Interview with Pierre Lavallée of Canadian Pension Plan Investment Board (Part 2/2): Lessons from a career in government, professional services, and finance.
Pierre Lavallée leads the Investment Partnerships team at CPPIB, which includes investment in private equity funds and secondaries, co-investments, direct private equity in Asia, public market investments through external managers, and thematic investing. Pierre joined the CPP Investment Board in April 2012, as Vice-President and Head of Funds & Secondaries in the Private Investments department. He was Senior Managing Director & Chief Talent Officer from March 2013 to November 2015, and was appointed to his current position in January 2015.
Prior to joining CPPIB, Pierre was the Executive Vice President, Reitmans (Canada) Limited, based in Montreal. Before joining Reitmans, he spent over 18 years with Bain & Company in Toronto. Pierre led Bain’s Canadian practice in retail, telecom and private equity. He also served as Managing Partner for Bain & Co. Canada. Before Bain, Pierre spent 5 years with the Government of Canada as a Trade Commissioner in the Department of External Affairs and International Trade, serving in Ottawa and Japan.
This is Part 2 of a 2-part interview. Part 1 is here.
Pierre’s key ideas?
- Clarity of purpose is very important.
- Commitment and self-sacrifice from leaders is critical.
- Help talent succeed, even if it means helping them find a job somewhere else.
- Keep the lines of communication open with your talent-always.
- When pursuing a new opportunity, bring the very best talent to the problem, and work in partnership to succeed.
Part 2:
Q: You’ve worked several places in your career, but the place you worked the longest was Bain and Company. What kind of impact did that company and culture have on you as a professional?
A: Obviously if you spend over 18 years in a place it is going to leave some scars, and I think of those fondly! I still maintain a very active relationship with the firm and the people there. Some of my longest lasting friendships in Toronto were built in a small office, where we all worked really closely together.
What I learned is that clarity of purpose is really important. We had an offsite in 1992 (I joined in ’91) where Orit Gadiesh, the chair of the firm made a speech that turned out to be a pivotal moment in the firm’s history. In the speech, Orit did a great job of translating our recruiting sales pitch into what it really meant when we would find ourselves in a tough client situation, a tough team situation, or when we were trying to do something that had never been done before. She brought in examples from her own experience. And having the privilege of working with her over several years, she clearly lived it every day.
It was a powerful speech and she had the support of the senior team and then that whole group behaved in a way that all of us were expected to, and also wanted to emulate.
For me, that was a great example of having clarity of purpose, strong communication, and of investing in order to enable the people to accomplish what you set out for them as a stretch objective.
There was a combination of firm, people, strategy, operations, motivations, and incentives that I was fortunate to witness early on, and then contribute to building over the following 15+ years.
It sounds a little bit like a start-up in the sense that start-ups live very close to the line. Some of them don’t make money for very long periods of time. But now we don’t think of Bain as a startup because it’s such a well-known global brand.
It was a start-up in Canada. The firm had 800 to 1000 people, so it was not a small firm. But it was a restart; it did not have a balance sheet, not a solid one anyway. The partners, and this is one of the things that connects it to the analogy that you’re drawing — the senior partners at the time of the rebirth of the firm had all committed to working two years unpaid. If there was no profit pool they would not ditch. They would stick around and give it at least two years.
Ultimately they were paid because the firm turned the corner much quicker than anybody thought. That level of commitment though…think of that group, they weren’t the 60-year-olds who had already accumulated some wealth. These were people who had kids in primary or high school. But they believed so much in what we were trying to do, that they were willing to do it for free, for two years. They gave the young ones like me an opportunity that otherwise would not have existed.
I’ve heard that at Bain, you were seen as ‘the guy that people came to talk to, and seek advice from.’ Did you cultivate that consciously, or did it happen naturally?
I always encouraged people to come and chat about what was on their mind. If it was about the strategy for the office or the firm, their client, or personal life, or even if it was about the headhunter call they got that included a really appealing offer.
The other thing I learned over time, from having close friends who went through that process of leaving Bain, is that leaving could be the right answer for them. As much as you want to retain your highly-productive employees, if they’re going to be miserable, then it’s not going to serve anyone, and ultimately they’ll leave.
What I tried to encourage people to do was to say, if you’re going through that thought process, let’s talk about it. Over time I saw people make some bad decisions. They left for the wrong job and/or at the wrong time. They would have been much better to stay another year or 18 months, or not jump on the first offer they got that looked appealing. With someone who’s not gone through that process, you can have a discussion to help them make the right decision for them at that point in time. That’s part of what we were trying to do, and it wasn’t just me, it was my partners and the senior team there as well. We were trying to create an environment where people felt comfortable discussing these things, and eventually it became a more natural thing for me.
When you were the managing partner for Bain and Co. Canada, how did you try to lead people there?
I tried to emulate the sort of things that had been successful for the firm overall. Clarity of purpose. Clarity of direction. Very broad-based collaboration. When the office was first set up here, we were basically told “you’re an island, figure it out.” We were the smallest of the major consulting firms in Canada. We had a more junior team, a more junior partnership; so we had to find ways to compete.
