BAILING OUT THE BIG 3 IS A BIG DEAL

I grew up in Flint, MI, and it has always been a General Motors town. When I was a kid, the city had more than 300,000, high employment and arguably the best Community School System in the world. I left in the late ‘60’s and returned in the late ‘70’s to a place that was a shadow of its former self.

Flint has always been a General Motors town. It grew because of GM, prospered because of GM and now it is close to death because of GM. The community of Flint has seen it all, and paid for it. And the country has helped pay for it as well:

• Between 1976 and 1996 GM was granted $1.8 billion worth of tax abatements     and eliminated 40,000 jobs


• GM has not given a dime back


• In August 2008, GM got Flint’s OK for more abatements

As close as I can estimate, more than 80,000 people have been laid off since the late ‘70’s. This YouTube video gives you a feel for what I am talking about.

Over the years, high labor costs have been blamed for a lot of the Big 3’s woes, and the United Auto Workers have taken the heat. But the UAW didn’t get over on anyone.  Management has always protected the right to run the business, and management explicitly agreed to the bargaining agreements that increased worker pay and benefits. When sales no longer supported these wage and benefits, management cut labor costs. To my knowledge, cutting executive pay was never discussed.

Over the last thirty years, the Big 3 have had quality problems and made poor decisions about products and markets. They’ve produced gas-guzzlers and lobbied the government against requirements for better fuel economy standards. Company leaders have shown little leadership in the global auto industry.

So last week the Big Guys from the Big 3 show up in Washington to press Congress for more taxpayer money. I agree with New York Times columnist Thomas Friedman, who says, “I don’t want to see Detroit’s auto industry wiped out, but what are we supposed to do with auto executives who fly to Washington in three separate private jets, ask for a taxpayer bailout and offer no detailed plan for their own transformation?”

To add insult to our injury, the Washington Post reported last week that these CEOs got defensive about the pay for senior management -- in the face of wage and benefit concessions by the UAW last fall.

It appears as if the bailout for the auto industry will happen. Too many other stresses on the economy exist to allow these major employers to slide into bankruptcy. My hope is that solid strings – ropes even – will be attached to any money they get from the government.

• Senior management should admit their responsibility in contributing to the mess


• They should back that up with executive pay reductions and a pay system overhaul


• GM should commit to a timeline for repayment of the “loan” with interest


• They must develop a business strategy focusing on cost-effective, environmentally friendly automobiles

Related article: UAW and bailout

JAMIE

AND THE SURVEY SAYS....

We ran across a couple of interesting surveys at internalcommshub.com recently. The Watson Wyatt's WorkUSA® 2006/2007 survey of 12,205 full-time U.S. workers showed that highly engaged employees are much more likely to receive communication from senior managers at least once a month.

In the other survey, more than 2,000 U.S. and Canadian human resources practitioners said that nearly half of all senior manages would earn a grade of C or below for how well they communicate with employees. The survey was conducted by a professional-services firm, Novations Group, in 2007.

Hmmmmmmm. Connecting the dots between good communication and employee engagement definitely wouldn’t dull a freshly sharpened No. 2 pencil.

Many other studies have shown a strong link between engaged employees and good business results, and frequent communication at work is one of the essential methods for engaging employees.

We would also encourage managers to think about the quality of communication. In the Novations Group survey, one of the complaints was that managers are too addicted to email. Frequent face-to-face conversations, where the expectations are to  tell the truth with goodwill and to be open to others' points of view, would go a long way to helping senior managers bring up the grades on their communication report cards.

WHO HOLDS YOU ACCOUNTABLE?

Jamie and I did a presentation at the ODNet Conference in Austin, Texas earlier this month, and since we were there, I took the opportunity to pop into a session about employee engagement being presented by our friends and fellow Berrett-Koehler authors Dick and Emily Axelrod.

During the presentation, Dick and Emily asked us to engage in a few mini-conversations with our neighbors. My conversation partner was a young woman who  began working as an HR manager eight months ago after earning a master’s degree in Organization Development.

During one of our chats, her question about accountability got my attention.

HER: So what do you think are some really effective ways to hold other people accountable?

ME: I don’t believe you can hold other people accountable. That is one of the big myths in organizations, and this belief that we can ends up wasting a huge amount of time and energy in organizations. People choose whether they're going to be accountable.

HER: But … but we have to be able to hold other people accountable to be effective!

ME: Can I ask who holds you accountable?

HER: Well, my boss holds me accountable. That is part of his job.

ME: So… if you didn’t have a boss watching you to make sure you did good work, you wouldn’t? You’d just show up and do the bare minimum in order to collect a paycheck?

HER: Of course not! I’m really committed to doing a good job! I take a lot of pride in the quality of my work.

ME: Then who is really in charge of your accountability?

IF YOU LOOK, THERE IS ENCOURAGEMENT

A hectic schedule has kept us from blogging, and we’re happy to get back to it again. We’ve set up alerts to topics we find relevant and interesting, and they often provide inspiration for this venue. Much of what we read, packaged as “advice for leadership”, reinforces our belief that too many organizations still rely on manipulation and parent-child conversations as a strategy for managing people at work. The themes, so familiar that people don’t even stop to think about them any more, center on:

√     How to do a better job building employee morale

√     Methods of communicating ideas so it will be easier to hold people accountable

√     How to use employee surveys to gauge how the rank-and-file feel about management and the business. 

In our point of view, this thinking is fraught with problems. Leaders and managers, for example, can’t “build” morale unless individuals make a choice to be motivated. Finding ways to hold others accountable is a myth that wastes an organization’s time and energy and focuses on compliance rather than commitment. Employee attitude and opinion surveys are a statement that management and employees can’t tell each other the truth face-to-face. And surveys also send a message that employees are off the hook because  managers are responsible for fixing problems.

Worth checking out are two blogs citing specific companies engaging in shop floor self-management (Ferragamo USA, Inc.) and Zappos.com where they conduct “culturefit” interviews as well as interviews for technical skills. The other one is a blog on retaining employees by focusing on human connection, employee growth and ethical conduct.

We feel encouraged to see that in a business world focused on compliance, companies are devoting energy to create cultures based on contribution, choosing to be accountable and honorable conduct.

JAMIE & MAREN