Labor Relations Insight by Phil Wilson
I’ve been doing this labor relations thing for 30 years, so it’s rare to get a question I haven’t heard or thought about before. But this week it happened.
I was on a call with the CHRO of a client. He’d been asked to present to the CEO and the executive team. In addition to the normal “update us on [insert crisis of the moment here]” agenda item, there was a new one: What should the CEO personally be doing now to boost the employee relations environment and make sure teammates don’t feel the need to pay outsiders to represent them.
I’ve been asked hundreds of times over the years about whether and how the CEO should be involved in an active organizing campaign. And I’ve been asked at least as many times from CEOs how to best improve an employee relations environment. But I don’t remember anyone asking me what the CEO should personally be doing to advance the employee relations environment and culture.
The question was probably triggered by the recent charges filed against CEOs like Howard Shultz at Starbucks and Andy Jassy of Amazon. On October 26 the Seattle Region of the NLRB issued a complaint against Jassy for comments he made on the CNBC show Squawk Box in April. Until the NLRB gets spanked for its total disregard for the constitution–not to mention its own statute–both of which clearly protect employer speech in this area, you can rest assured we’ll see more of these attempts to muzzle CEOs. It’s easy to understand why CEOs might be a little worried about what to say and do around the question of unions in this environment.
I’ve never been a fan of having a CEO swoop in and talk to workers they haven’t met before to “save the day” during an organizing campaign. It usually doesn’t work. And if there’s nobody closer to the situation who can make the case for a direct relationship to management, that explains why you have an organizing campaign in the first place. Finally, it’s not scalable. It is great for the CEO to visit locations from time to time and talk to teammates whenever they can. The best companies do this. But if you really want to move the culture needle, here are the suggestions I have for what CEOs can personally do.
1. Pay attention to culture when there’s not a crisis: It is human nature for CEOs (and all humans) to focus on what’s going wrong. And a lot of times that means not paying attention to the important/not urgent stuff until it’s too late. Unfortunately, a lot of CEOs don’t pay a lot of attention to employee relations and culture unless there is a crisis, like a union organizing campaign.
Instead, culture should be a top priority and regular agenda item for the CEO. Here at LRI, we spend a lot of time discussing and celebrating our culture. Every meeting we have an agenda item for core value “shout outs” (not yelling at each other but noticing when someone does something that represents our core values). Each quarter every team member does a check-in where we discuss what’s working and what’s not working around our core values. It’s one of the first things we talk about with a new client or consulting partner. We don’t add a new team member until they’ve presented to the whole team how they personally relate to each of our core values.
We’re not perfect, and we have culture issues like every company. But the team will pay attention to what the leader pays attention to. If the CEO spends most of their time looking at the numbers and little attention to the culture, that tells the team everything they need to know.
2. Provide resources for employees and employee relations: Attention to culture is important, but so are resources. We are heading into a recession, and it isn’t uncommon for companies to cut in areas like training, human resources, and employee relations when resources get scarce. Our labor market is so hot that hopefully this recession won’t impact working people like most recessions do. But companies need to learn from the great resignation that they must continue to devote resources to attract and retain the best talent, or the best talent will leave.
This is an area where CEOs will have to make hard choices. And how those choices are made and executed will say a lot about the culture. Resisting cuts and devoting resources to employees and to employee relations during the hard times will pay big dividends when things eventually turn around. In cases where layoffs are inevitable, there is a right and wrong way to do that. Again, everyone is watching.
In cases where there are issues, make sure the team is resourced to be successful. Investing in things like response teams who can go to problem areas and providing multiple channels for employees to express frustrations when they’re molehills versus mountains, are important things to resource during times like these. Many companies have implemented shared service models around human resources (which are rarely done well even in the best of times). Any move to economize around handling employee relations issues in times like these is a terrible idea. The CEO should personally fight for these resources when the easy answer is to cut.
3. Look for problems early: This dovetails with providing resources, but another thing the CEO can do is to probe the executive team and the rest of the organization about what we aren’t seeing or what we’re overlooking. Constantly be on the lookout for places where culture might be slipping. Don’t take things like survey results or business results at face value. This is an area where doing some walking around can really pay off. When you do get a chance to visit locations and talk to teammates, sincerely thank them and ask them direct questions about how we’re doing and what we can do better. Ask them about how new initiatives are really feeling. I really like the “What’s working and what’s not working?” framework.
This should be happening at every level of the organization. When someone–especially someone higher up in the organization–says something in employee relations is working or going great ask for the evidence. Ask them how confident they are in their appraisal. Challenge them to explain if their appraisal is wrong, how could that have happened (when we do our Tabletop exercises, we do a pre-mortem where we ask this).
4. Don’t be shy about the “U word”: Finally, the CEO should not be shy about explaining plainly and clearly why they prefer a direct relationship with employees. A CEO committed to building a great culture should also explain the negative impact unions have on a company culture. Unions are culture killers (the most recent Gallup research showed this once again) with a vested interest in creating conflict between employees and the company. And Jassy was exactly right–unions are slow and bureaucratic, and I would add that they consistently fail to deliver on their promises. Non-represented workers received bigger pay and benefit increases over the last few years than employees represented by unions. Unionized employers are much less reluctant to lay off workers (almost every labor agreement includes a layoff procedure). Unions are just a bad deal for the vast majority of workers.
The NLRB General Counsel is doing all she can to muzzle employers, but she does not get the final say. She may get the NLRB to go along with her (outrageous) theories about employer speech. But when federal courts get their say it will be clear that employers have a right to make their opinions known about unions.
Those are my tips. I’m curious what other suggestions you have?
Finally, I want to say thanks to you. I am very thankful for your reading of our newsletter and your continued support of our core purpose, which is to help our clients create extraordinary workplaces. Thank you.
