JULY 2016SPECIAL FEATURE

PAT CHETCUTI “Family comes first”

Joseph Badaracco Jr.’s must-read masterwork, Questions of Character: Illuminating the heart of leadership through literature (Harvard Business School Press, 2006), is perhaps the most singular examination of how the story of leadership isn’t nearly so much about skill-set but about how (and why) leaders challenge their own character to connect better—to share the beating heart of their story.

Badaracco’s no lightweight: he’s the John Shad Professor of Business Ethics at the Harvard business school. His book stems from an experiment he tried: asking a class of seriously accomplished CEOs (not students, mind, but folks with payrolls to meet and investors to satisfy) to read a short story by Joseph Conrad, The Secret Sharer…as a shared story about responsibility, not a business school case study.

What happened next stunned Badaracco.

The entire class rose to the challenge of debating the decision Conrad’s central character faced in the story—hook, line and sinker, the CEOs, none of whom had ever commanded a merchant ship in Southeast Asia like Conrad’s lead character, talked about responsibility and leadership and choice, grounded

in the deeply written world of Conrad’s character.

In short, we see people in the round, leaders most of all, because, in life, leaders are far more complex than any interview can capture. But ask a leader to tell a story about their business—not its sales numbers or its market share or market cap—and it’s a whole different ballgame.

FCT co-founder and President Pat Chetcuti’s leadership story is grounded deeply in his own family’s moving, powerful saga: his business roots are truly his family’s roots, the ongoing chapter of the kind of immigrant success story that might make average folks wonder what they’ve been doing with their lives.

First off, Pat’s of Maltese descent; like anyone from Malta, his family’s history is marked by their home island’s story, a story of great odds, real courage, and a street-smartness you’d expect from islanders who for thousands of years have been targets for conquest, from the ancient sea pirates of North Africa all the way to Hitler’s Luftwaffe, who tried (unsuccessfully) to bomb the Maltese into submission in 1942. That didn’t work.

The funny thing about leadership is that, as a set of human qualities, it’s far more simple than most biographers think: it’s about connection.

Human connection.

We don’t often hear this, because most leaders are all about what they’ve done and how they’ve done it: the cv story that runs in their heads tends to detail the accomplishment, not the why of how their story came to be.

And story is the key: no leader is solely their role—in fact, current social psychology research suggests that if you really want to connect with anybody about anything, share your story.

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“The Maltese tend to be A-types,” Pat observes. “That might have something to do with the fact the capital, Valletta, is a walled port town, constantly being defended, constantly under

siege, because of all the times people tried to invade the place.” Pat’s father and mother hailed from the same small town of Hamrun, not far from the densely populated capital district, on the southern island; locally, the Hamrunizi are renowned as a tough bunch and great stevedores—but the town also boasts the greatest density of schools in the whole country.

Pat’s father, a carpenter, already had a wife and two children to support when he left for Canada “for Hamilton, in 1948, with absolutely nothing,” Pat says. “He worked construction all his life, for a major company, while my mum looked after the five children. His success was directly related to the relationships between his customers and the company he worked for. When I was young,” Pat recalls, “I watched the clients sitting at our backyard barbecue, with him entertaining. I saw the respect they had for him. That respect was how he succeeded in his role of looking after the family.”

The first family home was a garage, a space Pat’s father converted into an apartment for free rent, on Hess Street North. His mother, still traveling back to Malta with Pat at age 93, came to Canada on a boat that took 28 days to cross the Atlantic, with two young children in tow, poor food—a very, very tough go,” Pat recalls. “I can’t even imagine.”

Those qualities of duty to family, connection to the community and simple pleasure in serving others all mark Pat’s own values. “I had an economics professor tell me once that the practice of law is really a business,” he says. “I never forgot that. Customer service has always been critical to me in my practice and at FCT: the distinguishing factor is service. That’s what sets a business— and its people—apart.”

In Pat’s case, the saga of FCT’s founding hinges not on an “elevator pitch,” but a moment in an elevator after the pitch.

To cut to the chase, the story goes like this: “After 19, maybe 20, years of running a very busy real estate practice in Hamilton,” Pat says, “I realized that 99 times out of a 100 the off title searches we were required to do came back clear and it slowed the process down and made things more expensive. An ideal opportunity to use insurance.”

“Then my partner and I bought a condo in Florida. I tore a page out of a payphone telephone book to find a lawyer to act for me on the transaction. The lawyer I called said, ‘We don’t do things that way. The title company does that.’ So I went through the (Florida) process and it was a good experience. Three years later (1992), I was doing some work for Income Trust here in Hamilton and (was asked) to give some advice on the concept of Title Insurance. Tom Grifferty, the CEO of First American Title in Canada had just given a presentation.”

