Willing to work together?

In offering a personal perspective on the Working Together Review, I should say at the outset that the work of the Review Group has crystallised in my mind the sequential conditional potential of having management and capital working in a more collegiate and considerate way with workforces and unions and, as a result, having many more organisations better able to both meet the reasonable and legitimate needs of their customers and have the resilience and cohesion needed to innovate, endure and grow.

Meanwhile, if there is an immediate tangible result from the Working Together Report it appears as paragraph 68 in the publication of Scotland’s recent ‘Programme for Government’, which reads: ‘We will work closely with the Scottish Trades Union Congress (STUC) and business representatives in the new Fair Work Convention, which will be a powerful advocate of the partnership approach which characterises industrial relations in Scotland at their best – and recognise the fact that business productivity goes hand in hand with proper pay for employees and progressive workplace policies’.

That commitment makes it all the more likely that Professor Ewart Keep’s aspirations for the review will come to pass and we will see many more of the recommendations of the Working Together Review, being implemented. Keep succinctly described the prize Scotland could achieve if it manages to implement the Working Together Review recommendations as: ‘Scotland is liable to be heading in a very different direction, from that which England is likely to follow in the short to medium term, and that Scotland (or at least some elements therein) wants to end up in a very different conceptual place and space from England (essentially Northern Europe rather than a point somewhere in the mid-Atlantic)’. That is a sentiment I believe all members of the Review echo and one that finds broad support from all across Scotland.

In fulfilling the remit, it was no surprise to find imbalanced power relationships in many workplaces and the need for an overdue rebalancing that could produce materially better outcomes based upon fairness, mutual respect and increased industrial democracy. Nor was it a surprise to see the causal link between poor workplaces and all the negative effects from low-productivity, low staff-retention to poverty, migration and poor health.

Indeed, the Review exposed the damage being caused by misguided workplace policies over many years as well as the ‘winner’s curse’ that many management teams have been progressively inflicting on themselves through misuse of power and their over-emphasis on short-term results.

The Review, and my reading in recent years, prove ‘results at all costs’ were achieved at great cost: a huge waste of opportunity for businesses and people to develop, and massive collateral damage as people and communities have faced the consequences of mismanagement, short-termism, discord and disengagement.

The report not only suggests that there is a better way, making practical recommendations to that effect, but it also makes a case for increased union recognition, higher levels of both union membership and collective bargaining and more direct employee-involvement in the co-authoring of strategy in private, public and voluntary organisations.

However, not only did we find a great deal of evidence to show that there was a better way for management, employees and unions to work together but also we found that evidence compelling; whether it was our Scottish examples or Rajendra Sisodia’s Firms of Endearment which tells us businesses that outperformed the markets between 1996 and 2011 by 10.5 times adopted the following principles:

1. Align interests of all stakeholders (customers, employees, partners, investors, and society) rather than seeking profit optimization.
2. Pay below-average executive compensation.
3. Maintain open-door policies to allow employees to escalate issues with management.
4. Pay above average for industry employee compensation and benefits.
5. Deliver above-average employee training.
6. Help employees to be more able to satisfy customers.
7. Hire employees who are passionate about the organisation’s purpose.
8. Humanise customer and employee experiences.
9. Enjoy below-average marketing costs.
10. Honour the spirit as well as the letter of laws.
11. Focus on corporate culture as a competitive advantage.
12. Channel energy and attention into innovative practices.

I know that we could emulate both process and results in Scotland, weaving in other lessons from elsewhere, building on what is already working, drawing on the wisdom of mediators and systems thinkers, who know that optimising any ‘system’ needs everyone to be involved, fairness to be established and a combined clarity of purpose to be discussed, agreed and formalised.

In the process, I believe we could roll back the misuse of Lean, Performance Management, Sickness Absence Policies and the perverse paternalism that have often limited the potential for fulfilment and rewards that people have a right to expect.

Equally, during the review, I became convinced that, whilst our recommendations would make a material difference and help us achieve this transformation, it would also be necessary for us to have a match for what Gary Hamel calls ‘Management 2.0’. That ‘match’ has to be the creation of ‘Unions 2.0’. I am confident that this can be achieved given so many skilled committed people in the union movement in Scotland, successful role model workplaces and the Review’s recommendations on developing capacity and capability in industrial relations with emphasis on learning and training.

