Tuesday, May 28, 2013

The labour power vacuum.

Can management restore legitimate power in the workplace?

On the surface it seems to be about some unassuming Trade Union offices at the now familiar Marikana platinum mine near Rustenburg.

But that’s clearly understating the breadth and depth of the issues at stake – issues that are much wider than even the Farlam commission of inquiry into the Marikana shootings will finally cover.

This onion in South Africa’s economy and labour relations has many layers that at their heart are challenging a myriad of assumptions, not only about organised labour but about power itself.

The first layer is about the battle for recognition between AMCU (The Association of Mineworkers and Construction Union) and NUM (National Union of Mineworkers). The mine owner, Lonmin has confirmed that AMCU now has a membership of 70% and NUM about 20%, reflecting a significant shift in representation in the last year or so, and challenging the latter’s right to office space at the mine. That’s a thin layer of onion in itself – but pungent enough to have triggered another “wild-cat” strike at the mine recently.

The thicker layer underneath of course, is union rivalry reminiscent of the 1980’s when there was a scramble for membership by unions who had been formed after Nic Wiehahn’s famous freedom of association reforms. They in turn were in no small measure prompted by the absence of a political franchise and the belief that some form of expressing majority aspirations was needed, and that the place to do this was in the workplace. That gave an extremely risky onion layer in the form of politicising the workplace – which explains the extreme degree of political expression in organised labour in South Africa, including the tripartite alliance between the ANC, COSATU, and the SACP.

Which bring us to a deeper layer – the centralisation of power politically, economically and in the labour movement. With that centralisation comes an increasing level of interaction and collusion with other powerful constituents such as government and big business, leading to compromise and a softening of former populist and intransigent positions. On the surface this may appear to be a good thing, were it not for the fact that with greater centralisation of power, one also finds increased corruption, nepotism, very strong personal jockeying for positions and a growing degree of alienation with rank and file membership. This alienation is exacerbated by unrealistic expectations created by the power mongers themselves.

There are clear signs of a fragmentation of centralised power in the support base on the political and labour fronts. Even capital globally is experiencing a strengthening wave of resistance to the centralisation of economic power in big corporates. The chronic civil unrest that has given South Africa the dubious title of “protest capital of the world” rests on a litany of broken promises and unrealistic expectations.

Disillusionment with power and fragmentation of support amongst workers has created a vacuum that has quickly been seized upon by rival and more radical unions such as AMCU against the NUM and BAWUSA vs. FAWU in the farm-workers protests.

But even here, despite their growing membership, these alternative players no longer have the absolute support of workers, leading to an increasing number of spontaneous, wild-cat, and illegal stoppages. In response, the rival unions are again at war with their most important weapon being false promises and the further entrenchment of unrealistic expectations. In a clear attempt to out-trump AMCU, the NUM’s current wage demands in the gold and coal mining sectors must rank as one of the more outrageous leaving its mark on the financial markets.

Current labour trends, including unemployment are clearly untenable and are challenging many of our long held assumptions about collective and centralised bargaining, the Labour Relations act itself, but the most important of all, this obscene haggling based on an assumed adversarial and competitive relationship between the three economic estates of labour, capital and government – a stance that is jealously guarded by vested interests in those groups.

All of this rests on a flawed understanding of the true nature of power, which is at the core of the onion. People submit to power willingly when it is seen to have their interest at heart. That is the key condition that makes power legitimate and sustainable, and distinguishes it from control based either on seduction or coercion which is mistakenly seen as synonymous with power.

The only group that can exercise legitimate power in the workplace on a day to day, minute to minute basis is management itself. They have ultimate control of those factors that forge employee trust and loyalty. The Chamber of Mines knows this. They have the results of extensive research done in the gold and coal mining industries in the 80’s that showed that trust in the workplace was based on the care and development of subordinates at all levels of employment. In turn a key element of that was dependent on the relationship between the subordinate and the immediate supervisor.

