Into the Blast Furnace: The Forging of a CEO's Conscience - Hardcover
From one of Canada’s top CEOs, a heartfelt invitation to reimagine the business world as a place in which conscience and empathy count.
Steel manufacturer Stelco Inc. went into bankruptcy protection in early 2004. There was a lot at stake during the company’s gruelling court-mandated restructuring: 6,000 jobs, 10,000 pensions; the struggling economy of a company town; and the egos and pocketbooks of lawyers, investors, union leaders, politicians and hedge fund managers, each with a special interest to flog and no interest in compromise.
Also on the line was the reputation–and conscience–of CEO Courtney Pratt, who was hired to clean up the mess. To Pratt, survival for Stelco meant attempting to keep the company alive as he ethically reconciled the competing interests, a task made absurdly difficult by the circus-like atmosphere that reigned among those fighting over its future. But at what cost?
To answer that question, Pratt has joined forces with novelist and non-fiction writer Larry Gaudet in a collaboration the two almost jokingly call “magic corporate realism.” Their book provides a thoughtful challenge to the very tired notion that, in the age of Enron and Worldcom, all CEOs are incubated for the sole purpose of looking after their own selfish interests. Pratt’s story, told with imagination, honesty and wit, is about a more important challenge: how to stay human in a bottom-line world.
Steel manufacturer Stelco Inc. went into bankruptcy protection in early 2004. There was a lot at stake during the company’s gruelling court-mandated restructuring: 6,000 jobs, 10,000 pensions; the struggling economy of a company town; and the egos and pocketbooks of lawyers, investors, union leaders, politicians and hedge fund managers, each with a special interest to flog and no interest in compromise.
Also on the line was the reputation–and conscience–of CEO Courtney Pratt, who was hired to clean up the mess. To Pratt, survival for Stelco meant attempting to keep the company alive as he ethically reconciled the competing interests, a task made absurdly difficult by the circus-like atmosphere that reigned among those fighting over its future. But at what cost?
To answer that question, Pratt has joined forces with novelist and non-fiction writer Larry Gaudet in a collaboration the two almost jokingly call “magic corporate realism.” Their book provides a thoughtful challenge to the very tired notion that, in the age of Enron and Worldcom, all CEOs are incubated for the sole purpose of looking after their own selfish interests. Pratt’s story, told with imagination, honesty and wit, is about a more important challenge: how to stay human in a bottom-line world.
"synopsis" may belong to another edition of this title.
About the Author:
Courtney Pratt is one of Canada’s most accomplished business executives. He has served as a board director, chairman, CEO and president at four large corporations over the past two decades, including Noranda and Toronto Hydro. He is now a director for some of the country’s leading corporations and is involved with charitable, educational and health care organizations.
Larry Gaudet is the author of two acclaimed novels, Media Therapy and The Peacekeeper’s Teahouse, and the recently published nonfiction book Safe Haven. He is also an experienced corporate writer, management consultant and intermittent venture capitalist.
Excerpt. © Reprinted by permission. All rights reserved.:
Larry Gaudet is the author of two acclaimed novels, Media Therapy and The Peacekeeper’s Teahouse, and the recently published nonfiction book Safe Haven. He is also an experienced corporate writer, management consultant and intermittent venture capitalist.
TOO NICE A GUY
September 2007
It’s a blustery lakeside morning, threatening rain. From the upstairs family room in our townhouse, located in a suburb west of Toronto, I have views to the marina around the next cove, a five-minute walk along the pedestrian path that skirts Lake Ontario. The marina isn’t a big operation, and is used mainly by recreational boaters. Surrounding it is persuasive evidence of gentrification: a hotel, shopping malls, condos, swatches of new parkland under which lie the remains of commercial life from generations past–the lost world of factories, shipping depots, stockyards. The jetty, constructed from boulders, slices out into the lake for perhaps three hundred metres, and my gaze tends to wander to where it ends. A tanker has been scuttled out there, parallel to the shoreline, and now functions as a sea wall. Up close, the vessel is probably a barnacled ruin, all rust and missing rivets. But from here it looks beautiful to me.
I’ve long been fascinated by industrial infrastructure: manufacturing plants, construction sites with soaring cranes and giant dump trucks, mining operations, oil rigs, harbours, electrical transmission towers. It’s a cliché to say that men have a special attachment to machines, or to technology in general. But for much of my career, spanning more than thirty years in business, I’ve been at the helm of companies involved in heavy industrial activity. I know all too well that what looks benignly impressive from a distance feels different–more dangerous–once you’re up close. But if you get past your awe (or fear) of large-scale mechanized activity, you realize these operations need people, and lots of them, to function effectively. When I stare admiringly at that tanker, I also see what’s missing: the crew on deck or below, sweating in the boiler room and the cargo hold, everyone doing back-breaking labour, day in, day out.
