Sandford Borins

Sandford Borins, Ph.D.

Sandford Borins is a Professor of Management at the University of Toronto. He writes, blogs, and teaches about narrative, information technology, and innovation.

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April 28th, 2015

Public Management and/or Political Messaging

Government, Politics

Two weeks ago I received an envelope from the Canada Revenue Agency that, surprisingly, was full of good news. First, it contained a letter from the Tax Centre that handles our returns listing the names and birthdates of our two children under the age of 18 on whose behalf my wife will be receiving the enhanced Universal Child Care Benefit. Second, it included a letter from Hon. Kerry-Lynne Findlay, Minister of National Revenue, informing us of the new package of family tax cuts and benefits that are being introduced by the Government of Canada (with asterisks indicating that they are subject to Parliamentary approval). The letter also mentioned enhanced benefits that have already been implemented. Finally, for good measure, the envelope contained an 8 inch by 3 inch colour flyer entitled “New family tax cuts and benefits for your family!” with the new benefits summarized in bullet points, a heart-warming picture of a family complete with canine strolling in the park, and the Economic Action Plan logo and Canada wordmark at the bottom.

What to make of all this? The letter from the Tax Centre rested on a foundation of integrated data management and provided an opportunity for my wife and me to ensure that CRA had the correct information about our children. That’s simply good public management.

The letter from the Minister and the flyer, however, are political messaging. Though “Government of Canada” rather than “Harper Government” was used, this was a clear instance of the Harper Government, in the run-up to the election, reminding this target group of all the things it had already done and would soon be doing for us. While this is less blatant and expensive than the Government of Canada commercials airing during the NHL playoffs, it is an instance of the same phenomenon. If the Liberals promised Advertising Commissioner in the Office of the Auditor General were in place, I’m sure (s)he would judge this mailing as unacceptable political advertising by the government.

More and more, politics as practiced by the Harper Government involves identifying target groups that polling data predicts are likely to vote Conservative, redistributing public resources to those groups through the tax system, and advertising to make sure that members of the group get the message and, impressed and grateful, vote Conservative. Demographics has happened to make me – a senior citizen with young children and a spouse who does not work outside the home – a recipient of many instances of Harper Government largesse. (Addendum: I once received Jewish New Cards from Stephen when the Conservatives were targeting the Jewish vote.)

The Harper Government’s vision of public policy is to a great degree based on marketing as she is taught in business schools. Use the redistributive capacity of the tax system to create private goods for targeted groups and then use public funds to advertise the availability and desirability of these goods. The French historian Renan wrote – and Pierre Trudeau quoted him – that “To have had glorious moments in common in the past, a common will in the present, to have done great things together and to wish to do more, those are the essential conditions for a people.” The challenge to the Liberals, NDP, and Greens in the coming election is to enunciate a vision of politics closer to Renan’s than Harper’s.

Finally, I should mention that I used this mailing as the basis of a question on the final exam in my public administration course, asking the students about the intentions of both the CRA’s and minister’s letters. Almost all the students in the course, many of whom are visa students from the People’s Republic of China, understood what the letters were about. So I feel I’ve done my duty to explain to my students how public management and political messaging dovetail as practiced by the Harper Government. What we must soon consider as voters is whether we want this vision or an alternative.

 

April 5th, 2015

Sherlock Holmes or Robert Langdon – That’ a No-Brainer

Narrative

I purchased Dan Brown’s latest book, Inferno, for an airplane flight and got around to reading it a few weeks later. The Wall Street Journal’s reviewer, featured on the back cover, called Brown “the master of the intellectual cliffhanger.” Excuse me, I always thought that accolade was reserved for Sir Arthur Conan Doyle, author of the Sherlock Holmes stories and novels.

I wrote a post several years ago – September 17, 2009 to be exact – about the Sherlock Holmes stories, discussing Doyle’s choice of a narrator. Departing from the nineteenth century convention of the omniscient narrator, the stories are narrated by Dr. Watson, Holmes’s assistant, representing the reader who is baffled by Holmes’s powers of observation and deduction. This approach was also used by Umberto Eco in his great 1980 detective novel The Name of the Rose. The narrator is Adso of Melk, the novice assistant to the great mediaeval detective William of Baskerville, a choice of name that signifies Eco’s homage to Doyle.

This led me to think about the nature of Brown’s story and his choice of a narrator. In Inferno, Brown’s long-term protagonist Robert Langdon attempts to prevent malefactor Bertrand Zobrist from unleashing an airborne virus that will render one third of humanity infertile, thereby dramatically reducing the world’s population. Langdon, as Brown’s readers know, is an art history professor at Harvard, blessed with eidetic (photographic) memory. Zobrist, who implausibly shares a surname with a talented and deeply religious professional baseball player, is a standard fictional villain, driven to pursue a reasonable goal – reducing global resource use – by an inhuman(e) means.

