This year Progress continues its comprehensive approach to the TOP 101 Companies survey, using a customized balanced scorecard.

The data, as analyzed by management specialists at the Sobey School of Business at Saint Mary’s University, reveal deep insights into the strengths and weaknesses of the region’s organizational practices.

The TOP 101 Companies survey and ranking took on a very different look last year—rather than focusing mainly on revenues to reveal top performers, emphasis was placed on non-financial operational aspects. This pointed not only to which firms in the region were sales leaders but also to which were best positioned for future growth.
    
This year Progress, in partnership with the Sobey School of Business at Saint Mary’s University, continues that approach using a customized balanced scorecard. The overwhelmingly positive reaction to the methodology introduced last year confirms the way Atlantic Canadian business leaders think about their operations. Revenues and growth certainly matter, but these are outcomes of certain operational practices. The balanced scorecard is designed to examine the performance of several different qualities, with an eye to giving organizations better insight into how well they are managed and what contributes to sales and growth in the future.

The operational measures considered were:

Customer orientation
How well does a company know its customers? This is important in determining what products will provide value in the market and spark communication   strategies to which customers will respond.

Innovation and learning
How well does a company continue to improve and create value? The ability to invent and learn allows for the introduction of superior products and an improved, more efficient operation.

Internal management practices
How well does a company manage its human resources? It is common knowledge that a large part of a company’s success is due to its employees. The way people are treated affects not only the way work gets done but also customer satisfaction.

Governance and social responsibility
Being a good corporate citizen is more important than ever. Not only do customers prefer dealing with these types of organizations but employees also prefer to work for them. When combined with governance that is objective and transparent, long-term performance is likely to improve.

These four broad categories of performance were first introduced in last year’s TOP 101 and resulted in Top 10 rankings in each area. This year we fine-tuned the measures to include some new aspects. We can now see not only which companies are leading in each area but also the trends in the data since last year. The data reveal interesting results.

Customer Orientation
How well do you know your customers? The answer determines how you provide value in the market and what strategies your customers will respond to. Overall, the largest and most successful firms in Atlantic Canada do the kinds of things that market-oriented firms do well

Most companies aspire to be market-oriented. Indeed, most perceive themselves to be market-oriented in that they claim to care what their customers think, and they try to deliver their customers value. Every single organization in the TOP 101 aspires to show this type of commitment to customers. This is a good place to start, but being market-oriented is a little more complex than just caring about customers. It is more important to have a systematic process to determine what customers are thinking. At a minimum, this means measuring the extent to which customers are satisfied.
    
This is something that TOP 101 companies do well: 72% agree that they systematically measure customer satisfaction on a regular basis. Still, there is room for improvement. This process can be as easy as taking a sample of recent customers, contacting them by phone, and asking two simple questions: Were you satisfied? Would you recommend the business to other customers?
    
In addition, an important and frequently forgotten aspect of market orientation is an understanding of the competition. It is important for businesses to be aware of and discuss the actions of competitors, because they are looking to grow at your expense. This is something that TOP 101 Companies buy into, as almost all agree that they engage in competitive intelligence. — Gordon Fullerton, associate professor of marketing

Case Study

Organization: Halifax International Airport Authority
What it does: Operates the Halifax Stanfied International Airport
Head office: Enfield, N.S.
Revenue: $56,600,000
TOP 101 rank: 46

The Issue: providing superior customer service

With rising airfares and congested flights, air travel can be unpleasant. The Halifax International Airport Authority (HIAA) wants to change that with its added airport perks, including free wireless Internet service for customers. “We weighed the potential generation of revenue from wireless against the benefits of increased customer service, and we decided to offer wireless for free,” says Michael Healy, HIAA’s vice-president of infrastructure and technology. “We have a high focus on customers and felt this decision was in line with our philosophy. So far customers are delighted; it has been very well received.”
    
