplishments. These examples should provide a solid foundation for the concepts described herein and transform them into viable instruments for managers faced with today's problems, as well as for those visionary executives who aspire to initiating the next wave of changes in business. Furthermore, we have observed how the Quebec government has changed its role through the five decades since the province embarked on a journey led by a series of strategic decisions that triggered remarkable growth in its economy. In our studies, we have seen how the Quebec

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government has been proactive in finding solutions to enhance growth in the province. The government of Quebec understood that the role of the public sector is to help the private sector achieve economic growth, as only through the maturity of the private sector will the province find itself able to compete in the global market economy. Quebec leaders understood that to survive in the global village, the province needs to open up to the world, either through outside investment or through internally funded projects. Training programs oriented at creating awareness and efficiency in dealing in a global market have been initiated. Tax deduction packages have been created for different areas of the economy. The government found helpful ways to assist the businesses and investors in their ventures. PRODUCTIVITY One of the aspects discussed early on in the book was productivity. We believe that Quebec's commitment to productivity was one of the key factors that contributed considerably to the province's continuous and sustained growth during the past five decades. We have seen how the province was inhabited by fewer than five million people at the beginning of the 1950s, in a territory that is approximately three times the size of France. The people of Quebec were mainly found in small, isolated towns, with poor commercial activity. Additionally, the transportation and electrification infrastructures were underdeveloped. The size of the province did not make things any easier. Quebec's cities were not many, and not very developed. These towns had monoindustries or were one-company towns. At the time, the political system in place was dependent on the Catholic Church. Also, the political and religious leaders of the nation in the middle of the century were stressing the importance of remaining devoted to conservative values and the need to protect traditional rural life. As a consequence of this reality, the elite of the French society were active in one of two main domains. It is known that the elite either came from within the clergy or belonged to the more liberal professions of law and medicine. In observing the changes that took place in Quebec's economy, we saw how productivity was a major factor of change in the process. We have discussed how, in the 1950s, the economy was planned around the exploitation of natural resources. These included activities such as farming, fishing, mining, forestry and hydroelectricity. Moreover, the large-scale operations from Quebec were mostly foreign owned, and their top management was foreign. Several years later, the government became increasingly concerned with the great potential of the local factors of production. Consequently, the

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leaders began to encourage local entrepreneurship, hoping that this would help build the new economy and align the province to the global trends in business. Some of the actions of the Quebec government in the 1960s provided strategies to jump-start growth of the private sector. These strategies were not new ideas. In fact, they were similar to the programs of the New Deal for the United States during the depression years. But they worked well, as the province quickly improved on productivity indicators and started building further. We discussed earlier how the 1967 exhibition in Montreal helped the province gain global coverage. The event initiated a new trajectory for the region, in which Montreal and other cities of the province would become involved in series of events that would gather wide public attention. The activities included in these events and the diversity of the people made Quebeckers more aware of the variety of value systems that exist around the world. Before long, they became more open to pluralism. The new openness of Quebec society, along with the fact that the province was in an accelerated process of transformation, had a significant impact on the value system of the French Quebeckers. It is also widely argued that these factors had an important if not crucial contribution to the expected separation of the govern ient from the church. The succeeding political leaders did not submit j the Catholic Church when making political strategies for the provin j . Quebec society often expressed itself when the general agreement was against the current policy. In the 1960s and 1970s there were several social protest movements against the province's power structure. Subsequent to these social movements, the government decided to adopt a position of less intervention and let the market forces act upon the economy of the province. This decision shifted significant costs to the province for accounts such as social assistance, relocation, and retraining. Thus this strategy soon proved ineffective, and the government was forced to admit to its own fault. One of the things that set apart Quebec from other economies is the coherent coexistence between the private and public sectors. The stateowned corporations in Quebec were restructured bearing in mind the market forces. These corporations are thus subject to the same rules as the privately owned companies. Moreover, they are managed in such a way that they can actually compete in the marketplace, together with companies from the province, as well as multinational corporations that have become competitors. A specific way in which these corporations function enables the government to get involved in maintaining production capacities in areas and during times when the economic conditions made them profitable, and it would then resell them to provide entities. Corporate goals of the state-owned companies included maintaining jobs and making the facilities appealing to private owners by increasing

