Is Our Corporate Culture Failing?

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Some things never change; I’ve been in the retail business for over 40 years and worker dissension is nothing new. But who’s making all the noise has. Unions are back; organizing is in. Jaz Brisack organized a Starbucks in Buffalo; she was a Rhodes scholar. Chris Smalls had no college education at all but organized Amazon workers in the Staten Island warehouse and is moving onto the national scene. (He got a cover story in New York Magazine, too). This new crop of organizers sees opportunities everywhere, and those companies that prided themselves on their people-oriented culture are finding that’s not enough to prevent union organizing these days. In those organizations that already operate in a union environment, including many retail chains, the power relationship between management and labor has shown a partial shift, as good help is hard to come by, or sometimes any help at all.

Signs of the Times

The Washington Post recently ran a story with the headline: “Chipotle closes store that sought to unionize.” Noted for being an enlightened company (for example, they were the first company to introduce pork from Niman Ranch, a pioneer in good practices in the meat industry), when push comes to shove Chipolte still does what it can to prevent unions. The more enlightened the company, it seems, the more they despise unions. And that’s understandable. The company hires, trains, pays, promotes, rewards and sometimes positively coddles its people and then they turn around and unionize. The C-suite cries: Outrageous!

You can have the greatest culture of all, but in the end, it still comes down to “show me the money.” You can have the best management, the best people, the best products, and service, but if the workers can’t make a decent enough living then trouble will brew faster than a latte at Starbucks.

Companies often use store closings as a threatening tool to send a message to staff and politicians alike. Starbucks closed a shop at Cornell University; Kroger closed three stores in L.A. rather than pay the extra $5.00 an hour required by local law. The punitive nature of these closings might invite bad press, but they send a powerful message from management: your job and that of your fellow employees is on the line if you mess with us. The subtext is don’t blame us; you brought this on yourselves. CEO’s get praised and rewarded by the stock market for showing bold moves like this. But local politicians get nervous.

The federal minimum wage remains at $7.25/hour, unchanged since 2009. According to Axios, if measured in 2009 dollars, the minimum wage has fallen over the past 13 years to just $5.27 per hour. Some places are required to pay higher wages by local or state mandates. It’s now legal in only 20 states to pay an employee as little as $7.25 per hour, as reported by Axios. Even a full-timer with 40 hours a week would find it hard to live on less than $300 per week gross pay these days. And then factor in retail’s penchant for part-time work, and scheduling which changes week to week. For part-timers it becomes hard to plan life at home with the kids. No wonder things are heating up all over.

Work Ethic

When Covid struck, we got to see who actually did the work that we needed to get done, while the rest of us locked down with our laptops. That’s not in the news much now, but it awakened a consciousness among those that work in the analog world with a reality check. Who is essential and who is not? Add to that, who’s getting paid what to be essential?

Office work seems to have changed forever: recently the Washington Post reports a mere 41 percent of workers that have been called back to the office ever show up on Fridays, with no-show Mondays the runner up at 30 percent. When I was in food retail, (admittedly 30 years ago) we were at work at 7:00 AM to set up, and left around 8:00 or 9:00 PM, depending on who was doing cleanup. And we were open for business 361 days a year (save only Christmas, Thanksgiving, New Year’s Day, and Easter Sunday). That means a staff worked those days and hours, almost every day of the year. In our restaurant business, the hours were even worse.

Are You Essential to Your Worker?

A recent survey done by RIS notes that 97 percent of retailers are having trouble attracting and retaining staff. Other issues—rising wages (which was the issue that came in second, at 50 percent) along with training, scheduling, and customer service—were much lower concerns for retailers. Yet these issues are all interrelated, meaning that even a corporation that has a supportive culture and wants its workforce to show a commitment to the company, to the work, to the customers, and to one’s peers, is finding it more difficult than ever to recruit, train, and manage new employees.

Let’s talk about millennials (born ’81-’96) and Gen Z (’95-’12); they often evoke angst amongst us old timers over their sense of entitlement or self-defined work ethics. But who can blame them? It’s a safe bet that when money is tight (and for many retail associates it is very tight indeed), people might stay put. But it seems that many next-gens have little reluctance to move onto better opportunities, or in what is now deemed the Great Resignation, to no job at all. Few people have the luxury of not working, at least for very long, or without some outside means of support. So, how does a retail company create an in-store culture that supports new values in the workforce and can attract and retain young talent?

And here’s the rub. The CEO has become an object of interest today. In the age of social media, fully 82 percent of next-gen respondents in one survey said they’d research the social media accounts of the bosses before joining a firm. Sites like Glassdoor run employee reviews of their firms, not always positive, which give insight into what it’s like to work at a place day by day. The site is highly popular for workers of all ages and a nightmare for HR.

Workforce Mismanagement

In 1991, when new techniques for managing people were becoming firmly entrenched, I wrote an article for Supermarket News entitled “Empowerment.” It was the buzzword that year for shifting decision-making down the organization. A number of prominent executives at the time weighed in. David Jenkins, CEO of Shaw’s, said, “People aren’t predictable. You turn them loose…and you never know what they’ll come up with. It’s a risk.” Management typically says it is open to feedback, but rarely solicits it, and even less rarely acts upon it. Customer suggestion boxes are often reviewed by store level management to make sure adverse comments don’t move up the chain. Employees also often use this system to provide suggestions, but the result is the often same: who reads ’em, who acts on ’em?

