Building Business Focused IT Leaders via Action Learning at Canadian Tire

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Summary & Biographical Sketches

In 2002, Canadian Tire Corporation’s IT division began a change journey focused on becoming more agile and business aligned. This transformational change has aligned organizational culture, structure and capabilities to IT strategy. One focal point for culture change has been to develop leadership capability within the manage-ment team using Action Learning, a high leverage process for ‘developing leadership while working real issues.’ Farooq Mosam describes the organizational shift toward building business-focused IT leaders and shares his experience as an Action Learning participant and facilitator. Mary Stacey provides an overview of the change strategy and shares the highlights of the Action Learning program.

Farooq Mosam, Group Manager of IT Delivery at Canadian Tire, is currently responsible for establishing the benchmark for growing IT’s strength in solution analysis, design and testing—all key capabilities required to further ensure business alignment and streamlining IT’s project delivery processes. Most recently, Farooq worked in Canadian Tire’s Marketing division playing a key role in the launch of Canadian Tire’s e-commerce initiative and in the sustaining organization where he managed all aspects of the Information Technology, Supply Chain and Customer Service Operations of the Online business. Farooq has a BS in Computer Science from the University of Wolverhampton, England.

Mary Stacey is managing partner of the Waterline Consulting Toronto office. She works with business leaders to develop integrated strategies that build leadership and management teams, accomplish deep change and increase organizational performance. Her clients have been impressed by the power of Waterline Action Learn-ing to build strong leadership accountability while solving complex business challenges. Waterline Action Learning has been adopted by companies such as Millennium Pharmaceuticals, Fannie Mae, American Express and Canadian Tire Corporation. Mary holds an M.A. in Organizational Leadership and Learning from Royal Roads University, Victoria, British Columbia.

Developing Business-Focused IT Leaders via Action Learning

Mosam: Hello everyone, I am very pleased to be here to day to share with you Canadian Tire’s IT change journey, and how Action Learning is helping us shift our culture, develop leadership skills and improve or-ganizational performance.

Before we start, I’ll provide you with a brief update on myself. My background is mainly IT, yet I also have experience working in the business. For five years I worked in Marketing, specifically in the e-Business division, where I helped launch and managed its supply chain, fraud, and telephone call center operations, as well as its technology develop-ment and operations teams. My current role is man-aging a team of business analysts and helping them build their skill set to become more business-focused. The experience I gained in the business area broadened my perspective beyond operations and IT. I saw the natural tension among these functions as I had to manage them. I gained a perspective on how technol-ogy affects the business, and at the same time, how technology can be leveraged to help the business.

I’d now like to introduce Mary Stacey, who is here with me today. Mary is a partner with Waterline Consulting, and she has worked with us throughout this change journey.

Stacey: Waterline Consulting is a Minneapolis-based firm specializing in learning-based approaches to stra-tegic change. I’ve been privileged to work with Canadian Tire’s CIO and his management team as they design and implement the IT change journey, which is focused on building agility and alignment with the business. The IT organization at Canadian Tire has about 450 employees. A powerful part of this change has been the Action Learning process and the results it has achieved.


Mosam: First I’ll provide an overview of Canadian Tire (Figure 1). Then I’ll introduce the IT change jour-ney and provide context for why we chose the path that we did. Finally, we will discuss Action Learning and how it has helped us achieve our culture change objectives.

