Kevin Huckle, Kodiak Group Holdings Inc.

bh IN BRIEF

Kodiak brand footwear has been a Canadian icon for fifty years, but since 2000, all its manufacturing had been done in Asia. Last Fall, with the acquisition of Terra Footwear, Kodiak was able to move about one-third of its production back to Canada, to two small-town plants. Kevin Huckle talks about managing and growing the company in a fast-paced environment, and of the human resource (HR) issues Kodiak faces in merging the two companies, building teams, investing in training, introducing incentives, and implementing new benefit plans.

Q: What general management issues keep you awake at night?

My number one concern is that we stay focused on our key strategic initiatives. We’re in a consumer business where many things change quickly, including styles, and it would be easy to get off track. We will introduce new manufacturing technology, implement a national business-to-business distribution strategy, and capitalize on growth opportunities in the US and Europe. However, probably our number one issue is to successfully integrate the acquisition of the Terra brand and the 300 employees we now have in Markdale [ON] and Harbour Grace [NL].

Q: What are the major HR issues in your Canadian operations? Do they differ between Markdale and Harbour Grace?

There are some differences between these two plants. In Harbour Grace, some employees are third generation with Terra, but in Ontario, we need to reduce employee turnover through training and a stronger HR focus. But our biggest HR issue is merging the Kodiak and Terra cultures. Up until 18 months ago, they were fierce competitors. We really focus on team-building. We quickly got rid of the “we” and “they” terms, and we welcome all ideas as good ideas. We try to model our behaviour on the practices in the book “Good to Great”. We have also repatriated some of our production back to Canada and that’s really helped bring our marketing and manufacturing teams together. Of course, we needed to integrate our operating systems and our health benefit plans. We had tremendous support through our group benefit provider who helped us blend the best of our two previous programs and introduce the new plan to our employees.

Q: With smaller margins here in Canada, quality and productivity are crucial to your success. How do you motivate your workforce to achieve these goals?

Bonuses for managers and line employees are based on productivity and quality. We have some leading-edge technology and have invested in training to ensure that all employees are focused on high standards. We try to forecast our business very well and take advantage of lower inventories and shorter lead-times here in Canada.

Q: How important is your benefits package in attracting and retaining key employees?

It’s very important. Our group benefit advisor played a huge role in designing the plan and in meeting with our staff to take them through the changes. We think our new plan will help us attract and keep good employees. We know our average age is creeping up and claims are also rising. We now provide a fitness subsidy and will be working closely with our benefit plan advisor todevelop more health-focused initiatives.

Q: How does Kodiak ‘connect’ with the two communities in which its plants are located?

In both places, we are a major employer so we take our community responsibilities seriously. We sponsor various events and sports teams, and also support the local hospitals.

Q: How important is a healthy workforce? Is the HR role different today than five years ago when you purchased Kodiak?

HR has obviously become more important as the number of workers increased. Since we added a manufacturing component, we have also had more health issues. To deal with the most serious ones, we added short- and long-term disability coverage in 2003. Initially, there were complaints because of the shared cost, but now the plans are seen as very positive because some people have had to use them. We recognize the need to strengthen HR. With our 50% purchase of ISECO, we now have access to a more robust HR function, and we will be looking to them to share their best practices.

Q: What advice do you have for other small and medium-sized business owners for succeeding in the current Canadian economic climate?

Many Canadians sell themselves short. We take great pride in saying some of our products are now made in Canada. Really, who would have thought a small manufacturing plant in Harbour Grace could still be a success in 2006? But our people have determination, pride and a belief that they can succeed. The truth is, they continue to exceed our expectations.