As we know, middle management, the control point in most companies, usually wants employees to do as they are told. Too many suggestions or opinions from subordinates are not what management wants; managers want obedience, action, productivity, efficiency, accountability, and a sense of urgency. I had a job in college where I took every opportunity to tell the bosses how to improve things, until finally they fired me. I wanted a say in things, but they didn’t think that was part of my job description. Surprise! I was ahead of my time. (Poetic justice, they eventually went out of business).

Power to the Workers

Although the CEO needs to take the lead on empowerment, top management is often the problem, not the solution. One consultant told me 30 years ago, “The problem usually is that top management isn’t sincere. There’s no one to hold the CEO accountable. He needs a coach…but doesn’t always get one or allow one.” At the time Japanese auto assembly line workers were presumably able to stop production, empowered by decision-making down to the lowest level. Maybe it was a good idea, but it’s hard to do. And when the crunch comes, as it has these days, top-down directives have come roaring back. Sure, there are some people who just don’t want to be empowered, but simply told what to do (and when they are told, here in New York City at least, the workers exert their unofficial “right to complain”). But the majority of the next-gen workforce wants a voice and a seat at your table.

The Human Factor

It all comes down to the people issue. Humans are so funny sometimes. (Make that all the time.) As I said, they are unpredictable and often don’t do what you’d expect. What does management do about that? Given the individualistic nature of our society, autocratic methods don’t work that well with employees anymore. In other words, people want to be treated like people, made to feel important, and praised for their contributions, no matter who they are or how they rank in the hierarchy.

An example from my early work experience illustrates the point. In the late 70s, at our small family business (Mayfair Supermarkets in N.J., trading under the Foodtown banner), we were losing money hand over fist. We knew we needed to turn things around but weren’t sure what to do. A friend of my sister’s ran an upstate New York chain, and I asked him for advice. He told me to hire Dr. P. and his wife, organizational development psychologists, which we did. I was the point man, as I was expected to run the company someday. Our culture was based on management “not rocking the boat,” never criticizing anyone or anything to maintain what we might now call a “good vibe.” So, we were going broke, but in a friendly sort of way.

When things became less subjective, and new performance measures were installed, along with clearer job descriptions and a real accountability system, things turned around. But there was also bitterness and regret for what once had been a cozy family business with many old-timers, some of whom had been with my grandfather in his mom-and-pop shop back in the 40s. Our best friends at work were leaving or dismissed because, as it turned out, not everyone was performing up to snuff after all. The new control techniques were quite sophisticated. After all, our consultants were psychologists, trained in inner city gang work, experts in turning around dysfunctional cultures. As it turns out, every organization is dysfunctional, each in its own particular way. Like families, or Congress.

As I experienced firsthand, most companies are happy to promote an enlightened public image. Yet reality eventually rears its ugly head, forcing adoption of better tools for better results from the workforce. Now everything is measurable. Data rules, even time management is old news, and AI will soon have analog work programmed down to the last nanosecond. And there are cameras everywhere (including all those laptops and computers), just in case.

The Experts Economy

There are always consultants to help management install the latest and greatest techniques for managing people. A friend, a contractor in his 40’s who runs his own shop, told me he uses a professional coach these days to help him juggle his work/life balance. And he’s not alone, so do all his pals. I hadn’t heard of that niche profession before.

But there’s an elephant in the consulting practice room. Consultants rarely ask management to provide secure jobs at a living wage. They’re more likely to talk theory and strategy and tell management that what they have to do is necessary, and for positive good. The consultants are there to assuage guilt. As an aside, in our family’s grocery business, there wasn’t much guilt about anything. So, today’s dysfunctional management system forces the hard moves. Unchecked labor costs eat up profits and even cause systemic failure. Who wants that? Yet there may be unintended consequences.

The Chipotle worker who brought an NLRB suit over the store closing had better press than the company: “…we are building a movement to transform the fast-food industry and ensure the workers who create all the wealth for these corporations are respected and no longer have to struggle to support their families.” The market of public opinion has swung in favor of the workers. But most of those folks often live in fear of losing their jobs, and only the bravest will buck the system.

A Living Wage

You can have the greatest culture of all, but in the end, it still comes down to “show me the money.” You can have the best management, the best people, products, and service, but if the workers can’t make a decent enough living then trouble will brew faster than a latte at Starbucks. With inflation at nine percent, and the minimum wage still the same as it was in 2009, workers are losing ground quickly. Taking inflation into account, the hourly wage today is that much less now (40 percent) than my first hourly job in 1968. Even crazier, tipped wages, the minimum for food service, has been at $2.13 for 30 years.

So, despite the incredible wealth we have managed to generate here in our country, we stand by and watch as the middle class disappears, and the richest and poorest classes increase, resulting in the inevitable rise in inequity and discontent. Putting our house in order will take some hard decisions about what we want and where we’re going, but you can bet these will be postponed until the future, as always.

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