Canadian Tire

Canadian Tire is a growing network of interrelated businesses with about $7 bil-lion in retail sales (Figure 2). Of course we sell tires, but we don’t manufacture them. We are Canada’s leading hard goods retailer, and have a number of strategic businesses: a large retail division, a petro-leum business with gas stations and car washes, and a financial division. We operate 452 Canadian Tire retail stores on a franchise model—our franchisees are Associate Dealers. We offer customers a large selection of national and retail brands through three ‘stores’ under one roof—automotive parts, accessories and service; sports and leisure prod-ucts; and home products—each of which has a large share of the Canadian market., CTR’s complementary online web store, offers more than 13,000 products for sale via the Internet and serves as an important communication channel to customers. Canadian Tire also operates 42 PartSource stores, of-fering automotive parts to commercial installers and automotive enthusiasts. These are similar to AutoZone in the U.S. We entered this business a few years ago, and are continuing to grow it. Canadian Tire Corporation also operates 333 corpo-rate and franchise stores across Canada under Mark’s Work Wearhouse. Mark’s is one of the largest specialty retailers in Canada, offering primarily mens’ and la-dies’ casual clothing, footwear and accessories for busi-ness casual and industrial work environments, as well as for recreational use or relaxation. With 230 gas stations and 54 car washes, our petro-leum division is the largest independent retailer of gaso-line in Canada. Finally, Canadian Tire Financial Services, which recently became a bank, offers a variety of financial products, primarily branded credit cards, that offer Canadian Tire customers a choice of payment op-tions, as well as increased loyalty re-wards. Canadian Tire’s retail technology is replicated across all of our stores. That is the primary focus of the IT organization that I will discuss today.

IT Change Journey

As many of you may remember, Y2K was a busy time for IT divisions. At Canadian Tire, it resulted in a reduction of the number of business-focused IT initiatives.

Before Y2K, we had been working on a large project to add new capabilities to our supply chain. We had to put that on hold and put all of our efforts into updating our systems for Y2K. However, the overall result was a lot of pent-up demand for adding new capabilities to our business.

Once the Y2K initiatives were complete, we refocused our efforts on the supply chain project. By that time, however, we did not have a particularly good relationship with the business. Our viewpoint was often, ‘let’s do what’s right from a technology perspective’ as opposed to ‘let’s do what’s right from a business perspective.’

Additionally, we did not have a strong performance mindset. As conversation with the business continued, it became more apparent that we were not delivering. We weren’t focused on what the business wanted us to do. That was the catalyst for this journey.

Our CIO, Andrew Wnek, had been in place for about a year when outsourcing the entire IT department came under consideration. He entered into months of exploration—which turned into negotiation—with a third-party vendor. Initially these conversations were limited to the leadership team, but over time IT employees heard about them. The usual change management communications were used, but employees began to experience a high degree of discomfort caused by uncertainty about the future.

Employee trust, confidence and morale declined very quickly. It was a difficult time for all of us, including the IT management team. Senior management was trying to understand how best to move the organiza-tion forward. However, the message back to the staff about the likelihood of outsourcing was a difficult one to deliver and a difficult one to hear. Trust suffered.

Months into the outsourcing initiative, the CIO made a courageous decision. He walked away from the ne-gotiating table. Once the decision was made, IT still faced two significant challenges. The first was regaining employee commitment. In a change management evaluation employees reported a loss of loyalty toward IT, feelings of betrayal, and a diminished sense of belonging to Canadian Tire. They also identified a loss in productivity and the development of a culture that spent much time managing individual fears and rumors about the future.

The second challenge was realigning to the business. As we began to think about this, it became clearer that as an IT organization we did not understand what our capabilities were—or needed to be. We had no clear performance metrics. What were we good at? What should we work on? What were our internal service levels? What were our service levels with the clients?We didn’t effectively measure those aspects of our business.

The IT leadership team stepped back and said, “Let’s define our vision. What do we need to be?” (Figure 3) They began to refocus the organization on becoming a more agile team aligned to the business, operating in a simpler technical environment with the appropriate standardized processes. They developed a few guiding principles around financial management, operational excellence, strategic alignment and people to guide everyone’s behavior.

However, the loss of trust still haunted us. IT’s strategy is about building capability to serve the business. The CIO created a People Program to build the culture and leadership that would build trust and help shift us from our IT-centered perspective to one of business focus and operational excellence.

John Harris, The Information Management Forum: You mentioned that IT was working for technology’s sake. How involved was the business in developing this new strategy?

Stacey: Early on IT worked with a third-party consulting firm. They engaged the business in think tank sessions that gave the CIO a lot of information with which he could craft a strategy. I believe that the process of evaluating outsourcing opportunities also gave him a tremendous amount of information that he could use to understand what IT did and did not do well in relation to the business.

