Good Business Guidelines
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The personal impact and responsibility of business on workers, consumers, and community “The leaders who work most effectively…never say "I." And that's not because they have trained themselves not to say "I." They don't think "I." They think "we"; they think "team." They understand their job to be to make the team function. …This is what creates trust, what enables you to get the task done.” —Peter Drucker, Management Expert POWER TO THE PEOPLE“They've had rough times, and that fuels a desire to say, 'Enough! We can't be kicked around anymore. There really is a sense of desperation. They have nothing to lose." Lead Fried, United Electrical Workers union organizer commenting on worker protest Power in the wrong hands is a dangerous thing as we have seen repeatedly in the financial news this past year. Banks, bailed out by taxpayer money yet without taxpayer consent, continue to shape the economic fallout. Congress and Treasury Secretary Czar Paulson gave carte blanche (blank check) to our banking and financial institutions to protect themselves as the mothership sank. Perhaps that was not the initial intention, yet that is undeniably the result. Yet out of the blue in the midst of the crushing of the masses by Big Banks and Big Brother, a small group of passionate protestors changes the game. Things are tough in working class America. For the 250 mostly Hispanic Republic Windows and Doors Employees on Chicago’s North Side, things have never been tougher. The unionized workforce received their employee Christmas present a few weeks early this year: three day’s layoff notice with no severance, no pay, and no job. The struggling and powerless workers were devastated contemplating their financial ruin and potential homelessness. Most workers made no more than $30,000 a year. At poverty wages for those supporting a family, workers live paycheck to paycheck. In a land where a strong work ethic pays the bills for ordinary citizens, the unceremonious layoff was a mighty blow. In three days many would be not only out of a job, but out on the street. So they did what any other misused American worker would do, they protested. Fortunately for Republic workers, they are part of a union that has negotiated vacation pay and severance. Fired Republic workers armed with economic desperation refused to leave the factory floor without collected monies owed them. “We are fighting for our family,” said one $14 hourly worker after 34 years of service to Republic. “We’re not going anywhere until we get what’s fair and what’s ours,” said a mother of two who had worked on Republic’s assembly line for 13 years. The rage and frustration of the cast-off work force was palpable. Financial hardship empowered the factory workers. Workers believe that Republic Windows and Doors will open its doors elsewhere to cut union labor and overhead costs. As of this report, GoodB could not corroborate this claim. Republic was not taking responsibility for layoffs and blamed the stiffing of long term employee’s back pay on its creditor Bank of America for pulling financing. Home construction was suffering across America and related businesses are forced to lay off workers and banks are forced to cut financing. All this sounds logical if one were to study up on free market capitalism. Only newly nationalized Bank of America gobbled up 25 billion of taxpayer money just weeks ago with no direct benefit to taxpayers who footed the bill. Banks including BOA are hoarding taxpayer money and cutting small business and consumer credit. Surely Republic and Bank of America are both accountable to the 250 workers and the American public. Big Banks are being reimbursed for bad bets, reckless investments, and outsized executive comp by ordinary working Americans who support them. Yet large banks and businesses seem to have little allegiance in return. While the press spotlight is on the tiny feisty crew at Republic Windows and Doors, Bank of America claims it will extend credit to the company for employee compensation. GoodB is staying tuned to see how the payouts are resolved. Check back soon. The Trouble with Workers
Sounds dangerous perhaps to more authoritarian managers, but CEO Vineet Nayar sees it quite differently. “Command and control is the easiest management style.” Nayar believes that as employees are naturally responsible to management, so should management be responsible to employees. “Leaders must see themselves differently.” Nayar, 45, embraces a cutting edge philosophy in his leadership role based on a tried and true old idea: employee “suggestion box.” Executives still hold the power to make final decisions and implement policy. Yet HCL employees are permitted and even encouraged to voice their complaints about anything and anyone in the giant technology services firm. Using the principle of customer “trouble tickets,” HCL employees can issue trouble tickets to air their differences on method and practice openly. Nayar says senior managers should “overcome the fear of being exposed.” The purpose of employee trouble tickets is to empower workers to have a say in their daily working lives and in the management style of the company that supports them. Perhaps there are workers abuse the right with petty complaints or personal attacks on superiors, yet most employees see it as an opportunity to maximize productivity. Nayar says the ultimate goal of empowering employees with a voice is increased productivity through collaboration.
Fair Labor Practices: Team Values
Costco has the lowest employee turnover rate in discount retailing saving the company hundreds of millions of dollars in recruiting and rehiring expenses. Ninety percent of employees, including part timers, are provided benefits like healthcare, dental, pharmacy, vision and 401k plans. They are paid 40% more than employees of competitors. Approximately 100% of promotions come from within the company. These advantages create a deep sense of loyalty in employees who are viewed as profit partners. Valuing human capital is an integral part of Sinegal’s corporate strategy for success. The bottom line results are Costco attracts the most affluent repeat customers in discount retailing. Many of Costco’s selective customers do not shop at worker unfriendly rivals and choose instead to shop at Costco. Sales revenue in 2007 was $64.4 billion, up from $52 billion in 2006. They are the largest warehouse chain club in the world and the fourth largest retailer in the United States. As of April 2008 the stock was trading at $71.51 per share, up from $53.00 in May 2007. Costco’s success under Sinegal proves that valuing employees is good business for the company, customers, shareholders, and the soul.
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The HUMAN BOTTOM LINE
RIGHT OUT OF PETER DRUCKER'S play book of management emerges HCL Technologies experiment with “workplace democracy.” Based in New Delhi, India, HCL has implemented a modern approach to employee management by asking for worker input. 
The idea sounds new, yet it really isn’t. Management guru Peter Drucker wrote that companies should view workers as assets rather than liabilities fifty years ago. Drucker saw the corporate environment as a “human community” based on mutual respect and teamwork. Oddly enough implementing the idea is very new. Publicly traded corporations have generally gone the other direction over the last few decades especially in the United States. Standard management operating procedure often views collaboration as unproductive. Yet hugely profitable corporations, even in the U.S., have used management/employee collaboration to great advantage - Google for example. Google’s Ten Golden Rules famously epitomizes the teamwork philosophy of Drucker and Nayer. Considering Google’s teamwork has increased profitability over 500% since its IPO four years ago, the corporate world would do well to emulate that model for success.
The general belief that building a multibillion dollar company requires an iron fisted managerial policy driven to extracting as much from employees as possible while paying the absolute minimum (cite competitor Walmart’s Sam’s Club) is seriously challenged by Costco CEO, Jim Sinegal. Ranking 32 in the Fortune 500, Costco’s CEO Sinegal has a unique view that his employees are valued team players. Over forty-five million people shop Costco’s 520 stores in thirty seven states and eight countries every day. Sinegal believes if employees are treated well, they in turn will treat customers and Costco itself well. At Costco customer service is the key to job security and a dedicated repeat clientele. Valued employees create a positive environment for shoppers.© 2008 Good Business International, Inc. ™| Powered by 100% Solar Energy
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