Ian White’s mandate is to downsize the monopoly grain marketer into one of the players.FRED GREENSLADE/Reuters
Ian White has one of Canada's trickiest management mandates. The CEO of the Canadian Wheat Board is radically downsizing the former monopoly grain marketer while guiding it into a new era where it must compete to survive. This seasoned Australian executive must also prepare the government-controlled CWB for privatization. The Harper government stripped it of monopoly status seven months ago, but it has stayed in the news – by rebranding, edging into new products and rolling out an ad showing a short-skirted young woman in a cowboy hat straddling a corral fence. The ad was criticized by some as sexist, but it got people discussing something besides the political tumult around this 78-year-old institution.
When you arrived in Winnipeg from Australia five years ago, did you know what would happen?
I knew the Canadian Wheat Board from a competitive sense, as one of the largest sellers of grain in the world. The government's intent was clear [in terms of removing the CWB monopoly]; they were in a minority government. I knew of the possibility changes might occur but, when I arrived, no real change could occur.
Did you have to stay out of the debate over the board's future?
It was more of a political and ideological battle. I tried to concentrate on the business issues because we still had a very large operation and were still selling 20-million-odd tonnes of wheat around the world. We had to make sure we did that as well as possible.
Since losing the board's exclusive marketing role last August, how has the process gone?
We've gone through the major work in the transition from being the only seller of export wheat and barley to being just one of the players. It takes the organization into a different mode – more competitive, smaller, not doing so much industry work. The CWB used to do a number of things that were classified as being for industry benefit. Now we basically concentrate on our business and look at what privatization means down the track.
What are the hardest changes?
People are always the tough issues. You wouldn't be a good manager if you didn't feel for all the people who had to change. And we had a cultural change, going from statutory mode to a surplus-driven mode. We now have to look at making a profit. The CWB never had to think about it before.
Have you dramatically slimmed down?
We've been in the process of doing that. We were 420 people, and as we go down in numbers, we are judging what is exactly the best configuration. We're talking maybe about 100 people [in the future] ... We're probably down to 125 now.
Who will do your sales and marketing now?
We've worked very hard to retain key sales and marketing people. They are doing slightly different roles in how they market, and they are trading more. They are valuable for their relationships with customers. We've also tried to keep an expert logistics group, and we've got an accounting and small administration team that has taken us through this ...
We realized we could reduce our IT people once we got our IT systems into a mode where we knew what we were doing. We were running a cash-advance program for the wheat industry and that moved to a different organization. Our administrative people were reduced; communications and policy functions were no longer needed to the extent they were.
How did you approach the people changes?
We talked to our staff a lot; communications is critical in a change like this. We tried to make clear to every person what we wanted for them – whether we thought they had a job in the long term or a transitional job. To the great credit of many, they were prepared to work, even knowing they would get severed. We wanted them maybe for x number of months and there was a date when they would be no longer with us. Just about everybody put in massive effort. It showed the character of the people.
What about your footprint in Winnipeg and elsewhere?
We do have our building for sale and we are not occupying as much space, and so are looking at what to do with some of that space. Our offices in Beijing and Tokyo are still open. It was important to maintain as much customer contact as we could. We will look at these things over time, but at this stage we have kept them open.
With grain prices so high, has your pooled-sales option suffered because farmers found it so attractive to sell on their own?
We are learning these things as we go through this process. When you take a system like this and quickly deregulate it, and bring all those competitive pressures to bear, there is a sorting out period. We have to have [pooling] products responsive to the farmer the whole year round, and we are learning that.
But no question, through a number of years and price cycles, pooling will be more attractive than at other times. It is easy for a farmer to take a cash price when prices are like they've been. But our objective this first year was to make the transition and develop our products. We're not unhappy with how it is unfolding.
And your volumes?
They obviously are much lower. We're not disclosing the amount yet. We aimed to get in the range of 20-30 per cent of the market in terms of crop; at the end of the day in total volume [for the crop year ending July 31, 2013], we won't be too far off that. We started slowly with canola and we will build that, and we will get into other crops such as peas.
Do you feel the contentious ad – based on a 1969 print and aimed at promoting winter pooling to farmers – at least got people talking?
We don't own assets in the countryside. The companies that own the assets have the daily contact with the farmer. We have a limited number of people in the field. We felt we needed to keep our message going in the country and I suppose there might have been the odd eyebrow raised about a particular ad. But we will continue to look at how we can be noticed and try to be as relevant to farmers' business as we can.
So you didn't mind the talk?
No. It's interesting that it was not just the farming community who were talking about the ad, but the general community. I've talked to lots and lots of farmers since then and in general they have said, 'Good on you, it was something different.'
How muchlonger will you stay in the job?
My current term ends in 2014, but we will have to see what transpires. I have a vested interest in seeing the CWB be successful and I want to stay to see that happen. I wouldn't like to discuss that – it is an issue for the CWB board and the government ...
We do need to privatize the CWB. It's a matter of getting shareholders [as owners] and to invest capital – and take it away from government ownership. We have a five-year time horizon from August last year. We have to have a plan to government well before that [deadline], and we're working as fast as we can.
What kind of company will this be?
The prime responsibility would be as a grain marketing operation, and trying to add to the success of that. We have other assets and are looking to use them to provide extra revenue, such as hopper cars – and we are in the process of building two laker vessels.
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IAN WHITE
Title President and CEO, Canadian Wheat Board, Winnipeg
Born Sydney, Australia; 62 years old
Education Bachelor of Economics,Sydney University.
Career highlights Varied career in commodities included stint with Australia's Elders Grain, where he rose to executive vice-president.
1989-1991: Worked for the Saskatchewan Wheat Pool as CEO of AgPro Grain
2000-2008: CEO and managing director of Queensland Sugar Ltd., of Brisbane
Joined CWB as president and CEO on March 31, 2008.