Trade Unions and their shop-stewards simply don’t have the ability to replicate that trust. They are mere surrogates whose primary weapons are false promises, seduction and coercion. These are instruments of control, not legitimate power.

This is the messy, difficult and complex aspect of industrial relations. South African business has generally failed dismally in applying it. The pillars of power in the workplace rest much more on engagement and involvement than on incentives such as pay. The latter is seduction, not power. Threats of lay-offs are coercion not power. They are control instruments that give Trade Unions their succour.

The World Economic Forum ranks South Africa’s labour relations as the worst in the world. Large employers may have found it expedient up to now to work within a commodity expression of labour, and an assumed adversarial relationship between labour and capital. After all, with layoffs being its final nuclear device in part to protect profit maximisation, it has been dealing with labour on familiar and uncomplicated terms.

“Labour relations are at a crossroads”, says Finance Minister Pravin Gordhan. Employee engagement and involvement are the only real and tangible instruments left that can restore legitimate power in the workplace. It may be a long and hard slog, but it has to start with acceptance that the current system is simply inappropriate, untenable and unsustainable. We need reminding perhaps of how Germany and Japan were able to create sustainable and exemplary participative industrial relations out of war trauma and deprivation.

Despite its frightening features, a labour power vacuum creates an opportunity for management to reclaim legitimate power through sound servant leadership practices.

And they can do so independently of the big constituents.

Tuesday, May 14, 2013

The Power of caring in business.

How the profit motive inhibits wealth creation.


Earlier this month, I challenged a long held assumption that has been deeply entrenched for decades in the Anglo-Saxon capitalist model: that human beings are by nature selfish. Indeed, the economic model we have constructed is not only based on that assumption, but encourages and thrives on that behaviour.

Without repeating my earlier arguments, I have always found it interesting how the undeniable logic that benevolent intent is a far more appropriate and sustainable driver for national, company and individual prosperity and well-being, is so readily accepted in discussion with groups of informed people.

In my workshops as a consultant, I found this to be readily so, even amongst hard line capitalist sympathisers.

Watch this excerpt from one of those workshops, and you’ll see what I mean.


Unemployment: Back to basics.

Are we becoming increasingly detached from the plight of the unemployed?

Every quarter the statistics confront us. Every quarter they are met either with some comfort or concern. For a brief while, they linger in the headlines, capture some sound bites of ivory tower pontificating and then get reconciled with the “grand plans”, the NDP, government action, and company and labour cooperation and involvement.

Until the next set of statistics are revealed. Like the latest QLS figures which reflect a 100 000 loss of jobs in the first three months of this year, bringing the official unemployment rate back to above 25%. If you add those that have given up looking for work, then it is estimated that 4 out of every ten economically active South Africans are without jobs. They have to face a life of hopelessness under the double edged sword of no means and no meaning, of which the latter is the real sharp edge of the blade.

Tragically, most of them are youth who have little else left than political expression and street protests, a far more serious threat to our preciously held economic theories than socialist-capitalist debates in hallowed venues such as boardrooms, conference halls and media columns.

We have to isolate unemployment as our biggest problem, and not divert our attention to other problems related to it, such as poverty, inequality, crime, labour unrest, wage demands, race and class polarisation, service delivery, the Guptas and even education. Most of our problems will be substantially ameliorated by fuller employment. Of course, effective education and skills training will make more people employable, but for many destitute families even free and dysfunctional education is not free.

Some months ago, I wrote about the need for declaring a state of emergency around unemployment. It is worth repeating. The populist call for “economic freedom” may have died down with the demise of Julius Malema, and it has been thoroughly discredited in the minds of many because it has been presented and largely understood as an expansion of hand-outs and dependency in a growing and bloated parasitic state. Yet, convert the intention or understanding of economic freedom from means to meaning, from money to opportunity, and it becomes a very valid ideal.