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the value of the corporation through productivity and profitability. Afterward the managers were concerned with planning for and ensuring the long-term survival and development of these operations. The government agreed to pay the cost of the reorganization and waiting period, with funds that came from nonpayment of social security, employment benefits, and retraining programs for very long periods, and by reorganizing services in education and health care in the affected region. QUEBEC'S DEPARTMENT OF I N D U S T R Y A N D COMMERCE Changes in the economic world have revolutionized the approaches by which governments interact with the entities under their jurisdiction. Having a strong and inspiring vision has proved to be the key element of public entities as they took on different roles. Moreover, setting ambitious goals now has to be accompanied by a flexibility that will allow the government to adapt to changes quickly and effectively. Since the government of Quebec saw the need to focus on industry and commerce, in 1935, the Department of Industry and Commerce has constantly been at the forefront of business development in the province. More than ever, in the 1990s, the department was active in attracting and accommodating new investors in the region, training Canadian businesses for the global business environment, and directing the industries toward the twenty-first century. Additionally, the Department of Industry and Commerce has made strategic partnerships to achieve its goals of promoting the new economy, also known as knowledge economy. Historically, the Department of Industry and Commerce has long been a factor of great influence and authority in the business environment of the province. Forward thinking and active involvement from the government of Quebec, in general, and through this department, in particular, contributed to the major change that brought about the prosperity that the province is experiencing today. The innovative ways in which the department deals with business issues make it an example for other governments on both sides of the Atlantic. The Department of Industry and Commerce has taken many roles in the business environment of Quebec. Its main focus, however, is on promoting the province's industrial capabilities and attracting new businesses. Another important factor is the department's concern with the business owners of the province, whether they are involved in start-ups or established businesses. The department provides these entrepreneurs with consulting and training on pertinent issues such as international trade, dealing with intercultural work environments, information technology, and electronic commerce. The current mission of the Department of Industry and Commerce is

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"to contribute to Quebec's economic development by enhancing market development and company competitiveness with a view to encouraging job creation." One of the goals of the government of Quebec, toward which all the departments have worked for the past decades, is to develop, consolidate, and diversify the economy of the province. Consequently, the Department of Industry and Commerce developed its objectives in concordance with the governmental goal. The department concentrates on both internal and external factors that enhance business competitiveness. The in-house factors are enhanced by supporting the adoption of innovative ideas by companies and also by supporting the development of domestic and foreign markets. Some of the ways to achieve the latter include the consolidation of exports among companies new to exporting, the diversification of export companies in strong markets, the expansion of the pool of new exporters, and the development of a foreign trade policy. The external factors to business competitiveness are enhanced by improving the business environment for companies and by contributing to the renewal of Quebec's industrial structure through investment and entrepreneurship. Some of the ways the government hopes to achieve these objectives are reinforcing and renewing the industrial structure of the province through the creation of conditions conducive to entrepreneurship and the expansion of the entrepreneurial pool. The yearly strategic plan of the department reinforces its mission. It includes several objectives that the department is aiming for in the following three years. Among these objectives, the department will contribute to the development of knowledge and strategies in the key sectors of the economy. Additionally the department will put in place a mechanism of retention and expansion of enterprises so that the business environment of Quebec will be a healthy, growing organism. Furthermore, the department aims at enhancing the development within the key infrastructures while also making all efforts to accelerate industrialization in the region. Not least important, the strategic plan mentions the need to promote products and expertise of the region outside Quebec. Under each of these objectives, the strategic plan includes a brief description of the problem followed by a detailed explanation of the action proposed. Training Programs The Department of Industry and Commerce in Quebec understood the importance of training the entrepreneurs for the development of the business environment of the province and initiated several programs that started in the 1970s. These programs were aimed mainly at business owners and managers but were open to all those who were involved in busi-

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ness and willing to learn more about expanding their activity and global business thinking. In 1970, the department started a course that discussed transportation issues related to global commerce and directed toward an awareness of environmental protection. That same year, the training division of the Department of Industry and Commerce prepared an introductory course to international trade. Additionally, a seminar was offered on how to sell products through exhibitions. In 1988 the training division presented a course on the importance of cultural contacts in the world as part of the sequence of training programs directed toward the generation of global businesses. The seminar that accompanied this course included advice on how to prepare a company's foreign business travel. In 1992 the department saw the need for coaching related to international business issues. Consequently, it started offering a course that year related to conduct of business in foreign markets. The seminar that was developed in conjunction with the course linked to the government's open policy to investments in Quebec. As a result, it dealt with training on the finest and most advantageous ways for welcoming foreign buyers. These training methods have proved successful for a long period of time. Accordingly, they have contributed to a more educated and healthier business environment in Quebec. In addition to the courses that have been presented directly through the government, the department is offering and constantly updating free on-line resources for those engaged in the global business environment. In the year 2000, the Department of Industry and Commerce succeeded in promoting a project that involved training the citizens of Quebec on the importance of information technology, the Internet, and electronic commerce. The project provided financial assistance for low-income families in buying personal computers and connecting them to the World Wide Web. The budget included assistance for 250,000 computers and two years of free Internet connection. The importance of this project to the government was proved by the amount allocated for it. The total annual budget for the department was Can$274.9 million. The budget allocated by the department for this project alone was Can$129.5 million, which represents almost one-half of the yearly budget. As expected, the project was a success, and the government anticipates a significant increase in computer literacy in the province for the following years. Although there are still political problems, one thing that sets Quebec's leadership apart is a crystal-clear long-term vision of where it is heading and a sharp focus on where it needs to be today to achieve the purposes for tomorrow. That explains why and how Quebec reached the desirable

