When David Shaw talks human resources, people listen. It has something to do with his resume.

Indeed, as chief executive officer of Knightsbridge Human Capital Management, he comes by his human resources savvy honestly. Shaw warmed up for this midlife career as an entrepreneur with a 22-year posting with PepsiCo International, pitching pop, including a four-year stint as president and CEO of PepsiCola Canada Beverages.

But when that job beckoned him to leave Canada, the 45-year-old Shaw seized the opportunity to make his dream of starting a company a reality.

Over the past four years, the Queen's University commerce grad has transformed Knightsbridge into one of Canada's largest human resources firms with annual revenue in the $25-million range. Even for a seasoned soft-drink executive, that's a pretty impressive pop.

Ken Kerr, Business Edge
Knightsbridge CEO David Shaw understands the value of a talented staff.

1. What was your first job?

"My job was cleaning horse stalls during summers (from high school) at a pony club in Nolton, Que. (Laughing) The working conditions were bloody awful. You had to watch out you didn't get kicked. I also worked at building houses and at the Redpath Sugar refinery in the warehouse as a member of the union. While doing my university degree, I also worked at a couple of small CA (chartered accountant) firms."

2. How do you reflect on your university experience and how it has helped you succeed in business?

"I had a focus on the accounting side of business, but as I progressed in university I realized that I wasn't an accountant. Yet, I understood the need for financial acumen. I think there's a big difference between those who are accountants and those who are sort of financially versed. What I did take from my studies was that if you want to run a business successfully, you have to have a fairly good understanding of the financials of your company. Anybody can look at a balance sheet. It's those who can look at a balance sheet and read it like a book who are generally successful as chief executives of companies."

3. How did you get your start with PepsiCo in 1976?

"They ran an ad in a newspaper for a financial analyst. I answered the ad, and I can always remember that because I hand-wrote the letter for the resume. I was told that one of the reasons they called me in for an interview was because I had taken the time to write it out in my own hand. And I got the job out of about 250 applicants."

4. What was PepsiCo like to work for?

"One of the great things about PepsiCo is that when they see young talent, they will offer you opportunities to work in various jobs.

They did that with me. Eventually, I moved from accounting to work in franchise opportunities. That was good experience for me because I learned consensus management and how to deal with people."

5. What are some of the valuable lessons that you came away from PepsiCo with?

Ken Kerr, Business Edge
David Shaw is 'having too much fun running this business.'

"One of the things I learned very clearly from PepsiCo was the value of people. Whether I was working in Canada, internationally or back in Canada as CEO, there was always a focus on how to develop good talent and how to make sure we kept that talent. As as result, I think Pepsi people are well sought after."

6. What kind of a leader were you when you headed PepsiCola Canada Beverages?

"I had an emphasis on customer relations. I really enjoyed the relationships with retailers like Loblaw or Wal-Mart. While they were tough negotiators, at the end of the day we both had something to bring to the table. I think people would look at me from a leader's standpoint as someone who could build and develop relationships with the customer base. Internally, I was as comfortable talking to people at the CEO level (senior management) as I was talking to people in the trucks or in the plant. I had no problem rolling up my sleeves because of my background in the company. My view is that understanding how your business operates right from the frontline, knowing who your frontline people are and who they're communicating with in terms of customers are the keys to success. If you don't understand that, then you aren't going to understand anything sitting in your own office. My leadership style was informal. Yet, it was one where I had a clear relationship with both senior executives and union people."

7. Why did you leave PepsiCo after 22 years?

"The company effectively took the North American bottling assets and pooled those into a separate company called Pepsi Bottling Group, which was a separately traded company on the New York Stock Exchange. So, within a very short time, my job was a very different job and a smaller one. While there was an opportunity to return to the international side of the business, you reach a point in your life where your family says that's enough moving. I had four sons, three of them teenagers, and I wanted to make sure they stayed in the same school for four to five years. When I combined the personal factors with the business factors, I made a decision not to stay. I was only 45 years old then and realized that if I wanted to live out my dream of becoming an entrepreneur, that was as good a time as any."