Only hard line communists and radical socialists would argue that equality can mean anything else but equal opportunity. As such, it is the valued and inseparable companion of liberty and justice, the other main pillars of free and functional societies.

South Africa’s unemployment problem deserves the same urgency as political transformation did in the early 1990’s. It needs the same spirit of compromise and sacrifice that led to political freedom for all. Yet we seem to dither, locked in incessant debate in which the loud wailing of vested interests, collectives, institutions, politicians, power mongers, labour leaders, company executives and others, drown out the murmurings of despairing millions.

Our inertia regarding the unemployment problem must be at least partly due to a lack of real and tangible concern by society as a whole. It is simply seen to be “someone else’s problem” – that “someone else” being government, Trade Unions, or big business. But it is a discussion that should feature in households, at every company board meeting and on the agenda of any collective from any walk of life. Until each one of us can say that we have more than a casual interest in the problem, we cannot be exonerated from the eventual outcomes.

I came to this thought after a discussion with my landlord and farm manager, Adrian Sutton, who has become passionate about trying to uplift the local community. Within the first few minutes we became despondent and overwhelmed by obstacles, yet not totally convinced that nothing could be done. In short, a seed has been securely planted for the establishment of a communal farming venture based on many experiences elsewhere – including rooftop growers in Johannesburg.

Agriculture must certainly offer the greatest opportunity for employment and sustenance. If we can move our attention away from grand plans of land transformation and ownership to communal and co-operative farming, we could make valuable contributions to both food security and employment. Much is already being done. We simply have to build on it.

When one hits an immovable obstacle in any challenge, one simply has to go back to the basics and strip the problem of all of its esoteric niceties and ideological posturing. Unemployment is such a problem.

In creating tangible value and productive employment, sound economies have to ensure freedom of choice, free moving prices, and maximum number of competitive suppliers.

Out of the box, perhaps even outrageous considerations for the three economic estates are:

· Government must be less obsessed with creating jobs and more focussed on creating the conditions for others to create jobs. In most cases, this will mean simply getting out of the way of private initiative, especially small and medium enterprises where, as Ryk van Niekerk wrote recently, it will need to revisit its draconian legislation that is discouraging mom-and-pop ventures.

· Organised labour has to come to terms with the need for less rigid labour legislation, the fact that developing and employing a large unskilled labour pool may require sacrificing developed country employment standards, and forfeit adversarial wage negotiations for flexible pay linked to wealth creation and greater job retention.

· Companies have to let go of their obsession with maximising shareholder value, which is more of a feature in the Anglo Saxon business model than elsewhere including Asia. The advantage to them is sustainability and a lower risk price for capital. Customer and market growth, as well as job creation and retention should be important criteria in executive remuneration.

Of course, there will still be dark clouds on the horizon, such as world economic conditions, slack demand and an unstable monetary system. We are simply too vulnerable to them – a vulnerability caused by structural and behavioural inflexibility.

The above suggestions will no doubt solicit a litany of comments from various ideological standpoints, and I concede that they all need fuller argument. But in the end, humanity’s greatest attribute for survival is caring for each other. This is not a soft, bleeding heart quality. The purpose of care is the enablement and empowerment of the receiver, not the creation of a lifelong dependency on the state or others.

Of course the final litmus test is willingness on the part of those being uplifted. That in turn will rely on three factors that are the crux of any employment relationship – involvement, engagement and incentive.

Of the three the first two are the most important.

Thursday, May 9, 2013

Port Elizabeth Flood 1968

On Sunday morning, September the 1st, 1968, I was called by the SABC reporter on duty, Dave Gray, who said he could not make it to the office because the roads were flooded.

I was within walking distance and decided to stand in for him.

I will never forget that day. The few hundred meters to the news office on a hill in Cotswold was like walking through water. I had to cover my nose and mouth to breath. On arrival, the engineer on duty informed me that all the telephone lines were down.

