Abstract
It is widely believed that Barrack Obama’s bailout of the automobile industry in Detroit was a decisive factor in his success in the 2012 presidential election. While this probably had more to do with the vagaries of the US electoral system than with the relative importance of auto manufacturing to the US national economy, the intervention was nonetheless loaded with symbolic significance. In contrast to Britain, where the gradual collapse of car manufacturing was met with a characteristically polite fatalism, the decline of the US auto industry has been nothing less than a source of national shame for many Americans. The poignant frustration of Hank Hill, the lead character in Mike Judge’s TV series King of the Hill, captures the essence of it: in one episode, Hank suffers a profound existential crisis when he borrows his neighbour’s Japanese-manufactured lawnmower and realises it is, without doubt, much better than his own, domestically-produced one.
In Worker Leadership: America’s Secret Weapon in the Battle for Industrial Competitiveness, Fred Stahl argues that progressive industrial management holds the key to restoring the USA to its former glory. At its core is a paean to the methods and pioneering spirit of Dick Klein, general manager at the Illinois-based agricultural equipment manufacturer John Deere & Company. The story of Klein’s success in turning around a number of seemingly moribund factories – starting with the firm’s Ottumwa plant in the late-1980s, moving on to the Harvester Works at Moline – makes up roughly two-thirds of this mini-treatise. Stahl, a former Boeing Company executive who has examined Klein’s techniques at first hand, believes that they offer nothing less than ‘a revolution in production, in labour relations, and in industrial competitiveness’.
For over 200 years since the dawn of the Industrial Revolution, bosses have fixated on concentrating the division of labour at the expense of the capacity for individual initiative. This reached its apogee with Henry Ford’s conveyor-belt system, and modern industry hasn’t looked back since. Managers inspired by FW Taylor’s doctrine of ‘scientific management’ have sought in vain to mitigate and manage the alienation of the industrial worker, whose work had become commensurately duller, more repetitive, and more mind-numbing. Psychotherapy and psychology were enlisted to help workers adjust: the eccentric theories of industrial psychologists like Elton Mayo were just the tip of a vast ‘human relations’ iceberg. The goal of Dick Klein’s ‘worker leadership’ is to reverse this historic process of de-skilling. Rather than trying to ‘fix’ unhappy employees, Klein recommends that managers look at what they can do to organise the technical aspects of work in such a way as to make jobs as fulfilling as is realistically possible. Mayo’s Human Relations Movement proclaimed that a happy worker is a productive worker; Klein is effectively turning that on its head, arguing that a productive worker is a happy worker.
Klein’s ‘worker leadership’ is essentially a progressive version of the lean manufacturing practice that had been imported to North America from Japan with mixed results in the late-1980s. Just as top-down control of a national economy is notoriously inefficient, says Stahl, so operational control remote from the workplace inevitably leads to waste. To this end, Klein advocates substituting Toyota-style ‘just-in-time’ production for the inefficient and wasteful ‘big-batch’ method that is still prevalent in most factories. The reduction of inventory to an absolute minimum serves to free up capital and compel managers and workers to fine-tune their production systems. Klein’s factories were redesigned on the basis of ‘one-piece flow’, locating machines close enough together so that a worker could hand a part to the next operator. Parts that had previously travelled miles before reaching final assembly would now travel only feet. Streamlining the flow of perfect parts would enable the re-organisation of processes into small-scale modules and cells – each module would be ‘a factory within a factory’ - enabling teams of workers to take charge of operations with minimal oversight from management.
The aim was to achieve a transfer of managerial responsibility and authority, away from production control departments in the front office to the teams on the shop floor level. Under Klein’s system, ‘Leaders of modules … replaced department supervisors, general supervisors, and superintendents.’ Alongside these changes, payment incentive schemes were altered in favour of a more sophisticated gainsharing system that rewarded team effort rather than individual output. Klein also instilled a new management ethos founded on openness, transparency and two-way communication, earning the trust of the employees: He let everyone in on new systems, building plans, and other capital improvement programs. He discussed department performance, customer information, company-wide initiatives, business conditions, good and bad news, and profits and losses. (pp. 51-2)
Klein’s record is certainly impressive: under his tutelage, the Hay and Forage Division at Ottumwa moved into the black with a profit of $16m in 1987, at a time when the market for agricultural equipment was depressed. By 1994, Klein’s Harvester Works section was the best-performing unit in all of John Deere, with all-time record profits; and output per employee at its flagship Planter Factory rose by more than 200 per cent. Staff morale was also at an all-time high. ‘Under scientific management,’ Stahl observes, ‘workers left their brains at the door … Worker Leadership ends that horrific waste of the human mind’ (p. 92).
