Labor and Management Confrontation
Following my General Manager appointment, the staff became quiescent but not so the works. At once I had a visit from the shop steward. What was I going to do about wages, working conditions and the canteen? Wages, I observed, were not high as local rates went, but as a judge of effort I thought everyone grossly overpaid. While he spluttered and sought the appropriate union verbiage, I added that I intended to complete my study before deciding.
He reminded me of the company's statutory obligations on pay and welfare. Then he went on about the unfulfilled promises of the Boss. I sat through this as dispassionately as my intolerance would permit. Tolerance is "putting up with", and I was quite unprepared to put up with what I had observed for the past three days. He began to bluster and swear. I had no terms of reference from the Boss as to how I should manage, nor had I been advised of any problem with labor. But I had rightly or wrongly assumed the responsibility for everything. My reputation was at stake and I would suffer no interference from anyone that might in any way prevent me acting as I thought necessary.
Consequently, I said things that no doubt would have given heart failures to members of the Board. I told him that he would have to prove that his threats were made in the heat of the moment; otherwise I would give some thought to dismissing him. I told him that I was the manager and that meant managing - not doing what he or anyone else thought I should do. I told him that if he brought the place to a halt by striking, he and his union members would have to find other jobs, because the place would never open again. Then I gave him the economic facts of the company's life. I told him how much was owed by customers, how much the company owed vendors, how much was owed to the merchant bank and the joint stock bank, and gave my estimate of the likelihood of any of them getting their money back.
I admitted that, from what little I had seen, I could not fairly say that the situation was the workpeople's fault. I made no bones about the changes I proposed, which included getting more work for the money paid for labor. The shop steward was surprised by these confidences, and also interested, so I developed my theory about what I thought to be wrong, not only with this company but also probably with thousands of others.
I thought that the country's industry was over staffed for one reason or another, but mainly it came down to management. Because the extra and unnecessary bodies wanted more space, so industry was over-tooled, over-officed and over-factoried and the expense of these burdens made our products uncompetitive abroad. My job was either to reduce labor in an effort to get costs down or, according to a very rough estimate I had made of the orders in the sales files, we had nine months work ahead of us working at twice the present rate. It was clear to him that, since the company was losing money as it was, my way was the only way in which jobs could be safeguarded. I even told him that I thought we could increase our prices to overseas customers by 25%.
I admitted that lack of sales research and common prudence had failed to recognize the need to pass on certain increases in cost that the market could stand. But such increases could not be used to maintain the workforce in its current slothful state. I explained my belief in the sales potentialities of as yet untapped markets. It is always good policy to tell everyone in companies all that they are capable of assimilating, not only to get their cooperation but also their interest and enthusiasm to make them feel through their knowledge a sharing of the burden. Above all, I stressed to the shop steward that this was not a case of them and us; it was "we" - or sink.
With a promise to keep him advised on the profitability situation, which I hoped would soon develop with everyone's help; I ended the meeting stating another principle of management, as it should be. I dislike the indignity of people feeling compelled to come to a boss for more money. A better policy by far is constantly to review and reward every member of the organization. If people did not get increases, they should think about looking elsewhere unless they were inclined to improve their effort.
I gathered the "management team" together: Sales, Accounts, Works, Design and Engineering, Production, and Purchasing. I informed them all of the confrontation with the shop steward, and repeated his dose, adding certain other facts of industrial life, namely, that the most important factor in the business was the customer. Without the customer we could not make a living and unless we had an organization that could put service to the customer before all else, we were all without a job. However, only through the development of an efficient happy, healthy and well-paid workforce could we all live and thrive.
All of this evoked looks of surprise and still more when I told the accountant to give the meeting the sorry facts concerning our financial position. It was clear enough, but I still had to spell out the extent of the weakness.