What to do as a journalist -- without telephones (long before cell phones) and no transport? I discovered that a teletext machine was working and sent a message to the news room in Johannesburg that we were dealing with a major event, but I could not give more detail.

Sopping wet, I stripped down to my underpants...fruitlessly trying to get some life out of the four telephone lines there. On one, all I got was crossed lines and I realised that any party on the other side was somewhere in the city and could relate some of the surrounding details to me. One begged me to get off the line because he was sitting on his roof, and was desperately trying to get hold of an emergency service.

And so, from many mouths of panic struck P.E. Citizens, I was able to get a good picture of the havoc being wreaked out by 420 mm of rain that had fallen within 12 hours. At about noon, a police Saraccen pulled up in front of the office and four bedraggled police officers with no ranks less than colonel, and a number of traffic cops, including the Chief traffic officer, pounded on the door.

Still only in my jocks, I was informed that P.E. was facing a real crisis and the only way to reach the ctizens to inform them to stay indoors, was via the Radio. A number of public announcements followed on air and the first comprehensive report took up nearly the entire bulletin of Springbok Radio's World at One.

It was only two days later, on the Tuesday, that some of my colleagues made it to the newsroom.

Oblivious to the fatigue that had set in, I grabbed my Super 8 Cine camera and shot several reels of film.

They had been laying dormant for years, until I recently had them converted into a digital format and was able to compile this short documentary of the aftermath.


Monday, May 6, 2013

The struggle of the self.

How a questionable assumption of human nature has polarised humanity.

It’s quite amazing how the great debate about economic systems, interactions and policies, comes down to one simple yet significant assumption about what truly motivates the human spirit and individual endeavour.

It is on that assumption that we have constructed the world around us. To question the assumption means questioning that whole construct. And to conclude that that assumption may be wrong would mean that the whole construct could be wrong and inappropriate.

In short, are we by nature, instinctively and intuitively selfish or generous?

We have to answer that rigidly because in the end it distils all of our behaviour, systems, and the world as we know it into one simple question: “why?” And before we respond too quickly and simply, consider that the question has occupied the minds of great philosophers, prophets, mystics, scientists, humanists, psychologists and sociologists for centuries.

So it is puzzling to say the least that economists, politicians, analysts, policy makers, company boards and yes, journalists so readily interpret the world on one narrow view as if it’s the absolute truth – that all our actions are driven by self-interest – if not as an innate condition of being human, then as a condition of an economic being…creating a schizophrenic creature of a Mr Hyde in our working or transactional environment and a Dr Jekyll elsewhere.

Supporters of the self-interest assumption often point to Adam Smith’s Wealth of Nations, the founding work of modern day capitalism as indisputable testimony that inherent selfishness is the “invisible hand” that creates prosperity. This ignores his more profound observation in his Theory of Moral Sentiments that: “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.”

To compound matters, we have different interpretations of the concepts themselves: on the one hand there is self-interest, selfishness, self-gain, greed, egotism, inward looking, etc. On the other we have enlightened self-interest, generosity, charity, empathy, altruism, outward looking, etc.

Our understanding of the three economic estates of capital, labour and state, is based on the raw immediate material self-interest assumption – capital is profit driven; labour is wage driven; and government is tax and revenue driven. (The latter becomes more burdensome and ominous when it becomes increasingly re-distributive.) Because they all have to feed off the same carcass, they automatically become predatory and adversarial, their behaviour held in check mostly through rules and regulations which in turn are often biased towards one or other vested interest within the three estates.

There’s a very simple self-evident equation or logic in economics that says if people by and large are taking more than they are giving, they will create deficits. If they create deficits, they create poverty. Conversely, if people by and large are giving more than they are taking they will create surpluses. If they create surpluses they create prosperity. “Giving” in this equation is not about money, but about giving of the self: time, effort, innovation and creativity. Clearly, the “what’s-in-it-for-me” or self-interest filter will constrain willingness to look beyond getting and more likely create the first condition which leads to poverty, or, as we have seen, increasing imbalance between the three constituents.