One of the approaches we had was to draw on expertise of the global team, outside of Bain Canada. I spent a fair bit of time insuring that when we were going into a competitive situation in Canada that we were bringing in the full force of the firm to the effort, not just the best that we could muster in Canada.
A typical sales pitch would be one or two partners, meeting the client, saying “here’s our point of view, here’s what we think you should do, here’s how we would do it,” it’s very standard. There’s one meeting that stands out where we brought nine senior partners from around the world in to one specific client, with no specific pitch. Our approach was to say “here’s what we’ve done, here’s what we know in the various areas relevant to you, let’s talk.” The conversation went on for two or three hours, and when we left the meeting the client essentially said “don’t call us we’ll call you.”
My eight partners who had flown in from Singapore, Hong Kong, Amsterdam, San Francisco, and Boston, and I all wondered whether this had been a gigantic waste of time, but before we made it back to the airport, the client called and said “could you come back because we would like to talk about the first piece of work we’re going to do with you.” So three of us went right back downtown to scope our first project. It led to a great, productive relationship. It was a great example for me of investing heavily up front to rally the best that we could muster, which can be unbelievably powerful.
Actually, it’s a principle that applies to what we think about in terms of investment partnerships at CPPIB. If we’re trying to invest in a particular way or in a particular sector or business, we don’t think that we have to do it all here. We think about ways to build something that can compete with the absolute best in the world.
At CPPIB, we work to create the best alignment possible with the best partners, so everyone is rowing in the same direction and at the same cadence. It was important at Bain and it’s also really important at CPPIB.
CPPIB has been growing steadily in the past few years. With that naturally comes some talent management challenges. Tell us about some of the talent issues you faced as you took the job of Head of Talent at CPPIB, and how you addressed them.
I took on that role a little over 3 years ago. At the time, we had been growing quickly for several years, and one of the first things that was obvious when I started to work with the HR team was that they were working unbelievably hard. Their capacity and capability had not grown at the same pace as the rest of the firm. HR is one of these areas where the effort is proportional to the workforce that you are trying to manage. If you don’t add resources fast enough, you end up doing what these people were doing, which was working unbelievably hard and always feeling like you were behind.
We set out to fill those capacity and capability gaps as a first order of business. That was both to add horsepower where we needed it, and add capability in some areas where we didn’t have anyone with the relevant experience. For example, we put an HR person in our London office and another HR person in our Hong Kong office. We have over 100 CPPIB employees in London, and as dedicated as our Toronto-based people were, it didn’t make sense for London-based employees to call Toronto about their dental claim or maternity leave questions or to discuss more sensitive issues. Where we have the critical mass of employees, it makes more sense to go down the hall to talk to their HR business partner or talent acquisition advisor.
Having recruited a lot of people set the stage for us to shift our growth model. We were at a stage where we had a large group of people who wanted to build a long career here, which is a great thing. We just had to give ourselves the tools, processes, training programs and culture to grow that talent. That is a process that we are still in the middle of, as we try to build an institution that will be able to self-regenerate for decades.
We think of career development as a lattice rather than a ladder. Every good move in my career, was not necessarily a step up, it may have been a step sideways. But in many places a lateral transfer is perceived as negative. When I took a lateral move from Ottawa to Tokyo, it gave me a great opportunity to grow and develop. It was a lateral move and it was a phenomenally enriching experience.
There is compelling evidence that diversity contributes to making better decisions. We are working hard to build a diverse organization and within that, we think that employees with a diversity of experience will also be superior decision-makers.
If we’re going to retain our people long-term, we need to continue to offer them great challenges, opportunities, and resources to get the job done. That’s what we are focusing more of our time on, now that we have built the capacity to deal with the day-to-day HR stuff.
You have a new CEO, Mark Machin, who grew up in England and spent 22 yrs working in Asia. You’ve also had cross-cultural experience in your career. As someone who’s also lived and worked in both Asia and Canada, have you given him any suggestions on leading and managing people in Canada?
The short answer to your question is no. I haven’t had a fireside chat with Mark saying “you’re coming to Toronto here is what you ought to do differently”. Over the last four years that we have worked together, we’ve had many discussions on how we build teams, capability and capacity, in all of our global offices. He had a role to play in that as head of international, I had a role to play in that as head of talent and investment partnerships.
I think both he and I, generally speaking, recognize that we can’t do everything exactly the same way everywhere. There are different cultural norms across the world, and that means there are some things that we need to adjust in each market. We need to adjust both as an employer and as an investor but within our overall culture and guiding principles. It’s phenomenal how cohesive and consistent the culture is across our different CPPIB offices and Mark was part of shaping that culture for the last four years.
The change of leadership is being done in the spirit of continuing what we already have under way. That has made the transition pretty seamless versus what I’ve seen in other places. It is also allowing us to focus on continuing to execute our strategy and to build a solid institution to deliver on our commitment to 19 million contributors and beneficiaries of the Canada Pension Plan.
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