Canadian leadership: Digital innovation and transformation in industrials

In this podcast, Heidrick & Struggles’ Emilie Johnson speaks to Chuck Magro, the former president and CEO of Nutrien, the world's largest crop nutrient company and the largest agricultural retailer in North America and Australia. Magro discusses digital innovation in the industrial sectors, including oil and gas, mining, chemicals, agriculture, and forestry—what leaders need to know and what abilities they need to cultivate. He also talks about how important it is for leaders to be able to tell the stories of their companies and industry, encourages inter-industry learning, and shares the lessons he’s learned throughout his experiences dealing with M&A integration.

Some questions answered in this episode include the following:

• (1:46) Based on your experience, what are the most exciting growth opportunities you see in Canada at this point?
• (3:49) What types of leaders do you think all these new opportunities will require?
• (5:53) Driving the technology and digital innovation, that's been a big part of your experience. What leadership strategies and skills have you discovered are imperative to success as you lead these types of transformations?
• (8:51) How have you thought about communicating the Canadian agriculture industry story and what do you think is important for all industrial leaders to think about when developing this type of communication style?
• (11:39) Another area in which you've clearly developed a lot of experience is acquisition and merger integration. Based on the integrations you've led, what are the critical leadership lessons you've learned in driving value through that integration?

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation.

Emilie Johnson: Hi, I'm Emilie Johnson, principal at Heidrick & Struggles and a member of the global Industrial Practice. Our H&S Canada leadership series shares timely and relevant leadership insights on what organizations and leaders should be thinking about to stay competitive, both in Canada and on the global stage.

In today's podcast, I'm excited to be talking to Chuck Magro. Chuck brings nearly 30 years of experience across the agriculture and chemicals industries, including over 15 years with Nova Chemicals and 12 years with Agrium and Nutrien. As president and CEO of Agrium, Chuck led the company’s $36 billion merger of equals with Potash Corporation of Saskatchewan to form Nutrien, which he then led for three years as president and CEO.

With annual revenues in excess of $20 billion and 25,000 employees worldwide, Nutrien is the world's largest crop nutrient company, the largest agricultural retailer in North America and Australia, and one of Canada's top 20 largest corporations. Chuck currently sits on the Canadian Pension Plan Investment Board and has held several other board roles including with the Business Council of Canada, the Business Council of Alberta, and the International Fertilizer Industry Association.

Chuck, welcome, and thank you for taking the time to speak with us today.

Chuck Magro: Hi, Emily. It's great to be here. Thanks for having me.

Emilie Johnson: Chuck, one of the great things about your background is that you've had the chance to develop your perspective based on a broad cross section of Canada's key industries—in a very global perspective as well. Based on that experience, what are the most exciting growth opportunities you see in Canada at this point?

Chuck Magro: Right. So, first of all, what I would say is that I'm very optimistic about Canada's growth prospects. We're a country that is actually blessed with having ample natural resources and such a talented and educated and skilled workforce. And I know there's been a lot of media attention around some of the newer economy driving the economy in Canada—digital e-commerce. And I think these things are really important for the Canadian economy, but my background is really in more of a traditional economy, in the industrial space. So, oil and gas, mining chemicals, agriculture, and forestry. And I think that where the new economy meets these older, more traditional industries, is really, really fascinating. I think what we're starting to see is that companies—and even the start-up spaces—are starting to use digital investments in big data, artificial intelligence, and machine learning. We're starting to see advancements in material sciences and bioscience that will really transform or even in some cases disrupt these more traditional industries. And I think that's going to be great for the industry; I think it's going to be great for Canada. In fact, when you look at what these advancements are trying to do, they're trying to make these industries safer and healthier for people, more productive, and, of course, more sustainable.

These industries typically have been really dominated by large organizations because, of course, the economies of scale are so very, very important. But what you're starting to see now in Canada is that there are smaller startups happening in these industries as well. It’s creating an ecosystem of talent innovation. And I think that that's going to be great for the Canadian economy. What I would say is, overall, I think that a more diversified, balanced economy will be good for all Canadians.

