The success secrets of Gerry Schwartz

Chairman & CEO, Onex Corp.
Toronto
Age: 66
Career Highlights:

• The corporate lawyer and MBA launches CanWest Capital Corp. with Izzy Asper in 1977; the company evolves into what is now CanWest Global Communications
• Leaves CanWest in 1983, and establishes Onex. Currently, the investment firm boasts annual revenue of $23.4 billion and a portfolio of 19 companies, including Celestica and Cineplex Entertainment
• In 2005, wins an Ernst & Young Entrepreneur of the Year Lifetime Achievement award for Ontario
• Is made an Officer of the Order of Canada in 2006

When you are looking to acquire a company, what are the most important factors that lead to the acquisition?
Marvin Garellek
Plan A Business PlanWorks, Montreal

Quality of management, from the senior executives all the way down to the loading dock. The quality of people, the culture, the integrity, the history. We really believe that business is all about people — when we have great people, we have great businesses.

And while we’re obviously interested in good, solid cash-flow businesses, we’ve probably done best where we could acquire a company and grow it significantly. We’ve grown six businesses with $1 million to $200 million in revenue each to between $3 billion and $8 billion in revenue each.

Onex has bid on many high-profile companies over the years, such as Canadian Airlines and Chrysler. Which company gave you the most pleasure to acquire? And which would you consider the toughest to lose?
Nico Cole
JCP Enterprises, Vancouver

I’d have a really hard time picking one that gave me the most pleasure to acquire because we’ve bought so many businesses, and so many have contributed to our success — we’ve had a 29% compound annual return on invested capital for 24 years. The toughest to lose was probably Labatt. It was a great company, and it went on to do great things. Our investment thesis — what we thought was the opportunity — turned out to be exactly correct. It was an iconic Canadian business and it would have been a real pleasure to keep it in Canada.

Based on your experience, what are your three most important tips for starting a new business?
Youssef Abboud
Clarus Securities, Toronto

No. 1, start a business in a field that you want to be working in. That way, whether the business is hugely successful or just a modest success, you’re going to be happy because you’ll have spent your life doing what you enjoy. Second, don’t be afraid to start small. Remember that the guy who owns the huge, international freight-trucking business probably started with one truck, driving it himself. If you’re ambitious, if you’re smart and if you have integrity, you’re going to take that small business and build it over time. Third, invest in yourself — don’t be afraid to take virtually all of your assets, everything you can scrape together, and put it into your business.

What role do you believe small businesses can play in the ever-changing Canadian economy?
Brian Grebow
Toronto

I think small businesses are the heart and soul of the Canadian economy. If you look at the facts, all new net jobs added in the country have come from small businesses. And while they start small, they don’t necessarily end small.

To what extent do your instincts and passion influence your business decision-making?
Debra Stuart
Toronto

Enormously. Instinct is the accumulation of knowledge over time, often from having made mistakes and learning from them, and I trust my instincts and the instincts of my colleagues at Onex. It’s like the history that goes into a computer. Passion is important because you have to want to dedicate your life to building a particular business, and if you’re not passionate about it, it’s not a lot of fun. The combination of passion and instinct together work well — instinct stops you from making a bad, passionate decision.

Throughout your career, the media has sometimes described you in less than flattering terms. As a budding entrepreneur myself, I’d like to know what words of wisdom you can impart to help deal with negative personal attacks?
Karim Kanji
RealCash Bancorp Inc., Toronto

Time takes care of those things. I was a bit of a new kid on the block in the early years, and there was a lot of skepticism — probably rightly so. But over time, as our record continued to improve — our stock has been one of the most successful stocks to own over 20 years of any company in Canada — the media started to write nicer things because we deserved it. We didn’t deserve it in the early years. We were brash upstarts who probably thought more of ourselves than the rest of the world did. But the attacks did hurt.

What was your first job, and what, if anything, did it teach you that you still apply to business today?
Irene Brydges
Hamilton, Ont.

My first job was working at my dad’s store in Winnipeg on Friday nights and Saturdays. It was an autoparts store that also sold white goods, such as televisions. I remember that he had one great salesman. I would watch this guy and just marvel, and over the years I came to appreciate the value of being able to sell your ideas. To this day, I believe that to succeed, you have to be a salesman.

How do you manage your own personal resources to prevent you from spreading yourself too thin or losing track of things?
Thomas Schneider
Schneider Power Inc., Toronto

I have absolutely terrific help at keeping up. We have a deep and very experienced management team, and they carry a substantial part of the load. In terms of personal work, I have two wonderful assistants who really understand our business, know my schedule intimately and take a lot of the workload off me.

Of the key business principles that you use on a daily basis, which is No. 1 in importance?
Dan Zwicker
Toronto

Integrity. It’s real simple: do the right thing, always.