Our facile and unquestioning accommodation of the material self-interest motive has institutionalised this behaviour, creating huge and burdensome collectives and collusions to wage war on each other, with government acting either as a benevolent or malevolent referee, depending on which side it blows the whistle, or often simply in its own interest. We have gone as far as to write the “profit” or “wage” motives into the fundamental tenets of ideology. In turn their measurements are used as indisputable proof of self-worth.

It’s no longer simply about behaviour but about a “system” as scenario planner Clem Sunter implied in a recent article on the death of the private sector. Yet, some years earlier in his book “Beyond reasonable greed” he urged companies to adopt “a more caring, holistic philosophy”. “Adopting” self-regulation and all it implies such as Triple Bottom lines, sustainability, governance, Mervyn King et al, have been around for decades and have done very little to contain greed on steroids. Indeed they have simply led to more regulation and government involvement.

The term “reasonable greed” is an intolerable oxymoron. At what point does reasonable become unreasonable and who defines that point? Greed is an addiction and one sniff of it sets the addict on a path of never having enough. Like drug abuse, not even laws will contain it. Attention will always follow intention. Vested interests simply become more adept at surpassing or breaking the rules, often even writing them.

It comes down to the one simple question I posed earlier: are we by nature malevolent or benevolent creatures? Adopting either one of these assumptions will have a profound impact on the world around us: the degree to which we reject or encourage certain behaviours; what we measure as important; what we tolerate as lawmakers, jurists, voters, consumers, customers, employees, employers or shareholders; what we teach in our schools and homes; our priorities and engagement at work and many more.

The real difficulty in answering the question is that ultimately there can be none other than “the self”. Everything we do affects the self so no action can be independent of self-interest. What lies at our deepest desire or intent will find expression in motives, purpose, goals, actions and interactions. One assumption that appears logical is that the deepest need for most of us is inner peace and contentment. It is the search for that state, so beautifully articulated in Viktor Frankl’s Man’s search for Meaning, that creates a world of great diversity in behaviour and structures which in themselves can be volatile and inconsistent.

In turn, that expression can be broadly condensed into two approaches in a specific moment – malevolent or benevolent, means or meaning. Our lives are made up of countless individual snapshots of choice leaning either towards malevolence or benevolence, feeding the evil or the good wolf, in an on-going subconscious experimentation to achieve an inner state of serenity and of meaning.

How on earth can we extrapolate an “average” of all of those trillions of moment to moment choices by 7 billion people to arrive at an absolute truth for all human behaviour? But I’m going to risk it and contend that on balance we are a benevolent lot – without which humanity would surely have disintegrated. Some believe it is already well on its way.

I have argued this case regularly in “The Human Touch” since I started writing this column and have cited volumes of research and experiences to support it. Of course, I still can’t propose the premise as if it were the absolute truth. Neither can those who argue the opposite, yet they have seemingly won the day in defining humanity in such gross terms and have constructed a world that encourages that behaviour.

Indeed, here’s a challenge: name me one great achiever, apart from an adventurous gold digger or oil discoverer, who has made a meaningful difference to mankind and where this was the result of a clear unambiguous stated intention to maximise profit. I’m not saying you won’t find one, or that gold diggers and oil discoverers have not made a difference – only that you may struggle in your search. One can, of course, name an infinite number whose focus on self-gain led to extreme suffering for many around them. I, on the other hand, have cited quite a few business and other heroes who were driven by something else than money. And recent Harvard research bears this out.

If our true value lies in our capacity to make a contribution to others, then we should be highly offended when people make assumptions about our malevolent intent. And if we define generosity as being not about hand outs, but about giving the best of oneself in a given moment, then generosity is the ultimate act of self-interest.

That is the invisible hand.