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economic position it holds in the world, as opposed to where the province was more than 50 years ago. What is believed to have made the government of Quebec efficient was its commitment to constant growth. Consequently, the methods oriented toward helping, supporting, and consulting have proved appropriate for the organizations that shape the environment of trade and industry in Quebec. Additionally, the government has proved instrumental in helping companies to adopt innovative ideas, while also concentrating on the development of domestic and foreign markets. A course on change management would find sufficient resources in the study of Quebec's achievements in the change of economic and social patterns, the nature of commercial interactions, and the inventive use of its resources, which have ultimately contributed to the constructive change of the business environment. The focus on change is where all governmental strategies of the past decades eventually converge, whether intended for the short or long term. THE EFFECTS OF C H A N G E Change has been the main theme of the past 50 years in Quebec. Change began with the people of the province, who understood their potential and wanted to make better use of the resources available. Benefiting from inspired leadership from the government and open-mindedness and cooperation from the other political forces, the transformation process was initiated at the higher levels of decision and policy making. As a natural consequence, the path of change followed through, influencing the economic and social aspects of the province. Along these lines, Quebec provides us with vivid examples of how change can be dealt with and some of the major steps that can be followed to attain success in a process of transformation. These examples team up with some of the most important concepts discussed in this book to give the reader a comprehensive understanding of the notion of change as well as present him or her with the applicable tools. We discussed earlier how change not only affects the way managers and employees work but, more importantly, affects our perception of the environment. Accordingly, it can be inferred that the changes of the past two decades have indeed been revolutionary, because they have transformed the environment as well as the way we perceive it. Change also affects the way we view success. Not long ago, success was still being defined as the attainment of wealth. Today, however, success has found a more encompassing definition as reaching a favorable or desired outcome, which will not always be represented by wealth. Social issues have been accepted as desired outcomes as new strategies of em-

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ployee empowerment have proved to have more resonance within organizations. Furthermore, environmental concerns have been voiced, and awareness for the protection of the environment was developed. This particular issue saw governments, scientists, and business owners join forces to find comprehensive solutions that would be favorable to all parties involved. Another dimension where there have been significant changes is the level of competition. Due to globalization, local competition does not exist anymore. Whether we're talking about a multinational corporation or about a local producer of toothpicks, the global market forces all businesses to compete on a worldwide scale, which makes competition tighter, but at the same time more receptive to the needs of the consumers. This comes with advantages and disadvantages. Quebec's economy gave us several examples of local businesses that were developed into global corporations through effective leadership and entrepreneurial spirit. The most obvious disadvantages come from the fact that corporations find it harder to stay on top for a very long time. The speed at which the business world is moving makes it fascinating to watch but very difficult to follow. That is why we have attempted to portray several successful companies in their pursuit of accomplishment, not forgetting to mention how they managed to adapt to the new level of competition. The changes in the way business is conducted today have also decreased the reaction time that executives (as well as everyone else in the business environment) have in the decision-making process. If the unit of measure in the old days was maybe a month, based on how long it took for messages and letters to be transported to another location, today the unit of measure is getting closer to minutes and seconds. This is explained easily by looking at how today a message can be sent and received almost instantaneously through electronic mail and Internet messaging services. By contrast, no more than 50 years ago, postal services were the main means of transferring documents, and the delivery time frame was much larger. LEADERSHIP Leadership has been examined as the instrument of successful implementation of any change throughout history. We have explored Quebec's leadership with a mind to the application of the government as a model of leadership, as well as looking at micromodels of leadership represented by Quebec companies that have used direction and assistance from the government, maximizing the use of resources provided. Leadership has formerly been defined simply as the position of a leader. This definition also included the capacity to lead or the act of leading. The office of a leader can include positions that range from military, to politi-