Emilie Johnson: What types of leaders do you think all these new opportunities will require? How does that differ from our traditional companies?

Chuck Magro: Well, some of the important leadership skills that have always been there are still front and center when it comes to what makes a good leader. We need leaders that are authentic, and that are purpose driven with strong visions.

And I think it’s important to have leaders who love what they do. It's a big part of our lives, as leaders, running companies. And it's really important that we love what we do, but I think that there is a modern take on the leader that we need for the future. Obviously, we need leaders with very strong global perspectives, because the world, now more than ever, is interconnected. Geopolitics, trade, competition, most is likely going to come from outside of Canada, and so we need Canadian leaders to really understand global dynamics.

I think the other trait I would say that leaders need now more than ever is that they have to be able to build strong and sustainable cultures. We understand the organization and long-term success factors more than we ever have, and it's really important that culture and culture building are key tools in the leader's toolkit, not only for getting results because the world is very competitive, but because the “what” and the “how” of how those results are generated have never been more important than they are in today's world.

The other thing I'd say is that if you think about leadership traits, all leaders—whether you're running a one-hundred-thousand-dollar-revenue company or a one-hundred-billion-dollar company—all leaders need to have an entrepreneurial mindset. [Successful] organizations try new things, move quickly, embrace change, and fail fast. Before, that used to be quite a criticism; leaders would never talk about their failures. Now, I'm starting to see many more progressive leaders really start to use case studies and communicate what worked and what hasn't and what they learned from it.

Emilie Johnson: Driving the technology and digital innovation, that's been a big part of your experience. What leadership strategies and skills have you discovered are imperative to success as you lead these types of transformations?

Chuck Magro: I've had limited opportunities to study digital and innovation, but what I have really understood, and on which we’ve had some really good success with, is incorporating digital innovation into our core strategy as an organization.

There seem to be some really key themes, and I think these will apply fairly broadly to most organizations trying to embrace agile innovation. The thing that certainly has worked for me and for the organizations that I've been involved with is that, first and foremost, there needs to be a clear business purpose for the digital innovation. It's like any other capital allocation investment or decision that we need to make. What is the purpose of that investment and what are we trying to accomplish? That needs to be front and center.

I think the other thing that I've observed is that your core business, whatever that is, needs to own the digital innovation—it can't be in a research and development lab. It can't be a project on the side. There has to be an integrated framework wherein the digital innovation is tied in with the overall core strategy of the organization. And if you start with those general principals, what you'll find is that it will cause the organization to change internal business processes, HR programs, and incentive programs, which are foundational, I think, to how organizations really drive transformational change. And for most organizations, that's what this is all about.

Emilie Johnson: And what about derailers? What are the biggest derailers in your mind for these types of transformation?

Chuck Magro: Well, when we first embarked on our digital journey, we actually took about a year to study companies that have been done this really well and companies that have had pretty significant failures in their adoption of digital innovation. One of the key things that stood out in the question of whether the organization accepted or rejected the digital innovation was that, in the companies that failed, digital innovation was thought of as a competitor to the core business. And that's because there wasn't an integration between incentive programs, compensation, or even cultural programs and systems. And that led to the core business really starting to compete against the new digital innovation. So, one of the major lessons I took away is that leaders need to work toward a seamless framework where the digital innovation will not only be supported but embraced, and where people will be rewarded for its adoption.

Emilie Johnson: That's fascinating. So many things to consider when driving innovation.

Switching gears a bit here, I've heard you talk a lot about the importance of the agriculture industry communicating its story, which is something other leaders talk about quite a bit as well, particularly within the natural resources sectors. Communicating a story, particularly to an end-consumer, is not something that was historically focused on. How have you thought about communicating the Canadian agriculture industry story and what do you think is important for all industrial leaders to think about when developing this type of communication style?