Unions 2.0 could make an even better case for union recognition, union membership and collective bargaining and also help prove the damage being done by managerial short-termism. Union 2.0 is yet to be written, but if it was, it would read like this:

1: Ensure collaborative work of management, workers and unions serves a higher purpose.
2: Help to fully embed the ideas of community and citizenship in management systems and the minds of all involved.
3: Reconstruct management’s philosophical foundations and work to have this co-authored and co-owned by unions and workers.
4: Eliminate the pathologies of formal hierarchy – take advantage of natural leaders and learn the lessons of commercial aviation’s Crew Resource Management approach
5: Expose and eliminate use of fear and intimidation and take joint steps to develop, increase and maintain trust.
6: Work with management to reinvent the means of control and create more autonomous teams committed to continuous improvement.
7: Redefine leadership in terms of developing and communicating goals, gaining necessary resources, improving work and developing people.
8: Create workplaces that value and leverage diversity, disagreement, and divergence as much as conformance, consensus, and cohesion.
9: Reinvent strategy-making as emergent and evolving that is respectful of all legitimate inputs and all reasonable voices.
10: Work with management to de-structure and disaggregate the organization, making it more adaptable and innovative – and helping large entities to be disaggregated into smaller, more malleable units.
11: Work with management and workers to share setting direction to engender commitment and create conditions that can help to restore pride in work.
12: Work with management and workers to develop holistic performance measures that their mutual customers would find acceptable such as end-to-end times for job completion.
13: Work with management, workers and public opinion to produce wholesome and reasonable alternatives to compensation and reward systems that encourage managers to sacrifice long-term goals for short-term gains.
14: Work with management and workers to create a democracy of information so every employee has the data needed to act in the best interests of the entire enterprise.
15: Work with management to encourage all employees to bring their complete authentic selves to work and to ensure that they are heard and their ideas put to the test.
16: Work with management to expand the extent to which employees can autonomously propose and test workplace ideas aimed at improving the work and/or the products and services on offer.
17: Work with management to create internal demand for ideas, talent, and resources aligned with the purpose that drives the organisation.
18: Work with management to depoliticise the decision-making processes – making them free of positional biases and leveraging the collective wisdom available from the entire organization and beyond.
19: Work with management and workers to maximize employee engagement through the sort of alignment, fairness and engagement that can unleash purposeful passion.

We have the skills and the allies and the scale to make this happen – all we now need is some initial conversations and some early pilots.

There will be those who immediately look for statutory underpinning as they believe is needed to make this happen but unlike Northern Ireland, even after the Smith Commission, employment law is not devolved. And I have no confidence that we will see such measures from any Westminster government. But, in spite of that, I am not pessimistic – for I believe that the report’s recommendations, the Fair Work Convention, and continuing focus and open dialogue on the evolution of the workplace will offer more momentum and legitimacy and improved results – that would be better than those produced by reluctant compliance with new legislation.

The key driver will be the realisation that a more collegiate and fairer approach to employees is the best way to reverse the negative effects of the higher costs, lower customer retention and lower levels of innovation and lower growth. Finally, a message picked up from Ireland following the financial crisis’s impact on its social partnership was that those ‘partnerships’ that allow the interests of the partnership to eclipse the legitimate interests of the respective partners, can, in times of stress and strain, be gradually dishonoured, devalued and breed division. My hope is that we can learn from this and other aspects of the report, creating a sound open and honest basis for the development of legitimate competing interests managed in the context of higher purposes, such as customer needs, common-good, fairness, resilience and longevity, that unites all of those involved.

Jim Mather is chairman of Gael Ltd and a visiting professor at Strathclyde & Heriot-Watt Universities and was the chairman of the Working Together Review (January to August 2014). He was also an SNP MSP and former Minister for Enterprise, Energy and Tourism (2007-2011).

The report of the Working Together Review: Progressive Workplace Policies in Scotland can be found at http://www.gov.scot/Resource/0045/00457659.pdf