Late in the semester takes on a degree of urgency for those involved in education on either side of the chalk. Similar to the wind down of a sports season, things count more and time runs short. Not surprisingly, the final project for my negotiations class entails analyzing a real situation to assess strategy and implementation of the parties involved. There is a timeliness and relevance that comes with looking at situations that are currently unfolding, and my classes have been blessed over the last bit:
- Fall 2008 – York University unionized workers strike.
Note: Neither Schulich (business) or Osgoode (law) were affected directly. All appreciated the irony of crossing a picket line to teach a class on Negotiating.
- Winter 2009 – Auto sector woes, which were welcome in the fall, continue.
Note: There is also a nice little transit strike in Ottawa.
- Summer 2009 – Toronto City outdoor and daycare workers strike
Note: Toronto City Counsellor Karen Stintz guest shared perspectives on this in class this semester.
- Fall 2009 – Cable companies and TV broadcasters
Note: Just in time for Fall 2009, CRTC Chair Konrad Von Finckenstein chastised the disputing cable and broadcasting companies with:
“You need each other; I don’t understand why you can’t negotiate.”
A final report gift, just in time for Christmas.
- Winter 2010 – Community College Teachers vs. Management
Note: As an instructor at Humber I was able to vote in this one. Who on Earth thinks that teaching is a profession in which to get rich?!
The thread through all of these situations appears to be “reacting to a business model that’s under strain.” Whether its wage dissatisfaction or margin envy, those involved, who really do need each other, would do well to hear Von Finckenstein’s words.
Complex situations? Requiring new approaches? This will ring familiar to those working in supply chain. Collaboration is easy to talk about and, theoretically, we can see the opportunity for creating/protecting value. The work comes in effectively executing on that mindset to address real challenges.
The competitive reaction appears to be automatic, especially if we are taking away things that people have “always had” (e.g. banked sick days) or have come to expect (3 – 5% year-on-year wage increase). The rightful target for competitive behaviour is often outside this relationship.
This means that even though it makes perfect sense to implement your cost-saving initiative, if someone is losing something, expect some push back. Positioning energy toward understanding the problem (hopefully a shared problem) is the most effective interaction. No situation is too small for a strategic look, which could start conversations toward some fixes.
Spending scandals are always good news stories; the best, of course, involve taxpayer dollars. There seem to have been a lot of them lately. One such story this week, involves the RCMP planning to spend $200K on the leadership development of three of its officers. Interestingly, perhaps, the issue this twigged with me is “what do you charge for these type of services?”
I recently had a conversation with a former professor and colleague of mine a Schulich Business School, and we agreed that one of the biggest challenges for providers of professional services (like me!) is pricing. The formula involves trading time for money: hours or days spent either with the client or in preparation. Time spent on the latter has more latitude because, as my client, you won’t know exactly how much time I have spent preparing. I will suggest that in most cases there is a reasonable range, which is usually driven by the size of the project and the available budget. The resulting agreement ensures that you, as my client, get value for money and that I, as the provider, receive compensation that allows me to stay in business with a manageable schedule (e.g. not working 90 hours a week, 51.5 weeks a year).
A recurring stat in my profession is that employers spend on average $1200 per year per employee on training and development. Some will receive a much higher investment in their skills and abilities, and those are the ones that most providers like me hope to train. I am not sure of the upper limit of the reasonable range for an individual’s training allowance, but I think it is considerably south of “$200K for three people.”
What happens when the buyer fails to enact the “reasonable range”? The current levels of scrutiny on such spending, as well as the strong trends toward forced transparency, may eliminate these situations completely. Until that happens, individual ethics will dictate how much time makes into onto the invoice. Let’s call this “micro governance.” I think that it can cover for any governance/oversight that may be lacking in the always imperfect systems. Ethics or no ethics, for the sustainability of both sides, the reasonable range is the safest place to be. I hope we can continue to find it.
Toronto city workers are striking, because they can. City management and union representatives, hopefully, continue to negotiate, because they have to. I am expecting final class assignments devoted to analyzing this situation:
- what went wrong?
- how could it have been better?
- what should they learn for next time?
I always enjoy the perspectives and the biases that come out in the analysis. Likely because he shares my biases, I enjoyed Howard Levitt’s legal perspective on the situation in today’s National Post.
As an additional perspective, my MBA class (Negotiations) this week tried to deal with ethics as practically as possible. With the assistance of some readings, excersises and discussions, we arrived at some criteria that can help inform ethical decision making. (I don’t like to think that it always “depends;” there are some more biases for you!) One of the criteria was “It is unethical to maximize your own interests with a disregard for shared interests.” You can argue the semantics of any of those words, but the point, as I see it, is look out for number one, but stay attentive to shared interests.
Under this criteria, in nature, a parasitic relationship becomes unethical if it threatens the survival of the host. Does that mean the Bernie Madoff was unethical because he failed to create a sustainable Ponzi scheme? Maybe. Remember, this is one of four criteria.
Do city workers violate this ethical code by holding out for, specifically, sick day banking and pay-back for half a year of sick days upon retirement? I think the answer is, “Yes.” The shared interest is in a sustainable system whereby reasonable tax revenues cover reasonable city services. As Mr. Levitt illustrates, the status quo union agreements have progressed to being unreasonable (evidence by the fact that you don’t see similar benefits in the private sector).
The checks and balances of the private sector are not perfect–and certainly do not guarantee ethical behaviour–but can help. Uncompetitive wage burdens were part of GM going bankrupt. Unions, workers and pensioners live with the consequences. Pushing a business to unsustainability is unethical if your plan is to continue working there (as it appeared to be for many workers) or to bank on retirement income from the company (as it appears for many pensioners).
If today’s City of Toronto workers are in it for anything other than short-term gains, they are not behaving ethically, I will suggest. Anyone who makes such a claim, better have a strong ethical leg to stand on (or had best make it on a blog whose readership is limited to like minds… we will see.)
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