What about the workers? Them or us?

This morning I met Tony. He works for a company who unblock drains, so quite a messy job, but curiously satisfying when the blockage is removed. Anyway, he was a very chatty chap and while he was flushing out years of accumulated unmentionables from our pipes, he told me about a previous job he had working for a rail company. The story went that he had been made redundant and his wife passed on an ad to become a train guard. He thought 'why not?', so signed up and loved the job. One day, following a challenging train delay that he needed to delicately manage, he got a knock on his door to be confronted by a passenger. "How can I help you sir?" he asked. "I thought I'd let you know how well you dealt with that situation", the chap replied. "Well done!". Turned out he was the chairman of the rail company. A day or two later, Tony was called into his bosses office and told that he had been recommended to become a guard trainer. Promotion and more money. Fantastic. He loved the job. In fact he did it so well, he was summonsed again and promoted to guard manager. Even more money. He was on a roll. Then overnight his world collapsed. Yesterday he was mates with everyone, doing a great job encouraging best practice, safety, quality customer service etc, the next he was ordering people around, enforcing discipline, hiring and firing, negotiating wages and benefits - and everybody hated him. The bosses needed him to deliver tough messages and reduce costs - difficult to do at the best of times. The workers wanted him to keep the bosses off their backs and look after their interests. So he left, and ended up flushing out my drains - which he did brilliantly and with great pride in how and what he did. Top bloke.

In the UK we currently experiencing endless strikes by rail workers - indeed virtually every public sector worker seems to be on strike at the moment. Our country is in extreme economic chaos. Everything is getting too expensive and unions are sharpening their swords to make sure their members aren't left behind in the clamour for higher wages. It's a vicious circle as withdrawing labour only makes the problem for bosses harder as revenues decline and operational costs become even more expensive as suppliers demand higher prices to feed their own increasingly desperate employees. One solution is for businesses to try to remove wages from the system by increasing productivity - which on the whole will be resisted be employees as automated systems threaten their livelihoods. Hence the Luddites and other worker resistance movements who, Canute-like, tried to push back against the tides of machines replacing their jobs. What those early resistors didn't realise was that many more opportunities would result from increasing automation, so jobs would change from sweaty and dangerous to skilled and creative. BUT, that tide is also now turning. What labour there is left for humans to do is being farmed out to cheaper global competitors or to robots and AI. What's left is becoming less well paid relative to the costs of living, and increasingly at threat of being made redundant.

I asked Tony what he thought of the current rail strike action by his former union (before he became a manager). "Them and Us", was his reply. "Once I became a manager, I knew 'they' needed to change their working practices - whether for shareholders or for 'customer service'". A worker is only as content with their lot if collectively they share the same ambitions as their managers. Saving costs by making people redundant and changing working practices will never be an easy sell to 'them' by 'us', even if it makes sense to employers and customers. It has to make sense to all 3 parties".

So how do businesses close the gap between Us and Them? Simply paying workers more is not a solution unless there are productivity and revenue or profit gains as a result. And reducing profits and therefore returns for investors - mainly workers' pension funds and institutions who are taking long term risks with their money - is only going to reduce the appeal of investing in those businesses, making wage increases even less likely. Capitalism only works if everyone is happy.

Returning to Tony and his dilemma about crossing over the Us and Them line where needing to see the constraints balanced by the opportunities, suggests where the light at the end of the tunnel might lie. Why is he so happy to work for the bosses who currently employ him, but faced conflict between Us and Them at his previous employer? I believe job satisfaction needs to include taking pleasure in customer satisfaction. Where there's a vicious circle of declining revenues (like today's railways) and increasing numbers of angry customers, workers will blame tight fisted management, who in turn will blame idle, self-centred workers. Some truth on both sides no doubt. But where both sides share in praise and satisfaction expressed by customers, the business does better for everyone to benefit - including investors.

Richard Branson of Virgin famously replied, after being asked who was more important: Your staff, your customers or your investors, "My staff. If they're happy, they deliver great products and services making my customers happy. Who in turn happily pay what we need them to pay, recommend my business to new customers, and keep coming back to keep my investors happy." (or words to that effect). All well and good, but what happens when a businesses products and services simply aren't what customers want, despite the best efforts of your staff? The rail companies can run as many customer satisfaction services as they like, but at the end of the day if people would rather fly, drive, ride or walk, there's not a great deal you can do to make train travel more appealing... or is there?

Watch the first minute of this great talk by Rory Sutherland (and then watch the rest if like me you can't get enough of him).

So Rory talks about 'intangible value' or 'perceived value' where customer satisfaction depends on understanding it from the perspective of customers (ie what they're actually experiencing rather than what you think they're experiencing) - and that's something staff will probably understand far better than management and any satisfaction surveys can reveal. Bosses not only need to tell workers what to do, they need to gain a far better understanding of customer experiences through and in collaboration with their staff in order to generate more profit and higher wages over the long term.