The Last Canadian Knight

by Gordon Pitts

  Day, in Toronto, watched these events unfold from a distance, geographically and intellectually. There, he came under the spell of a man who would change his life: Leslie Raymond Smith, known as Les or LRS, the senior vice-president for the eastern region. Smith took to the young lawyer, and Day worshipped Smith, who became a mentor.

  The son of a Scottish immigrant, young Les had left high school in the Depression and joined Canadian Pacific as a “spare board”—a work-if-available casual employee—thus beginning an improbable rise through the ranks to run the sprawling eastern region. Although Day had only a dotted-line reporting relationship—his actual boss was Jim Wright, the chief legal officer—the young man became Smith’s sounding board. Smith would pop into the lawyer’s office to ask: what about this? It would open up a long and exhilarating conversation—the kind of frank discussion Smith could never have with those who reported directly to him. “So I was second-guessing things at his request,” Day says, “and he was teaching me. Lord knows what he got out of it, but I got everything.”

  Smith had assembled around him a group of young managers called “Les Smith’s boys,” and Day became one of them, an honour he cherished as the only member who wasn’t an operating railway man. Smith paved the road from Day’s being a big-picture lawyer to becoming an operator knowledgeable about the company’s inner workings. He was getting the taste for management at the ground level, and he liked it. Smith would call him in to hear his speech to the new regional assistant superintendents. He would tell his charges that the burden of management would have to fall on them, and to take responsibility for their regions. He would leave them alone for six weeks, and after that he would be on their doorstep. Meanwhile, he said, “you have to cover every inch of track in your area and know everyone in your organization. And go buy yourself a hat so they will know you are the assistant superintendent. Above all, walk the property—you have to be seen.” These words would echo in Day’s mind for the rest of his life.

  Later, a commerce degree or an MBA would become the standard ticket into corporate management, but in those days it was all about on-the-ground experience under a mentor. Day was fortunate in having a great one. Smith practised what management theorists today call “management by walking around.” It would later be a fashionable theory, but in Smith’s day it just made sense. Tom Peters, the management guru, would call it the science of the obvious. It was the only way to find out what was really happening in an organization and to build on that knowledge to create effective strategy. It was an opportunity to spread the company’s values and to provide instant feedback and guidance.

  From his first day in Toronto, Day found himself in a different world—in an operations environment, not a remote headquarters. He was included in operating meetings, and got to don a boiler suit to crawl around and underneath locomotives and cars. He rode in cabs running on the main line, and there were always ad hoc lectures by Smith about how to interact with employees and customers. But the critical part was watching Smith as he managed CP Rail’s largest region. Later in life, Day found himself asking, “what would LRS do?” His mentor, he concluded, was “by no means a planner or strategist, but he was an extraordinarily effective manager and people motivator.”

  In recent years, Day has come to know about a TV show in which company bosses go undercover and infiltrate the front lines of their business, working unknown as clerks, cooks, or waiters, to discover how things really go at the sharp end. The whole idea of an undercover boss, however, drives Day to profanity—and he does have a salty tongue. He finds the concept distasteful, that a boss could possibly go undercover without his front-line people recognizing him or her. “The idea that employees don’t know the boss—I mean, Jesus Christ, how awful is that!”

  The Les Smith experience was part of a rich training in the complexity of management. He saw one man, Smith, who was a highly skilled manager of people despite a shortage of formal education. Then there was John Stenason, an executive vice-president who was well-educated but legendary for his terseness and lack of people skills. That made him the butt of jokes by Sinclair, who was brilliant, outgoing, and very funny, but also a bully. All of which provided lessons for the young Graham Day to absorb and store away.

  To boil down the critical lessons from his on-the-job experience, Day summed up the art of management in four points. A manager, he concluded, must be able to deal with people, including through delegation, in a constructive and supportive way that enables them to perform and develop; learn quickly and deploy information of widely different kinds to “get the job done”; assess situations quickly, develop a preliminary plan, and modify that plan during execution as circumstances require; and take decisions and accept responsibility for them. This became his operating approach as he moved closer to the front line. As a quick study, he would come up with a plan, and start implementing it right away. But he continually reassessed, making course adjustments as necessary. He was never a weekend sailor, but he understood the sailor’s method: have a chart and a plan, but watch the winds, and tack if necessary.

  At this moment, Day’s knack for the quick study was very useful to CP. Still a lawyer, he took on a broader mandate as troubleshooter. Over his time at CP, he appeared in court only once. He spent his time in labour negotiations and in an array of overseas assignments. “When a wheel fell off, I was the guy sent to put the wheel on,” he says. “I was drinking from the proverbial fire hose.”

  CP’s vast breadth meant there was much to do. The company was moving out of ocean liners, but expanding in merchant shipping, which required new deals, particularly in Asia. Railways were undergoing the switch to diesel, which meant new staffing and equipment requirements. There was a lot of abandonment of spur lines and small stations; airlines were moving to jet propulsion, and CP Air’s reach was extending. With so many things in flux, Day couldn’t really anticipate where the next challenge would come. “The old story was, if you get one deal done well, you go to the next and the next.”

