[This file consists of all the articles in the first issue of _American_Workplace_, a newsletter issued by The Department of Labor.] THE NEW AMERICAN WORKPLACE [by] Robert B. Reich, Secretary of Labor Just prior to the Conference on the Future of the American Workplace, I announced the creation of a new agency in the Labor Department--the Office of the American Workplace (OAW). I have charged this office with building on the momentum created in Chicago and developing concrete initiatives for promoting innova- tive workplace practices and cooperative labor-management rela- tions. I don't need to tell you that tremendous changes in markets and technologies have dramatically altered the rules for compet- ing in the global economy. To stay ahead of the competition, and at pace with changing market conditions and technologies, compa- nies must switch gears to a high-value, high-performance workplace. One of OAW's principal tasks will be to provide more information about high-performance work and to offer technical assistance to companies interested in transforming their work- places. New work systems offer potentially extraordinary benefits for companies, front-line workers, investors, and the American economy. Indeed, there is a growing body of empirical evidence that high-performance work practices are good indicators of long-term productivity and profitability. In the coming months, The American Workplace, OAW's official newsletter, will provide information about the changing workplace. We will spotlight the best that American organizations have to offer in empowering and rewarding to enhance workers' skills, in providing for ongoing training, family-friendly policies, and safe and healthful workplaces. We also will be listening and learning from the views, perspectives, and opinions of our readers. In this respect, The American Workplace [this newsletter] will be a forum for exchang- ing ideas and creating an ongoing dialogue to help advance our collective efforts to continuously improve the quality of Ameri- can work. This Administration is committed to encouraging more compa- nies to become high-performance workplaces. We firmly believe that these changes are essential to our goal of creating more high-quality jobs and improving the performance of American businesses. I pledge that President Clinton and I, in partnership with Commerce Secretary Ron Brown, will do all we can to acceler- ate the pace of workplace change. __________________________________________________________ FORECASTING THE FUTURE OF THE AMERICAN WORKPLACE Emphasizing the importance of high-performance workplace practices to the nation's economy, President Clinton convened a Conference on the Future of the American Workplace July 26 in Chicago. The conference, co-chaired by Labor Secretary Robert Reich and Commerce Secretary Ron Brown, brought together some 400 leaders to spotlight best workplace practices and discuss issues critical to the development of high performance workplaces. Conference participants--CEOs, labor leaders, plant manag- ers, front-line employees, and academics examined innovations in employee involvement, team design, labor-management cooperation, employee ownership, and advanced manufacturing practices. In opening the conference, Secretary Reich called for a "new compact" between labor and management to make their companies more profitable, their employees more valuable. "This new compact recognizes that we're in a different world now, where the enemy is not a nasty boss or a stubborn union head, but rather, all the obsolete ways of working that no longer work," said Reich ECONOMIC IMPERATIVES Pointing to fast-changing economic conditions, Secretary Brown said, "Competitive success now requires constant, sustained innovation. That means for governments and businesses and work- ers, we must constantly be re-interpreting, re-evaluating and re-inventing how we work." According to Reich, there are at least four workplace attributes most suitable for today's new economic environment: an unusual reliance on front-line workers; the treatment of workers as assets to be developed, not costs to be cut; new forms of worker-management collaboration that break down adversarial barriers; and the integration of technology and work in such ways that machines serve human beings, not vice versa. LEAVING THE PAST BEHIND Case studies and round table discussions drew heavily from participants' experiences. Martha Quesada, a UAW worker at New United Motor Manufacturing, Inc. (NUMMI) in Fremont, California, led off the conference by relating how her previous distrust of management adversely affected productivity. "Fifteen or 20 years ago (at GM in Fremont), I don't think management could have cared less about what workers felt," said Quesada. Even a company turnaround doesn't always provide all the answers. Jack Stack is the President of Springfield Remanufactur- ing in Springfield, Mo., a company that has produced both signif- icant financial returns and employment security through open information sharing and training in business and finances. Stack said, "I am desperately trying to figure out how to accelerate the learning process where people can really understand busi- ness--where they can understand the rules, where they can play by a scorecard, and where they can at least get some stake in the outcome of playing the game. What's necessary is to eliminate this arrogance and ignorance that occurs at all levels of an organization." TAKING THE HIGH ROAD U S West and the Communication Workers of America was offered as one example of a high-performance workplace. After listening to their case study presentation, President Clinton said, "What turned out to be good for the company, also turned out to be most rewarding for employees, by making jobs more interesting." The President's comments echoed a theme recurring throughout the conference-high-performance