Chuck Magro: I think this is a great question. I'll talk about agriculture, but I think it is, as you say, so much broader. In fact, most natural resource–based industries do a pretty lousy job of telling their stories. The industry participants who have deep expertise are not talking about all the wonderful things that are happening or telling their stories about their industry and the progress that they're making and, of course, the challenges that they have.

If you just look at Canadian agriculture—first of all, I'm a very proud participant in the Canadian agriculture scene. I've been all over the world and I've talked to farmers basically of all kinds, and Canadian farmers are some of the most sophisticated and sustainable farmers on the planet. And if you look at the percentage of sustainable farming that Canadian farmers use, it's by far a much higher percentage than almost any other developed agricultural economy in the world. Canadian farmers are leading the pack. It's obvious when you look at them. And then, if you look at Canada as an agricultural producing country, it’s only one of a very small number of countries in the world that actually export food. And we need to be proud of that as Canadians and as a Canadian agricultural industry, because we're doing our part to feed the planet; we're doing our part to produce more with less. And yes, there are opportunities to improve, but that is a fantastic story. And the reason that I'm so passionate about telling the story is because 40 or 50 years ago everyone had a connection to the farm; many of us came off the farm, multiple generations. And today, that's just not the case, so there's less known about what Canadian farmers actually do. So that's why it's so very important to tell the story.

And, from a leadership perspective—talking about tools in a toolkit—tell a story, help people connect to it. You know, our brains are wired to understand and to enjoy stories. It was a primary mode of education for many of us for hundreds of years. Leaders need to get good at telling stories both internally and externally. I think it will help these industries that, you know, to be candid, are misunderstood on multiple dimensions.

Emilie Johnson: Completely agreed. Thanks for that. Chuck, another area where you've clearly developed a lot of experience is acquisition and merger integration. Based on the integrations you've led, what are the critical leadership lessons you've learned in driving value through that integration?

Chuck Magro: Yeah. I probably have more experience here that I care to admit. I've been involved in, in one way or another, over a hundred acquisitions. Some were exceedingly small; some were quite large. And then, as you said, the mega-merger of $36 billion. Size is an important factor, but it sometimes it doesn't determine whether the merger is going to be easier.

When you look at the success factors of mergers and acquisitions, companies need to build core competency around it. But it's really a fascinating experience when you've been through as many as I've been. And if you start thinking about what you need to get right to make a merger or acquisition successful, the textbooks will all talk about the need have strategic fit or industrial logic. And the math, of course, has to create value. And most companies will hire an army of specialists and advisors and consultants to help with that, and it’s important and it makes sure that the organizations get it right. But I think what I've always found absolutely fascinating is that the actual work starts when the deal is signed and all the consultants go home and the leadership team is left to deliver the results. I’ve found that the biggest determiner of success or failure really comes down to the people involved and the culture of the organization. And, look, I've made a lot of mistakes in this area as a leader by not paying enough attention to these critical issues.

But when you look at the companies that do this really, really well, it is a muscle that needs to be built up—and it can be built up. But what I find is that the leaders in those organizations understand that and they're really focused on the people and they're communicating very closely with the organization and all their external stakeholders on what's working and what's not working. And I think an important differentiation to be made is that companies that get this right are listening. They're not just communicating; they're listening to their people. They've got mechanisms in place and with today's technology, there's no excuse. Whether it's mini pulse surveys or just candid conversations using Zoom, you can get a very good pulse of how the organization is thinking and, more importantly, how its people feeling about the journey that they're on when it comes to the integration of the organization.

So those are some of the things that I've learned, the things that really have made difference in for M&A. It’s the left-brain stuff, right? The numbers have to work, but then you have to spend most of the time listening, communicating, and ensuring that you're putting in place the right culture to embrace the change that organizations will go through with basically any M&A process.

Emilie Johnson: I love that call-out on the listening part. It sounds so simple, but it’s probably often overlooked.

In the spirit of inter-industry learning (which is key to our purpose here), based on the cross-section of industries you're exposed to, are there any other opportunities you see for knowledge sharing and learning from a leadership perspective that we haven't touched on?