8. Why did you choose to go into the human resources business?

"Growing up in PepsiCo, you get it in your DNA that people really do matter and learn what a difference good and great people can make to any organization. When I looked at the landscape, I saw that there was an opportunity to get into human resources because KPMG was selling its human resources business (a business Knightsbridge acquired). People ask me how you can go from selling Pepsi to selling people consulting services. The linkage was my love of working with people. I had been successful with that at PepsiCo, I felt I understood it and felt I could probably do it with my own company. But I can tell you one thing. Managing an organization where your revenue is driven by the people in your company versus selling a tangible product like a case of Pepsi is a very different proposition."

9. Why is this a good time to be in the human resources business?

"Right now, people have to become more concerned about the talent they have in their organizations for two reasons. First, you've got the demographics at the upper end working against you because the Baby Boomers are getting to a point where they're starting to retire. For example, if you look at the Ontario government, over 60 per cent of their workforce will be retiring over the next 10 years. So you're going to see a huge amount of capability start to migrate out of the workforce that many companies can't afford to have. You've also got a situation where all the layoffs and downsizing that occurred in the late 1980s and early 1990s essentially gutted a number of organizations of their then-middle management, which would today be forming their leadership.

10. So how do you see the culture of the workplace changing as a result of those issues?

"Well, right now you're getting a very young workforce being asked to take on that leadership and they're not yet prepared for it. More importantly, the young people today are a very different type of individual. They've grown up in a world where search engines have always been a part of their lives. They've grown up in a world of communicating with friends by cellphone. And they've grown up in a world that is much more global and much more culturally diversified. So their expectations of what their environment should look like is very different from what I came into. After the downsizing, the young people looked at what happened to their families, with their dads being laid off. For them, loyalty took on something very different. They're not loyal to the company but they're very loyal to their colleagues and friends. And so the nature of work will change. The nature of work will become more project driven because these people like to work in teams and they're very good at it. They're going to be very clear about having a work/life balance."

11. So what will be the key to retaining the loyalty of the new breed of workers?

"It will be the companies who understand the young workforce and what their motivations are who will retain an engagement. If they don't understand the workforce, then the people will walk. When I saw something I didn't like, I just sort of stood up and said, 'Gee, I don't like that, we need to change.' The young people today? They don't even do that. They say, 'There are opportunities elsewhere and off I go.'" 12. What's the most common mistake companies make that leads to a disgruntled and unproductive workforce?

"For one thing, I don't think they communicate enough with their people. If you talk to young people today, you find that one of the things they're very good at is that they constantly communicate. They have cellphones and they have MSN (Internet instant messaging). So your ability to communicate, to be visible in front of (employees) and to understand how they're working is absolutely the biggest challenge."

13. What companies will be successful in managing such a challenging workplace environment?

"It will be those that recognize and reward cultural diversity. When you take a look at Canada, where we allow 250,000 immigrants a year right now, in order for us to satisfy our labour pool in the next 10 years, we're going to have to allow 500,000 immigrants a year into this country. And that's just to satisfy our current needs."

14. What in your mind makes a great business leader?

"It's somebody who can be decisive. It's somebody who can inspire a vision in people. When you've got a vision and you can keep coming back to it, and you hit a bump in the road, people understand it's just a bump in the road. But if you don't have a real clear vision and you hit that bump in the road, people tend to scatter in all different directions and say, 'My gawd, the sky is falling in.' If you're continually communicating with people and letting them know what your progress is, to me that's a great leader. People like to know where they're going."

15. What about CEO compensation? Do you know any CEOs who are actually worth $5 million to $10 million a year or more?

"You know, in my view it's all about shareholder value. For some CEOs, if they're creating value for their shareholders, they're absolutely worth it. What I completely disagree with is those who are taking a $5-million (pay) package and the shareholders are, in fact, losing money."

16. Do you shake your head when you look at the management problems that have dogged Nortel Networks?

"I think everybody does. This was a great Canadian company. It had all the hallmarks of being a truly international and global leader, and management stumbled. And that's unfortunate because that takes along with it people that are coming to work from nine to five every day and putting in the best effort they can. That's where leadership really comes into play. A leader must have integrity. If a leader doesn't have integrity, then the organization doesn't have that as part of its DNA."

