Speaking notes for Hubert T. Lacroix to ACC Québec

March 28, 2017, Montreal

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Hubert T. Lacroix, President and CEO of CBC/Radio-Canada, was invited by the Quebec chapter of the Association of Corporate Counsel (ACC Québec) to talk about disruption in the media industry and managing the public broadcaster’s transformation.

I have a great job. I lead an institution that has touched the lives of Canadians for 80 years – for many of you, it has touched you in ways that may be deep, very personal and long-lasting.

For me, my first “professional” connection to the public broadcaster goes back 33 years, 1984, when I was hired by Radio-Canada to cover basketball at the Olympic Games in Los Angeles. I had two lives at that time: one was as a public mergers and acquisitions partner at McCarthy Tétrault; the other was as head coach for the McGill and Quebec provincial women’s basketball teams.

So you can understand the pride I felt in being part of the Radio-Canada team assigned to cover the Olympics. I found myself analyzing basketball games alongside the likes of Richard Garneau and René Pothier.

I feel the same pride today, as I lead the public broadcaster through some of the most fascinating years of its history.

I started my term as president in January 2008, over nine years ago. Nine years isn’t that long; but in our world, it might as well be a century.

In 2008, 56% of Canadians reported owning a regular cellphone, while only 9% had a smartphone. Tablets hadn’t even arrived on the market and Netflix didn’t exist.

In 2017, 77% of Canadians have a smartphone. Slightly over half of Canadians, of all ages, own a tablet. Nearly 45% of Canadians subscribe to Netflix. And 9 out of 10 francophones have a home internet connection.

Digital has disrupted the way we work, communicate, do business, entertain ourselves and, naturally, how we deliver the news to you.

In 2017, we are also just beginning to understand the “internet of things” and how that connectivity will transform our lives. Just look at what’s happening with cars. They’re becoming increasingly connected and smarter. They can even park themselves now!

All industries have had to adapt to “digital and mobile.” That goes for the public and private sectors alike. Some businesses are dying out, others are being created. And some, like newspapers, are still struggling to adapt, with mixed results.

In my career, I have worked for both private and public organizations. Many of the challenges are the same, but the way you manage these organizations is completely different.

Private companies measure success in market share, revenue multiples, earnings per share, and share price.

At CBC/Radio-Canada, we talk about “return on citizen,” “benefit for citizens” and “accountability to Canadians.” Our measures are all focused on you and whether we are relevant and compelling in the delivery of our services. Our performance indicators depend almost entirely on our relationship with audiences.

As public broadcaster, it is essential that we have your trust. You count on us to inform you about the issues that matter to you, because you know that we offer you reliable information – something especially important in this era of “fake news.”

The most recent IPSOS surveys, both nationally and for Quebec, show that Canadians have a strong emotional connection with their public broadcaster. They identify with it and are proud of it. We are part of their lives, wherever they may be.

CBC and Radio-Canada ranked 10th and 6th, respectively, among the top influential brands for English Canadians and Quebecers. In Quebec, Radio-Canada is the most influential Canadian brand, on the heels of the multinational giants Google, Facebook, Apple, Microsoft and Wal-Mart. In English Canada, CBC remains the most influential media brand – ahead of Netflix, CTV, Rogers, Global and HBO – for the 6th year in a row.

Worldwide, CBC and Radio-Canada rank second behind BBC among television brands, also according to IPSOS. Among public broadcasters, we rank third right behind the BBC and the Swedish public broadcaster.

This vision, of a public broadcaster that’s close to the people it serves, is what’s behind our five-year strategic plan, Strategy 2020. It is all about us becoming more digital, more local and more ambitious in our Canadian programming.

In 2014, we saw digital as an opportunity to deepen our connection with Canadians.

If we had been starting over, the smart money would have been to invest EVERYTHING into digital.

But we were not starting with a blank canvas. We are an institution rooted in this country’s history, with powerful legacy assets, and a feeling of fierce pride and ownership by Canadians.

Public institutions like ours are expected to be at the forefront of change. We have to be connected and relevant to a digital generation. But, at the same time, we have to ensure that we don’t leave other Canadians behind – those who still watch about 27 hours of live television each week and really enjoy our traditional radio services.

Our English and French television and radio services reach 76% and 41% of Canadians each month.

So, we need to nurture these connections as we move to digital, all in an environment of limited financial resources. You can see our challenge!

It’s been two and a half years since we launched Strategy 2020. At that time, it seemed like a lot of change for CBCers. There was much resistance to our ideas. And it didn’t help that, as we were launching this plan, our government appropriation was substantially reduced and our advertising revenues were under pressure.