This ship has a story to tell, or many stories. And while a good detective could likely dredge up old-timers who swabbed decks, coiled heavy ropes and set the rudder, before long only a few will be left to talk about what happened on those stormy nights on rough seas when the ship nearly went down. And while that’s a shame, it’s also reality. Stories die out if they’re not shared, and the same goes for the insights that good stories offer. That’s one reason why Larry Gaudet and I crafted this story about my tenure as the CEO of the steelmaker Stelco Inc., one of the great names from Canada’s industrial heritage and the pride of Hamilton, Ontario, for nearly a century now. It’s a story like no other in the history of Canadian business–a rollicking corporate soap opera, at times comic, but very nearly tragic. The resolution was in doubt until the very end, after playing out for two years in bold headlines in the media, where the reporting, on occasion, seemed to me a little less than informed or objective and more like character assassination, often directed at me.
When I joined Stelco in January 2004 after having served on its board of directors for nearly two years before that, my assignment was to help steer the revival of what had become an uncompetitive steel producer, struggling under high debts, including the $1.3 billion it owed to its employee pension plans. For two years or so, I was involved in making exceptionally difficult decisions that moved Stelco through a painful–and insanely protracted–process to emerge from the protection of the Canadian bankruptcy court into which we’d taken the company after years of losing money.
How to convey what that experience was like?
I was flipping TV channels one night a while back and found myself watching a show about a magician attempting to set a world record for holding his breath underwater, submerged in a glass tank with the cameras and lights on him, the crowd cheering. He intended to stay there–and remain alive–for something like eight or nine minutes. It was excruciating to watch. When it became clear that he was on the verge of unconsciousness and was inhaling water, his assistants went into the tank in scuba gear and pulled him out, just in time. All this was broadcast in prime time, a riveting spectacle, although also completely ridiculous, a manufactured crisis. But that’s entertainment for you. The analogy to Stelco–and it’s not perfect, I realize–is that we, as a company, were submerged underwater for the corporate equivalent of ten or maybe fifteen minutes, pretty much breathing water toward the end, floating face down in bankruptcy court and actually prevented from surfacing at times by those who put our survival at risk to serve their own needs.
None of this was produced for entertainment purposes, although there were certainly blockbuster costs. Our restructuring tallied $200 million plus in legal and consulting fees–money that would have been much better invested in making the company more competitive. But this was the price the company and its employees and shareholders paid for letting Stelco slide perilously close to ruin through years of losing money and of never resolving the fractious relations between management and the unions. Stelco’s situation was far from unique, with dozens of steel companies in North America having already been through a major restructuring involving the courts. But Stelco was among the last holdouts to face the reality that it needed a total financial makeover to compete in a North American steel market increasingly subject to powerful global forces. And because restructuring had been delayed for so long, the disease of uncompetitiveness had progressed very deep, making our task much more difficult.
We stayed underwater until we fixed our finances. If we hadn’t, in all likelihood a corpse–not a company–would have floated up. By the time we did come to the surface, we’d been in bankruptcy court for twenty-six months, an achievement one shouldn’t be proud of. However, with so many cooks crowded into our restructuring kitchen–company executives, a battalion of lawyers, a Superior Court judge, court monitors, financial advisors, creditors, restructuring consultants, angry shareholders, hedge funds, government bureaucrats, union leaders and media commentators–it’s a wonder we made it out at all.
The Stelco story, as I hope you’ll come to agree, is rich with conflict and conflicted characters, including myself, and it has everything you’d want in terms of suspense and plot twists that brought out the best and the worst in the people involved. This is only one version of the Stelco story, my version, a snapshot through the lens of my memories and biases. It reflects my way of looking at the world, supported by the facts as I understood them to be, if not always how I wanted them to be. The stakes for Stelco and for me, as its CEO, had never been higher, and the consequences of failure would have been disastrous–liquidation, layoffs, economic catastrophe for Hamilton. It was the wildest, most challenging assignment of my professional life. And while this restructuring process unleashed plenty of rage and a few tears, the sound that lingers in my ears is the laughter of my colleagues–and pretty much everyone on all sides of the story–as we worked together, argued, negotiated and fought through long days and even longer nights to save the company from being scuttled.
Even when things were at their absolute worst, there was laughter–the most redemptive of all human sounds.