17. What's your view of stiff jail sentences to CEOs such as Bernie Ebbers (who received a 25-year sentence) and the impact they may have?

"In my view, that (WorldCom scandal) was outright fraud. It's not about Ebbers. It's about the people who no longer have a pension. It's about the people who no longer have jobs. I don't think some of these CEOs understand the implications of what they're doing. I don't know that some of those sentences are stiff enough. But Ebbers (at 60) probably won't get out of jail. My view was that they destroyed people's lives and families' lives."

18. How do you rate the job Canadian universities are doing in preparing MBAs for the workforce?

"Our company is doing a lot of work with some of the universities on exactly that topic. One of our businesses is helping people transition from one job to another. There is very little difference when you start talking about the transition for MBAs looking for opportunities. We're working with universities on how you become more focused in looking for your job, how you market yourself and how you know what job you should be going into. I find that really exhilarating from a standpoint that I think the universities recognize that career centres aren't just the only thing that is going to make that (transition) happen. And the fact that we as a smaller private company are working with a number of large universities to help them tells me we both recognize that we have to do a better job at providing students with the tools that will enable them to get the right jobs."

19. What's your best single piece of advice for an MBA grad?

"In my view, you've got to go down to your belly. My best advice is that you've got to do work that, when you wake up in the morning, you can be really passionate about it. That may sound like a cliché, but really knowing yourself and going out and finding that opportunity is the best piece of advice I can give. You know, starting this company, I've gone through having to deal with banks and all those things you get with a startup. But at the end of the day, I wanted to keep going because I had the passion in my belly and I wanted to be successful."

20. What's your vision for Knightsbridge?

"In terms of size, it's to be a $100-million company (in annual revenue) and to provide businesses that are in tune with where the market is. We've launched a business called interim management where we're placing senior executives in roles for nine to 12 months. That's a huge business in Europe and it will be a huge business in North America. We also want to ensure that we've got those businesses that we know organizations either need today or are going to want tomorrow. I'm not thinking about (retiring early). I'm having too much fun running this business."

David Shaw

* Title: CEO/Founder/Part-owner, Knightsbridge Human Capital Management.

* Born/raised: Montreal/Montreal, London, Eng.

* Education: Queen's University (Kingston, Ont.), bachelor of commerce degree.

* Family: Wife Martha, four sons.

* Career: Shaw moved into the human resources business with Knightsbridge after ending a 22-year stint with PepsiCo International and its Canadian division, PepsiCola Canada Beverages, in 1999. He spent his last four years with the soft-drink conglomerate as president and CEO of PepsiCola Canada Beverages. Prior to that, he worked in various capacities with Pepsi in accounting, marketing and management, and managed operations in three countries abroad - Australia, Singapore and Turkey.

* Moonlighting: Shaw is the former chairman of the North York General Hospital Foundation and currently a member of the hospital's board of directors. He is chairman of the Stratford Chefs School and a board trustee of OMERS (Ontario Municipal Employees Retirement System). He is also on the advisory board of the Schulich School of Business and the board of Queen's school of business.

* Pastime: Reading.

Knightsbridge Human Capital Management Inc.

* Brass: David Shaw, CEO; Victoria Davies, vice-president/chief financial officer.

* Profile: Knightsbridge is a national human resources firm specializing in assisting clients manage their people. The firm was built by combining four of Canada's leading human resources consulting firms - the former KPMG career transition services, Herman Smith Search Inc., GSW Consultants and Bussandri Macdonald Groupe Conseil. The firm has 14 offices across Canada, including seven in Ontario and one each in Vancouver, Calgary and Edmonton.

* Key Divisions: Knightsbridge Executive Search (based in Toronto), Knightsbridge Interim Management (Toronto), Knightsbridge Bussandri Macdonald (Montreal).

* Moonlighters: Two of Knightsbridge's managers, David Weiss and Vince Molinaro, are authors of a book about the challenges of human resources called The Leadership Gap.

* Website: www.knightsbridge.ca

* Head Office: Suite 600, 350 Bay St., Toronto, Ont., M5H 2S6.

* Phone/Fax: 647-777-3000/777-3100.

(Gyle Konotopetz can be reached at gyle@businessedge.ca)