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What Are My Values? Let Me Get Back to You

Holger Kluge on the big deal between Shoppers and Loblaw and the importance of a handshake

Holger Kluge has made his mark on the Canadian finance and business scene during his 55-year career. Notably, he was President of CIBC’s Personal and Commercial Bank and Chairman of Shoppers Drug Mart. He orchestrated the $12.4 billion sale of Shoppers to Loblaw Companies Ltd. with Galen Weston, Loblaw executive chairman and president. In this QSB Insight TALKS presentation, Kluge discusses his views on leadership, his experiences as a banking executive in Asia, and how the deal between Shoppers and Loblaw went down.

Video Highlights

6:00     Surveys consistently identify five key leadership traits: integrity, strategic thinking, adaptability to change, ability to work in a team, and communication skills. “While acquired skills such as math, finance, analytics, and accounting are important,” Kluge says, “their demand varies from time to time. In business, your personal traits, or soft skills, like communications, collaboration, thinking, and leadership, are just as important and maybe a deciding factor in your long-term career.”

8:56     When he started his first job at the age of 12, delivering newspapers, Kluge’s father told him to always look customers in the eye and give a firm handshake when collecting payment. Many decades later, Kluge would remember this advice when recruiting for a CEO for Shoppers. Most candidates left a bad impression because of inattention to seemingly small matters, such as failing to look him in the eyes. “You think these are simple things but they’re not. In Toronto, we asked [one candidate], What are your values? She said, Let me get back to you later in the interview with an answer, but she never did.”

15:08     Kluge talks about his days working in Japan, Singapore, Hong Kong, and China, building CIBC’s business in Asia. His most important business relationship was with Li Ka-shing, now Asia’s wealthiest man but then an ambitious small businessperson. Kluge approved a $1 billion loan for Li Ka-shing on a handshake even before the deal was approved by head office. “May your handshake be as binding as your signature on a contract,” Kluge says.

24:52     Kluge discusses the differences between working for a “boss” and a “leader.” His own leadership philosophy is to offer employees training and authority, to celebrate success, and to learn from mistakes. He also places a premium on corporate ethics: “There is no such thing as a minor lapse in integrity. Ethics starts with you and your value system and the company that employs you.”

35:32     Kluge is best known for his involvement in the $12.4 billion sale of Shoppers Drug Mart to Loblaw Companies. Shoppers had rebuffed Loblaw four times. After the last refusal in 2013, Galen Weston, Loblaw executive chairman and president, called Kluge and asked if they could go “for a ride in the country.” When they got together, Kluge recalls, “He asked, What do you want? I said, It’s very simple. I want a 30 percent premium, an unconditional deal, and we have to do it over this weekend so it doesn’t leak and no one else can jump in. He said, Can I have a handshake agreement on that? And I said yes.” As for why he didn’t offer Shoppers in an auction, he said, “I am very competitive. I don’t like American companies continuing to monopolize Canadian firms, and here as an opportunity to build a first-class Canadian company.” The challenge now is to build a new corporate culture from two very different organizations, one entrepreneurial and the other family oriented.