8 Tips for Leading a Unionised Team While Driving Real Performance

Episode #346 8 Tips for Leading a Unionised Team While Driving Real Performance

IT’S TOUGHER, BUT NOT INTRACTABLE

Leading a team in a unionised business is different. It’s hard enough to lead when you have direct line of sight to your people, but when there’s a third party running interference between the two of you, it can be super tricky.

I had the opportunity to work for a number of industrial businesses that had a heavy union influence, and I learned an incredible amount about leadership, because of the inherent degree of difficulty.

No matter what anyone tells you, it’s way harder to lead for performance in a unionised business… but also, no matter what anyone tells you, it is possible to lead your team to make positive changes in a unionised business.

After all, the vast majority of people come in to work each day wanting to do a good job and wanting to make a difference. Don’t let the adversarial nature of your relationship with the unions taint your optimism or dampen your enthusiasm.

I’m going to kick off with a little history and background on the Labour Union movement; I’ll look at a few of the problems that are inherent in unionised businesses; and I’ll leave you with eight practical tips to lead for performance in a unionised business.

A BRIEF HISTORY OF THE UNION MOVEMENT

When I was a young lad growing up in the late 1960s, we lived not far from a major brewery in the inner suburbs of Sydney. Many of you will fondly remember the Resch’s Brewery at Moore Park, only a few kilometres from the heart of Sydney city.

One of my earliest childhood memories is that, every year in the lead up to Christmas, the brewery workers would go on strike. If they were going to extract big pay increases, they knew the time to do that was just before the peak demand period, when their leverage was at its greatest.

Christmas in Australia is oppressively hot, and beer is considered an essential provision. The workers would just walk off the job – they’d go on strike until the company conceded to their demands and paid them what they wanted… and we all drank Resch’s Dinner Ale with our Christmas roast.

You can imagine the impact that this had on the company’s cost base (and on the pay packets of its semi-skilled workforce) when compounded over many years.

Lots of rules have been put in place since the 1980s, but the legislation in Australia and many other developed countries now falls very much in favour of workers, not companies.

It’s important to say that this episode is not about union-bashing. In fact, we have many union leaders who are loyal followers of this podcast.

Historically, the union movement served an incredibly important purpose. The physical and economic abuse of workers was unchecked before the collective power of the union movement was brought to bear.

Labour unions first sprung up during the Industrial Revolution in the mid-eighteenth century. As workers moved from small-scale artisan production into large-scale factories, the dynamics of the labour market changed.

The balance of power was heavily weighted towards capital (the people who owned and ran the companies), rather than labour (the people who worked in those facilities).

This was mostly about supply and demand dynamics – labour was cheap, plentiful, and relatively expendable – but it was also about human rights, exploitation, and the dignity of the workers.

It took centuries for the balance between capital and labour to equalise. Right up until 1824, unions were actually illegal in the UK, but eventually they were decriminalised and other countries, such as the US, quickly followed suit.

It wasn’t until the end of the 19th century, though, that unions started to get some real traction. This was driven by a few factors, including: the emerging socialist philosophy in society; growing political influence in the union movement; and, most importantly, the advent of collective bargaining.

Workers assigned their rights to the union so they could be jointly represented in negotiations on pay and conditions, delivering a more favourable, shared outcome. This harnessed the power of leverage that the group of employees could wield collectively, but not individually.

Labour reform laws began to be enacted, and once again, this was an incredibly positive development. It meant that many developed countries removed the sweatshop-style conditions that still exist in some developing countries today.

It also accelerated the erosion of the dominance once held by capital at the expense of labour, and the rewards were spread more evenly.

After World War II, union membership exploded, and progress continued at breakneck speed. The unions fought for – and won – massive improvements in working conditions (e.g. securing a 40-hour work week).

By the 1980s though, unions were beginning to lose some of their relevance. Workers’ rights were largely enshrined in law. Things like high wages, decent working hours, and safety standards were pretty much a given.

That’s when the role of the union started to evolve again. They began to act more as intermediaries for workers, both individually and collectively, in any disagreement they might have with management. And this sets the scene for our discussion.

THE EVOLVING ROLE OF UNIONS

The labour union business model is in decline, and has been for a few years, for a couple of reasons.

The first reason is that we now have strong legal protections for workers’ rights in virtually all developed countries.

The second reason is that we’ve shifted from a manufacturing economy to a service economy.

The third reason is that labour markets are now dynamic and liquid – to attract the right talent, companies have to provide a more attractive value proposition than their competitors.

Having said all of that, high union participation rates persist in some countries. For example, in Sweden and Denmark, over two thirds of the workforce are members of a labour union. It’s entirely understandable why they have very restrictive labour practices that favour employees’ rights over the commercial considerations of the companies that they work for.

