The leadership styles of corporate executives can be instrumental in creating,and addressing crisis situations. Depending on the issues that are involved, how executives lead could also help avert costly strikes.
The headline-making strikes in 2024 included those by workers at Amazon, Boeing, and Starbucks. Sometimes the threat of a strike is enough to make the news. That was the case this month at Costco.
“A threatened strike at 56 Costco stores across six states has been averted for now,” CNN reported on February 1. “ [T]
he company and negotiators for the Teamsters union, representing 18,000 workers, reached an 11th hour tentative agreement…” according to the news organization.
In 2023, there were 470 work stoppages (466 strikes and 4 lockouts) involving approximately 539,000 workers, which resulted in approximately 24,874,522 strike days, according to the most recent Labor Action Tracker by Cornell University’s School of Industrial and Labor Relations.
Strikes by unhappy workers do not have to be foregone conclusions, according to an informal survey of labor experts and CEOs who shared advice on how leadership styles can help avert this type of crisis.
Leadership And Relationships
“In my experience, leadership styles play a very large role in maintaining a strong employer-employee relationship…I believe leaders who focus only on bottom-line costs without considering the long-term impact on morale and retention are setting themselves up for workforce instability. Strikes do not just happen overnight, they tend to be a cause of built up and long standing frustrations that reach a boiling point when not properly addressed,” Darian Shimy, CEO of FutureFund Technology, commented via email.
Making The Hard Choices
The companies that do the best job in preventing strikes are the “ones you never hear about because good labor relations doesn’t really make the news. It’s also important to understand it takes two to tango: the union and the company often have to be willing to make some hard choices at the end to avoid a strike,” Philip B. Wilson, president and general counsel of LRI consulting Services and author of The Leader-Shift Playbook, pointed out in an email interview.
‘Ironing Out Frictions’
The sooner that executives listen to the grievances of employees, the better.
“I once resolved a case in which our workers were complaining about working at midnight and pay scales. Instead of brushing off the issue, I arranged a session in which everyone could speak out about their concerns. By compromising, we agreed to adjust a few shifts and make our budget constraints transparent. That open-door policy helped a lot in ironing out frictions,” Evgen Kushnirchuk, CEO at HireDevelopersBiz, recalled via email.
How business executives decide to work with unions can determine the result of negotiations.
What Matters Most
“Money matters, but respect matters more. Employees demand equitable wages along with benefits and working standards, while also seeking appreciation and recognition. When leadership approaches negotiations as a numerical exercise rather than a meaningful dialogue ,resentment will develop. I ensure that my team understands how their feedback drives business decisions in my own company. When people feel heard, they stay engaged,” Zarina Bahadur, CEO and founder of 123 Baby Box, pointed out via email.
“I do not believe that averting a labor strike is only about meeting demands, in my opinion it is more about fostering a culture where negotiations don’t reach a boiling point in the first place,” FutreFund’s Shimy commented.
‘Leverage And Relationships’
“At the end of the day avoiding a strike comes down to two things: leverage and relationships. If a company can withstand a strike’s impact they’ll have the most leverage, otherwise the union will have more leverage. But relationships also matter a lot,” Wilson of LRI Consulting, noted.
Executives should ensure that they do not say or do anything that could make matters worse.
“Even in situations where a union doesn’t have a lot of leverage, corporate executives can so poison the situation that a union decides to strike even if they don’t think they’ll get a lot in return. Corporate executives who have a ‘win at all costs’ mentality can definitely create situations like this. On the other hand, corporate executives who foster collaborative relationships with union leadership and look out for the interests of both sides in the negotiation can often avoid a strike even where a union feels like it has leverage,” Wilson advised.
Business Partners
“Leaders who avoid strikes understand that union leaders have a job to do, and a big part of their role is political. Union leaders need to keep their members happy with the job they’re doing and the results they’re getting. In many significant ways union leadership is one of your business partners, and if the company looks like it’s always taking advantage of the current union leadership, you are likely to end up with a business partner you don’t like,” according to Wilson.
A collaborative approach to labor issues could be the key to preventing strikes.
“This is why a collaborative, relationship-centered leadership style is critical to avoid strikes. The best leaders work on creating these relationships long before a contract expires. They try not to surprise the union or their members. They look for ‘win-win’ solutions whenever possible, and understand that the union occasionally needs to take a victory lap,” he recommended.
Listening to and responding to the concerns of employees can be an effective way to prevent a labor problem from turning into a crisis.
“I personally check in with my team on a regular basis to ensure no problems stay unresolved. Strikes don’t happen overnight. The process starts with minor issues which accumulate as time passes,” Bahadur of 123 Baby Box concluded.