The CIO has always been clear that he wants IT to be significantly stronger in delivering technology and play a key leadership role to the business as well.

Mosam: I think that this direction is also confirmed in conversations with his peers in the business units. He certainly has a good perspective on where the business is moving. He does not originally come from IT, and I think that helped him quickly clue in to where IT needed to focus.

Stacey: IT used three models to design the culture change journey. First, we needed to be clear about the type of change needed. Not an incremental change, or a transitional ‘from current to future state’ change, but a transformational change that would dramatically shift mindset and behavior.

The outsourcing decision had provided the wake-up call for transformation. With a new vision in place the organization could begin the journey and engage in continuous learning along the way. The change design had to be one that would be able to accomplish change on all levels—individual, team and organizational.

Second, we used a capability-building model. We’re committed to helping employees build their capacity to change as well as develop their capability to lead change. Farooq (Mosam) and his colleagues began working with us a couple of years ago. We formed a team of middle management change agents, and helped them to work differently. People learned to remind each other to ‘trust the process. We will figure this out together.’ Two years later, Farooq and his colleagues can speak to the change journey and the gains they’ve made with Action Learning; and they can facilitate it without a change consultant.

Finally, this change is about strategic alignment. We have designed an integrated approach to change, and focused on aligning the culture, structure and capabilities to the IT strategy. I’ll provide a few details about what we’ve done in the structure and capabilities areas before we move on to talk about our Action Learning initiative.

Aligning Structure and Capabilities to Build Business Focus

In early 2004, IT went through a strategy mapping process that began with clarifying the customer value proposition. A cross-functional group of senior managers spent many hours in dialogue developing the strategy map, and then used it to develop an organizational design that brought IT’s structure into better alignment with the business (Figure 4). IT now has three core areas: Govern, Operate and Deliver. From within that structure, IT delivers its capabilities.

IT has spent a lot of time defining and developing the capabilities it needs to deliver to the business. We’re beginning to help employees understand the skills re-quired to deliver these capabilities so IT can deliver even greater value to the business.


The overall transformation has involved strategies for people, process and technology change, and a particularly innovative part of it has been the culture change initiative. IT has 45 middle managers, and the CIO saw the opportunity to focus on them as change agents. The best way to build their capability to lead change was to create a culture where they could talk to their peers about the business and IT—and learn important leadership skills.

We developed a customized Action Learning program for the middle managers. After being involved in Action Learning groups for two years, the middle managers no longer ask, “When will it be over?” They no longer ask, “Where will we be when we reach our goals?” They now know that continuous change is essential to achieving the IT vision. Two years down the road the managers are embracing the notion that change in IT is business as usual.

Farooq (Mosam) will now provide background on why we called our Action Learning initiative Getting People Started (GPS).

Mosam: When we first started talking about this new initiative for the manager team, we asked ourselves questions: ‘How could we inspire our people and help them take more effective action?’ We’d been hearing a lot about the need to change—the benefits and results—but how could we actually do it?

I remember the meeting I attended when Mary first joined our group. I thought the ideas she presented for ‘how’ sounded vague. The approach was far different from anything we’d ever tried at Canadian Tire.

There was less structure than we’d had with change management in the past—she was proposing that we help her create something that would be a good fit for us. The more the team members talked and understood the objectives of Action Learning, the better we understood that it had the potential to provide a wake-up call for people, and the IT organization needed one.

We decided we needed an identity to go with this new initiative. Our company’s current advertising theme I’ll Start With You shows up in all Canadian Tire’s TV and radio commercials.

Naming our Action Learning Getting People Started (GPS) connected us with that, and in a subtle way reconnected us with business strategy.

Action Learning

Background and Definition

Stacey: Action Learning has been around for more than 50 years and is used by many companies to solve problems, make progress on projects, and develop leaders. Waterline has evolved this approach to help par-ticipants develop the skills required to think and act more strategically in complex environments. We’ve worked with more than 30 companies, including Millennium Pharmaceuticals, Fannie Mae, and American Express (Figure 5).