But in the more free market-style economies, union participation rates have been steadily declining.

In the USA, only about 10% of the workforce are now union members; and in Australia, around 13% of the workforce are union members.

Even then, the balance is skewed towards government employees. In the US, over 30% of public sector employees are union members, whereas only 6% of private sector employees belong to a union.

The trend in Australia is similar. Over 30% of public sector employees are union members, but less than 8% of private sector employees belong to a union.

I’m a huge fan of irony, as you may know. The last people on Earth who might need protection from an unscrupulous employer are government workers. But this gives us a clue about the nature of the relationship between union participation and performance.   

During my corporate career, I worked for companies that were highly unionised; and I worked for companies that weren’t.

I got to see and feel the difference, up close and personal. Unfortunately, I also got close enough to the political process to see the disproportionate influence that union leaders have on government policy when a left-wing government is in power.

Don’t get me wrong – this is by no means a political statement. It’s just a simple fact that, in Australia at least, the labour unions drive the agenda of Labor Governments.

Why do I mention that? Because it’s these governments which are more inclined to implement legislation and regulations that protect workers right across the board, regardless of union participation.

This in turn determines where the balance of power lies in any workplace dispute between management and workers… it determines the tools you have available to you when you’re trying to lead your team… and it directly correlates to the degree of difficulty you’ll face in simply trying to set a higher standard for performance.

Considering the very low penetration of labour unions in the Australian workforce, it’s quite astounding how labour-friendly the workplace relations laws are. This is very different from the US experience.

You have to hand it to them – based on the facts at hand, it’s reasonable to conclude that Australian labour unions are punching way above their weight. They’re doing an excellent job in wielding their political influence in the places where it matters most. Bravo, I say!

HOW DO UNIONS STYMIE PERFORMANCE?

The pendulum has certainly swung back since the days of peak union influence that I saw manifest in the annual Christmas brewery strikes… but I still think that unions are a massive handbrake on performance.

I want to take some time to explain exactly why I believe that’s the case. I’m not going to tell sensationalist stories about the theatrics, shenanigans, and dirty tricks that I saw over my years leading in unionised businesses.

But I do want to clearly outline a few compelling reasons why non-union businesses are safer, more productive, and ultimately more competitive than unionised businesses.

A number of years ago when I was working for a company called Aurizon, we had a major focus on improving safety for our people. We had engaged DuPont to help guide us on our safety journey, as they were considered to be the world leaders in industrial safety at that time.

I was fortunate to be given the opportunity to do a tour of several of DuPont’s operating sites in the US. Seeing firsthand how the DuPont leaders created a strong, high-performance, accountable safety culture was just phenomenal.

We only spent six days in the US, but we visited sites in Delaware, West Virginia, and Louisiana. I cannot begin to tell you how much I learnt from that experience. It completely shifted my view on what it means to lead a team to being safer, more disciplined and, ultimately, more productive.

As I flew home at the end of the trip, I remember trying to put what I’d learned into the context of the company that I was working for.

I was sitting on the plane next to the lead consultant who managed our account on DuPont’s behalf. We had plenty of time on our hands on the flight back to Australia, so I started quizzing him on the role that the unions played in the interactions between the employees and the leaders on each DuPont site.

I wanted to know how to conquer that beast and to improve the team of about a thousand people that were in my group at the time.

Well, lo and behold, it turns out that DuPont only took us to non-union sites. After several hours of conversation, I came to understand that the difference between DuPont’s union and non-union sites was chalk and cheese.

Having said that, overall, DuPont had one of the most impressive safety records of any company on the planet. The reason this was so meaningful for me, though, is that I became acutely aware of what good leadership looks like in an environment that isn’t constrained or hamstrung by union intervention.

The contrast helped me to clearly see the unhealthy dynamic that the union and management interactions were creating.

THE FOUR FORCES OF UNDERPERFORMANCE

Now, that story’s just anecdotal of course, but I want to go beyond that and explain briefly why I think a union presence is most often a performance killer, and why that increases the degree of difficulty of leading a unionised team.

Here are four forces that, in my view, work against a good leader who’s trying to drive positive outcomes for the team and the individuals:

1. Collectivism. I’m incredibly passionate about the fact that everyone should be treated absolutely fairly. They should have a level playing field, and they should be enabled to flourish and succeed (or not!) based on their individual merits. But meritocracy is the arch enemy of collectivism.
   The socialist view of the world, which the most militant unions subscribe to, is that everyone should be protected equally, and everyone should be treated identically, regardless of the choices they make about their own behaviour and performance.
   One of the core characteristics of high-performance leadership is differentiation, and collectivism drives the completely opposite outcome.
   
