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Only Chaos Will Save Us
Offman, Craig. Report on Business Magazine (Jun 2011): 36.

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Canadian Tire CEO Stephen Wetmore is convinced of the virtues of near-anarchy: The more tasks you have to deal with, the more productive you are - an unconventional notion that comes from the 2001 business book Surfing the Edge of Chaos . When Wetmore moved…

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It's not the kind of thing you usually hear from the CEO of a Canadian icon. But Stephen Wetmore believes that to save Canadian Tire - our last domestically owned department store - from irrelevance, things are going to have to get messy. If only Canadian Tire were a little closer to chaos , Stephen Wetmore would be a happy man. Not chaos itself, the CEO quickly qualifies, but just on the brink of it. Because Wetmore is convinced of the virtues of near-anarchy: The more tasks you have to deal with, the more productive you are - an unconventional notion that comes from the 2001 business book Surfing the Edge of Chaos . A corporation, the authors posit, is no different from an organism: Adapt to your hostile environment or succumb to the equilibrium and die. You would never guess that the mild-mannered Wetmore would be such a fan of turbulence, judging from his tidy perch on the 18th floor of Canadian Tire's headquarters, a drab, 1970s-era high-rise overlooking Yonge Street in Toronto. Wetmore's corner office is almost gleefully banal, as though the whole thing were ripped out of a Grand & Toy catalogue. When Wetmore moved into this office more than two years ago, he found an iconic but lumbering giant that he'd be the first to describe as lethargic, its lack of dynamism and creativity seeping from the Corp's HQ down to all 485 dealerships across the country. "There is a state here of planning yourself to death," he says, his arm resting on the table, thumb and index finger gently tapping. "'I'll get back to you in a week or three weeks. I'll have four committee meetings and plan it forever.'" That is not, he believes, the way to fire up Canadian Tire's 57,000 employees at a time when this country's last domestically owned department store chain is about to be beset by Target, which will open 105 stores across the country by 2013. In fact, ever since Walmart and Home Depot crossed the border in the 1990s, Canadian Tire has struggled to maintain primacy in its natural habitat. It remains a pre-eminent national brand, with 2010 sales of $10.3 billion (up 3% from the previous year), 1,200 stores and gas bars nationwide, the PartSource automotive chain, and 383 Mark's Work Wearhouse stores - Canada's No. 1 menswear retailer. It even owns a chartered bank that has issued five million Canadian Tire credit cards. But Wetmore believes the retailer has grown complacent - the company needs to get out of the meeting rooms and go primal. And so he is undertaking a dizzying array of initiatives: slashing bureaucracy at head office, retrofitting dozens of stores, renegotiating the tricky agreement it has had with store dealers for almost 80 years, jump-starting its automotive business - the list goes on. And just to keep Canadian Tire's rivals on their toes, Wetmore announced in May that the retailer would pay $771 million to acquire Calgary-based Forzani Group, a complicated agglomeration of 12 sports-and-apparel banners, with a mix of corporate-owned and franchised outlets. Along with all this is a rebranding campaign that has moved the company away from its more female-driven ethos of the past decade and started it on the road to being the authority on all things Canadian. The new ads are an attempt to speak directly to the quiet defiance inside us all. Canadians are so weather-hardened, one spot implies, that we don't mind barbecuing in the rain. We actually kinda like it. The slogan: "Bring It On." That could just as well be the mission statement for the Wetmore era. "If you're taking 14 months from the time you come in and show us a new product to the time you put it on the shelf, that's too long," Wetmore says. "We're up against the best companies in the world." Or, as the company's senior vice-president of marketing, Rob Shields, puts it: "We're the underdog." When Wetmore took over the top job in January, 2009 - Canadian Tire's third CEO in nine years - analysts questioned whether he was the right pick. Like his predecessor, Tom Gauld, he was not a retail guy. An accountant by training, the New Brunswick native spent 10 years in the health-care sector before landing at Bell Aliant, the Halifax-based