In order to entice airlines to dock at Stanfield, HIAA provides the computer, communications, and kiosk equipment needed to operate through its common-use terminal system. While these services are standard in the world’s largest airports, HIAA took a step further by improving terminal technology. “Each terminal can be accessed by the airlines, which gives us greater use of terminals,” says Healy. “Recently, we implemented a VoIP common-use system. When an airline logs into a terminal, the phone assumes the airline’s telephone codes, and the airline can use its own digital public-access system for boarding information. This technology is new, with very few airports using it. We have an efficient system that rivals the major airports of the world.” -Julie Sobowale

Internal Management Practices
How do you manage your human resources? It is common knowledge that a large part of a company’s success is due to its employees. The way people are treated affects not only the way work gets done but also customer satisfaction

The one internal feature that all organizations share is people—they make the decisions, interact with customers, and sift through a wealth of information to determine what gets acted upon and what does not.
    
Human resources are an important part of a company’s success, but with each passing year good people are becoming increasingly difficult to find. Skills shortages in the Atlantic provinces continue to make the news. Businesses have already started to notice fewer applicants, often with less experience, than what they were receiving. This situation is only going get worse as baby boomers retire in increasing numbers.
    
This new reality makes the management of human resources a high priority. Creative hiring strategies are being seen as businesses try to position themselves as employers of choice. More attention is being paid to retaining employees. As competition for top talent increases, organizations need to be creative in making jobs attractive to an increasingly diverse workforce. Stiff competition for labour also means that succession plans, and not only those for executives, are increasingly important.
    
As in last year’s TOP 101 survey findings, less than half of the companies have formal succession plans. This points to a major weakness in the human resource management practices, especially in today’s labour market.
    
One positive sign is that about 70% of TOP 101 companies place employee retention as a top priority and use some kind of incentive pay to reward top performers. Investment in training and development still lags behind other developed countries and has decreased slightly from 2.5% to 1.8% of revenues in this year’s TOP 101. This indicates another area where there is plenty of room to improve—investing in human resources not only brings productivity gains but also improves job satisfaction. In today’s economic climate, both of these outcomes need to attract management’s attention more than ever. — David Wicks, dean and associate professor of management

Case Study

Organization: Holloway Lodging REIT
What it does: Acquires and operates full service hotels
Head office: Bedford, N.S.
Revenue: $69,750,637
TOP 101 rank: 43

The Issue: managing a growing workforce

Within the last 18 months, Holloway Lodging added 22 hotels to its portfolio of hotels. With locations across Canada and the U.S., such rapid growth adds to its challenge of finding quality employees.  
    
Recruitment and retention are major themes for Holloway. An employee-referral program encourages part-time or full-time staff to recommend propects for employment. The company co-sponsors the annual Pacrim Invitational Golf Tournament to support scholarship programs in tourism and hospitality at Mount Saint Vincent University as a recruiting tool and hires co-op students from the university.
    
Part of Holloway’s strategy for retention is a comprehensive management-training program. The intense two-year program takes employees through every department of the various hotels at the line-staff level, before learning duties and responsibilities of supervisors at each accompanying department. Linda Good, the director of human resources, says the training allows Holloway to maintain quality standards while giving employees the freedom to move around. “We are committed to maintaining best practices throughout the organization,” she says. “We want to maintain our reputation for good leadership in career development.”
     
Getting valuable feedback from employees requires legwork. Holloway takes an annual employee-satisfaction survey one step further; facilitators from the human resources department have open discussions at every hotel with each department’s front-line staff to review results and receive employee suggestions for improvements. After the meetings, facilitators talk with managers individually to discuss implementing best practices. “People need to feel that they’re being treated fairly and with respect,” says Good. “We need the ongoing feedback so we can maintain those principles at every step of an employee’s career. Just as we want every guest to have the best experience, we want every employee to have the best experience too.” -JS

Innovation and learning

The ability to invent and learn allows for the introduction of superior products and an improved, more efficient operation

Young innovative companies are diversifying the Canadian economy. A great example is Research in Motion (RIM), which generates $6 billion in annual revenue.
    
