MODERNISING UNIONS - 1999

This discussion paper was presented at a Unions 21 seminar by Michael Allen, of the Centre for Strategic Trade Union Management, Cranfield School of Management, Cranfield University.

Introduction

Trade unions in advanced industrial societies continue to confront a range of profound challenges to their operational effectiveness, leading some commentators to dismiss trade unionism as in terminal decline. Such arguments are not only determinist but neglect unions' capacity for organisational modernisation, innovation and renewal. Organisational innovation, in itself, will not counteract the steady decline in union membership, bargaining leverage and political influence. But it is even more difficult to imagine badly-managed unions which have failed to examine ways of utilising diminishing resources more effectively.

A preliminary survey of 24 union organisations conducted by Cranfield's Centre for Strategic Trade Union Management indicates that an increasing number of unions are adapting strategies, structures and services to reflect changing membership aspirations, new employer strategies and broader socio-economic shifts. It reveals considerable change in the areas of structural reform, management of resources, marketing, and strategic planning.

Unions' internal management

Internal management restructuring is a precondition of organisational innovation. The reorganisation of the TUC's internal management structures and processes, as part of its Strategic Review, prompted its successful re-launch as a more effective and high-profile organising, lobbying and campaigning organisation. Similarly, the experience of the Service Employees' International Union (SEIU) the fastest-growing union in the USA, suggests that the strategic re-orientation associated with New Unionism has important implications for trade unions' management and resource-allocation. It is often overlooked that the SEIU initiated major management changes and internal reorganisations before securing the major recruitment successes of the 1980s and early 1990s.

Taking a cue from business, unions are adapting best practice techniques and processes for the more effective management - and targeting - of unions' financial and human resources. Some are delayering traditional structures - taking out tiers of management and union organisation - to effect costs savings, decentralise resources and bring the organisation closer to members. Decentralisation of bargaining and privatisation have led unions to devolve resources to local or regional level, rationalising structures to bring the union closer to members through the use of focus groups or branch development plans. Recognising that commitment is no compensation for lack of competence, many unions are using the union officials' NVQ, improved recruitment and selection procedures and Investors In People (IIP) to improve staff motivation and performance. TUC general secretary John Monks concedes that IIP was "very hard work" but helped the TUC develop a "get-on-with-it culture".

Membership decline demands cost-effective utilisation of resources. This does not mean that enhanced union effectiveness will sustain the servicing model at the expense of the organising model associated with the New Unionism. Rather, it suggests that the prospects for revival associated with Fairness at Work will only be realised by those well-poised to exploit the new opportunities. In the case of unions like the GMB, GPMU, finance union UNiFi and RMT, amongst others, structural reform has been designed to release resources for organising purposes. Resources spent servicing committees are being diverted to recruitment.

Unions and new management

Unions are adapting - not simply adopting - new management concepts and techniques. And they do not do so uncritically or without reflection. Some unions have invested considerable time and resources in management schools or with independent consultants. UNISON states that its functional reviews incorporate elements of business process re-engineering: each function must determine its outputs and cost them to allow for organisation-wide cost comparisons and benchmarking. Cross-functional teams have been introduced by several unions. As well as teams, other unions have replaced standing committees with short-term project-specific task groups which require less servicing and generate less bureaucracy.

In some cases, structural change and managerial reform is a direct response to organisational crisis or a radical change in the union's environment. Several years ago the crisis in construction workers' union UCATT appeared terminal. It had run up a £2.3 million overdraft while its spending exceeded income by £7,000 a day. On the theme of marrying democracy with efficiency, UCATT replaced its full-time paid executive with lay representatives, reduced the number of regions, offered voluntary redundancy to 60 officials and sold union property. It is now in surplus and generating a series of radical training-centred 'partnership' deals with employers.

Other unions, particularly public sector or former public sector unions, have responded to the decentralisation of bargaining by devolving resources to local or regional level. Some have used the opportunity to rationalise structures in order to bring the union closer to members through the use of focus groups or branch development plans.

Unions as employers

Historically, few unions would claim to be good employers. Some union officials confess that they claim pay rates, benefits and employment conditions for our members that we have never even considered for union staff. The belief that working for TIGMOO (This Great Movement Of Ours) generates a level of motivation and commitment which compensates for lack of technical competence remains prevalent in some quarters. Some unions are tackling the issue through the union officials' NVQ and improved recruitment and selection procedures. A growing number of senior union managers and officials are pursuing or already hold MBAs. The idea that activism is in itself a suitable apprenticeship for a trade union career is finding fewer supporters.

Unions' involvement with management schools like Cranfield and Oxford's Templeton College provokes predictable suspicion and criticism from some activists who suspect the cost of organisational efficiency is diminished democratic accountability. But the available evidence suggests that members want union resources - their subscriptions after all - to be well-managed and their representatives and officials to be of high calibre.

