Management vs. Labor – Bad Omen for the US
- February 24th, 2011
- Posted in Outsourcing . Shared Services . Systems Thinking and Government . Systems Thinking and Management
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Anyone hoping that the US is on the road to recovery has to take a step back. Governors blaming government workers for “outrageous” salaries and pensions. Management blaming unions for the ills of being uncompetitive . . . if that were only the case. Each own some responsibility, but the lion’s share of the problem is with management.
Unions and workers bear some responsibility, but management has hacked and sawed its way through cost-cutting to international uncompetitiveness and large government deficits. Management bears the burden of creating work designs with waste and sub-optimization, and unions have locked in the waste with contracts based on poor design.
In a country that now, more than ever, needs cooperation between management and workers to compete against more savvy international organizations (like China, Japan, South Korea, etc.) we have instead pointing fingers of blame. This will go nowhere and while other countries grow, we are left fighting and blaming each other for the shrinking pie of prosperity.
The fact is management needs labor and labor needs management. The two are inextricably tied together and the fortunes of the US rely on better management thinking and work design and an engaged workforce that can make decisions and identify opportunities. Both elements have skin in the game and until they realize this, the US has little chance to be a player on the world stage.
Where management needs to change thinking is being so fixed on costs that they miss the causes of costs. Too many management decisions begin with a plan rather than knowledge. Knowledge of the work is with laborers and decisions need to be made with knowledge.
Pointing fingers as if labor is to blame is a bad start for any management . The adversarial and long-term hard feelings are sure to make the task harder for cooperation needed to reverse the trend. Management and laborers now have new reasons to hate each other.
Labor has been under fire with stupid management tricks like outsourcing and shared services, looking to reduce costs they increase them. Misguided by mass-production-, industrialized- and economy of scale-thinking. They miss the real costs associated with flow (or the lack thereof).
Indiana, Wisconsin and more state governments will follow the wrong strategy to reduce labor costs assuming the government work designs are optimal. Government and private industry would do well to engage workers to help fix flow and eliminate waste rather than pick fights. The pot of gold they seek from benefit and wage cuts is much smaller than the hidden huge opportunity to fix their systems.
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Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public). His organization helps executives find a better way to make the work work. Read his articles at Quality Digest and his column for CustomermanagementIQ.com Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected]. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.
I think that the more proper term for what you are describing is the historical term: ‘capital’ versus ‘labor’.
Management, by definition, is simply hired help. It is the owner- capital- which drives the contention between the two.
In these times, capital has become the shareholder who must be accommodated, regardless of the outcome to labor or the business itself.
This article brilliantly states the problem facing the US today. As a person who has worked with public systems for the last 12 years, I know that the process flow is far from optimal. The introduction of systems thinking is just starting to come forward. Given the “quality reformation” that took place in the 80′s, it is still far from being a common or disciplined practice. There is much work to do. Blaming the workers or the unions is not helpful in any way.
Interesting blog, glad i stumbled upon it. I dont know much about business/economics/whatnot but i know well my dollars, few that i have, buy less and less while the quality of what i buy get is also less and less. Is it that hard for capitol, or management or whatever it is to figure they may make more profit in the long run if they dont treat the customer like a slash and burn crop whose only purpose is to be harvested?
I will be reading more of your posts,
G.