The short: RIM, a TSX 60 company, introduces its first BlackBerry in 1999, and subsequently its Pearl, Curve, and (soon) Bold models in 60 countries across significant Asian, European, and North and South American markets. The company earned $1.88 billion in revenue for Q4 2008 and has cash and investment assets of over $2 billion.
    
The long: RIM has filed over 500 international patent applications since 1995. To build and sustain its patent base, the company hires Canadian talent from specialized youth programs, such as Shad Valley, and universities with technology and business-technology hybrid programs. Leveraging provincial incentives and SR&ED credits on top, RIM opened a support centre and a development shop in Halifax. The company has signed 100 of its 160 carriers across 60 countries within the last two years.
    
Such firms are creative and innovative and transform their innovations into successful businesses that can compete internationally. These innovations help make their business models sustainable and can lead to new revenue streams, product diversification, market penetration, and new market opportunities. Patent protection allows Canadian companies to compete for customers with firms such as Apple, Nokia, and Pfizer.
    
Innovative firms continuously introduce new products and services in international markets, make significant investments in research and development and marketing, hire and motivate skilled employees, seek innovation funding, and maximize benefits for R&D activities from favourable federal and provincial tax programs. These actions stem from their visionary employees, management, and shareholders. Among TOP 101 firms, such as Cobham Tracking & Locating and Ocean Nutrition Canada, “foreseeing is believing.”
    
The short: Ocean Nutrition Canada (ONC) supplies its omega-3 products to makers of Becel margarine, Danone yogurt, Oasis and Tropicana fruit juices, iFish infant formula, various brands of dietary supplements (including a Clearwater–branded supplement), and various milk, chocolate, and baked-food products.
    
The long: Clearwater Fine Foods Inc. and ONC have filed over 20 international patent applications since 2001, employing 11 PhDs and 30 scientists to conduct R&D. Inventors share favourable patent assignation with ONC. The company’s value-added products are distributed by other companies through huge retail chains (Wal-Mart, Costco), Amazon.com, and Drugstore.com, to name a few. — Dawn Jutla, professor, computer and information systems
 

Case Study

Organization: Cobham Tracking & Locating Ltd.
What it does: Creates innovative technology solutions
for law enforcement and search and rescue
Head office: Windsor, N.S.
Revenue: $34,806,294
TOP 101 rank: 56

The Issue: innovation for customer benefit

In late October of 2007, three-year-old Kate Williams hung from her seat in the wreckage of a plane for four hours before she was rescued. Ian Foss, the president of Golden District Search and Rescue, along with his rescue team, used a homing device designed and manufactured by Cobham, the ProFIND SAR DF, to locate the plane in a snowy creek bed near Golden, B.C. “We would have been unable to locate the aircraft without your device,” wrote Foss after the rescue in an e-mail to Paul Steward, Cobham’s program director. “It saved a life.”
    
For Cobham, business means much more than the bottom line. Steward says that the motivation to do well lies in saving lives and understanding customers’ needs. “We know our customers want everything to be small for greater convenience, but at the same time still have the same capabilities as the larger search-and-rescue equipment,” says Steward. “For us, the challenge is to continue making improvements and creating greater functionality.”
    
The ProFIND hit the market in 2004 as one of the first handheld homing devices used to locate emergency-beacon signals from fallen aircraft or missing boats. Cobham continues to build a solid reputation through its research and development, introducing four to six new products each year. “Innovation is the main driver to our business and is critical to what we do,” says Steward. “We’re gratified that the products we create are impacting lives.”-JS

Governance and Social Responsibility
Being a good corporate citizen is more important than ever. Not only do customers prefer dealing with these types of organizations but employees also prefer to work for them.  
When combined with governance that is objective and transparent, long-term performance is likely to improve

As little as 20 years ago, it was common for businesses to be concerned only with profits; in fact, leading thinkers of the time thought it was irresponsible for business to do otherwise. Business ethics was a rarely used phrase and was seen as almost an oxymoron. That attitude has changed; today social responsibility and governance are vital and important. Social responsibility is centrally concerned with how organizations conduct their affairs to produce a positive impact on society. This logically consists of two related phenomenon: the way in which an organization is run in terms of its people and processes, and its impact on society. More than ever, organizations need to consider the impact of their actions on a diverse group of stakeholders.
    