2. Lack of accountability. Unionised workforces try to spread accountability, so that no single person can be held accountable for anything. If a mistake is made, it’s almost impossible to pin down the person who made that mistake. The team closes ranks.
   I totally get why this happens – it’s a protection mechanism developed from previous bad experiences, where terrible managers would scapegoat well-intentioned workers, looking for any excuse to remove them from the company.
   And those people give leadership a bad name.
   But shared accountability is no accountability. Without a strong culture – no blame / no excuses – performance will lag and mediocrity is the inevitable result.
   
3. Over-reliance on process. Processes are awesome, right!? They deliver consistency… and predictability… and repeatability. But no process is perfect and over-reliance on a process can be incredibly dangerous. I’ve heard people say on many occasions, “Oh, look, boss, we followed the process to the letter, but the process was wrong. It’s not our fault!” That’s what I call, working from the neck down only. That same person won’t take accountability for identifying any holes in a process in advance, nor will they take responsibility for fixing a hole once they’ve found it. If a process fails, that’s a management problem, apparently, for not making sure the processes are perfect. And that’s a dangerous game of cat-and-mouse to play.
4. Disintermediation. When a union official or delegate is placed in between a leader and their people, it changes the very nature of the relationship. It breeds distrust and adds a level of formality that isn’t helpful, in all but the most extreme circumstances. Communication between leaders and their teams is hard enough, without having the extra layer of separation. And when you consider the lack of goodwill in that separation mechanism, on both sides, it’s easy to see why misunderstandings are rife, communication becomes muted, and barriers become immovable.

EIGHT TIPS FOR SUCCESSFULLY LEADING UNIONISED WORKFORCE

If you are in a unionised business, here are my top eight tips for moving the team to improve performance despite any obstacles you might encounter.

1. Meet at the point of common interest.

   If you want to make any changes, start with something so undeniably important, and so obviously in the common interest, that you can’t possibly get disagreement. For me, that’s safety. Outside of the public sector, industrial businesses are the ones that are most likely to be unionised. Work with your people (and their appointed representatives) to improve the safety culture, the safety processes, and the safety performance.

2. Pick your battles.
   

   Don’t go after every… little… thing. I’ve had more union officials trying to discredit and undermine me than I’ve had hot breakfasts – but you can’t let that get under your skin. Don’t react. Don’t get distracted. Stay focused on the big picture. You want to build a team that’s enabled to perform. Nothing else matters.

3. Follow the processes.
   

   Any process that’s been agreed between the company and the unions is sacrosanct. Don’t take shortcuts and don’t try to bypass relevant steps. For example, in consultation, follow the letter and the spirit of the agreement. Ultimately, this is the only place you can get tripped up. As long as you follow the process, you can lead for performance and you’ll be operating within the guardrails, no matter how onerous the employment regulations are.

4. Use your noggin (that is to say, your common sense).
   
   Appeal to your people’s sense of fair play, decency, and reasonableness. If you’re direct, open, and clear, people are going to respond to that. I would say quite frequently things like,
   “Come on mate, let’s be fair dinkum about this. You know as well as I do that that’s not acceptable.”

5. Don’t be afraid to communicate directly with your people.

   The unions would much prefer that they were the go-between for every message that you relay to the workforce. Don’t let that happen. The “us v. them”, the “workers v. management” stuff is going to be baked into any messages that the union conveys on your behalf.
   Direct communication is key, so pay attention to it, and give it your time and your energy. Listen to your people’s concerns, and make sure you respond to them.

6. Treat people fairly.

   Don’t fall into the trap of letting the relationships with your people become adversarial. Treat them exactly as you would want to be treated. Separate any bad behaviours you see (which you might not like), from the individuals themselves (who are basically just like the rest of us – they’re just doing the best they can with what they’ve got).
   Give your people the benefit of the doubt and don’t take it personally.

7. Be clear about your expectations, and the impact of people’s choices.

   A leader’s job is to set the tone, the pace, and the standard. Don’t balk if your people are reluctant to lift. Sometimes, benchmarking can provide a reality check.

“You’re telling me that everything’s optimised as much as it can be. Then why are we in the bottom quartile of global companies in our industry?”

8. Be the leader your team needs.

   If you’re a poor leader who rules with positional power and doesn’t trust your people, well, you deserve everything you get. You have to model integrity, accountability, and courage. Show your people trust, give them empowerment, and break that vicious cycle!

BETTER PERFORMANCE BENEFITS EVERYONE!

Leading a unionised workforce is an order of magnitude harder than a non-unionised one – but you can still lead strongly, and you can still get results.

If you’re trying to bring change into a unionised business, you can expect to encounter resistance at every single turn. And this is why it’s so important to believe in your heart of hearts that better performance is good for everyone.

It’s good for the company; for the team; for the customers you service; for the suppliers you engage; for the communities you operate in…

And yes, it’s even good for the reluctant employees who would rather not listen to a word you say.