"The Shift in Leadership"
Thank you John and good evening.
I’m truly honoured to receive this award, and to join the company of its past recipients – incredible leaders and outstanding CEOs.
Et je suis spécialement flatté de voir tant de gens prendre le temps de venir souligner cet événement malgré leur horaire chargé.
Many paths can lead you to where I’m standing tonight. But no one gets here alone.
I’ve been incredibly lucky throughout my career. People have helped me along each twist and turn -- and as John mentioned, I’ve had plenty of them. Bosses who took a chance on me, or overlooked youthful exuberance. Colleagues who stood by me in tough times. Friends and acquaintances who helped me through periods of transition.
Some are here tonight. I won’t single them out. There isn’t the time for proper tributes. But I do want to say: you made a difference and I am deeply grateful.
I will make one exception for my wife Fran.
Fran has always been a pillar of strength – a calm, steady and positive force in my life. She is extraordinarily wise – able to offer advice on both business issues and people without knowing all the details.
She has stood beside me with each of the moves in my career and adventures in my health. Fran has been a magnificent mother to our four great kids, and has transitioned to being a great mother-in-law and perfect grandmother. Indeed, as I have told many people, my almost 42 years of marriage have been my competitive advantage.
As I know others do, I see myself as a custodian of a great Canadian institution – in our case 156 years young. My chief responsibility is to make sure TD’s best days remain ahead of us. So if I do my job right, I’m really setting others up for success -- as others did before me.
My predecessors built a foundation for future growth; and I have been able to take advantage of it.
Allen Lambert’s vision to build Toronto's first skyscraper – the TD Tower – was, more broadly, a vision to transform our city into a major financial centre. It has been called the “best single architectural statement in the city”. Even better, its statement to the world put Toronto on the map. And now, like so many other businesses, we’re reaping huge dividends from our city’s growing global status as a financial centre.
Dick Thomson ran TD for our shareholders. And in doing so he took a deep personal interest in understanding and managing risk – making sure our bank avoided the blow ups that wipe out shareholder value. Dick set the tone from the top: willing to make decisions that went against the pack, but never against the interest of our investors.
Charlie Baillie anticipated where our industry was going, and made sure TD got there first. Bold moves were required. The acquisition of Waterhouse moved us quickly and confidently into the North American online space. And the acquisition of Canada Trust fundamentally changed our business mix and growth strategy. It was an inflection point in our history.
So strong leadership does make a difference.
And at the end of the day, it’s often about choices that can make or break an institution.
We all seek growth, but know that some forms of growth can kill. That’s especially true in organizations like TD where our core business is taking risk. Being opportunistic is one thing. Going too far, too fast is another. Knowing the difference can be a matter of life and death for organizations.
Understanding where your natural competitive advantages lie, and having the discipline to stick with them is also crucial. Too much time can be spent looking “across the fence” to see how our competitors make money. What is important is how you can make money. Focus on a space that you can own, and will deliver reasonable rates of return for shareholders.
Balancing short-term pressures and long-term objectives is another core challenge. The market, analysts and press are focused on the short-term. Building sustainable franchises requires patience and persistence. It’s a tough balancing act. But it’s what leaders are paid to do. There are no easy answers. To build great franchises for the long-term you have to carry the support of your shareholders in the short-run. Both matter.
And, of course, there are key business decisions such as acquisitions or business mix changes that define institutions.
These “make or break” choices have always been there for leaders. But, even here, where the burden of final decisions may rest with a single leader, there are ways to reduce the risk of the big mistake, and increase the chances of getting things right. And it begins by creating a culture of transparency and openness where a leader can be challenged.
The financial crisis underscored the risks of great CEOs driving their organizations and ignoring old fashion risk paradigms.
The financial crisis has also necessitated a shift from relying on a single great leader -- who makes all the important decisions -- to a leader who can develop the right culture and values throughout a much wider management team. This requirement, to develop stronger leadership teams throughout the organization, is reinforced by many other changing factors.
In our case, these factors have included a fundamental change in business mix towards retail and commercial banking, the increased importance of understanding wholesale trading risks, the increased vulnerability to global systemic risks and the critical need to earn and protect a great reputation among the public, governments and regulators. And the realization that avoiding a specific risk associated with a crisis doesn’t necessarily mean you have avoided the second round impacts.
