I was having dinner with a friend of mine recently. He is now retired, but was a highly successful Wall Street executive (and, in my view) a brilliant person who has deep insights about economic and financial issues. The conversation revolved around what it would take to improve economic conditions in the United States, which seem weak now and show possibilities of worsening.
He offered a variety of prescriptive ideas and among them was a call to eliminate or restrict union influence–especially in the public sector. He cited the following study: Employer Costs for Employee Compensation Survey from the U.S. Bureau of Labor Statistics. It shows that private industry employers spent an average of $28.57 per hour worked for total employee compensation in December 2011, while total compensation costs for state and local government workers averaged $40.90 per hour worked in December 2011. This represents a 43% cost premium for state and local government employees (a significant portion of the discrepancy is attributable to benefits).
As you can imagine, the conversation became animated, and we discussed issues related to the importance of meritocracy, of worker productivity and so forth. You couldn’t escape the conclusion that this was an emotionally charged issue for both of us. It is also one that I am not wishing to debate here.
As I reflected on this discussion I thought about how we all have biases and ways of looking at the world based on our accumulated life experiences. Whether you are anti-union or against greedy or incompetent executives, one thing is certain, we all feel strongly about our viewpoint, which is emotionally rooted in us. The longer the discussion continues, the more entrenched our views tend to become. None of this leads to high-minded debate. In the end I was calling my friend a heartless capitalist and he charged me with being a left-wing nutjob.
I was also struck by the fact that I was debating with someone for whom I had the highest level of respect and who I know to be a person of high integrity and intelligence. Yet the debate degenerated to a level that left neither one of us persuaded, nor produced any viable solution. (It made me better appreciate the challenges faced by lawmakers in Washington today.)
It seems to me that it is a natural human tendency when thinking about problems to blame some person or group for our difficulties. While this is convenient, it does not generally lead to effective problem solving. In this case, I am sure that you can find reasons to criticize some union behaviors, and, I would not suggest that public employees should be paid 43% more for their services. But that is surely not the whole story, and we need to force ourselves to consider multiple and even conflicting perspectives. Let me offer an example.
In my white paper Using Crisis for Good: Driving Innovation and Change, I tell a true story of a situation where a group of mainly unionized employees rose to the occasion without any significant management involvement to completely redesign a major product line and the processes we used to build it. They were able to reduce the cost of our product by over 30% in just three days. What this experience taught me was that in the right environment and with the right information, ordinary people can do extraordinary things. This happened, partly at least, because I removed one of the main impediments from progress – our management team. It was an eye-opening experience for me. (Read the article t0 get the full story).
I was impressed by the inventiveness, creativity and ability to problem solve demonstrated by our unionized employees. It made me ask, “If we could save 30% of our costs on that product line, what other mammoth savings opportunities were there that we were not yet tapping?” When I thought about what had happened, I started to see that the main reasons why we hadn’t found savings before, was because I (and my executive group) were the main problem – not our union. After all, I was the person mainly responsible for creating:
- the existing silos by how I chose to organize the company
- the managers who sometimes behaved in territorial ways
- the incentive systems that encouraged sometimes noncollaborative behaviors and misaligned priorities
- the process design that was linear, and did not actively seek input from those downstream of our sales and engineering teams
- the shifting priorities that created stress and pressure on some departments as new situations emerged
- the labor costs and work rules in our contract which I had my hand in negotiating
There is more to the whole story than just these elements, but it seems to me there are always two ways to think about the mess in which you sometimes find yourself. You can define the solutions by blaming others for creating the situation. Or, you can start first by assuming YOU are mainly to blame, and since you aren’t likely to fire yourself, you can get on then with the business of doing something constructive to make things better.
Many of my managers behaved like my friend from Wall Street. They were critical of the customers’ purchasing tactics, the aggressive actions of a competitor, high labor costs, our location in Detroit or the ineffective job done by our sales and estimating engineering group. They all saw the root cause of our problems as stemming from something outside their basic control.
While that may be convenient, it is not helpful. We must take ownership of our fate, focusing on those things we can influence. All other postures lead nowhere good.
For me, this episode caused me to begin seeing my leadership in a different perspective. I saw that it wasn’t the job of managers to solve the problem, but instead to create the environment within which our employees could. I saw that our job needed to become more about opening doors, than about finding answers.
So, while it may be easiest for us to assess blame for our problems (on our customer, our middle managers, our union labor contract, etc.) it is not healthy to start there. Why not start first with yourself, and the things you can do to affect positive change?