phone company that he is credited with turning into a regional powerhouse. But Wetmore had served on the Canadian Tire board since 2003. So when Gauld announced he was retiring from the chief executive post, his fellow directors turned to one of their own. Wetmore had left Bell Aliant at the end of 2008 (reportedly because he lost out on the top job at parent company BCE Inc., to George Cope), and he was familiar with the guts of Canadian Tire and understood the many challenges the retailer faced. Wetmore says his biggest contribution to the company so far is a culture of urgency. Recalling one of his first big initiatives, for instance, he was horrified to learn that the team he'd put together had spent its first six meetings just coming up with a name for the project. "When you hear that, as the CEO, your stomach goes into a knot, because that's the way the organization operates," he says, taking a deep breath. "And you start to wonder why - why is this happening? And then you go out and realize that your competitor has an app for paint and you can download it on your mobile device and it's been out there for a year and a half. And you go, 'Whoa, we missed the boat or what.'" Part of the problem is a sprawling, Kremlin-style bureaucracy within head office. Wetmore's first major undertaking was to streamline management in automotive. When he arrived, auto-related divisions such as PartSource, petroleum and roadside assistance all reported to different managers. Wetmore brought them under a single roof. Now, the guy in charge of tires is four, not six, reports from the top boss. "I now know the category business manager," says Wetmore. "The CEO would never have known that before. I get to work with him and ask him what he's doing." Wetmore has also dedicated a lot of energy to bringing up the standard of Canadian Tire's other core categories: hardware and sporting goods - putting the testosterone back into the brand, as he put it early in his tenure. Under Gauld and his predecessor, Wayne Sales, the shopping experience had tipped toward women, with Debbie Travis paint, scented candles and fully furnished bathroom displays. The cult of storage swallowed up 50% more floor space than it had previously. At the same time, the chain had strayed from the holy trinity of Canadian Tire's man-cave religion. "There was a very specific focus in the format to raise the profile of what are sometimes called female-friendly categories that women are more interested in," Wetmore told an investor conference last year. "But I think we made too many compromises in order to achieve that." Reviving Canadian Tire's image as an automotive force was Wetmore's first job. Many of the auto-parts depots, scrapped years ago, have reappeared, making it easier for customers to get what they need on the spot, instead of having to wait for days. Tires used to be hung up so high, you almost needed field glasses to read their specs. Now, new stores display them at eye level, and management has been pushing other dealers to lower their displays, too. There is a greater variety of rim sizes, and a tire selector tool that helps you match your car with the tire it needs. You can even order tires online. Even so, Wetmore's much-heralded plan has yet to yield big results in stores. Sales-per-square foot inched up $3 versus the previous year, to $370. During the same period, gross operating revenue rose only 1.2%, to $5.6 billion.

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and that has worked with such brands as Coca-Cola. the French supermarket chain .ProQuest http://search. there has been civil unrest. The two sides shouldn't have to quibble over minor details. We just didn't see innovative things happening. but they're free to undercut it.and keeping dealers onside . helping to refine Canadian Tire's layout. While the Corp is responsible for buying all goods stocked in stores." says Wetmore. So far." says Morris. featuring a bike rack outside. including long-time CEO Bob Sartor. the dealer determines how many of each item they want to order. and little garden vignettes complete with BBQs. the brainchild of Dunnhumby's two founders. Wetmore's tone has been much more conciliatory. he says. a simple survey of local stores reveals stunning inconsistencies in presentation. the currency's thrifty ambassador . which means that kids on the prowl for a North Face jacket or Columbia boots don't go anywhere near the place. (Dealers also have leeway when it comes to pricing .50 in cash per share . with well-informed staff and furniture displays worthy of high-end specialty stores.making the layout more navigable and