  Day was not a one-man band. Very early, he realized he needed a trusted second-in-command or a team of them—what he later came to describe as his “sweeper.” It might be someone to sweep up administrative details and potential operational issues behind him. Perhaps, it was to be as much a minesweeper as a broom-wielding sweeper. It was not the typical boss-subordinate role, but more of a partnership, and he was able to spot talented younger people to be thrust into this role. After the job was over, he would take a keen interest in their careers, making sure they did well in their post-Day periods.

  His great talent was putting the right personalities in the right spots—strong people, not pushovers, people who would talk back and persuade him if they saw he was not getting things right.

  David Gardiner was a young Montrealer, just out of Sir George Williams University (now Concordia University) and working as a researcher at CP. His work took him to Toronto to review the railway company’s new properties in the eastern region; there, he attended a meeting that included a lawyer named Graham Day. Day seemed to be an interesting person, but also informal and friendly. Even though the two men had just met, Day invited Gardiner home for dinner. The three Day children were small at the time, and Gardiner remembers that, before the adults had dinner, Day disappeared into a bedroom to read a bedtime story. “He was a consummate family guy. You could see there were many sides to him right away.”

  Later, the two men would work together on setting up a holding company for CP’s shipping interests in Bermuda, and eventually they would travel the world together. Gardiner crunched numbers and did research; Day provided the legal work, and he could call the shots on behalf of CP. The trips to Japan were memorable. The grand vision was that CP owned coal mines, it owned oil companies, it owned the rail system, along with terminals in Vancouver. So why not build ships in Japan and carry coal and other goods over there? There was a lot to do because they needed to negotiate contracts to build the
ships and carry the goods. The tasks were varied and seemingly endless.

  There was one marathon trip to Japan in 1967 to arrange shipping deals to carry resources from Australia to Japan. The two men waited and waited for meetings, but nothing was happening. Days stretched into weeks and months. At one point, after a month or two, a frustrated Graham Day was on the phone with Buck Crump in Montreal about the fact he was still sitting there. How long should he wait? Crump asked how old he was. Thirty-three, Day replied. Well, Crump remarked, “you still have thirty-two years to retirement, so settle in.” “We just weren’t allowed to come home until we had actually signed up something,” Gardiner says. The targeted deal did get done, and then two more transactions were achieved on the same trip.

  Day was learning what many North Americans did not yet grasp: the true test of partnership in China, Japan, and many other Asian countries is patience. He would watch others, especially Americans, arrive in Japan with the best of intentions, expecting to drive a deal and be on the next plane home. That would not happen. Their would-be Asian partners would ask themselves if these guys could be true long-term business partners when they were so impatient. For Day, the fortitude to wait out his hosts eventually resulted in big contracts, but it took time, and these lessons stayed with him, as Japan became a constant factor in his later careers in shipbuilding and automaking.

  Gardiner was struck by Day’s prodigious ability to read and absorb. When he went into a meeting, he had already researched the country and its history. He could talk knowledgeably about Japan’s dynasties and about the cultural aspects of Japanese domestic life. Gardiner remembers being invited to a Japanese executive’s home for dinner, which was very rare. “And Graham knew every one of the customs that were normal in that environment.”

  Gardiner also got some insight into Day’s musical background as they visited Tokyo’s karaoke clubs, with Day quickly becoming the star attraction at a couple of them. He kept being asked back to perform.

  The flip side was Day’s toughness in business. “He didn’t suffer fools gladly, for sure,” Gardiner says. “He had that kind of aw-shucks way about him at times, but he was hard. He knew his business.”

  The Japanese had a strategy to wear down the Canadians. Day and Gardiner kept getting triple-teamed. Three men would work with them all day, then three others would take them out for dinner. Three different people would be there to see them the next morning. “But Graham was on to that, and a couple of times we just took off, and weren’t in our hotel for a couple of days.”

  Day gained an appreciation of Japan that continued through the CP deals and, as a British auto executive, in negotiations with Honda over new car models. He even learned to speak a little Japanese. On one trip to Japan, when Day was dealing with trading company Marubeni, one of its managers, who had become a friend, was entrusted with keeping him company on a long weekend. The two men visited the shrine at Nikko, formerly the treasure house of the Tokugawa Shoguns, war lords who ruled Japan for hundreds of years. His Japanese friend decided Day needed an omamori, or “body safe,” a talisman for longevity carried by many Japanese. The friend bought one for him, and Day would carry the little silken bag with him always. When the first one wore out, he got another one. Decades later, in his eighties, Day would report that the bag was dog-eared, but still doing its work.

  It was clear that Day was a comer in the CP organization. He was a manager who had been bloodied by battle, had carried the day, amassed varied experience, and proved he could deliver results. “I had been told, and I believed, that I was being prepared to be a contender for one of the top jobs,” he says. He was also told that boss Ian Sinclair resented the support for Day among senior managers for whom he had performed. There was also a strong precedent for plucking CP’s leaders out of the legal department. Sinclair himself had that background, and so did his number two, Fred Burbidge. According to Peter Mills, Day’s colleague at CP, “the law department was seen within CP as one of the sinews that went around the whole empire and was a ground for talent development into very senior positions. You were either an engineer or a lawyer to be the CEO of CP in those days.”