Chuck Magro: Categorically yes. I've been lucky to be in multiple industries over my career, and I always find it fascinating when I go to a new industry, because usually what happens is people are proud of the industry they work in. And I love to see that, but they also think that they're a little bit more unique than they really are. And they usually think that they're a little bit better than they really are. So then what happens most of the time is that the leadership of these organizations under-invest in, sort of, looking beyond the fences of their industry. And there's so much you can learn by looking at other industries and learning from other leaders.

And certainly, from my perspective, what I have found is that building a good network inside of your industry is mission critical. Every leader will tell you. But building your network outside of your industry is as important as building it within. We talked a little bit already about just the challenges and the opportunities out there. The world is just so competitive, and we have some really big issues that we need to solve. I'll call out one: climate change. I think it is one of the foremost challenges of our time. No one company, no one country, no one industry, can really solve it. So how are we going to deal with climate change?

Governments and company leaders will need to really step back and learn from each other. Leaders must also work together and build a framework where we can tackle such an enormous opportunity of challenge as climate change. And I'm optimistic that that is happening. I think that most industries that I've been in have embraced the notion that climate change requires purpose, action, change, and learning. And I think that what you're going to see is that addressing climate change will become one of our greatest success factors. And business leaders, if we can embrace it, then can use those skills to learn about other parts of, of their industry and opportunities beyond that.

I'll give you one other quick example in safety: trying to keep our people safe. I come out of the industrial world where we're moving big equipment; we're mining, we're producing. And one of our core values has always been to keep our people safe. But we don't have the textbook on what that means, and so we've looked at other industries. No company would say that they compete on safety. They would gladly open their doors and share everything. The companies I've been involved with willingly did so. So, I think the same thing needs to happen with climate change action.

Emilie Johnson: That makes sense. And that cross-pollination between industries—it can happen through the inter-industry collaboration and networking. It can also happen through recruitment and that's certainly something that H&S feels strongly about and tries to contribute to—actually cross-pollinating by introducing people from different industries to one another’s professions.

As we bring this conversation to a close, I have one final question. As you reflect back and think about the future, what are the most important ways your organizations are building on the lessons of 2020?

Chuck Magro: I think there's going to be lots of lessons learned here. And I think there's a lot of positives that have come out of such a horrible situation. I'll start by saying, look, 2020 will go down in the history books as an impact to the family. Yes, of course there was the economic challenges, but people lost loved ones. We need to remember that first and foremost this was a human suffering story. 

That being said, businesses transformed out of the need to survive. And there is a new reality now, from a business model perspective, that I think is going to be quite exciting in the future. Many industries have had to change their business models basically on the fly—changes that would typically have taken decades took literally weeks—involving everything from the office environment to ensuring business continuity, as well as changing consumer behavior and demands. All of these happened at the speed of light, and leaders, of course, were forced to adjust, which I found extremely fascinating. I think that what you're going to find is that organizations are going to become more employee centric—which I think is going to be great—and more customer centric.

And I think companies have to simplify their offerings and their businesses. And, in general, what they did in 2020 is focused on their customers and employees. And out of that, some really neat and cool business processes happened.

Virtual learning, virtual offices, all these things that people are still trying to figure out now, what does it mean in the new world? I think we'll find the right spot for most organizations, but I am encouraged because I think we just saw probably a decade’s worth of change transformation and learning in a single year. And that's going to have profound impacts, which makes me excited about the future.

Emilie Johnson: Absolutely. Chuck, thank you so much for taking the time to speak with us today. These insights have been fantastic. And thank you to our audience for listening to the Heidrick and struggles leadership podcast. And this episode of our Canada leadership series.

Thanks for listening to the Heidrick & Struggles Leadership Podcast. To make sure you don’t miss more future-shaping ideas and conversations, please subscribe to our channel on the podcast app. And if you’re listening via LinkedIn, Twitter, or YouTube, why not share this with your connections? Until next time.

About the interviewer

Emilie Johnson (ejohnson@heidrick.com) is a principal in Heidrick & Struggles' Calgary office and a member of the Industrial Practice.