I hear Alexa in the next room on the phone, talking to our daughter-in-law about the new baby, an exchange between mother and grandmother about sleeping patterns, dietary quirks, teething. Our two sons are grown men, both fathers themselves, and by now I consider myself fairly fluent in on-demand parenting advice. But listening to my wife is always a tutorial on empathy in action.
In Alexa’s voice are proven reserves of patience and wisdom shared without conveying that she always knows best. Still, after our thirty-nine years together, it never fails to amaze me how judicious she can be, how sensitive to the nuances in a conversation. As I eavesdrop for a minute, I hear that she listens at least as much as she talks, reacts as much as initiates and always responds on the basis that the quality of the ritual is as important as the advice dispensed.
In the midst of the restructuring, Alexa was diagnosed with cancer. There’s not much I will divulge about that, out of respect for her privacy and mine. Anyone who has had a life-threatening illness understands the fear that metastasizes in you, and everyone close to you, through rounds of medical consultations, invasive surgery and the worries that come at night when the data you found on the Internet about mortality rates presents itself for sleepless contemplation. Alexa is in remission now, a full recovery, although the scars–in every sense–are fresh enough.
Her illness was one of many factors that affected how I made decisions that had consequences for thousands of other people at Stelco. And the fact that we were facing her illness probably affected those decisions for the better, if truth be told, even in those moments when all I could really focus on was her terrible confrontation with cancer.
You can choose not to learn from the hardest life experiences. Or you can absorb the blow and, if you’re lucky, use it to ...
September 2007
It’s a blustery lakeside morning, threatening rain. From the upstairs family room in our townhouse, located in a suburb west of Toronto, I have views to the marina around the next cove, a five-minute walk along the pedestrian path that skirts Lake Ontario. The marina isn’t a big operation, and is used mainly by recreational boaters. Surrounding it is persuasive evidence of gentrification: a hotel, shopping malls, condos, swatches of new parkland under which lie the remains of commercial life from generations past–the lost world of factories, shipping depots, stockyards. The jetty, constructed from boulders, slices out into the lake for perhaps three hundred metres, and my gaze tends to wander to where it ends. A tanker has been scuttled out there, parallel to the shoreline, and now functions as a sea wall. Up close, the vessel is probably a barnacled ruin, all rust and missing rivets. But from here it looks beautiful to me.
I’ve long been fascinated by industrial infrastructure: manufacturing plants, construction sites with soaring cranes and giant dump trucks, mining operations, oil rigs, harbours, electrical transmission towers. It’s a cliché to say that men have a special attachment to machines, or to technology in general. But for much of my career, spanning more than thirty years in business, I’ve been at the helm of companies involved in heavy industrial activity. I know all too well that what looks benignly impressive from a distance feels different–more dangerous–once you’re up close. But if you get past your awe (or fear) of large-scale mechanized activity, you realize these operations need people, and lots of them, to function effectively. When I stare admiringly at that tanker, I also see what’s missing: the crew on deck or below, sweating in the boiler room and the cargo hold, everyone doing back-breaking labour, day in, day out.
This ship has a story to tell, or many stories. And while a good detective could likely dredge up old-timers who swabbed decks, coiled heavy ropes and set the rudder, before long only a few will be left to talk about what happened on those stormy nights on rough seas when the ship nearly went down. And while that’s a shame, it’s also reality. Stories die out if they’re not shared, and the same goes for the insights that good stories offer. That’s one reason why Larry Gaudet and I crafted this story about my tenure as the CEO of the steelmaker Stelco Inc., one of the great names from Canada’s industrial heritage and the pride of Hamilton, Ontario, for nearly a century now. It’s a story like no other in the history of Canadian business–a rollicking corporate soap opera, at times comic, but very nearly tragic. The resolution was in doubt until the very end, after playing out for two years in bold headlines in the media, where the reporting, on occasion, seemed to me a little less than informed or objective and more like character assassination, often directed at me.
When I joined Stelco in January 2004 after having served on its board of directors for nearly two years before that, my assignment was to help steer the revival of what had become an uncompetitive steel producer, struggling under high debts, including the $1.3 billion it owed to its employee pension plans. For two years or so, I was involved in making exceptionally difficult decisions that moved Stelco through a painful–and insanely protracted–process to emerge from the protection of the Canadian bankruptcy court into which we’d taken the company after years of losing money.
How to convey what that experience was like?