Zobrist’s hubris comes in preparing for the world a coded message explaining his vile intentions. Langdon, with his vast classical knowledge of Florence’s streets, architecture, and art works, ultimately cracks Zobrist’s code. Langdon and Zobrist are both geniuses, albeit in different ways, the former a visual savant, the latter a leading-edge biogenetic scientist. There are lots of other really smart people in the novel: a genius actress-linguist-physician who appears at first to be helping Langdon; the brilliant head of the World Health Organization, mobilizing global health networks to combat the virus; and a mercenary event planner, who unwillingly facilitates Zobrist’s scheme.

In the Sherlock Holmes novels and in The Name of the Rose, the best choice of narrator is the assistant to the master of deduction. In Inferno there are so many geniuses in conflict with one another that Brown uses an omniscient narrator to help the reader understand the nature of their conflict. I find Robert Langdon much less compelling than either Holmes or Baskerville. Holmes and Baskerville were exercising their highly-developed powers of observation and deduction to solve ill-defined problems. When, at the end of the stories, they explain what they did, we recognize the workings of their minds as similar in kind to our own but operating at a higher level. Thinking like Holmes or Baskerville is something worth aspiring to. For most of Inferno, Langdon was exercising his exceptional powers of recall, remembering places or works of art he had seen once. There is something much less intellectually satisfying about a protagonist who relies on eidetic memory, because that talent cannot be reproduced or emulated. As Brown kept eluding his pursuers because of his superior knowledge of the Florentine terrain, eventually I found the exercise simply boring.

To return to the title of this post, the choice is a no-brainer. I find Holmes a much more stimulating and inspiring genius than Langdon. Brown’s novel – spoiler alert here – ends with the airborne virus released, so presumably there will be a sequel in which Langdon and other geniuses figure out how to put the genie back in the bottle. Undoubtedly, it will sell millions of copies, just like Inferno. I won’t be buying one.

 

April 1st, 2015

Alan Hockin’s Grace under Adversity

Education

Alan Hockin had a distinguished career as a senior public servant in the Department of Finance and then as executive vice-president at Toronto-Dominion Bank. His third career as Dean of the Faculty of Administrative Studies (now Schulich School of Business) at York University was likely his most challenging.

When Alan became Dean in 1985, the faculty was eager to move forward, but without any clear sense of direction. Alan was selected Dean in spring 1984 by then President H. Ian Macdonald, but by the time he arrived Macdonald had completed his term. Macdonald and Hockin had common experiences as senior public servants in finance and would have worked well together. I don’t think he and Macdonald’s successor, Harry Arthurs, had the same chemistry.

Alan invited me to serve as Associate Dean, which I did for much of the time he was dean, so I had a close-up view of the issues he had to confront. It became apparent to Alan that one big obstacle to moving the faculty forward was that it was cross-subsidizing the rest of the university to a substantial degree. As befits his background, Alan wanted to know the precise extent of the cross-subsidy. Reluctantly, York’s central administration provided an answer that confirmed Alan’s suspicions.

There were colleagues who expected that Alan would leverage his corporate connections to bring in vast sums of endowment dollars. Given the state of the faculty’s finances, Alan didn’t think he could play that role with integrity.

Roger Wolff, Dean of the University of Toronto’s Faculty of Management was facing a similar predicament. Thinking out of the box, he and Alan hit upon the idea of the two business schools merging to create a stand-alone management faculty. Both felt this approach would reduce or even eliminate cross-subsidization and attract greater support from the business community. While rare in North America, there are a considerable number of stand-alone management faculties in Europe. The proposal was ultimately vetoed by the two university presidents. At that point, Alan thought it appropriate to end his term as dean.

Harry Arthur’s selection of Alan’s successor turned out to be one of his best decisions. Dezso Horvath, much to his credit, found other ways to move the faculty forward. His Hungarian background provided a great opportunity for public profile at the moment the Soviet Union was collapsing. He worked tirelessly on outreach to the business community and on increasing the faculty’s international orientation. Seymour Schulich’s naming endowment and the construction of a new building were important achievements. These initiatives, like those at other Ontario universities, were supported by the Ontario government’s deregulation of tuition fees at management faculties.

Former York colleagues Chris Robinson and Bernard Wolf have posted on Alan’s condolences page (http://www.yatesfuneral.ca/obits/obituary.php?id=540136) that he was supportive of their careers. When I think back on my time at York, I realize how supportive he was of my career, and in so many ways. When Allan Blakeney came to Osgoode Hall as a visiting scholar, Alan Hockin put us in touch; Blakeney and I subsequently taught a course together and co-authored a book. Alan noticed that my salary had fallen out of step, and without my asking gave me a raise. My time as associate dean didn’t end particularly well, so he recommended I be granted a one-semester leave to regroup.

When I received an offer to go to the U. of T., I asked Alan’s advice. Alan was shrewd and realistic, and empathetically approached the question in terms of my own best interests. A few years later, as Chair of the Department of Management at UTSC, I began fund-raising for a research fund in honour of Wynne Plumptre, UTSC’s first Principal and, before that, one of Alan’s fellow mandarins in Finance. Alan made a substantial donation that got this initiative off to a good start.