Previous attempts at implementing lean manufacturing had been far from successful. Stahl highlights one failed initiative – at the General Motors plant in Linden, New Jersey in the 1980s – as being particularly emblematic of the difficulties of putting this theory into practice. In this instance, it was the factory’s middle-management who scuppered the project by continuing to adhere to traditional methods and effectively undermining the initiative – a natural instinct of self-preservation, perhaps, in the face of a strategy that threatened to render them obsolete. The experiment was abandoned in 1987 amid much industrial strife. More generally, Stahl notes that the original just-in-time system was geared to a Japanese culture of obedience. The American culture of individualism meant that US workers were ill-suited to some of the more oppressive elements of Toyota’s management philosophy. The import was ‘a naked technical system, lacking suitable models of social and labour management’. Klein’s ‘worker leadership’, then, is lean manufacturing re-calibrated and adapted for US culture, combining the efficiency and productivity of just-in-time production with system that enables workers to use their initiative with minimal supervision.
Stahl believes Klein’s ideas can help the US steal a march on its Asian rivals in the struggle for global market share. Labour will always be cheaper in places like China and South Korea, so the US needs to outflank its competitors in other ways. Despite their industrial strength, China and South Korea are behind the times when it comes to industrial management. Hyundai responded to the Korean financial crisis of 1997-98 by cutting high-wage, unionised production jobs to a bare minimum, and outsourcing the production of parts and manufacture of subassemblies to sub-contractors who hired low-waged employees in sub-standard working conditions. It found itself mired in industrial unrest: stoppages in 2012 alone cost the company $1.5bn in lost production. As for China, its state-subsidised industries are still stuck in the early 20th century, with big-batch mass production and oceans of inventory: ‘As far as they are concerned,’ writes Stahl, ‘Henry Ford had it right in Highland Park’ (p. 147). The field, in theory, is open.
Some aspects of Worker Leadership will not be to everyone’s taste. At times, Stahl’s register lapses from enthusiastic recommendation into the kind of sales-pitch language typically associated with recent religious conversion, or television shopping channels. (He actually ends one brief tale of industrial woe with, ‘The plant manager might have succeeded had he had the Worker Leadership Checklist.’) His apparent confidence in the emancipatory potential of magnetic name-tags and employee-of-the-month awards – gimmicks that have already achieved wearyingly platitudinous status in many a workplace – may strike some readers as naïve. But Klein’s prescriptions for restructuring the workplace along ‘collar-blind’ lines are highly persuasive. The parasitic human resources industry is a bane of 21st-century life, a bloated and self-serving aberration; it grows unabated even in the bad times. Any sensible strategy for revitalising a manufacturing operation should start with the front office and overheads – laying off shop-floor workers might save money in the short term, but it won’t address whatever had caused the rot in the first place. His analysis also provides a welcome antidote to the scientific management thinking that continues to inform so much of management culture: if systems are working properly, and employees are treated with respect and dignity, the chances are they won’t need to be correctively ‘managed’.
It is telling that Klein’s successful interventions happened in factories that had been flagging and needed a shot in the arm: this desperation gave him the flexibility to implement his ideas in full. Most businesses wouldn’t have the courage, particularly in the current climate, to carry out such a full-scale overhaul in the full knowledge that it might be a year or two before they saw a return. Convincing shareholders would also be an uphill task. Courage, precisely, is what is required: Stahl challenges industry leaders to ‘grasp the opportunity to make the United States the industrial juggernaut it once was’. Stahl’s recommendations offer food for thought; but the status quo is well entrenched and may prove difficult to shift.