I was flipping TV channels one night a while back and found myself watching a show about a magician attempting to set a world record for holding his breath underwater, submerged in a glass tank with the cameras and lights on him, the crowd cheering. He intended to stay there–and remain alive–for something like eight or nine minutes. It was excruciating to watch. When it became clear that he was on the verge of unconsciousness and was inhaling water, his assistants went into the tank in scuba gear and pulled him out, just in time. All this was broadcast in prime time, a riveting spectacle, although also completely ridiculous, a manufactured crisis. But that’s entertainment for you. The analogy to Stelco–and it’s not perfect, I realize–is that we, as a company, were submerged underwater for the corporate equivalent of ten or maybe fifteen minutes, pretty much breathing water toward the end, floating face down in bankruptcy court and actually prevented from surfacing at times by those who put our survival at risk to serve their own needs.
None of this was produced for entertainment purposes, although there were certainly blockbuster costs. Our restructuring tallied $200 million plus in legal and consulting fees–money that would have been much better invested in making the company more competitive. But this was the price the company and its employees and shareholders paid for letting Stelco slide perilously close to ruin through years of losing money and of never resolving the fractious relations between management and the unions. Stelco’s situation was far from unique, with dozens of steel companies in North America having already been through a major restructuring involving the courts. But Stelco was among the last holdouts to face the reality that it needed a total financial makeover to compete in a North American steel market increasingly subject to powerful global forces. And because restructuring had been delayed for so long, the disease of uncompetitiveness had progressed very deep, making our task much more difficult.
We stayed underwater until we fixed our finances. If we hadn’t, in all likelihood a corpse–not a company–would have floated up. By the time we did come to the surface, we’d been in bankruptcy court for twenty-six months, an achievement one shouldn’t be proud of. However, with so many cooks crowded into our restructuring kitchen–company executives, a battalion of lawyers, a Superior Court judge, court monitors, financial advisors, creditors, restructuring consultants, angry shareholders, hedge funds, government bureaucrats, union leaders and media commentators–it’s a wonder we made it out at all.
The Stelco story, as I hope you’ll come to agree, is rich with conflict and conflicted characters, including myself, and it has everything you’d want in terms of suspense and plot twists that brought out the best and the worst in the people involved. This is only one version of the Stelco story, my version, a snapshot through the lens of my memories and biases. It reflects my way of looking at the world, supported by the facts as I understood them to be, if not always how I wanted them to be. The stakes for Stelco and for me, as its CEO, had never been higher, and the consequences of failure would have been disastrous–liquidation, layoffs, economic catastrophe for Hamilton. It was the wildest, most challenging assignment of my professional life. And while this restructuring process unleashed plenty of rage and a few tears, the sound that lingers in my ears is the laughter of my colleagues–and pretty much everyone on all sides of the story–as we worked together, argued, negotiated and fought through long days and even longer nights to save the company from being scuttled.
Even when things were at their absolute worst, there was laughter–the most redemptive of all human sounds.
I hear Alexa in the next room on the phone, talking to our daughter-in-law about the new baby, an exchange between mother and grandmother about sleeping patterns, dietary quirks, teething. Our two sons are grown men, both fathers themselves, and by now I consider myself fairly fluent in on-demand parenting advice. But listening to my wife is always a tutorial on empathy in action.
In Alexa’s voice are proven reserves of patience and wisdom shared without conveying that she always knows best. Still, after our thirty-nine years together, it never fails to amaze me how judicious she can be, how sensitive to the nuances in a conversation. As I eavesdrop for a minute, I hear that she listens at least as much as she talks, reacts as much as initiates and always responds on the basis that the quality of the ritual is as important as the advice dispensed.
In the midst of the restructuring, Alexa was diagnosed with cancer. There’s not much I will divulge about that, out of respect for her privacy and mine. Anyone who has had a life-threatening illness understands the fear that metastasizes in you, and everyone close to you, through rounds of medical consultations, invasive surgery and the worries that come at night when the data you found on the Internet about mortality rates presents itself for sleepless contemplation. Alexa is in remission now, a full recovery, although the scars–in every sense–are fresh enough.
Her illness was one of many factors that affected how I made decisions that had consequences for thousands of other people at Stelco. And the fact that we were facing her illness probably affected those decisions for the better, if truth be told, even in those moments when all I could really focus on was her terrible confrontation with cancer.
You can choose not to learn from the hardest life experiences. Or you can absorb the blow and, if you’re lucky, use it to ...
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- PublisherRandom House Canada
- Publication date2008
- ISBN 10 0307356035
- ISBN 13 9780307356031
- BindingHardcover
- Number of pages352
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Into the Blast Furnace: The Forging of a CEO's Conscience
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Into The Blast Furnace : The Forging Of A CEO's Conscience
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