customer-friendly. First.ca/cbcabusiness/docview/873490821/. the dealer has to file an application to sell them. drawing hallelujah-like refrains of "Bring it on" from the audience as he talked about the looming retail invasion from the south. And just a few years ago. how they say it. The Dunnhumby team has also identified products that are important to Canadian Tire's core shoppers . diesel products have traditionally been grouped with oils. even groceries. has 15 million members. its Tesco Clubcard. But the idea of ditching its 50-year-old Canadian Tire money along with Sandy McTire. "It's noisy to change things overnight. "We've taken a look over the past years where Sport Chek has opened up stores next to existing Canadian Tire stores.Wetmore's most crucial challenge. Though management would not reveal the details of its particular laws. "One of the first things that struck me about the stores was the difference between their concepts and layouts." says Wetmore.to figure out how to get them to buy more.-based Tesco. which he's convinced will be big sellers with nearby apartment dwellers. Canadian Tire gleaned customer information from its credit card use. rumours have floated that U.through loyalty programs and the like . Dealers knew best how to organize their stores. especially when they have so many bigger issues to confront. In automotive.) Wetmore hints that Forzani's plan to consolidate brands is still on the table. "They have talked for a year or two about banner rationalization. At one point. He sounded part-megachurch leader.net website. Say a dealer who owns a store in downtown Montreal or Vancouver wants to stock pillows. Long before Dunnhumby came on the scene. paying rent and a percentage of sales to head office.. or so the thinking went. a London-based company that specializes in so-called forensic retail analysis. almost 25 years ago." says Feist. it helps retailers collect information on customers' buying habits . retailer Dick's Sporting Goods.a British transplant who has consulted for Tesco and Monoprix. there's its Soviet appreciation for customer service. it is a strained partnership that is governed by 31 committees and a 300-page contract that lays out every detail. I think that's a very clever move. Because a quality shopping experience is not what "Crappy Tire" is known for. (It also comes with a seasoned team of retail execs. "You couldn't put your finger on it. Understandably. "There is a very small overlap.S. for example." Wetmore told the crowd that gathered for the company's annual dealer conference.cleaning products. they started to fly. Its key client. stock their shelves and hire the most effective employees to serve the local clientele. which is. 103 out of 485 retrofits have been completed.Only Chaos Will Save Us . whose official title is vice-president of client solutions. He won't discuss how Canadian Tire will absorb Forzani . transforming them into "smart stores" .just as Mark's Work Wearhouse stores have remained a separate entity. For months. it's just over 50% (financial services.a reality that can put the contract's interests ahead of all else. No question the retail side of Canadian Tire has drifted.and made sure they're stocked in every store. and on and on. relations became so inimical that the dealers tried to purchase the entire company from A.is reportedly facing some resistance from inside. "Forzani is over 70% into apparel and footwear. Billes's three children. will that ever happen at Canadian Tire stores? Wetmore says no .ocls. so will Forzani's many brands. Their hope was that leaving some key decisions to franchisees would lead to a more entrepreneurial spirit. seems to capture the zeitgeist among dealers. and the company is forecasting 60 more this year.." Morris says. "Being able to react to your best customers requires agility and a decision-making process that is really not designed in our existing arrangements with our dealers. Nowadays.'" The dealer system was established by Canadian Tire's founding Billes brothers. a well-ridden hobby horse on the popular canadiantiresucks. and they. "That means taking 12 banners and bringing that down to a much smaller number.CBCA Business . Nestlé and Procter & Gamble. he trouble with making over Canadian Tire is that every detail must first be approved by its network of 485 dealers. who supports Wetmore's initiatives.J. which also includes the golf-geared Nevada Bob's. Enter Dunnhumby. who had a controlling interest in the company. The Forzani deal . often the dealer just doesn't bother. In the meantime.which should be a bonanza for dealers several stores in the Greater Toronto