Waterline Action Learning is particularly effective at integrating middle management teams, who often feel as though they’re ‘stuck’ in the middle and pulled in all directions. It brings cross-functional managers to-gether to accomplish many things simultaneously—stronger peer relationships, knowledge sharing that breaks down silos, individual leadership skills and a sense of confidence in the middle management team. Retail companies have interesting cultures. Some people say “retail is detail,” which highlights their tactical ori-entation. I’ve heard people describe themselves as ‘ac-tion junkies’ without recognizing that an addiction to action keeps companies locked into short term thinking and limits results. Action junkies tend to confuse motion with progress, and that’s not a luxury that com-panies can afford. Action Learning teaches managers that there is value in stepping back to look at the big picture, take some time to become an observer of both yourself and the system in which you work, and then act in a more strategic way.

21st Century

Action Learning is the kind of leadership development process we need in the 21st century. It goes beyond training, team-building events, and curriculum based leadership development. Today’s organizations are more complex and facing more difficult challenges from the competition. We’ve found that the Action Learning process helps people learn the skills that enable them to keep pace with change, become more strategic, manage complexity, and develop leadership capabilities required by high-potential employees. Now more than ever we need high-performing teams, which depend on the transfer of high quality cross-functional knowledge. The value of intel-lectual capital is increasing. We have a greater need for learning and less time to learn. Action Learning addresses these things.

Action Learning at CTC

Mosam: I’ll discuss my experiences both as a GPS Action Learning participant and as a facilitator (Figure 6). We launched GPS with 6 manager groups, each with 10 members. We were asked to make GPS our highest priority one morning per month. It was blocked off on the calendar, no questions asked. If you had issues with attending, you were reminded that it was a program sponsored by the CIO.

Each group had a manager facilitator and an Action Learning coach. The manager facilitators had an additional monthly session as well, to build their team facilitation and systems thinking skills. This group was really the hub of the culture change in IT.

GPS groups were cross-functional and included 45 managers from areas such as application delivery to infrastructure to consulting. Knowledge sharing was a key objective. Broader and deeper knowledge helped us understand the issues in the organization so we could better collaborate to achieve results. These sessions also helped build peer relationships. Now when one of us calls to ask for something, we can put a face to a name in the phone directory. The relationship building helped break down many barriers within IT that were slowing us down.

Our stronger relationships and increased knowledge sharing led to better organizational performance, particularly in striving for the common good, which is one of the key Canadian Tire leadership expectations. We became more focused on the fact that whatever we do well achieves a common goal for the business and IT.

Stacey: GPS Action Learning is one of the key culture change initiatives. With each one we are connecting people to the part of the IT vision focused on building ‘an agile team aligned to the business.’

We set aside a good period of time with our pilot group to ensure they had both the mindset and the skill set to support their peers. By the time we introduced GPS as a program, the pilot group had created it with us. They were natural ambassadors for it.

Sponsorship is critical to any change initiative, and our CIO’s sponsorship for this work has always been very high. People have been a bit surprised by his determi-nation that this initiative would take hold, and his willingness to support it financially each time the man-ager feedback indicated it was working and they wanted it to continue.

Early on, we had many conversations about whether GPS should be voluntary or mandatory. We decided it should be mandatory. Without a doubt, we had a few ‘prisoners’ in early sessions. This form of leadership development is very different for people, and they may not recognize the value of it prior to participating. We noticed that around session three or four the light went on for most people. They saw the value of the coming together cross-functionally, coaching their peers and presenting themes to receive coaching themselves. Leaving the sessions with action plans made them more aligned as a team and better able to be effective as individuals.

We’ve been through two phases of GPS. Phase 1 monthly sessions continued for eight months. We took the summer off and then began Phase 2 for another eight months. We evolved the program in each phase. In Phase 1 sessions, individual managers received coaching around a challenge that was a real accountability they were passionate about. In Phase 2, we provided peer coaching for individual challenges for the first four months, and then each team explored a more systemic challenge such as ‘How can we build IT cred-ibility with the business?’

