Dean Barber

A Workers’ Story

In Uncategorized on August 31, 2014 at 12:52 pm

This is a pretty crazy story, one that I may not fully grasp. But it’s still important for us to try. My hunch is that there are some lessons to be learned here.

Appropriately, it happened or concluded nearly on the eve of Labor Day, in which we celebrate the American working man and woman.

Make no mistake about it, this is a workers’ story, one that is “unprecedented in modern U.S. labor history,” according to Thomas Kochan, professor of management at MIT’s Sloan School of Management.

Christopher Mackin at Rutgers School of Management and Labor Relations echoed that sentiment saying, “This is unheard of in corporate America.”

The Summer of Market Basket

So there you go, this is an odd story but maybe not so much when you reflect more upon it. For the “Summer of Market Basket” was not a labor strike in the traditional sense.

That’s because there was no union involved. What’s more, white-collar managers of a 71-store supermarket chain in New England found themselves protesting alongside blue-collar workers they supervised.

So that in itself makes it strange. But it became much more so when non-unionized employees, vendors and customers, too, of Market Basket banded together to protest the firing of company CEO Arthur T. Demoulas and a shift in corporate strategy that would benefit owners at the expense of a loyal workforce.

Think about that for a moment – workers walking off the job, risking their own jobs for that of their boss. Talk about putting it all out on the line.

To be sure, the striking workers who demanded that “Artie T.” be returned to his position as CEO, did so out of their own financial interest. He subscribed to a business model of keeping prices low and compensation and benefits above average. (Starting salaries for full-time clerks are $4 higher than Massachusetts’ minimum wage.)

A Personal Touch

But there may be more to it than that. There were stories of Arthur T.’s phone calls to workers, attending their relatives’ funeral services. One store manager told of how he came to her dying husband’s bedside at the hospital, and thanking them both for their service to the company.

In doing so, he gained an almost mythical hero status among the workers, as they truly believed that he cared about “his employees.”

Now I’m not sure if that personal touch can be taught in a business school, although maybe we should try. Because in the end, employees, which should be considered the greatest asset of any business, will be loyal to a management that is loyal to them.

To Give is to Receive

The loyalty factor actually comes to play in corporate site selection, to which I serve in a consulting role. Companies want less turnover and a loyal workforce as it adds stability and efficiency at the workplace. But again, to be the recipient of loyalty, a company must give it as well.

That’s my big takeaway. People matter and companies should damn well treat them like that, as it makes ultimately good business sense. I only wish more executives in Corporate America and Wall Street could get that into their heads.

An aside. This past week, my wife was among a small group of employees who had lunch with the company CEO. She works for a Japanese-owned company and he was predictably so Japanese. But she found him very nice and thought he took a genuine interest in the lives of “his employees.” She came home very upbeat about the company and her role in it.

Guess Who Won

Oh, but back to Market Street. You should know that the workers won. Market Basket’s board of directors last week approved the reinstatement of Arthur T. as CEO. His cousin, Arthur S. Demoulas, and his allies agreed to sell their 50.5 percent stake in the company to Arthur T. and his allies, who own 49.5 percent. The price was more than $1.6 billion, which puts the value of the chain at about $3.2 billion.

So ends one of the strangest labor actions in American business history, with the sole demand of the workers, from top management to the lowliest clerks, being met.

So the workers are the heroes of this story. They took on and triumphed over those Wall Street analysts who would criticize companies that choose to pay employees well and build a loyal customer base rather than just maximize shareholder returns.

Two Competing Philosophies

Thankfully, there are good companies out there who have consistently proved that they can provide good jobs, products and services, and good profits and long-term shareholder returns by treating all stakeholders fairly and with the respect they deserve. Costco and Southwest Airlines are examples that come to mind.

And then there are the others, dominated by senior corporate executives who choose to enrich themselves at the expense of their workforce and their customers. I tell you that is not a sustainable business practice and there will be a reckoning if you continue such short-sighted policies.

While Market Basket may be unique in the annals of labor history, people are getting fed up. And believe me, I am no proponent for unions. None was needed here.

Capt. Jack Understood

I am in the process of reading one incredible book right now – “Empire of the Summer Moon.” It’s about the rise and fall of the Comanches, probably the most powerful Indian tribe in American history. Much of it is set where I live in North Texas.

In the course of the book, I came across the exploits of Jack Hayes, arguably the greatest Texas Ranger of all and the one person whom the Comanches really feared.

Hayes taught his rough bunch of hard-drinking, knife fighters that they would more likely stay alive by adopting the Comanche style of fighting on horseback. And despite leading rangers into pitched battle, he had a reputation of keeping them alive.

“He was extremely cautious where his men’s safety was concerned, and almost motherly in his care of them when they were wounded.”

Consequently, they would follow him to hell and back. And frequently did.

So a first rule of management, one that Jack Hayes instinctively knew and one demonstrated by Arthur T. Demoulas at Market Basket, is to take care of your people. If you do so, they will respond in ways that will surprise even themselves.

Yes, the workers are the heroes. On this Labor Day. On all Labor Days.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm based in Plano, Texas. If your company needs an optimal location for future operations anywhere in North America, we can help. If your community needs to improve its competitive standing, we can help. All requests for information are considered confidential.

If you liked what you saw here, invite me to speak at your next meeting.

© Unauthorized use of this blog is strictly prohibited. Excerpts and links may be used, but only if expressed permission has been granted.

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  1. Thanks Dean, for another good article. This is one of the best you have written. Being from the blue collar you really touched me. This is a part of our business that owners don’t understand or just don’t give a dam about. I realize companies or businesses need to make a profit but to rob the workers so the owners or top executives get rich is just wrong. Thanks again. Hope you will make it back to Michigan again.

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