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.

Join me for the International Deming Conference in New York City on March 21 – 22.

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  Download free from “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 LinkedIn at