Freedom, Inc_ - Brian M. Carney [48]
What happened in Telluride in 1901 and the following years was extreme, even by the standards of the day. Beyond the shootout between the strikers and the strikebreakers, management and labor had become locked in a vicious, self-destructive conflict. Two months before the shooting broke out, the miners had gone on strike to demand three dollars a day in pay and an eight-hour workday. But when the Smuggler-Union mine decided to play hardball, it hired strikebreaking miners—for the same three-dollar, eight-hour days that it refused to concede to the union. The result was not just the deadly shooting on July 3, 1901, but years of labor strife in Telluride. And it began with a pay concession that the mine granted its own strikebreakers right off the bat. More than three years after the first strike began, the mine owners finally broke the union.2
But to no end. In those days, there was no shortage of militancy on both sides of the labor-management divide, and no shortage of violence, either. A century later, the violence is a thing of the past and the right to strike and to organize is more widely recognized. But the legacy of that old-time antagonism still haunts the labor relations of many firms, with unions and management alike falling too easily into a lose-lose trap of trying to squeeze as much as each side can out of the other.
This is not unique to unionized workplaces, either. It is, in fact, depressingly common. A company tries to goose performance and cut a bit of fat by implementing a set of controls and norms of how people should do their work and how much work they have to do. Those controls might be designed to act as a floor on performance, but in practice they become the ceiling. Everyone starts to “work to rule,” in the union phrase. That phrase, by the way, is extremely revealing. Technically, unions negotiate all those work rules in order to have clear definitions of how to do their jobs. But unions and management both understand that “working to rule” can bring a business to its knees. Both sides are negotiating over rules that neither side plans to honor except in a larger dispute—and then the rules become weapons wielded against one side or the other. Management and labor both know that, whether vindictively enforced or quietly ignored, those rules are no way to run a business.
Even in less severe cases, it is all too easy for these rules and performance standards to become, or be mistaken for, the business goals themselves. As Jeff Westphal of Vertex put it, you need to fill the gas tank to get to Big Sur, but you don’t drive to Big Sur just to keep filling the tank. Or, to borrow another phrase, because you get what you measure, your measurement becomes the performance. And before long, rather than boosting your firm to ever-faster growth and ever-higher profitability, you have people busy “making the numbers,” a creative game that they love to play because it’s a great outlet for expressing hostility toward a “how” company, as well as to undermine its performance more subtly than a strike would.
Teerlink, in a way, was fortunate. When he first came to Harley in 1981, the company was in dire straits. As he recounts in More Than a Motorcycle, most people he knew thought he was crazy to take a job at a company that seemed doomed. By the time he stepped aside in 1999, he and his colleagues could claim credit for one of the most dramatic turnarounds in American manufacturing, although Teer-link, a mild-mannered, Chicago-born man, is too modest to do so. Still, the facts speak for themselves: Within a few years, Harley had gone from the brink of bankruptcy to 30 percent-plus profit margins—performance you’re more likely to see at the best software and technology firms than in American manufacturing.
One of the keys to Harley’s reversal of fortune was a total rethinking of labor-management relations, which then transformed workplace relations overall. And it began with an idea as radical, in its way, as the notion