  Mills became another of Day’s sweepers. The recruiting of Peter Mills paralleled what Day himself had experienced, drawing on that extensive Maritime and Dalhousie network. Mills, a Nova Scotian studying at Dalhousie Law School, was a good student, recently engaged to be married, with the potential for postgraduate studies. One of his professors asked if he might consider a corporate law post; he knew a guy at Canadian Pacific who was looking for someone like him. The wheels started to turn, and within days Mills was being interviewed by Graham Day. Mills found that the older man had already done extensive due diligence. He knew about Mills’s fiancée Lynn, his fiancée’s family, his father, and what he did. “It was almost instant chemistry,” Mill recalls. Soon, Day was making an offer for Mills to join CP in Toronto, promising interesting, challenging things to do.

  Mills learned that among Day’s talents were talent spotting and delegating. He drew people to him, and people could see he was on the move. It also meant he had occasional jealous competitors, although it was always very polite.

  Later, when Day was transferred back to head office, Mills remembers him bursting into his office: “How would you like to go to Montreal?” By that time, they were very good friends, and their families were friends. “I always felt like it was an informal partnership. Graham was the senior partner, obviously, but our complementary skills made it very useful to him to have me bird-dog things for him.”

  Mills did a lot of the actual legal work, while Day took a broader focus. Day appreciated that Mills was a very good writer. The two confided easily in each other, and later, when they moved to England, they actually did each other’s banking on occasion. “We were tight enough that I could tell him when he was just plain wrong,” Mills recounts. It was not always easy—Day was physically tall, intimidating, and very forceful. Mills recalls there was a little joke in the company: really, it’s not true that Graham was kicked out of the Mafia for excessive cruelty.

  Mills saw another dimension to the man. When the two families moved to Montreal in 1970, it was a very hard winter, with huge amounts of snow. The Mills family lived in suburban Beaconsfield, about three blocks from the Days. Lynn Mills, pregnant, then contracted German measles, which meant there was a risk to the unborn child. The Millses had to get to the hospital, but they couldn’t get their car out of the garage because of the deep snow. Day managed to get one of his trusty Beetles onto the street, plowed through the snow to the Mills’s house, and got Lynn to the hospital. That was the kind of thing he would do.

  Not that he had much time to be the good neighbour, because he was always on the road. He happened to be in Canadian Pacific’s London offices on April 1, 1970, when he was called to a meeting. He was told that the parent company of Cammell Laird Shipbuilders, the Merseyside company that was building three first-generation container ships for CP, would likely have to declare bankruptcy. Day was told by Montreal head office to stay put and monitor the crisis.

  Britain’s Labour government had earlier formed an investment bank, the Industrial Reorganization Corporation (IRC), to intervene in situations like this. Within the next couple of days, Day was sitting down with a team from the IRC to try to arrange a rescue. The IRC team was led by another Gardiner, John (no relation to David), a fascinating character who would become one of Day’s closest friends and fiercest champions. Whip-smart and boisterously opinionated, John Gardiner boasted a strong financial background, having been an analyst at the Prudential insurance company and later a financial journalist. He had been a writer of the widely read and rigorously reported LEX column in the pink-sheeted Financial Times before joining the government and getting involved in tight situations such as this. The two men were drawn to each other, no doubt because they were intellectual equals.

  The upshot was that the British go
vernment, through the IRC, acquired half ownership of the shipyard’s parent company, Laird Group. Gardiner became the managing director of the Laird Group, and the government agreed to be managerially passive. Day spent the summer working with Gardiner and his team to solve the crisis and ensure that CP would get its ships. Any rescue plan depended on the yard’s customers kicking in more money. Most of the shipowners were balking, but Day stated CP was ready to step up and contribute to the interim funding. His comment to Gardiner was: “If you fly with the crows, you can expect to be shot with them.” A plan was hammered out to keep Cammell Laird going.

  Meanwhile, Gardiner had a chance to inspect close up the young Canadian across the table. He could see this was someone who wanted to be more than a travelling troubleshooter; he wanted to run something. Gardiner tucked that observation away. The two men, and that star-crossed Merseyside shipyard, would meet again soon.

  Chapter 6

  A Hard Day’s Night

  It was the dead of night in the old shipyard of Cammell Laird, one of the world’s most venerable shipbuilding companies, directly across from Liverpool on the broad Mersey estuary. An almost completed Canadian Pacific container ship, one of three under construction in the yard, was floating in the wet basin, awaiting the final touches before edging out to sea. But a labour dispute had broken out in the yard over which workers got to do which tasks. It had blown up into a full-fledged strike that had closed down Cammell Laird. Throughout the day, pickets clustered around the entrances to the yard, and nothing was moving, in or out, including the CP ship trapped in the wet basin.