As Calvin McDonald (Executive MBA ’00) reflects on leading a company through a crisis, he says it's crucial to not only address the immediate problem, but to forecast its mid- and long-term effects.
Calvin McDonald, Executive MBA ’00
lululemon was well positioned to weather the effects of the pandemic, said McDonald, CEO of the Vancouver-based high-performance athletic apparel retailer. With the normal pace of life coming to a halt, more people were looking for comfortable yet functional outfits for home and work. More people also turned to physical activity for stress-relief.
But despite this, lululemon was hit with significant operational challenges.
“In the first year of the pandemic, the volume for our digital channels was unprecedented with online shopping becoming the only way for our guests to interact with our brand. Our digital infrastructure couldn’t keep up with the demand on our website,” McDonald told a virtual audience as part of a Rotman event series with Canadian CEOs this spring.
lululemon had to pull forward almost three years' worth of investments in capital expenditure to build upon its digital infrastructure – years ahead of schedule, he said.
The company had to balance this digital growth spurt with ongoing operational issues, including store closures and manufacturing upheaval.
“Do we cut orders with manufacturers, or find a way to pause rent with landlords of our stores? Will employees need to be laid off, and how would we rehire once stores open again? These were questions that our leadership grappled with,” said McDonald.
To make decisions, he deferred to three guiding principles: protecting lululemon’s people, managing its share of mind for both short- and long-term and continuing to invest in the future.
“We decided we were not going to cut orders, working with our manufacturing partners and figuring out flow; we were going to pay our landlords, and we would pay every full-time and part-time employee through store closures,” he said, noting that lululemon was in a fortunate position financially to do so, with a board that supported those decisions.
"You have the opportunity to choose who you want to be in a crisis. You either lean in on your values and culture or you choose not to, and we chose to lean in. But most importantly, I think you want to look back and know that culture and values aren't just words in the organization – it's truly how we show up for each other.”
“Showing curiosity and vulnerability with a willingness to be nimble are signs of an effective leader.”
—Calvin McDonald
CEO, lululemon
Executive MBA ’00
Long-term leadership
Thinking about the long-term potential impact of the pandemic, McDonald points to the extensive lead time for new products in the apparel industry, which often require two to three years to conceptualize, develop and produce.
“Two to three years from now is when you run the risk of seeing the implications of the pandemic — from remote work to a lack of inspiration by the very teams that are creating the products which fuel your business,” he said.
“It’s critical to engage those teams and make sure that you're not extending the crisis, you’re building the right products and empowering them.” From his time at the Rotman School in the Executive MBA program, McDonald said it was the lessons on effective communication that stayed with him to this day. “One of my favourite courses in strategy was taught by David Beatty, who always reinforced the importance of strong communication,” he said.
“That really landed with me — you can have the most disruptive idea imaginable, but if you can't articulate it, inspire and enroll people behind the idea, it's not going to go anywhere.”
He added that time management and prioritizing tasks is one of the biggest skills learners walk away with from the program.
"Those are the skills that you bring forward in life. I'm applying them all the time. Am I focused on the right things by allocating the right time to the right ideas? How do I manage my time knowing there's an infinite amount of work and a finite amount of time?” McDonald said.
Vulnerability can go a long way to help leaders connect with their teams, he added.
"The general image of a leader having all the answers or conveying a sense of confidence even when they don’t feel it — I think that's a dated leadership style. Showing curiosity and vulnerability with a willingness to be nimble are signs of an effective leader.”
McDonald’s insights have recently been published in a book, Unprecedented, a collection of 29 first-person stories on leadership during the COVID-19 pandemic from chief executives at Canada’s largest companies.
Written by Jessie Park | More Student Stories »