As in his careers in government and banking, Alan brought dignity, integrity, and imagination to his career at York. As a first-time academic administrator, I learned much from him. He cared about his colleagues and used his influence to advance our careers. I mourn his passing and honour his achievements and his legacy.

 

March 28th, 2015

The Investing Wisdom of George Luste

business, Economics

As we mourn George Luste, former University of Toronto physics professor and transformational president of the University of Toronto Faculty Association, who passed away on March 21, I want to discuss his wisdom and legacy as an investor. I came to understand George’s investment philosophy on the basis of several discussions, some in the company of renowned mutual fund manager Francis Chou, and I witnessed George in action when I served on UTFA’s investment committee several years ago.

As a physicist, George became involved in the University of Toronto’s venture into large scale computing in the Eighties and Nineties. He came to realize that large main frames were becoming dinosaurs and that the future lay with personal computers. Recognizing this technological sea-change, he began investing relatively early in personal computer companies. Despite starting with only his savings on an academic salary, he built up a large and rapidly growing portfolio. The lesson here is that if you see and understand a major technological change invest in it and, if it is profitable, keep investing in it.

The situation with UTFA’s investments was different. By the middle years of the last decade, UTFA had built up a small reserve fund of approximately $2 million, all of which was invested in either cash or bonds. The purpose of the reserve was to pay for exceptional expenses, such as litigation for grievances. Furthermore, the reserve funds of non-profits are constrained by law. If the funds grow too large, some of the money must be returned to the stakeholders.

George realized that UTFA’s portfolio composed entirely of bonds and cash was more risk-averse than it needed to be, so he recommended that the make-up of the portfolio be changed to one third cash, one-third bonds, and one-third equities (diversified equally between Canadian, US, and global). As the bonds bought long ago came due, the committee endorsed George’s recommendations, and shifted to the asset allocation strategy he recommended. To do this at low cost – something consistent with George’s personal financial parsimoniousness – he used index funds to implement the asset allocation strategy.

The committee implemented George’s investment strategy in 2006 and 2007. The global financial crisis of 2008 was a critical juncture, as the proportions of the portfolio in cash and bonds increased and that in stocks decreased. In a situation like that, if you believe your initial asset allocation decision correctly reflects your assessment of your needs and your attitude towards risk, you rebalance the portfolio. Again at George’s recommendation, the committee rebalanced the fund in early 2009 to sell bonds and cash and to buy stock funds. The timing was exquisite, as it took advantage of the bull market in equities that began in spring 2009. UTFA’s investment fund has done well since then, and has enabled the Association to give its members several holidays from paying dues.

This experience leads to three pieces of advice that are well-known, but hard to practice unless you are disciplined. First, develop an asset allocation strategy that reflects your situation in terms of the possible demands on your investment funds and the level of risk you are willing to accept. Second, use low-cost investment vehicles. Third, when the asset allocation in the portfolio gets out of balance, rebalance it.

George’s investment wisdom enabled him to do very well as a personal investor and enabled the organization he led and cared deeply about also to do very well with its investments. This is a legacy worth remembering.

 

January 7th, 2015

Julian Fantino: A Liability in Veterans Affairs but an Asset in Vaughan?

Federal Election, Politics

When Julian Fantino had his first major confrontation with his department’s constituency, I predicted in my post of Feb. 13, 2014 that it wouldn’t end well for him: “Perhaps in a few months Harper will have a done-like discussion with Fantino, telling him not to expect to remain in cabinet if the Conservatives are re-elected. The sub-text of the message would be that it is time for Fantino to take one for the team and announce his retirement, so the party can find a more presentable candidate to contest Vaughan.” A few days ago, Prime Minister Harper removed Fantino from the Veterans Affairs portfolio, but kept him in cabinet in a low-profile portfolio. Fantino on his website expressed his intention to contest the next election.

Steve Chase, writing in today’s Globe and Mail, reported that this decision “demonstrates [Fantino’s] enduring political value to Prime Minister Stephen Harper as a star candidate in the GTA.” I don’t think it demonstrates Fantino’s value, rather it demonstrates that Prime Minister Harper assumes Fantino has political value. Perhaps the Conservatives have done private polling that demonstrates Fantino’s political value. Or perhaps they haven’t and are assuming it.

It seems to me that Fantino is a particularly vulnerable candidate. The opposition parties have numerous clips of Fantino’s confrontations with veterans that they can incorporate into their print and online advertising to depict Fantino as uncaring and out-of-touch. A young and energetic candidate would, by his or her very presence, send the message that Fantino is old and out-of-date.

If this is what the opposition is thinking, surely it must be going through the minds of the Conservative constituency organization. Can’t they find a young, energetic, empathetic, and, given the demographics of the constituency, Italian candidate to unseat Fantino? I can’t imagine that there aren’t some local conservatives lining up to oppose him. I wouldn’t bet a great deal of money that Julian Fantino is the Conservative candidate in Vaughan in the 2015 election.

Political careers often end badly because a politician decides to stay on one election too long. Perhaps Fantino’s own party will stop him before the Liberals or NDP unseat him.