The Labor-Savvy Leader

The time has come for management to start working with—rather than against—organized labor. Here’s how.

by

and

Liba Wenig Rubenstein

by

and

Liba Wenig Rubenstein

From the Magazine (July–August 2023) · Long read

Thomas Heinz

Summary.

For much of the past century, U.S. companies feared that unions would hurt shareholder value and innovation, so they responded to organized labor with one strategy: Fight, at all costs. This was brutally effective. Companies perfected the skill of union busting—so much so that most business leaders now have little experience with organized labor.

But owing to an array of forces, including the pandemic and inflation, the landscape is shifting. Workers today feel less secure in their jobs and more uncertain about the future, and not surprisingly, a growing number of them are organizing. In fact, worker interest in joining a union, and public support of organized labor, is at its highest in decades.

If business leaders stick to their old playbook, they risk permanently disenchanting their workforce and harming their brands. Instead, they must begin to reinvent corporate America’s relationship with organized labor, working with, rather than against, unions and other formal and informal structures. Indeed, in the next 20 years, the skill of leading an organized—or organizing—workforce may well become the critical leadership skill.

Idea in Brief

The History

For much of the past century, U.S. companies feared that unions would hurt shareholder value and innovation, so they responded to organized labor with one strategy: Fight, at all costs. They were so successful that today’s business leaders have little experience with organized labor.

The Challenge

With worker interest in joining a union now at its highest in decades—and public support for unions in the United States as high as it was in 1965—business leaders need a new playbook.

The Solution

Companies need to reinvent corporate America’s relationship with labor so that more people can share in the rewards and firms can compete and grow in new ways. That will require leaders to learn how to work with, rather than against, organized labor.

Business leaders today are confronting labor challenges of the greatest consequence. Because of inflation and the pandemic, workers feel less secure in their jobs and uncertain about whether they can afford a decent life—trends that have been mounting for decades. At the same time, they want more from their jobs: In addition to higher pay and dignified working conditions, they expect their employers to reflect their values. Thanks to social media, employees are able to communicate their expectations, experiences, and grievances in new ways. They can share privately with one another and widely with the public, in real time. They can connect with and enlist customers and other stakeholders as allies more easily than ever, making it harder for employers to suppress their voices. Given all these forces, it’s not surprising that a growing number of workers, across a wide range of industries and roles, are organizing.

A version of this article appeared in the July–August 2023 issue of Harvard Business Review.

Roy E. Bahat is a venture capitalist at Bloomberg Beta, a firm focused on the future of work, and teaches at UC Berkeley. He also convenes the Aspen Institute’s Business Roundtable on Organized Labor and is a commissioner on the California Governor’s Future of Work Commission.
TK

Thomas A. Kochan is the George Maverick Bunker Professor of Management at MIT’s Sloan School of Management and a codirector of the Institute for Work and Employment Research. He’s the author of Shaping the Future of Work: What Future Worker, Business, Government, and Education Leaders Need to Do for All to Prosper.
LR

Liba Wenig Rubenstein is a fellow at the Aspen Institute’s Economic Opportunities Program. She was previously head of social impact at 21st Century Fox and Tumblr.

The Labor-Savvy Leader

Idea in Brief

The History

The Challenge

The Solution

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