All this increased complexity compounds the challenge of developing leaders. Business leaders must know their businesses. And that knowledge imperative has become deeper and more sophisticated. In effect, it’s led to a “siloing” of expertise. This in turn presents a core challenge: how to create more general leadership skills across multiple businesses and geographies in a content-intensive and diverse world.
I’d also argue this shift in leadership is reinforced by a shift in employee expectations. Today, more than ever, employees want to both believe in their company’s vision and mission, and be involved in fulfilling it. And they want to be identified as part of a winning team. So our leadership challenge has become two-fold: leaders must learn even more content. And, at the same time, they must develop the people skills to inspire, lead, and attract diverse talent pools.
John Thompson deserves a lot of credit for framing this leadership challenge for me. He encouraged my efforts to build capacity throughout the organization. We both saw people development as a core activity in a franchise business.
To this end, much of my journey as CEO has focused on getting the right values and leadership principles in place, making sure our folks understand our business strategy and brand, what we stand for, and what makes us outstanding.
Getting everyone on the same page is critical – how we make money, what behaviour is rewarded, where our competitive edge lies, and what is our risk appetite.
Once you have everyone on the same page, you must also create an employee experience brand. And I’d argue that it’s just as critical as our customer brand, or investor brand.
As John noted, TD has experienced huge amounts of growth in recent years. You need the right people to achieve and sustain this kind of growth, and to take on the challenging roles that come with running more complex and larger businesses.
That creates huge people opportunities – externally and internally. We need to attract and retain the best people. And we need to help the people we have be their best. To become an employee brand of choice, we’ve learned that, above all else, people are attracted to organizations with great values and culture.
That’s a big reason why we introduced our diversity initiative. We learned about barriers that could impede the growth and development of some of our employees, barriers that could make life uncomfortable for them, that could make TD an unwelcoming place. So we’ve set out to tear them down. We are not focused on filling quotas. We are interested in fulfilling careers. And that’s what makes a business a great employer.
We have also worked hard at understanding and articulating our culture. This helps us attract candidates with the right fit. It also ensures our people get what is important to the Bank.
Every leader at TD is accountable for developing the next generation of leaders. Indeed, if you want to be a leader, it’s not enough to grow a business. You must also grow your people.
So, in the end, leadership matters and matters hugely. But it’s not so much that leaders make a few single critical decisions. Yes, those count. But they are more likely to be consistently right if leaders create the right surrounding culture.
Moreover, there are many factors at play that create opportunities and risks. I’ve talked about the increased complexity of content, the diversity of business issues, and multiplicity of decisions across the organization. As such, the key leadership challenge is to create layers of leaders who can explain strategy, inspire passion and attract and grow great people.
Because, in the end, it’s our employees who:
- deliver legendary customer experiences, and bring our brand to life;
- manage risk smartly, and create shareholder value;
- make TD a comfortable and inclusive place to work;
- drive our exciting growth story, and build the Better Bank.
In short, it’s our employees who allow me to stand before you tonight, and accept this incredible recognition.
I want to leave you with one last thought.
People lucky enough to lead major enterprises know their commercial success depends a great deal on their country’s success.
Our business leaders owe a lot to Canada.
We need corporate champions to create and sustain the prosperity of our nation. We must be an engine of economic growth. To do that, we must improve our productivity and learn how to extend our reach, which in many cases means going beyond our borders.
Our country does need a class of home-grown, global champions that can win on the international stage and that remain firmly anchored in Canada.
By doing so, we are not only building a better future for Canada, but also for all the communities where we work and live.
That has been our experience at TD. As I said before, I see myself as the custodian of a great Canadian institution. It is an important part of the national economy. But it is also a strong positive force in the US economy. Indeed, during the recent economic downturn, we ramped up our lending activities when customers needed us most. We are proud of our growing presence south of the border, and look forward to developing even deeper ties.
TD’s story underscores how a global enterprise, with a strong base in Canada, can contribute to this country’s success, while also enhancing the prosperity of every community where we operate.
Our journey continues. And, like all business leaders here, our focus is on setting up future generations for success. Above all else, this means creating opportunities that enable people to develop, grow and prosper in an increasingly global economy.
Je vous remercie d’avoir célébré ce moment spécial avec moi. I want to thank you for celebrating this special moment with me.