Back in 1993, with the country in a deep recession, partners at Deloitte noticed a disconnect in Canada’s business world: While the news was dominated by doom and gloom, many of the companies the partners visited through their work were bucking the trend and finding success. “They were navigating turns in the road quicker than others,” says Peter Brown, senior practice leader at Deloitte Canada.
To celebrate these positive stories—along with the leadership teams behind those businesses—Deloitte launched Canada’s Best Managed Companies. Now in its 23rd year, the program prides itself on taking a holistic view of how companies operate and grow. “When you go to school, there’s a lot written about startups and a lot written about the corporate giants,” Brown says. “But there’s not that much out there about these great mid-market companies that are, in many ways, the backbone of our society.”
For Brown, the crucial component is people—finding the right team, investing in employees and having them aligned to a common vision. Time and time again, that’s what he sees as the common element among the top 50, which are otherwise diverse: new economy and old, large and small, with revenues under $20 million or over $1 billion.
“I love that about the program and our winners,” Brown says. “They demonstrate that you can run a great business in any segment and any community by sticking to timeless principles: having a group of people that work well together, doing what you say you’re going to do and working hard at executing it. They’ve figured out that it takes a village to raise a business.”
The evaluation process
Each year, a few hundred companies from across Canada apply to the program. While some find out about it on their own, others are encouraged to submit by peers or Deloitte, CIBC and the other sponsor companies. Coaching teams—each made up of a Deloitte partner or senior manager and a CIBC commercial banker—help applicants assemble submissions that best tell their stories. A short list is then created and evaluated by a panel of judges from all the sponsor companies. “We ensure it’s fair, and they all deserve that national recognition,” Brown says. “It’s a big exercise.”
The evaluation framework has remained the same for 15 years, consisting of four components.
“In this first area, we look to figure out whether they know who their customer is and isn’t; how they are creating more value than their competitor; and whether they communicate the strategy far and wide,” says Brown. Rather than looking strictly at the strategy itself, judges evaluate how that strategy is executed and communicated to employees, and how effectively that works to make all staff aware of company goals and achievements.
Execution is evaluated here: Are things getting done or just being talked about? Is the right senior team in place to execute strategy, and are talent practices in line with that as well? “Do they have the right team, and how well do they walk the talk?” says Brown. “Private companies need to be nimble, more productive and more innovative.”
“The older I get, the more I think this is the magic quadrant,” says Brown. “This involves soft skills: the culture, the alignment of the leadership team, the development of the next generation of leaders, the learning and growth the business goes through.” Here, judges assess practices used to foster culture and teamwork, and review any reports provided by applicants on employee engagement.
“It would be a hollow business award program that didn’t include financial performance,” Brown says, noting a good business doesn’t exist without conservative balance sheets, quality risk management and strong reporting systems. “It doesn’t need to be the best of the best—just in the top 25% in terms of profitability for their sector,” he adds.
The winners’ circle
The 50 companies that make the cut every year aren’t ranked. They simply become the newest members of an elite community of great Canadian businesses, secure in the knowledge that a trusted expert panel has considered them worthy of inclusion. “People compete because it helps them build their brand and because people want to work for well-run companies,” Brown notes. Plus, he says, “it helps them meet a network of other great businesses they can share best practices with.”
Current and previous winners are invited to a symposium and gala for a full day of world-class speakers followed by the largest annual business dinner in the country. “About 2,000 people will come out—it’s a huge black-tie event,” says Brown. “What’s really gratifying is that companies that have been in the program for years, even since day one, keep coming back to celebrate new winners and help build this community.”
Businesses that make the top 50 list for seven years in a row receive an added honour: They are named “platinum” companies, of which there are fewer than 150. “They really are the who’s who of private companies in Canada,” Brown says. “It’s hard to run a great business year after year, and that’s what we’re trying to measure in this program.”
More than just awards
The Best Managed Companies program is about celebrating success, to be sure, but Brown notes that Deloitte has also built a tremendous knowledge base by spending more than two decades evaluating prospering private companies. In studying successful companies year after year, Brown and his colleagues have become valuable resources for any organization that wants to improve its business practices, he says.
The companies that make the list are caring employers who invest in not just their people, but also their communities, Brown says. “These are great companies with great leadership teams that aspire to be more, and they tell a great story that deserves to be told.”
In fact, the program has been so successful in Canada that Deloitte has rolled it out in other countries as well. Ireland, the Netherlands and Mexico now host their own versions, with Chile, the U.K., Belgium and Israel next on the list—all based on the Canadian example. “It’s a great way to foster business excellence,” Brown says.
For Brown, that magic ingredient is always the people—because a strategy and financial plan are nothing without the right team in place to execute. “What really makes this a special program is that it celebrates teamwork,” says Brown, the program’s co-leader. “To build a great company, you have to build a strong foundation. That’s the real secret to this program—it celebrates team success and the ability for a company to grow beyond its original entrepreneur.”