Armed with Tom Grifferty’s phone number, Pat cold-called First American’s CEO and stated his case: “ ‘I hear you’re bringing title insurance to Canada—I think that’s a great idea.’ There was dead silence. Did I offend somebody? When we finally met, I asked him about the prolonged pause.

I thought you were a friend, playing a joke on me, because I’ve been running around (Canada) for the past year, trying to sell this idea and I would usually end up getting thrown out of the (prospect’s) office—‘we don’t need that here, go back to the United States kind of deal.’

But I knew what title insurance could do, how it could improve the process. I had to help design it and bring it to Canada.”

When Tom Grifferty met with the insurance regulators to register FCT, he discovered his start-up was the third title company in Canada. The regulator was dumbfounded: “Why,” he asked, “are you doing this? The other two companies aren’t doing any business.” Undeterred, Pat and his partner decided to stick their necks out: “We figured we could use title insurance to change the way (mortgage) refinancing is done in Canada. We knew we had the solution.”

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Fast forward to a high-pressure 1993 meeting in the Canada Trust Tower, 35 stories up, in a big board room, at a big long table. Pat and Tom were negotiating a pilot title insurance project for the trust company in their western Lake Ontario region, including Hamilton.

“There were senior vice presidents there, very senior individuals, risk management, product people,” Pat remembers, “as we did our spiel. The risk people had done their due diligence on First American but the operations and the technology people sat up and said ‘Listen, you realize we’re as busy as banks are? There’s going to be a huge volume, even in this restricted pilot area. The only way we’re going to do this is with email.’ There were total blank stares (between Tom and me). Finally I said, ‘Absolutely. There’s no other way we can do this except through email.’ Now this was 1993. Email was just beginning—in fact, GE had just launched email.”

The Canada Trust team replied, “OK, email, that’s what we’re going to do. The pilot’s approved.” Pat and Tom left “as calmly as we could and headed for the elevator. The elevator doors closed and there was no one but us inside. And I turned to Tom and said, ‘What the hell is email?’ He looked at me and said ‘I thought you knew!’ ”

Upshot? On May 4th, 1994, FCT was ready to go live on email…and Canada Trust wasn’t. The team spirit of that sprint to launch the pilot that would make the company, still fires Pat’s passion all these years later. “That’s the personality of the people at FCT—they’re ‘just do it’ people. Our employees are incredible. Some of the things they do have astonished me, what they’ve done to make things happen.

Pat recalls a particular compliment paid to the FCT people: “I’ve had visitors tell me that ‘the building vibrates.’ I can’t think of a higher compliment. And that culture was built from that day at Canada Trust. You could have that same (elevator) conversation with FCT people today. No question. That’s the greatest success,” he says quietly. “This culture was absolutely conscious. It was essential. We couldn’t have pushed the real estate transaction and changed the process otherwise. People told us we were crazy—the old way was how things had been done for decades and decades. Nothing changed.”

He pauses and thinks for a moment.

Without that quality and dedication of your employees you can’t deliver world-class customer service. You need world-class people to deliver world-class service. The reason FCT was created is because we thought differently. Lawyers are trained to look backward at precedents.

This value of thinking differently, of looking forward, at complete odds with that (mindset). The culture we built in the early years is that it’s better to make a decision—even if it’s wrong—than not to make a decision.”

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“This is my own view. Our future is very bright, that’s true, because we have the insurance component as the internet accelerates”

“Yes, we’re dominant in our field. But to me, the real success is to be able to sit back and watch the success of the family of people who came to work for us. They’re more than employees. They’re friends. How nice it is to move on and go back into the building and have a great sense of family.” ■

That transparency applies without distinction to FCT’s clients. “Trust is the most significant thing for them. Don’t hide the issues. If there’s a problem, let them know. And here’s what happens when you’ve built that trust—they’ll pick up the phone and call you. They won’t go to someone else. It’s so valuable to get to that level, where your customers are now your confidants.”

What about the impact of digital disruption and the rise of FinTech and virtual banking? “I think technology is going to be FCT’s friend,” he believes. “

And as the use of technology expands, risk tends to move to the top of the list. Technology will leave room for the insurance aspect of our business in providing appraisals, moving money around, even as things move more quickly and the human profile decreases.”

Pat’s dialing back his direct role at FCT, transitioning, but his passion for the culture FCT hasn’t diminished, it has evolved.