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cal, to art oriented, all putting the person occupying them in the top rank of that organization. A simple but compelling meaning of the word "leader" relates to a horse placed in advance of the other horses of a team. Indeed, the leader's role is to steer those under his leadership toward his vision. In the wake of the economic revolution, leadership has assumed new meanings in addition to the ones just mentioned. First, leadership is an act that must begin with a clear vision for the future and a desired outcome or position for those involved in the endeavor. There is no leadership without a clear vision. From this perspective, the leader must be a visionary who recognizes the new trends, understands where the organization should adjust in order to fit, and communicates the new roles that the people need to assume. In The Drama of Leadership, a study of leadership in Quebec, Patricia Pitcher (1997) touches on some sensitive aspects of leadership. First she separates leaders into artists, craftsmen, and technocrats in an attempt to shed more light on the inefficiency of leadership and how certain types do not fit in the new economy. Based on her experience, Pitcher observes that the main barrier to teamwork is the technocratic mentality that still exists in the organizations. Second, Pitcher notices that it is up to the leader to understand that a more advantageous position is attainable for the organization in order to motivate followers. Clearly, if the vision is unattainable, the leader will find no cooperation in setting objectives with those in his or her team and will also encounter great difficulty assigning tasks to those in charge of execution. Simple idea creation does not mean a clear vision. In fact, successful leaders have admitted that most ideas are not useful at all. The great volume of ideas is what gives them one viable alternative that proves to work. Third, leadership relies on people who have appreciation for teamwork. A vision is neither attainable nor feasible without people to support it. Efficient leaders understand that in a changing environment, their individual and group actions are the true drivers of success, regardless of external influences employed by either competitors or the market forces themselves. Quebec companies used as examples in this book have shown tremendous growth by being "masters of their own destiny." In this respect, Quebec leaders quickly learned how to use the internal locus of control to compete in the local as well as the global market. Another important meaning added to the concept of leadership is the refusal to become self-satisfied. A company that is content with its accomplishments will be less aware of the changing marketplace and will demonstrate less ability to adapt quickly to these changes. The process of leadership must be consistent and must have relevance to the goals of the

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organization. A complacent company will most likely be a reactive one, instead of being an institution that exercises proactive leadership. Furthermore, leadership in the new economy requires good communication skills. A vision will never be implemented unless it is well understood by the parties involved in executing it. A step further in this direction would require those under the same vision to believe in it. For this to happen, a vision must be communicated clearly and openly. We discussed earlier how the government of Quebec learned that listening is an important function of the communication process. The feasibility and attainability of a vision can often be decided by listening to the people that will have to carry it through later on. Additionally, listening is valuable because people can often contribute with practical ideas to adjust a vision so that it will become a realistic one for the organization. An important part of communication discussed in this book is how leaders relate to failure. It is important to emphasize the effects of failure in an organization, as oftentimes how a leader relates to failure will decide how well he or she communicates with employees from that point on, as well as how well his or her vision is being implemented. In a change process, there is a general agreement that success cannot possibly be accomplished instantaneously. Allowing room for failure and showing support during constructive efforts on the employees' part will make the difference between an inspiring leader and a coercive manager. In conjunction with this, a leader must also be aware that people need the necessary resources to get the job done. Indeed, to reduce the odds of failure, employees need to have access to the resources that will help them operate at an optimal level of efficiency. This also relates to the need for transparency in the organization, because employees need to constantly monitor and communicate in a timely fashion what their needs are. Efficient leadership means knowing what the needs for resources are through constant observation, understanding how they need to be managed for maximum efficiency, and providing those resources to those who use them, usually the employees. Pitcher (1997) makes some important points about leadership when deciding to explode some of the myths associated with it: "The first myth is that we need one kind of leader—the charismatic visionary. The second and much more pernicious myth is that anybody can become one. The third is that if you tell leaders what they should do, they will all do it" (p. 5). From this perspective, we can close the circle and observe that leadership ultimately involves two parties: leaders and followers. Making disciples has historically been the most important meaning of leadership, the reason being that only through followers will the vision be carried on and multiplied. Mobilizing followers can be viewed as the simplest form of having adherents to one's vision. Nevertheless, leaders can accomplish a deeper and more desirable role

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within the organization, which would be to make leaders out of followers. The multiplication of the vision is crucial in any organization, because when all the employees work under the same vision, the organization will function as one body. In order for a leader to mobilize followers, people need to adhere to the vision, they need to be inspired by it in their work, and they need to support it with their actions. ENTREPRENEURSHIP The term "entrepreneurship" became part of the spoken language in the second half of the eighteenth century, as it has been correlated with certain business practices. Many researchers have defined the term, and they have done so in diverse and relatively inconsistent ways. Accordingly, these definitions cover an ample array of activities, ranging from creation of organizations, exploration of opportunities, or bringing together factors of production. Early on in the twentieth century, it was thought that entrepreneurs attempted to predict and act upon change within markets. From this perspective, the entrepreneur is somewhat responsible for the uncertainty of market dynamics. Although the entrepreneur does bear responsibility, it is usually the responsibility of the risks assumed on behalf of the organization. An important, integrating characteristic of an entrepreneur is his or her ability to recognize and act upon market opportunities. Somewhat contrasting is the opinion that sees an entrepreneur as an innovator who implements change within markets by introducing a new product or quality Implementing change can also mean introducing a new method of production, penetrating a new market, or finding new ways to allocating resources, to name just a few. From this perspective, the entrepreneur not only recognizes and acts upon market opportunities but also answers to a higher calling, according to which he should become the "rainmaker," the one who brings change in the environment surrounding his organization. More recently, leadership has been recognized as an important element in the context of entrepreneurship. The definition accordingly identifies entrepreneurship as the process of recognizing, developing, and bringing a vision to reality. Visions can include innovative ideas, opportunities, or new ways of solving old problems. The expected outcome of such a process would be the conception of a new endeavor that regards risk and improbability as part of everyday business, not as major obstacles in attaining success. In this respect, it is common knowledge that entrepreneurs assume a managerial role in their activities. Yet everyday administration of an operation is not considered entrepreneurship.