A concern for the environment is perhaps the most common way for businesses to show their responsible side. It shows a moral compass that recognizes that the world’s natural resources are being depleted at a rapid rate and that manufacturing processes have damaged, perhaps permanently, water systems and the atmosphere in ways that affect everyone on the planet.
    
A concern for the environment is one aspect of social responsibility that every organization can and should demonstrate. In last year’s TOP 101 survey, only 28% of companies reported public commitment to the environment, a surprisingly low number. This year it has grown to 36%, evidence of the upward trend in attention companies pay to environmental issues. This good news partially offsets a somewhat surprising result from this year’s survey: that only 54% of companies reported introducing progressive environmental or workplace safety practices, down from 70% last year.
    
This result is surprising, considering the relatively high rate of physical workplace injuries and psychological conditions such as stress, anxiety, and depression that originate at work. A stakeholder approach to management, inseparable from social responsibility, recognizes that organizations affect people and other organizations in myriad ways. At a time when the labour market is tightening, top talent is increasingly difficult to find and retain. When consumers place higher expectations on the companies from whom they buy products, displaying social responsibility is more important than ever.
    
Another dimension to social responsibility is governance, the set of processes by which an organization is run, monitored, and controlled. One of the principal governance mechanisms is a board of directors, which public companies are required to have. The reason corporations need a board is because the owners (shareholders) are often not the managers and, therefore, have no direct say in how an organization operates. This creates what is called an “agency problem,” where the personal goals and objectives of managers diverge from those of owners. The board of directors can align these interests and minimize the agency problem.
    
Guiding an organization in ways that reflect the interests of all stakeholders, even private firms can benefit from a board to which they report and from which they receive advice. Generally, organizations benefit from having outside directors in greater numbers, those not closely related personally or financially to the organization. Of the TOP 101 Companies with boards, almost one-third have no outside directors. On average, boards have about equal numbers of inside and outside directors, much the same as in last year’s survey.  
    
A recently published research study adds a new element to the discussion of board composition. Organizational performance, the survey found, increases as CEOs seek advice from executives at firms with whom they do not share friendship ties or common backgrounds. This shows that there is a tendency for CEOs to prefer the advice of familiar people, or those from similar backgrounds, because they tend to confirm their ways of solving problems and assessing opportunities. This preference limits organizations in accessing novel points of view that can lead to better decisions, which in turn lead to superior performance. — D.W.

Case Study

Organization: Cooke Aquaculture Inc.
What it does: Farms and sells whole fish
and value-added products in North America
Head office: Blacks Harbour, N.B.
Revenue: $211,000,000
TOP 101 rank: 21

The Issue: social responsibility

How does a fishery become environmentally friendly? For Cooke Aquaculture, the idea is to be an industry leader in the area of sustainable development. This year the company became the first in North America to achieve the Certified Quality Salmon Eco-Label for its freshwater division; it pursued the certification in order to provide a sustainable alternative for customers. “Retailers are being pressured by consumers to provide more sustainable food products,” says Nell Halse, Cooke’s director of marketing. “People are concerned about their food and where it comes from. We want to be ahead of the curve.”
    
The aquaculture program is the first in the world and is accredited by the Independent Food Quality Certification. In order for companies to qualify, management must develop environmental policies, standards, and a formal review process. This includes refining Cooke’s current tracking practices and training staff on the processes. So far the certification covers the company’s hatcheries, but Cooke hopes to achieve certification for its saltwater and processing divisions by the end of the year. Already the certification is paying off: the company’s eco-labelled eggs are being sold to Ireland and Chile. -JS