Time marches on . . .

Great times, great memories

I finished my MBA at University of Western Ontario in the spring of 1976 and was recruited by McKinsey & Company, Inc. McKinsey was a great experience but involved a lot of travel and long hours of work. Expecting our first son, I left McKinsey in 1978, to join Canadian General Electric Company Limited (CGE), one of Canada’s largest companies, as a planner for one of the business units. The pay was less than McKinsey but the hours made it possible for me to spend more time with my wife and infant son. Our second son was born in 1981.

In 1981, Jack Welch became CEO of GE, CGE’s parent. In October, 1982, I met Jack at GE’s Crotonville executive education facility, part of a group of what GE called “Hi Pots” meaning executives with “high potential”.

Shortly thereafter, at age 37, I was appointed Vice President, Corporate Development of CGE with Vice Presidents Dave Abel and Ted Pashler reporting to me. Jack Welch had a heavy hand in my appointment. CGE earned $39 million in 1983, making it one of Canada’s 50 most profitable companies.

I reported to Bill Blundell, who had taken the helm as CEO of CGE from Al Cartwright. In my 1983 annual review, Bill told me I could have a successful career as a staff executive but I should forget about an operating role since I had no operating experience.¹

In January of 1984, I joined a few hundred other GE Vice Presidents at GE’s annual officer’s meeting in Boca Raton. On the first day, which as I recall was January 3, 1983, GE’s CFO put up a slide with the 1983 financial results, subject to audit. When audited statements were later released, they were identical to those presented at the meeting. GE’s financial controls impressed me. About 500 officers attended and, among other things, had a tennis tournament which I won. My prize was a red Polo cardigan which Welch gave me personally. Welch liked winners.

Not long after, I had a call from the office of Ted Levino who headed GE’s Human Resources operations at head office, to ask if I would interview for a higher level operating role which would have been a significant promotion. It was in Schenectady and I was unwilling to relocate my family with two small boys at home. Levino’s office was clear that if I refused a promotion my GE career would likely stall or end.

In April of 1984, I left CGE to found The Enfield Corporation Limited (“Enfield”). Enfield bought a small plastic moulding factory from CGE for $15 million and Enfield had its first manufacturing plant, employing 338 people. I created a subsidiary, The Complax Corporation (“Complax”) to host the plastics business, which had been only modestly profitable (a few hundred thousand dollars a year) while owned by CGE. Ralph Zarboni ran the plant and turned it around by cutting needless overheads, increasing productivity by improving balance and flow, and entering the automotive exterior body panels business. By having Complax separately incorporated, Complax executives could have ownership of their business apart from other operations Enfield might later acquire.

The plant was immediately quite profitable. Here are Complax’s early statements.

By 1986, Enfield’s interest in Complax had fallen to just over 50% through transactions that raised over $30 million.

Through acquisition funded in part by an initial public offering that raised $67 million Enfield had by 1987 acquired controlling interests in Federal Pioneer Limited and Consumers Packaging, Inc., two of Canada’s largest manufacturing companies in their respective industries.

By the summer of 1987, barely three years after incorporation, Enfield was more profitable than CGE, earning $63 million for the year ended June 30, 1987

Blundell’s assessment of my potential as an operating executive was more right than wrong. Recognizing my limitations I hired strong operating managers to run Enfield’s various businesses.

Not everything was sweetness and light. Enfield was taken over in 1989 and I was dismissed.

I had dinner with Russell Baranowski last week. Russ had left CGE to join Enfield after Enfield’s acquistion of Federal Pioneer Limited, and became CEO of that company. Russ did a great job more than doubling the profitability of Federal Pioneer in his first two years as CEO. We remained friends ever since. Russ made a major contribution to my success not only in Enfield but also in later business ventures.

Over dinner, we reflected on our CGE days. We noted that of the list of CGE officers in 1983, most had passed away. Russ is 86 now and I turn 80 next year, so it is not a surprise that many of our 1983 colleagues and contemporaries have since died. Cartwright, Blundell, Haller, Druin, Fell, Gordon, Noble, Feltham, Martin, Pashler, Rankine and Stafl are all gone from this Earth and Gillespie (now 94) is suffering from Parkinson’s.

I have great memories of my short years in GE. The people were competent, honest, hard-working and conducted themselves to high standards of integrity. I learned more from Bob Gillespie about how to manage than I learned during my MBA at Western or at any time since. I learned leadership from Jack Welch and stayed in contact with him long after we had both left General Electric.

I will always treasure the memories of those days.

1. Jack Welch disagreed with Bill, and through his Human Resources staff offered me the chance to interview for a high level operating role as Executive Vice President of a unit of GE, the parent company of CGE, but it involved a move to Schenectady and I wasn’t prepared to move my family. I chose to resign from CGE and start my own company in 1984.