At the end of Phase 2, our six groups shared their stories at a management team Knowledge Xchange, and the learning we harvested is being rolled back into the organizational change. For example, a Credibility Self-Test that was developed by one GPS group was shared with all 450 employees at the quarterly IT Communication Session. Our language is also changing. Employees are now encouraged to ask themselves whether an intended action is going to be a ‘heroic save’ (our term for quick fix) or one that will produce effective results over time. We are building think-before-acting mindset into our action-oriented culture.

We will begin Phase 3 in January 2005 and evolve once again. Managers will use the first four months to coach one another on individual challenges. Then, for the first time we will integrate the Directors into the middle managers’ teams so they can work together on finding breakthroughs to some systemic challenges. This is a marked departure from the peers-only frame-work of Action Learning. However, our Directors have been developing themselves and learning the GPS process in their own Breakfast Café. Our biggest commitment is to build an integrated, effective management team, and we’re ready for this step. Our CIO and his VPs will join us at the 2005 Knowledge Xchange. GPS groups will share their results with this panel—and this time the panel will include represen-tatives from the business.

Session Snapshot

Mosam: Figure 7 shows an overview of an Action Learning session. Each session begins with a team check-in and review of the ground rules. Then, prior months’ presenters provide an update on the progress they’ve made as a result of the coaching they’ve received. Each session involves skill building related to strategic and systems thinking and soft skills such as coaching, listening, and presentation skills.

Imagine you’re this month’s presenter. You present a theme, which is a real challenge that you would like to receive some coaching on, and that you truly care about finding new approaches to. You give the team an executive summary that includes a detailed background, your accountability, who’s involved, and what you’ve tried to do to move it forward. For about the next 40 minutes you do nothing but respond to the questions they ask using the Waterline Action Learning process. Initially the sessions feel quite structured as you all work to master the process. Your peer coaches use their questions to help you ‘go below the waterline’ to explore your assumptions, see patterns that are emerging, and then figure out what it all means. Finally, they guide you to finding the high-leverage ac-tions you will take after you leave the session, which will help you move forward with your theme.

Confidence with the process and trust between team members can initially be slow to develop. However, once one of the individuals comes up with a theme, such as—‘I need to manage up. My boss is giving me all of these assignments, and I think we need to take a step back. I need help developing an approach’—the team tends to open up and have future conversations at a deeper and more productive level. One of the biggest payoffs of Action Learning is the broader and deeper perspective that manager’s gain. They realize their colleagues can see the organization from different vantage points, and that this diverse thinking is available to them outside the GPS sessions. They also see how others might address challenges similar to those they face, and therefore expand their repertoire of managerial tools.

Stacey: The confidentiality involved in every session is a trust-builder, and people adhere to that. The Action Learning process itself is also critical to success, and takes some time for participants to master. Finally, both committed sponsorship and a peers-only environment are required for this to work. There are some other critical success factors for Action Learning. People ask whether we actually need an Ac-tion Learning Coach in the room. Yes, we do. This type of facilitation is different from course facilitation or training. Action learning coaches are seasoned facilitators who can support the group in becoming more strategic and developing their individual leadership.

How Do We Know It Is Working?

Mosam: How do we know that Action Learning is working (Figure 8)? First, we’ll be clear that our CIO encouraged us to avoid the trap of scorecard thinking. A needle on a dashboard doesn’t suddenly move during a transformational change. One day you wake up and find that things are different. Customers are satisfied, work is being delivered more efficiently, and the management team is acting with greater alignment. One strong indicator of success is that IT is no longer on the Board’s list of things that are broken and in need of fixing.

Participants have given us strong indica-tion that GPS is working and that they want to continue to participate. 89 percent surveyed said it develops relationships in the management team, which can be tracked to more collaboration and faster, more effective ways of getting things done. Eighty-one percent of participants said that, in a profit-sharing company, GPS is a worthwhile thing to do. Finally, there was a strong recommendation that Action Learning be extended to the business side.