Unions' cultures

The transfer of strategic management concepts and practices to trade union organisations is complicated and problematic. Trade union cultures, structures and procedures differ considerably from those of commercial businesses or public authorities. Few union leaders enjoy the powers of a chief executive. Unions are essentially democratic organisations: to varying degrees, power is exercised transparently and leaders are accountable and often vulnerable to electoral pressures. The most energetic shareholder activists place few restrictions on a managing director's discretion and autonomy compared to union general secretaries' accountability to their conference and executive committee. But can representativeness hinder effectiveness?

Few would doubt the importance of democratic accountability but it is entirely legitimate to point out that some aspects of trade union democracy do cause particular problems for the effective management of the organisation and may, in certain respects, undermine the union's performance. Without wishing to suggest that each conference resolution or executive decision be subject to rigorous cost-benefit analysis, organisational resources and capacities must become a more prominent factor in the determination of union policies and strategies. Trade unions are sophisticated organisations with complex objectives. What businesses now call "mission statements" are generally spelt out in trade union constitutions and rule books. They usually focus on organising, representing and advancing the interests of members (and sometimes potential members). But this raises more questions than answers. Unlike businesses, unions do not have a simple, quantifiable measure of success such as market share, profitability or added value. For trade unions, financial viability is a necessary condition of survival and success but is no more than a means to an end.

Many problems of trade union management arise from the fact that organisational objectives are manifold, complex, often inconsistent, occasionally contradictory and rarely capable of being measured. A union in the retail sector, for example, is more likely to prioritise recruitment of new members as a measurement of success since the turnover of employees is such that such unions often have to re-recruit a large percentage of their membership each year simply to maintain existing membership levels. Where trade unions are involved in jointly-administering welfare systems or otherwise subsidised by the state (as in France under the Auroux Laws), they will be far less subscription-dependent for their financial survival. In countries like the UK unions have none of the institutional supports or incidental subsidies that arise from the finances and facilities associated with extensive forms of industrial democracy, information and consultation.

Exacerbating these problems is the fact that unions are, in practice, pluralist organisations, comprising many different interest groups and responsible to a variety of stakeholders. The membership of most unions is heterogeneous, covering a wide range of salaries, functions and occupations. In terms of bargaining priorities, for instance, one group will prioritise education and training while another looks to preserve salary differentials; the interests of unemployed members may conflict directly with those of the employed while certain agreements may protect and enhance the conditions of 'core' workers at the expense of 'peripheral' employees. The interests of all the stakeholders will rarely be congruent and it is a function of effective management to reconcile or at least balance conflicting interests and competing priorities.

Membership decline

The widely existing situation of declining memberships and income are occurring at a time when the demands on union services are growing almost exponentially, with the replacement of national-level bargaining and giant workplaces by local bargaining and small work sites. Careful management is needed if the unions are to survive and prosper. Yet trade union leaders do not reach their positions, whether elected or appointed, on the basis of proven management skills. They may have risen through the union's ranks as experienced negotiators, as exceptional organisers, or owe their position to being head of the faction which currently enjoys hegemony within the union. Many European unions are highly unlikely to recruit personnel to strategic positions in the union on the basis of open recruitment and even less likely to appoint them solely on the basis of technical competence. Unions expect, and often explicitly state in a job advertisement that commitment to the labour movement is required. This may be justifiable but an unfortunate consequence is that unions tend to assume their personnel are self-motivating and do not require the incentives and rewards they routinely demand from employers on behalf of union members.

Managing unions against such a confusion of demands is difficult. But union members have a legitimate right to demand that organisations to which they pay their subscriptions and, in many cases, commit their time and energy, are well-managed and that resources are efficiently utilised. Trade union members have more experience than most of the consequences of bad management. In short, trade unionists know that management matters.

Traditionally, unions have been at best suspicious if not hostile to the notion that management skills and techniques had any relevance to their operations. Union leaders' own lack of management skills reinforced a reluctance to recognise unions' competency gaps and consolidated the 'organisational slack' which led to poorer performance and the under-utilisation of resources. British unions remain highly subscription dependent: unlike their overseas counterparts they receive no state subsidies or institutional support , as in continental Europe, and few unions possess substantial investments, as in the USA.

Initiatives like those outlined above cast doubt on the caricature of unions as bureaucracies remote from members and nostalgic for the past. On the contrary, unions have been modernising their structures, management processes and policies in a little-noticed quiet revolution. The unions have survived 18 years of Conservative governments and several pieces of explicitly anti-union legislation against a backdrop of adverse social and economic trends. The defensive consolidation represented by the mergers of the 1980s maintained the unions' fabric. They are now committing substantial resources and some imagination to redefining their organisations, structures and operations to reflect the demands of the modern workplace, to meet members' changing needs and to forge new relationships with employers. If unions continue to marry innovation to resilience, they will be better placed to seize the opportunities offered by the Fairness at Work provisions.

Some discussion issues raised by this paper

• How can unions generalise GOOD PRACTICE?

• To what extent can organisational innovation in trade unions facilitate renewal?

• Can representativeness hinder effectiveness?

• Does counterposing a SERVICING MODEL to an ORGANISING MODEL reflect the real strategic options available to unions? Are they mutually exclusive or compatible?