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In this sense, entrepreneurial activity may seem ephemeral. An individual may perform an entrepreneurial function in creating a business or developing a venture, then later transfer those responsibilities to a managerial function, more suitable with the situation in which the company settles. On the contrary, the example of today's successful companies demonstrates that entrepreneurship is a key element of continual improvement. In the current business environment, companies can not afford to dismiss entrepreneurs, as they are the visionaries who understand best the opportunities, and they can also appreciate the extent to which an entity can afford to take risks. Speaking of risk, one of the things that is increasingly discussed in recent literature is an organization's ability to learn from mistakes, even from failures. Many companies throughout the world have adopted this philosophy and shaped their culture around it. It has also been the belief of many prominent Quebec corporations that leadership should tolerate failure as a way of learning. Likewise, leadership should really value its people as the most valuable resource the organization possesses. Learning from failure and treating employees as a company's most valuable resource have been used extensively by Quebec's contemporary management as strategies to mold an entrepreneurial corporation that would bring economic growth in a flourishing business environment. These strategies also help to establish an innovative culture within the organization. In fact, many of the Quebec companies have become successful because they nurtured a culture based on innovation and entrepreneurship. What makes entrepreneurs is found in the way they organize, manage, and assume the risks of an enterprise. This, however, does not implicitly mean that the business enterprise will be a successful one. The key word that is missing is "innovation." What makes for a successful entrepreneur is the innovative way he or she organizes, manages, and assumes risks. In today's business environment, "innovation" is not just another buzzword. Innovation has become a necessity for all organizations, and thriving entrepreneurs realize that being innovative is one of the keys to productivity. INNOVATION An indirect aim of this study has been to portray the systems that can generate innovation, and to show how these systems, management structures, and leadership styles can bring about organizational change. Innovation has become an important focus in the strategic planning of the major corporations in today's business environment. With respect to Quebec's development, we observed that "innovation" has not been used as

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a buzzword. Instead, innovation is the foundation upon which the new economy of the province was built. We looked at what the word "innovation" comprises and indicated that it does not represent a random, innate skill but rather an organized process that helps those involved in a transformation process. We have also suggested that under this definition, and for the purpose of this study, the concept of innovation becomes a skill that can be learned, through the appropriate process. Subsequently, organizations and employees can benefit from the qualities of innovation. We have also provided managers and executives with success stories of companies established in Quebec. Behind each of these success stories, it seemed that one of the major tools used by the leaders was innovation. In the new economy, innovation does not simply mean bringing new products into the market. On the contrary, the concept is far more encompassing, and the use of innovation can differentiate a successful global corporation from a low-horizon, slow-growing regional company. Innovation, in the examples provided, sometimes meant, but was not limited to, the use of previously unknown strategies. Furthermore, we have discussed the ways in which the government of Quebec used innovation as its core approach to the economic growth and strategic development of the province. We have seen how the government understood that innovation is the engine that can power this growth and decided to promote and encourage business entities to build their strategies around innovation. The government also helped private financial institutions in their efforts to find capital at a time when the market evaluated the risk involved in financing each company. This was accomplished through specific fiscal measures that allowed taxpayers to deduct the money invested from their gross income into publicly owned Quebecbased companies. The leaders from the government realized that research and development is a growing field and that the province can benefit greatly from positioning itself strategically toward continuous growth in the business. When negotiating solutions for the research and development companies in the province, the government used a holistic approach to their problems and used all the means it could find to optimize their condition so that these corporations can act freely without bureaucratic burden and without financial constraints. In doing so, the government applied the same approach that it did to the capital problem, and within a short period of time, government officials made sure to review all its policies affecting research and development. Recently, many studies have been conducted regarding the research and development possibilities in Quebec. The results of these studies placed Quebec in excellent standing to perform research in North America and possibly the world. One of the main reasons Quebec possesses this critical

