Weekly Business Insights from Top Ten Business Magazines | Week 305 | Leading & Managing | 1

Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 305 | July 14-20, 2023

The Labor-Savvy Leader

The time has come for management to start working with—rather than against—organized labor. Here’s how. 

By Roy E. Bahat et al.,  | Harvard Business Review Magazine | July–August 2023 Issue

Listen to the Extractive Summary of the Article

Business leaders today are confronting labor challenges of the greatest consequence. Because of inflation and the pandemic, workers feel less secure in their jobs and uncertain about whether they can afford a decent life—trends that have been mounting for decades. So, it’s not surprising that a growing number of workers, across a wide range of industries and roles, are organizing.  

Most companies aren’t prepared for this new wave of organized labor. For much of the past century, when workers organized to demand change, companies’ knee-jerk reaction was fear that unions would hurt shareholder value by raising labor costs or slowing innovation. CEOs responded with one strategy: Fight, at all costs. This was brutally effective. In the last half of the 20th century, with companies perfecting the skill of union busting and labor laws too weak to deter it, unions lost much of their power and influence—so much so that most business leaders now have little experience with organized labor.0

 If companies continue to assume that organized labor destroys value and to reflexively fight all collective-action efforts, as has been happening at Starbucks, Amazon, and elsewhere, they run an enormous—even existential—risk.  Business leaders can choose a different path: They can start working to reinvent corporate America’s relationship with labor so that more people can share in the rewards and companies can compete and grow in new ways. Choosing that path will require leaders to learn how to work with, rather than against, labor.

Contract negotiations can go well or poorly depending on how the company and the union manage them. Employers lead by taking the high road, whether or not their organized labor counterparts start there, also because companies typically have much more power than their workers do.  Some guidelines for getting started:  assume that you don’t understand your own workers, invest in training in e.g., how to collaborate successfully with one another, seek advice from an expert who shares your goals, set the ground rules, set the tone yourself for frank, civil discussions, and decide what to bargain over, ask yourself: What’s good for everybody?

As in any constructive business relationship, you should follow a no-surprises principle to engender trust. Engage your labor-leader counterparts in an ongoing dialogue and keep them informed about business developments.

3 key takeaways from the article

1. Business leaders today are confronting labor challenges of the greatest consequence. Because of inflation and the pandemic, workers feel less secure in their jobs and uncertain about whether they can afford a decent life—trends that have been mounting for decades.
2. Most companies aren’t prepared for this new wave of organized labor.  
3. Contract negotiations can go well or poorly depending on how the company and the union manage them. Some guidelines for getting started:  assume that you don’t understand your own workers, invest in training in e.g., how to collaborate successfully with one another, seek advice from an expert who shares your goals, set the ground rules, set the tone yourself for frank, civil discussions, and decide what to bargain over, ask yourself: What’s good for everybody?

Full Article

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Topics: Negotiation, Leadership, Trade Unions