'Because I told you so' is never the answer.
Quote of the Moment
Why should I be in the office? It’s not ‘because I told you to.’ That’s not the answer.
| Tom Naratil, the president of UBS in the Americas
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Starbucks’s new C.E.O. scraps stock buybacks to ‘invest more profit into our people.’ | Andrew Ross Sorkin and Lauren Hirsch report that Howard Schultz, the returning Starbucks CEO, confronted by a rising tide of unionization, will suspend stock buybacks. Is he preparing for the need to pay unionized workers more, or is he trying to buy them off?
Mr. Schultz said that stopping buybacks would allow Starbucks “to invest more profit into our people and our stores — the only way to create long-term value for all stakeholders.” When a company uses its funds to repurchase and retire its own stock, it often raises its share price, rewarding investors and executives who typically hold large amounts of stock.
During Mr. Schultz’s last stint as chief executive, between 2008 and 2016, Starbucks spent more than $6 billion on buybacks. Last month, Starbucks announced that Mr. Schultz would return as chief executive on an interim basis, replacing Kevin Johnson, who took over from him in 2017. Mr. Schultz helped turn the Seattle company into a global powerhouse.
Now, Starbucks is under pressure from a growing effort to unionize its stores, which it has resisted, as workers push for better wages, hours and benefits. Starting late last year, a handful of stores have voted to unionize, the first in the company’s history. Over 100 locations in more than 25 states, out of nearly 9,000 company-owned stores across the country, are planning to hold elections.
I’m betting he’ll try to buy them off, democracy be damned.
Jordan Zakarin reports on a federal complaint brought against Starbucks for union-busting tactics:
Threatening employees that they won’t be able to work at other Starbucks locations if they unionize, and retaliating against pro-union employees by selectively enforcing dress codes.
[...]
Starbucks Workers United filed the new Unfair Labor Practices complaints with the NLRB on Tuesday on behalf of unionizing employees at two Starbucks locations in Santa Cruz [California]. They allege that Starbucks management has “interfered with, restrained, and coerced its employees” who are seeking to organize stores on Ocean Street and Mission Street. Workers at those stores filed for a union election on January 21st and 31st, respectively.
The Financial Times offers some background to unionization in the US:
Despite a recent wave of successful actions at companies including John Deere and Kellogg, US labour unions are for the most part still struggling to increase membership. The share of workers who are union members fell from more than 20 per cent in 1983 to just 10.3 per cent in 2021 despite a brief uptick at the start of the pandemic, according to the Department of Labor.
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With 1 Sentence, Google’s CEO Just Shared the Best Plan Yet for Returning to the Office | Jason Aten interpreted Sundar Pichai as saying 'Be purposeful with how you ask your team members to spend their time' but Pichai said something quite different, the usual workwashing about in-office brainstorming: 'But I think we can be more purposeful about the time they're in, making sure group meetings or collaboration, creative collaborative brainstorming or community building, happens then.'
Typical ‘the glory of collaborative brainstorming’ workwashing.
It gets better, however, with this:
"Last fall, I wrote about an email from Amazon's new CEO, Andy Jassy, in which he told employees that "instead of specifying that people work a baseline of three days a week in the office, we're going to leave this decision up to individual teams." The people who are in the best position to figure out how to get work done are the people you trusted enough to hire for that purpose.
Jassy is listening.
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Kat Boogaard reminds us that work culture can have an enormous impact on productivity -- and I will add, on everything at work, really -- including well-being. She offers good advice to detoxify a sick culture and a quiz for self-assessment.
She also cites a study on Toxic Culture by Michael Housman and Dylan Minor that found nearly half of employees who experienced incivility in the workplace reduced their effort and made a conscious choice to spend less time at work. But the larger impacts are this: toxic work settings spoil everything for everybody, except perhaps for the toxic people that create them.
Housman and Minor make some key recommendations [emphasis mine]:
From our study, it seems clear that toxic workers originate both as a function of preexisting characteristics and of the environment in which they work. In particular, we found consistent evidence that those who seem overconfident in their abilities, who are self-regarding, and who claim rules should be followed, are more likely to become toxic workers and break company and legal rules. Thus, one strategy for managers is to screen potential workers for these traits to reduce the chance of hiring toxic workers.
Interesting paradox: the ones most likely to break rules are those that insist they should be followed. (I wonder though, if this characteristic isn't also a sign of more creative people, too?)
The researchers continue:
However, we also found that toxic workers are more productive, at least in terms of the quantity of output. This could explain why toxic workers are selected and are able to remain in an organization for as long as they do. For example, an investment bank with a rogue trader who is making the firm millions in profits might be tempted to look the other way when the trader is found to be overstepping the legal boundaries. In fact, Pierce and Snyder (2013) find that unethical workers enjoy longer tenures.
This performance finding suggests that toxic workers are similar to what Jack Welch described as "Type 4" workers -- those who deliver on the numbers but do not have the right values. Welch claimed that while difficult to do, it was critical to remove such workers: "People are removed for having the wrong values...we don't even talk about the numbers" (Bartlett and Wozny (2005)). We find evidence that such a policy -- one that removes the "big shots" and "tyrants" -- seems to be one that would lead to more productive organizations in general, despite terminating such a productive worker.
Similarly, Delong and Vijayaraghavan (2003) argue that the top performers are not always the best workers to pursue over even an average worker, as the former can also create organizational issues, including reckless behavior. In recognizing this trade-off of productive workers that might be toxic, we were able to directly explore some of the characteristics that lead to better performance and toxicity. In particular, we identified confidence as predicting workers that are both highly productive and toxic. However, when considering these outcomes in tandem, the net consequence in terms of profit is still net negative when hiring such workers.
Thus, when considering simultaneously the dimensions of productivity and toxicity, certain hires no longer make sense, even setting aside ethical concerns and instead relying solely on profit maximization. Thus, an important take away is that managers should consider toxic and productivity outcomes together rather than relying on productivity alone as the criterion of a good hire. As we found, doing so could allow a manager to avoid a worker who would have caused net profit losses, a worker she would have otherwise hired if she considered productivity outcomes alone. An even more general take away is that managers should hire multi-dimensionally in terms of outcomes.
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JPMorgan’s Jamie Dimon on Ukraine, energy security and hybrid work. | Lananh Nguyen reports on Jamie Dimon's annual letter to shareholders, which principally dealt with the Ukraine War and energy issues:
In the letter, Mr. Dimon also softened his earlier stance on wanting all JPMorgan employees back in the office as soon as possible. Instead, he now expects that about 40 percent of JPMorgan’s roughly 271,000 employees may move to a hybrid working model, and an additional 10 percent could end up working from home full-time. But he also said there were “serious weaknesses” to remote working, which “eliminates much spontaneous learning and creativity.”
There’s that glorious serendipity again.
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At the Webex Ahead site’s Burnout or betrayal?, I take a hard look at the global pandemic of burnout:
One that reaches into all aspects of life, at work and at home. Exhaustion, cynicism, and loss of productivity are seeping into every aspect of work.
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China’s Gig Workers Are Challenging Their Algorithmic Bosses | Masha Borak reports: Food delivery drivers are using platforms’ data-powered systems, mass WeChat groups, and unofficial unions to fight unfair conditions.