work practices reap rewards for everyone. "The high road isn't just one that makes you feel good, where you go home feeling more whole about your life and work balance," suggested Amy Schuman, Manager of Organizational Development for Fel-Pro. "It is also a workplace where you are also more profitable and more successful." WAKE-UP CALL FOR INVESTORS Participants, including several investment representatives, suggested that financial investors should pay greater attention to companies with progressive workplace practices as a potential indicator of long term gain. "I think that very little is known about [workplace practices] in the investment community. We deal with statistics and ratios, and the human elements aren't much paid attention to by money managers and investors," said William Crist, Board President of the California Public Employers Retire- ment System. "I think that's a mistake. I've thought that for a while, and I'm very much convinced of it this morning." Business leaders pointed to investments in workers as one key to their future competitiveness. "For years, many of us invested in new machinery to deskill operations and speed things up. I think the lesson today is we need to start investing in people," said Chairman and CEO of Levi Strauss & Company, Robert Haas. "The real technology of the 1990s and 21st century is our people," Strauss added. "The moral of our discussion today is that when a company invests in its people, profits will follow." Boeing President Phil Condit agreed: "Technology can be copied and moved readily. If we are going to win, it will be because of the asset of our people, and those people working together are absolutely crucial to our future." ___________________________________________________________ CREATING THE NEW WORKPLACE The Office of the American Workplace asked invitees to the Conference on the Future of the Workplace to address what it will take to convert from traditional workplaces to workplaces well-suited to the future. Some powerful themes emerged. THE HEART OF THE ENTERPRISE "High-performance systems must have at their center whatever it is that really drives the enterprise (e.g., customer satisfac- tion, profitability, shareholder value). The people engaged in the work flow won't otherwise believe that the change is 'real' or required, and from long experience, they can tell the differ- ence between what really matters to management and the next program-of-the-month." John Read, Executive Vice President, Engine Group for the Donaldson Company INSTITUTIONAL RESPECT "The development of new work systems and practices requires companies and unions to recognize not only the realities of a changing, highly competitive world but that to succeed in this new world, each must respect the other as an institution." Lynn R. Williams, International President, United Steelworkers of America "How do we mutually grow the business so that we mutually win?....For me, as an executive, this means embracing the notion that there has to be more than a 'win' for employees; there also has to be a 'win' for the formalized union that helps address issues and concerns on behalf of those employees." Jerry Johnson, Vice President, Network and Technology Services, US WEST Commu- nications SHARING POWER "At Magma Copper Company, we believe the companies that succeed in the international marketplace of the 21st Century will be those that share responsibility and accountability with all of their workers. By sharing power and working together, these companies will increase productivity as a way to create jobs." Burgess Winter, CEO, Magma Copper Company BARRIERS TO CHANGE "Key barriers to adopting these new work systems are manag- ers who are more comfortable giving orders with little input and complacent employees who like not having to think. We must understand how difficult the change process is for people and that firm leadership is needed to lead the process." Robert Frey, President, Cin-Made Corporation "Barriers that I have found are...of decades of conditioning that has our society divided into a class system, whereby manag- ers believe they are solely able to lead the business and workers are told what to do and when to do it." Bill Kane, NJ. Area Director, UAW Region 9 "Two key barriers to the adoption and nurturing of a people empowerment workplace...an uneasiness in the minds of the majori- ty of CEOs about the whole empowerment concept. They feel they will lose control...(and) the difficulty middle management has in adopting to an empowerment environment. They traditionally manage through power. Now they must manage through persuasion." Robert J. Fien, President/CEO, Stone Construction Equipment "Fear that change will eliminate jobs and status is the greatest barrier....Opportunities have to be created to change rewards from the carrot and the stick to the heart and the stomach. We must teach people to make good decisions and then reward them appropriately, good or bad." Mitchell W. Manning, President of the Board of Directors, The Association for Quality and Participation A CULTURE OF OWNERSHIP "Successful employers must create a culture that fosters dignity for employees, provides opportunities for individual growth and development, ensures ownership of ideas and tasks, and reinforces quality work." Sally Gore, W.L. Gore & Associates, Inc. "I feel that I own my job!" Peggy Alexander, Secretary, Motorola, Inc. TWO-WAY COMMUNICATION "Any program must develop in a participative way, soliciting ideas from everyone in the organization....Good communication is critical. Avenues of communication must be provided to allow communication to the workforce and from the workforce. If this cannot be accomplished during normal working hours, other ar- rangements must be made. All employees must feel free to express their opinions without fear of repercussion." Cal Tinsley, Plant Manager, L-S