You would have had to be living under a rock to not hear about the recent demise of Twinkies and Ho Ho’s, marketed by Hostess Brands. The core problem was the run up over the years of the salaries, benefits and pensions of the members of the Bakery Union, because the union would threaten work stoppages if lush increases were not put in place. Finally the burden became too great.
Another group of Hostess employees were members of the Teamsters union, and Hostess typically negotiates with both unions at the same time. While the Teamsters agreed recently to a package consisting of an 8% wage cut, decreased company contributions to health insurance, and cuts in the Hostess contribution to pensions, the Bakery Union rejected the offer and many iterations of negotiating made no progress. Net, as Hostess had indicated all along, with no deal they had no option but to terminate 19,000 jobs and close its doors.
What is the main issue here? While the company exists with the primary objective of serving shareholders and give them a good return on their investment, the Bakery Union existed with the objective of maximizing the salary and benefits of the workers. That is an impossible situation for the leader of this company. Sooner or later someone is going to lose big; either the shareholders as the company operates uncompetitively, or the members of the union as they lose their jobs.
As a leader, having factions you have no control over and that have completely different objectives is a recipe for disaster. For a leader to be able to lead, you need the following:
1.) Everyone working toward the same objectives – Factions that are working toward a completely different set of goals makes leadership impossible.
2.) The authority to make the necessary decisions for success – You simple can’t live with a situation where the leader has no control over a subgroup that can impact the overall results of the group.
3.) The ability to reorganize and put key people in key jobs – If you have no control over the personnel in part of your organization, it is unacceptable.
If you are in a job where any of these things are a problem, get a new job!