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advantage over other parts of the world is the province's fiscal advantages. We mentioned, for instance, that if the companies did not make profits during the current fiscal year, the state would pay the income tax deduction in cash. This fiscal measure guaranteed that the government would reimburse the expenses in research and development at a convenient rate of 20 percent. In addition, the government kept consistency with its vision to promote innovation and innovating activities throughout the province through different sets of incentives. Some of these stimuli include income tax exemption for two to three years on the personal incomes of new researchers coming to a research facility located in Quebec. Also, in this last period of growth, the government joined the new entrepreneurs and attempted to create good conditions for solving their growth problems. It also acknowledged that private institutions are better equipped to manage and create economic development. TECHNOLOGY We have observed how at the beginning of the 1990s Quebec possessed an industrial structure that would secure its continuous progress. The industrial structure relied on several strategic elements that were thoughtfully built by the leaders of the province. Some of these elements include the natural resources sector, the educated and productive workforce, the capital resources, some of the best research facilities, and the attractive fiscal incentives for entrepreneurs. The economic growth of the province was powered by a wide and well-developed network of export activities. As we have analyzed and exemplified earlier, Quebec's exports range from newsprint, aluminum, and other raw materials to telecommunications equipment, aircraft, food products, and transport materials. Technology in Quebec has been one of the most flourishing among its different sectors. We have examined sectors that rely on technology and produce it. These sectors include aerospace, biopharmaceuticals, information, and telecommunications. The specific examples of companies in these industries emphasize the importance of specialized services and industries that promote entrepreneurship through highly developed facilities. The technology of information and communication is one of the primary driving forces in the change process toward the new economy. The examples offered by the Quebec corporate environment show that information technology has helped create or contributed to the enhancement of many new jobs. In fact, there seems to be a constantly growing need for workforce in this sector of the industry. There have been discussions regarding the benefits or losses of huge investments in technology over the past decade. Some argue that tech-

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nology is a growing field that needs constant replenishment of resources, and therefore any investment is justified. In opposition, others argue that unwise investment in technology may obstruct the competitiveness of some companies, in the sense that they will lose their competitive edge over low-cost producers from developing countries. Regarding the Quebec business environment, we have surveyed how technology-intensive companies have staffed themselves with highly competent staff. This helped make wise decisions concerning the investments in technology. Also, the risks of failure in Quebec are much lower than in other areas, as the governmental incentives provide a safety cushion against shortcomings from investments in technology. In general, Quebeckers tend to appreciate that the technological changes of the last decade have mainly positive results in conjunction with their work. Moreover, technology is often considered as a powerful tool for achieving high levels of productivity within the corporation. There is some concern with regard to the way in which technology is viewed as being opposite to the people who actually use it. Lowe (2000) argues that the key to successful implementation of change through technology is not the technology itself, which can be purchased and installed rather easily. He suggests that leadership should employ an approach to innovation that makes sure workers go through training programs that prepare them extensively for the use of the new technology. Additionally, leadership should consider revising its organizational processes, management styles, and workers' skills, as these elements are equally important for success in making the best and most efficient use of technology. Lowe advises that innovation in these areas is crucial and technology alone does not add worth to the organization. Lowe also discusses the importance of innovation within the organizational framework. Technology by itself will not prompt innovation within the company, as technology is nothing more than a tool in the hands of the managers or workers. However, technology, at any level, supports and embraces innovation in the quest to identify ways for a corporation to become more productive. The author observes that organizational innovation is directly correlated to the technological innovations; thus, if the organization is not amenable to innovation, the technological innovation will falter. QUEBEC'S POTENTIAL FOR GROWTH The international business world has noted that in recent years, Quebec has started to settle into a position from which it can become an international leader in many of the knowledge-based industries that are expected to command the global economy in the near future. Correspondingly, we have seen how Quebec has already provided many advantages to growing

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companies, as well as incentives for foreign investors that value entrepreneurship and innovation as crucial skills for doing business. The foundation for the economic renaissance of the province was built on intense investment in learning and education, attractive fiscal incentives for hightech industries, and entrepreneurial spirit. Consequently, areas such as the aerospace industry are recognized as the best in the world with respect to the magnitude of their operations as well as their concentration in this area. Also, fields relating to photonics, multimedia, life sciences, and telecommunications have received more attention, and the province is planning to lead these industries into the global economy as well. As a matter of fact, photonics is a field that deserves more attention, as Quebec has truly become a world-class leader. Quebec-based companies have become increasingly convincing in the global market as a consequence of the tremendous intensity and concentration in the research and development expertise. Educational institutions such as Laval University in Quebec City have had a major impact and played an important role in redesigning Quebec's competitive advantage in these areas. The university has sustained a vision that helped it progress into becoming the headquarters of the world-renowned Center for Optics, Photonics, and Lasers (COPL). As we saw earlier, one of the most important leaders in photonics is EXFO, the company established in Quebec City in 1985. EXFO owes much of its success to being located in Quebec, as the province has a wealth of highly skilled research and development engineers. Additionally, the company's leadership maintained that the multicultural character of the province has helped the company gain a competitive advantage in the global marketplace, where EXFO aimed at becoming one of the key players. Something else that makes Quebec unique in the world is its tourism industry. The uniqueness comes from several intrinsic aspects of the province. One of the most obvious things that attracts people from the North American continent is the fact that Quebec is the only place in the mainland with a deeply rooted French culture and language currently still very much alive. Additionally, the province benefits from a long tradition of hospitality, which turns occasional visitors into regular tourists who keep coming back. The city has become famous for its international heritage and for being the foundation of French civilization on the continent. On a different pole, Montreal is known around the world as the place where European and American cultures meet in an auspicious way. In fact, people who moved to Montreal have found it to be a safe environment that secures one of the world's best lifestyles. Montreal has also become the focal point of business activity in Quebec. The city has a population of about 3.5 million, which represents about one-half of the total population of the province.