Electro-Galvanizing Company EMPLOYEE EMPOWERMENT "Bringing employees to a level of high involvement is not an easy process. High involvement organizations empower their employees by pushing down decision making responsibility to those close to internal and external customers. To support high in- volvement, organizations must share information, knowledge, power to act, and rewards throughout the workforce." Ann Howard, Devel- opment Dimensions International "True empowerment of workers cannot be achieved unless workers have an independent, democratically elected source of power in the workplace." Morton Bahr, President, Communications Workers of America NEW WORKER SKILLS "If structural hierarchy is removed, employees will rise to levels of responsibility concurrent with their abilities and ambitions..if the system encourages employees to check their brains at the door, they will do just that. If the system encour- ages and enables employees to use their various skills to take on more responsibility, they will in turn perform at higher levels and develop higher skills." Ashley Korenblat, Merlin Metalworks, Inc. "I have witnessed the significant changes that are occurring on a daily basis. I believe labor and management should work together in finding ways to train and promote higher skilled workers enabling them to provide quality not only to the custom- er, but to their own work life." Betty Bednarczyk, Secretary-Treasurer, Minnesota's Health Care Union, Local 113 SEIU LABOR-MANAGEMENT PARTNERSHIP "At the Saturn Corporation, the UAW and the company are engaged in a true partnership of co-managing the enter- prise....The Memorandum of Understanding...provides for the union to be a full partner in the running of the business with the right to block decisions." Michael Bennett, UAW Manufacturing Advisor, UAW Local 1853, Saturn Corporation EMPLOYMENT SECURITY "New policies must reflect new forms of security while embracing the emerging realities of flexibility, mobility, and change. If security no longer comes from being employed, it must come from being employable. Employability security--the knowledge that today's work will enhance the person's value in terms of future opportunities--is a promise that can be made and kept." Rosabeth Moss Kanter, Professor, Harvard Business School WORKFORCE DIVERSITY "I'm a firm believer that, as a teacher friend of mine once said, 'None of us is as smart as all of us.' It is only by finding ways to harness the diverse skills of all its employees in the pursuit of mutual goals that a company can achieve its full competitive potential." Philip Condit, President, The Boeing Company EXTERNAL PARTNERSHIPS "Our priority is to build strong, long-term relationships with customers, employees, and suppliers based on mutual trust and respect....Fel-Pro has always known that serving customers' needs is vital to business success....Our sales force is known for establishing close, service-oriented relationships with their customers. They do not just write up an order, they roll up their sleeves and help the customer organize his or her warehouse, or help clean up old stock." Kenneth Lehman, Amy Schuman, David Weinberg, Fel-Pro ECONOMIC REWARDS "All these systems and practices alone can not achieve their total results without sharing gains and business ownership with all employees. To me employee ownership ties together a deeper commitment and cultural bond that answers the question of 'why should employees give so much of their minds and hearts to their company?' When employees have a stake in the rewards of new workplace practices, they become real business people who share in the profits and wealth of the company they own and work in every day. This entrepreneurial spirit can be tapped through employee ownership--and it is this spirit that can ultimately be the driving force to promote permanent, long-lasting, high-performance work practices, and not merely some token new business fad that comes and goes." Robert Zicaro, Machine Operator, Web Industries, Inc. ______________________________________________________________ WORK PRACTICES CORRELATE WITH FIRM PERFORMANCE There's a growing body of evidence that work practices de- signed to provide employees with skills, incentives, information, and decision-making responsibility are associated with increases in firm productivity and long-term financial performance, accord- ing to High Performance Work Practices and Firm Performance, a U.S. Department of Labor report summarizing recent research on high-performance work practices. The report pays particular attention to three high-performance practices-employee involvement in decision-mak- ing, compensation linked to firm or worker performance, and training. Research studies generally conclude that instituting at least one of these practices resulted in higher productivity. Three studies cited by the report examined the relationship between work practices and long-term financial performance; each study found that firms implementing high-performance work ele- ments were more profitable than firms not implementing similar programs. For a single, free copy of High Performance Work Practices and Firm Performance, write: Office of the American Workplace, U.S. Department of Labor, 200 Constitution Ave., NW, Room N-5419, Washington, DC 20210 or fax us your request on (202) 219-8762 ______________________________________________________________ A FEW WORDS ABOUT YOU Your interests, your information needs, and your experienc- es will become an obsession with us. This is an open invitation to weigh in on any aspect of this newsletter: its design, con- tent, and usefulness. We particularly are interested in any issues or best practices you would like to see highlighted in The American Workplace. Call Meg Ingold on (202)219-6098 or fax suggestions to (202)219-8762. [This file was prepared by The TQM BBS, 301-585-1164.]