Area were still featuring the same tired mix of batteries. the crowd's enthusiastic reception is a good sign. before Wetmore replies. the new smart stores have waiting areas with flat-screen TVs and Internet access. His presentation ended with a video set to clanging music: little smiley-faced soldiers from Target. right down to who will pay for the high-speed Internet hookup for Canadian Tire's new e-kiosks. too.rap. The dozens of new features include seasonal displays up front. only to be driven back by a vast army of red triangles. in 1934.under this superbrand. then I think the next step is to say. inventory and fixed assets. with stacks of lawn fertilizer and weed whackers near the entrance. if you will .is one of three Dunnhumby-ites assigned to the Corp full-time.the nation's only sports-centric chain. each dealer owns his own store. 'Let's go after this.$26. U. There are times when the contract has direct implications for customers. And." 2 of 4 9/14/2011 10:38 PM . but they were getting lost in the crowd of other performance fluids. Unlike more traditional franchise models. "We had some challenges. With Wetmore in the process of renegotiating the agreement that governs the HQ-dealer relationship. where pressing the customer button sets off a page for a service person . The process can take months. Now Canadian Tire is putting in place a modern. has tripled in size since it started working with the shop in 1995.was a pre-emptive strike that will plug a gaping demographic hole for Canadian Tire.head office sets a ceiling. The relatively new dealership near Toronto's Dundas Square. Another store was more in sync with the season. The deal with Forzani is crucial to Wetmore's effort to revive Canadian Tire's reputation as the go-to sports retailer. trying to determine why certain products sell and others don't.4% or 0. recognize that. which makes reforming the system . meanwhile.com. Suzi Morris . Tom Gauld told a room full of dealers that they were Canadian Tire's biggest problem. "We should minimize the time we spend checking up on each other and maximize the time we spend together. Edmonton dealer Gerry Feist." Wetmore says. In the automotive section. In essence. was expanding to Canada. He also stresses that the deal won't cannibalize Canadian Tire's sales. 70% of overall operating profit came from its retail arm. What they've done is take Nevada Bob's and put it inside Sport Chek.K. Because the Corp doesn't buy pillows. Walmart and Home Depot jumping off Juno Beach-style landing craft onto Canadian shores. which drew a record 445 dealers this past April. I guess." So.) But every store has its own quirks . "Canadian Tire. customer help buttons and help desks. with nary a barbecue or lawn chair in sight. so they really get into the 18-to-35 age group. what happens when an in-store air conditioner breaks. and it's had a 0. Its average shopper is middle-aged. She spends a lot of her time poring over sales data and wandering the aisles. Athletes World and Atmosphere. now generates 30%). With Dunnhumby's help. Once Canadian Tire shifted diesel products to a stand-alone section.5% effect on business. "If you can build a level of trust in your relationship." Wetmore has just spearheaded one of the largest retail acquisitions in recent Canadian history. the prevailing theme is that everything is a negotiation. In the lead-up to the May 2-4 weekend . you place your bet on two or three or four brands and you say this is how we're going to build this business .proquest. is a marvel of navigability and airiness. But dealers can filibuster decisions made by Canadian Tire executives. part-Churchill.who never arrives. whose store is cited as one of the chain's top performers. That doesn't necessarily mean that those banners will disappear. air fresheners . Seventy-five years later. But more important." That simply can't be. Wetmore is beginning a store-by-store retrofit. A few subway stops to the north is the confused realm of the Yonge and Davenport store. in so doing. But he is less confident about his favourite shopping experiences: Which stores excite him? An uncomfortable silence follows. card-based loyalty program that will allow it to collect even more customer data." Wetmore says. and increased staffing in the sporting goods and recreation departments. but her work is paying off. chips and book bins in the centre aisle. which has 300-plus stores south of the border. who is responsible for late or damaged deliveries. No possible scenario is too mundane or minute for inclusion in this tome: how to transfer inventory during an ownership transition. At the beginning of the past decade.