So, we had to scale back and let many people go. We lost a lot of talent.

The initial public response wasn’t much better: many feared that we were dressing up cost-cutting.

You wouldn’t have wanted to be sitting in my chair during those years.

Where are we today?

We now reach over 16 million Canadian users each month through our desktop, mobile and native apps. This is three million more than last year. We are closing in on our goal of 18 million monthly Canadian users by 2020. At that point, we’ll have doubled our initial reach.

We are reaching 60 % of online users aged 18–35, and CBC.ca is also the top digital news and information source for Canadians.

During last summer’s Rio 2016 Olympics, more than 32 million Canadians followed their athletes on our platforms. In terms of digital audiences, CBC/Radio-Canada’s English- and French-language websites and apps generated more than 229 million total page views and nearly 37 million video views over the course of the Games.

We’ve come a long way. It was a tough slog through the desert.

So, what have we learned about the challenges of transforming a large public institution?

Here are my three hard-learned lessons:

  1. Transformation is relentless. There is no finish line. Every decision, every conversation, has to have this direction as a filter and a focus, every day. But change and constant movement can undermine your employees’ sense of stability. Too much change, too fast, can paralyze an organization. Your employees need to see, as quickly as possible, how their day-to-day job fits with the corporate vision. As soon as you have more details to share, do so. Keep team managers thoroughly briefed so they can answer questions. Encourage open dialogue and provide updates as often as necessary.

  2. Your organization has to be ready for change. We invested heavily to retrain our employees for new digital skills (nearly 1,300 people) and for new business skills (630 people) to support our digital direction at all levels. We need to do more. Do not underestimate the importance of structured training programs. They give security to your employees in these crazy moments of change.

  3. Maintaining the momentum of your transformation is the key to success. Your employees need to see small successes every day. Because if they don’t see what they’re gaining from your transformation, they’ll stay focused on what they lost. We realized how important it was to keep employees informed of our daily victories. Humility is not the right approach here.

In September 2016, we launched a lab called Next Generation. It’s an experimental space, created and managed by millennials, to develop ways of enriching and sharing news and current affairs content.

In December, we revamped the format of our year-end interview with the prime minister to increase public participation. French-speaking Canadians were not only able to submit questions via social media; they could also speak to the prime minister directly on Skype or FaceTime. Audiences followed the interview live on ICI RDI and on Facebook. This new approach – which helped bring the concerns of people across Canada to the forefront like never before – would have been inconceivable three years ago.

People need to see that our transformation is allowing us to do things we simply couldn’t do before.

This is our transformation in action.

And while you are doing all this, you need to help your employees look beyond the immediate issues and see where our world is headed – to identify the blue-sky ideas that can change everything.

As many of you know, the Government last year launched a public consultation on the future of culture and Canadian content in a digital world.

The Government has indicated its desire to build a new model to support the creation, discovery and export of Canadian content. But the big question is: What should it look like?

We have recently shared our vision for building Canada into a CULTURAL POWERHOUSE – with public broadcasting at its very heart.

Just imagine the possibilities, in today’s digital age, to harness our Canadian culture and share it more broadly. To create a cohesive cultural investment strategy that engages all of our diverse and talented creative sectors. And that yields significant societal and economic gains.

What we are proposing is an investment in Canadian culture that will help drive the Canadian economy.

An ad-free CBC could focus on cultural rather than commercial priorities. We could partner more closely with Canada’s creators, industry partners and cultural institutions, without being limited by the need to monetize every initiative. Even storytelling could change. Anyone who has watched an HBO or a Netflix original series can see how rich, how layered, storytelling becomes without the need to program for commercial interruptions.

To exit advertising, and invest in additional Canadian content, requires an increase of $12 per Canadian, from $34 to $46, the equivalent of $1 more per Canadian per month. Canada currently ranks 15th out of 18 in funding to public broadcasters. This would raise us one spot, to 14th.

Such a move would allow us to remove advertising from all of our platforms and complete our transformation to digital. Even better, it’s an investment with a payoff for the Canadian economy. The global analysis company Nordicity recently determined that moving to an ad-free model would create an additional 7,200 jobs in the cultural sector and generate a net GDP gain of $488 million dollars a year in the Canadian economy.

That’s a significant gain.

So it’s really a question about how we see ourselves, and our future. If Canadian culture – the things we believe and the values we hold dear, are important to us, let’s develop a plan and a focus to ensure Canadian culture thrives both here and around the world.

That’s the suggestion at the heart of our plan.


Thank you.

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