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City officials believe that the most important asset that Montreal has to offer is a highly skilled, multilingual, and stable workforce. Also, the city offers investors surprisingly low setup and business costs, especially in contrast with North American standards. In addition, the city has made major investments in the past to develop a high-quality infrastructure that offers access to world markets. Besides, the leadership of Quebec established a vision that helped develop Montreal into a city where various knowledge-based sectors are growing at a rapid pace.

CONCLUSION In our quest to identify new tools and work instruments for managers and executives, we have studied and presented the path of Quebec economy as it has gone through dramatic changes over the last 50 years. We have portrayed the success stories of several Quebec companies that show determination and give examples of how change can be fruitfully managed. In judging the business environment in the Canadian province, it is important to understand that Quebec reached the current status of development mainly because it found innovative tools to use in problem solving. The economy in Quebec was constructed through wise leadership in both the public and the private sectors, who responded to the will of the people to progress. On the other hand, progress would not have been possible without the cooperation of the people, who understood and worked toward their common goals while also constantly communicating their needs. Flexibility and continuous learning on the part of the government worked hand in hand with the people's open-mindedness toward change. We hope that the concepts described in this book will prove helpful to readers who need to apply them in everyday life. REFERENCES Evans, P., & Wurster, T. S. (2000). Blown to bits: How the new economics of information transforms strategy. Boston: Harvard Business School Press. Hoyle, F. (1973). Nicolaus Copernicus: An essay on his life and work. New York: Harper and Row. Kotter, J. P. (1998). Leading Change: Why transformation efforts fail. In J. P. Kotter, R. Pascale, J. D. Duck, J. Porros, & A. G. Athos, Harvard Business Review on Change. Boston: Harvard Business Review on Change. Koyre, A. (1973). The astronomical revolution: Copernicus, Kepler, Borelli. Ithaca, NY: Cornell University Press. Lowe, G. (2000). The quality of work: A people-centered agenda. New York: Oxford University Press. Pitcher, P. (1997). The drama of leadership. New York: John Wiley and Sons.

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Robertson, P. L. (1999). Authority and control in modern industry: Theoretical and empirical perspectives. New York: Routledge. Stearns, P. N. (1996). The ABC-CLIO world history companion to the industrial revolution. Santa Barbara, CA. Worth, M. (1999). Sweat and inspiration: Pioneers of the industrial age. Stroud, Gloucestershire: Sutton.

Index

Addiction, in organizations, 27 Aerospace, 122-23 Sterna Laboratories Inc., 125; cancer research, 125 Alcan, 73-74, 88-90; alliance with Hydro-Quebec, 74; as global leader, 88 Altamira, 42 Anapharm, 127 Ankcorn, Michael, 126 Atrium Biotechnologies Inc., 102, 125 Baie James, 97 BCE Emergis Inc., 63, 64, 119-22; target clientele, 120 Beaudoin, L., 21 Bell, Larry, 71 Bell Aircraft Corporation, 72 Bell Helicopter Textron Canada, 71-73; participative management, 72 Biopharmaceuticals, 123, 125-26 Bombardier Inc., 17, 102; Aerospace, 70, 122; Joseph-Armand, 19-21; subway cars, 20 Boothby, B. C , Jr., 99

CAE, 123 Caisse de Depots et de placement du Quebec, 91 Canadair, 20 Cascades, 48-52, 55,102; environment, 50; profit sharing, 51; recycling, 49; Research and Development Center, 50; success, elements of, 49 Casiez, B., 18 Catalonia, 43, 44 Catholic Church, 87, 91, 144; influence of, 11 Center for Optics, Photonics, and Lasers, 158 Centre de Recherche Industrielle du Quebec (CRIQ), 97, 105 Change, 34; crisis, 137; effects of, 149-50; model, 3-7; new paradigm, 5; pressure for, 15; tools to manage, 2,3 Chaos, 82 Cirque du Soleil, 112-16; communication, 114; corporate culture, 114 ClicCommerce, 42