Summary & Next Steps

We talked a bit about our evolution in Phase 3 (Figure 9). Phase 1 involved only the management layer. The Director team now has its own GPS, which we call the Breakfast Café. Phase 3 will mix up the groups, inserting some of the senior leadership members into the managerial teams. Together they’ll work on systemic challenges such as process improvement, business alignment, or team agility.

It will be an interesting development, particularly the way we translate the trust built among peer groups into these vertically mixed teams. Hopefully, it will break down certain perceptions about senior management—and open up the conversation at all levels. We think of this as the last leg of our journey to build an integrated, effective management team.

Phillis Clements, Allstate Insurance: How many leaders have gone through that process?

Mosam: All in all, about 60 have participated. We started groups at the middle management layer, which includes our functional managers, project managers, business consultants and architects. Now, the Director team has its own Action Learning group, as does the VP level.

Allen Liken, Eastman Chemical: When people begin to share best practices and break down barriers, you begin to share information across the company. Have you built a system or database to facilitate that? Is that a part of this process?

Mosam: No, we have not. Given that this is a culture vs. technology based approach to knowledge sharing, it stays on the conversational level—and translates directly into the action people take back in their roles. It is building knowledge internally and soft skills such as self-awareness, courage, and striving for the common good. Some of these things we cannot teach or write down, but we begin to see the growth in employees and teams. Inspiration and confidence come out naturally.

GPS is still offered only within IT, so we have not included the business people yet. We hope to share our GPS success story with them in 2005. One of the other things that we are thinking about is how to bring more of the business challenges into it.

Likens: In IT, certain themes were repeated. Therefore, you have an opportunity to share best practices across IT.

Mosam: Absolutely, and this happens. It’s just not stored in a repository.

Stacey: We are not taking a knowledge management approach, but more of a leadership development and organizational learning approach. We are trying to broaden individual’s perspectives of the system they work in, so that work is done more effectively, and so that managers have the capacity to lead in an environment of continuous change. All of this will contribute to organizational performance. We can identify best practices in each of these areas, and often do in our GPS evaluations.

Maura Purdon, Sun Life Financial: As you were talking, it struck me as to what happened in our organization. IT leaders will frequently ask, “What is senior management doing about issue X?” It is as though it is someone else’s accountability. We should be talking about the challenges of all leaders, and perhaps even the entire staff. The learning you have outlined equips the middle management group with a new skill and knowledge. This would not be as effective without proper sponsorship as well because you have worked on this for more than two years. From my experience, that is a long time for senior management to be focused on a particular initiative.

Mosam: We’ve been fortunate to have a period of stability at the executive level to guide us through this change. It would have been unfortunate to engage the management team in such a powerful change process and then lose sponsorship for it. The organization has now evolved to the stage that we are again having conversations about sourcing strategies. We are back to where we began, yet in many ways things are very different. The way we approach these conversations today is different from how we approached them back then. Our CIO speaks directly with the middle managers because he wants to explain, understand their views, and be there to answer questions. He wants to keep everyone in the loop, and makes time to meet with our small GPS groups. That is powerful because we see the sponsorship, we see someone who is walking the talk, and that inspires us as individuals that much more.

Stacey: We had a different culture two years ago, and the number one irritant for our CIO was an entitlement mindset: ‘I will sit back and wait for them to tell me what to do.’ That has changed in our middle management team; they now have capacity and skill set to influence the organization above and below them.

Mosam: I think that the questions that the management team now asks our CIO are richer than they were couple of years back. We have built a level of trust within the team, and with the organization’s leader.

Stacey: If the IT organization is going to be agile and aligned to the business, its people need to be flexible and accountable. GPS has helped people to broaden their mindset. It has developed some ‘hard’ leadership skills such as managing change, coaching and facilitation as well as hard to measure soft skills like self-awareness empathy and courage—in such a way that people are now acting far more accountable for their own mindset and behaviours. They’ve been able to move outside their silos and build a cross-functional team. As a change approach, GPS truly does ‘develop leadership while working real issues.’