J." says Feist. Mind you. Chief executive officers. she wrested a 61% share from her co-heirs in 1997. Muriel (Moore) Billes (1903-1979) She married A. "This is mine!" He and David were handed a succession of high. a Target is scheduled to replace a Zellers by 2013. but the new process saves dealers weeks in delivery time. insisting instead on the tam-wearing Sandy McTire. The lore has it that she nixed her husband's plan to have the coupons bear the image of a semi-nude Greek goddess. and redoubled focus on the customer experience. Corporate objectives.J. Stephen Canadian Tire Retail (NAICS: 441320. which features a product show spread across 175. Mapleview Drive. I bleed triangles. though only the two sons were groomed as eventual successors. This year. Fred. Corporate objectives. He claimed to have spent much of his time acting as the diplomat with his two siblings. That has changed under Wetmore. so is his brother." On his street." ************ The Billes family tree In 1922. brothers J. "No. with combined savings of $1. Chief executive officers. David Billes (1938-) He's better known for his passion for fast cars . "It's fantastic. where he died 10 years later.com. Brands.W. Tires. She also sued an ex-lover for millions after investing in his failed business. he retired to the Cayman Islands. a symbol of Scottish frugality that survives to this day. Secretive and litigious. David and Martha. he'll tell you how loyal he is to the company: "You know what they say about me . Tires. A Lowe's Home Improvement is a few lights away. he competes with Rona. After Martha bought her brothers out in 1997. Owen. while their baby sister was relegated to the steno pool. Alfred (Fred) William Billes (1935-2007) A.than his role at Canadian Tire.he backed Jacques Villeneuve in the 1986 Grand Prix . who owns a store in the boundless sprawl of Barrie..ProQuest http://search.'s plan was for Martha to become a dietician in the company cafeteria. Alfred Jackson Billes (1902-1995) Among A. She is now majority shareholder of Canadian Tire and sits on the board.to 160 outlets across five provinces. and A. Retrofitting.proquest.ca/cbcabusiness/docview/873490821/. his dad is a Canadian Tire dealer. Billes bought an auto parts dealer on Toronto's Gerrard Street East. and left his younger brother in charge. each a 20% share. Corporate profiles.incorporated as Canadian Tire .800. Brands. Business conditions 873490821 3 of 4 9/14/2011 10:38 PM . Right off the bat.J. It sounds basic enough. its attention to supply-chain issues.when I get cut. "You think. Canadian Tire loaned iPads to store buyers so they could get their orders rolling on the spot.ocls.J.rap. dealers would put in their orders in principle at the event." Innovation is even on display at the convention. A Best Buy will anchor a mall down the road. in 1928 and is credited with coming up with the idea for Canadian Tire money in 1958.'s eldest son is said to have run through store aisles at age 5 shouting. Canada Business And Economics 08277680 Magazines English Feature Retailing industry. Martha Billes (1941-) A. His plan was to leave his children.CBCA Business . Craig Report on Business Magazine 36 2011 Jun 2011 2011 Report on Business Magazine The Globe & Mail division of Bell Globemedia Publishing Inc. He doesn't have much choice. Feist raves about the new openness between head-office buyers and dealers. owns a dealership and is the only third-generation Billes to sit on the board. Retrofitting. Indexing (details) Subjects Locations People Company/Org Title Authors Publication title Pages Publication year Publication Date Year Section Publisher Country of publication Journal Subjects ISSN Source type Language of Publication Document type Subfile ProQuest Document ID Cite Retailing industry.000 square feet. and then follow up with HQ to make an actual purchase. He says he doesn't mind the competition: It just brings more shoppers to the area. And across the way. By 1955. laughing. unconditional tire guarantees and profit-sharing for employees. it's not going to end. and the return of the auto-parts depot and emphasis on automotive . Corporate profiles.'s marketing coups: roller-skating clerks. 447110) Only Chaos Will Save Us Offman. Dale Derbyshire. is also psyched up about the company's return to automotive. died unexpectedly of anemia." "Everyone is energized about what's going on.Anna-Kaisa Walker John William Billes (1896-1956) When J.Only Chaos Will Save Us . . is it ever going to end?" he says. his complicated will blocked his own wife and children from any meaningful stake in the company. All Rights Reserved. He walked away from Canadian Tire for good after Martha's buyout. Costco and Walmart.. In years past.paying jobs within the company starting at a young age. Business conditions Canada Wetmore. north of Toronto. who spent much of the 1980s locked in a battle for control with store dealers and non-voting shareholders.J. they'd expanded their company .which he calls the "cornerstone of our business. 2011 CTVglobemedia Publishing Inc. Her son.W.

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