Index

162 ClinTrials BioResearch, 126 CMC Electronics Inc., 131 C 0 2 Solutions, 106-9 Commerce and Industry Ministry, 103 Communist Economics Planning System, 12 Competition, 106 Copernican revolution, 138, 141 Copernicus, Nicolaus, 138 Creativity, 83 Cretier, Stephan, 38, 58, 63 CRIQ (Centre de Recherche Industrielle du Quebec), 97,105 Crown corporations, 96 Culinar, 44^48, 52, 54; acquisition of Hostess of Canada, 46; Arc-en-ciel (Rainbow Project), 46, 47, 69; bilingualism, 48; leadership, 44; management strategies, 46 Daimler Chrysler AG, 21 Dalton Favreau Commission, 87 Desjardins, Le Mouvement de Caisses populaires, 45 Diversity, 56 Dupont, Eric, 125 Economic development, 24, 90, 147 Economic revolution, 40 Edwards, Brian W., 64 Entrepreneur, 34; government as, 76 Entrepreneurial: manager, 57; organizational model, 67-70 Entrepreneurship, 61, 69, 153-54; behaviors, 7; problems in a corporate setting, 23; team, 63 Environmental sciences, 107 Ericsson Canada Research, 132 EXFO, 129-31, 158 Expo 67, 91, 140, 145 Francophone, 41, 87, 140 Front de Liberation du Quebec, 141. See also Separatism FTQ (Workers Federation of Quebec), 104 Garda World Security Corp., 58-60, 63 Gates, Bill, 53

Gauthier, Daniel, 113-15 Global growth, 119 Globalization, 2, 33; impact of, 22; international competition, 79; Summit of the Americas, 32 Granny's Country-Oven Bakery, 46 Helix Hearing Care of America Corp., 83-85 Hodgetts, R., 56 Human resources, 55 Hydro-Quebec, 91, 92-94 Industrial revolution, 139 Industry and Commerce, Department of, 146 Information technology, 128 Innovatech of Greater Montreal, 18 Innovation, 70, 101-2, 109, 115, 154-56 Intuition, 111 IPL Inc., 64-66, 116-17; ISO 9001 certification, 64 Kanter, R. M., 9 Korn, H.}., 105 Kotter, John, 137 Laliberte, Guy, 113-15 Landry, Bernard M., 32 Lant, T. K., 36, 76, 105 Leaders, 37, 38, 80 Leadership, 37, 58, 106, 150-53; challenge, 8; as a driver of innovation, 57; followers, 58; new paradigm, 6; soft skills, 8 Learjet, 20 Lemaire family, 51 Lemay, Patricia, 48 Lesage, M., 91 Lowe, G., 142, 157 Luthans, R, 56 MacDonald, Robert, 72 Marcheterre, Andre, 124 MDS Pharma Services, 126 Merck-Frosst Canada, 124 Mission, 51, 53

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Museum of Civilization, 109-11, 115; innovation in management, 109; matrix structure, 110 Myers, J., 63

La revolution tranquille. See Quiet revolution Risks, 154 Robert, Michael, 61, 101

NAFTA, 33 Nanus, B., 10 National Bank of Canada, 41-44, 52, 54, 56, 69; electronic commerce, 42; globalization, 43; Internet, 42 New economy, 141-43 Nortel, 132

Samure, Jean-Louis, 43 SDI (Societe de Development Industriel du Quebec), 97 Separatism, 91, 94, 141 SGDL Systems Inc., 17 Ski-Doo, 19 Societe de Development Industriel du Quebec (SDI), 97 Societe de Placements dans T Enterprise Quebecoise (SPEQ), 104 Solidarity Fund QFL, 18 Success, search of, 28 Summit of the Americas, 32, 34. See also Global growth

OPEC, 95 Organizations, addiction in, 27 Ouellet, Line, 109 Ouellet, Martin, 133 Partnership, state and business, 34-36 Pascale, R. T., 6 Peak Investment Services Inc., 66-67 Peladeau, Pierre, 97, 98 Pitcher, Patricia, 151, 152 Pratt and Whitney Canada, 122 Productivity, 144 Quebec, 11, 32, 37, 39, 54, 61, 76-80, 87; culture, 69; Department of Industry and Commerce, 146-49; economic development, 24, 103; fiscal advantages, 156; governmental role, 78; government as entrepreneur, 26; Quebec Federation of Labor, 23; research and development, 54; unions, 48 Quebecker, 140. See also Francophone Quebecor Inc., 97-99, 102; acquisition of TQS, 98; listing on NYSE, 98; Quebecor Media, 99 Quiet revolution, 38, 40, 78, 91, 139-41 Raymond, Real, 42 Recruitsoft, 132-35 Research and development, 54

Team entrepreneurship, 63 Technology, 17, 122, 156-57; global growth and, 119; impact of, 21; information, 128; innovation and, 70 Telecommunications, 128 Textron. See Bell Helicopter Textron Canada Tourism, 140, 158 Training programs, 147 Vachon, Rose-Anna, 45-48 Values, 24 Videotron, 102 Vision, 5, 38, 52, 53, 149; Museum of Civilization and Cirque du Soleil, 115 Ward, Peter D., 30 World Exhibition. See Expo 67 Workers Federation of Quebec (FTQ), 104 Young, Arthur, 71

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About the Authors RANDALL CAPPS is Visiting Professor of Management at the Gordon Ford College of Business, Western Kentucky University, in Bowling Green. PAUL CLERMONT is Associate Professor of Management at the University of Quebec in Montreal.