For six months now I've been visiting the workplaces of America, administering a simple test. I call it the "pronoun test." I ask front-line workers a few general questions about the company. If the answers I get back describe the company in terms like "they," or "them," I know it's one kind of company. If the answers are put in terms like "we" or "us," I know it's a different kind of company.
It doesn't much matter what's said about the company. Even a statement like "they aim for high quality here" suggests a workplace that hasn't yet made the leap into true high performance. It isn't yet achieving ever higher levels of quality, productivity and service. Only "we" companies can do this.
The L-S Electro-Galvanizing Co. in Cleveland -- at the heart of the rust belt -- passed the pronoun test with ease. Every front-line worker I talked with recently told me how "we" were meeting the competition, how "our" company was succeeding.
L-S Electro-Galvanizing is succeeding. The company is winning awards for quality. Its customers are loyal, and its profits are mounting. Why the success? At first glance, it's something of a mystery. The company's equipment for putting zinc coatings on cold-rolled steel doesn't give it an advantage over the competition, since the same equipment is available to all, including foreign competitors with cheaper labor. And its customers -- big auto companies still reeling from recession -- are looking for ways to cut costs.
L-S Electro-Galvanizing's advantage lies in its workers, who are constantly discovering better ways to use the equipment and serve the customers. The galvanized steel emerging from the factory is consistently high quality, tailored exactly to customer specifications and sold at a competitive price. Simply put, L-S Electro-Galvanizing is offering its customers a great deal.
This is a high-performance workplace, organized from the bottom up. You can't tell managers from employees. They wear the same uniforms, park in the same parking lots, eat in the same cafeteria, prosper together when the company does well. They use the same pronouns.
Worker committees do the hiring, decide on pay scales linked to levels of skill and set production targets. One-quarter of workers' take-home pay is based on productivity improvements. They rotate jobs, so that every worker gains knowledge of the entire system. More than 10 percent of payroll is spent on training. And jobs are secure. Even during the recession, when its customers were scaling back, the company kept everyone on board.
High-performance workplaces are gradually replacing the factories and offices where Americans used to work, where decisions were made at the top and most employees merely followed instructions. The old top-down workplace doesn't work any more. That's because the old competitive advantages -- large scale and specialized machines doing the same operations over and over -- have been eroded by global competition and by new technologies capable of performing many different operations.
The new competitive advantage comes in using equipment to meet the unique needs of particular customers -- and doing it quickly, reliably, efficiently. L-S Electro-Galvanizing's customers want quality and service. And no one in the company has more intimate knowledge of the equipment and the customers, and therefore of how to provide the greatest value at the lowest cost, than L-S Electro-Galvanizing's front-line workers.
Using the "we" pronoun, and feeling responsible for the company's future, L-S Electro-Galvanizing's workers are making the company work. Technically, they don't own the company. It's a subsidiary of LTV Steel, in partnership with Sumitomo Metal. But in a broader sense they do own the company, because they comprise its most important asset, they make the most important day-to-day decisions, and they do well when the company does well.
The jobs in L-S Electro-Galvanizing and in other high-performance workplaces are the kind of jobs that may rebuild America's waning middle class. These jobs offer hope to the 75 percent of Americans who won't graduate from college and whose wages and benefits, adjusted for inflation, have been declining for 15 years.
So why aren't all workplaces like this? First, because many of our non-college workers aren't adequately prepared. L-S Electro-Galvanizing isn't a high-tech company. Its workers don't have engineering degrees. Most don't have college degrees. But they do have enough education and basic training to be able to learn on the job and to take advantage of more specialized training. One worker explained to me how she had come up with an idea for reprogramming a machine for better accuracy. I asked her where she had learned computer programming. "I knew technical math and statistical process control when I got here," she explained. "When I wanted to learn computer programming, our training committee thought it would be a good investment, and I took a course."
A second impediment is the reluctance of top executives to give up control and to entrust front-line workers with day-to-day decisions. Most top executives got to where they are because they are good at exerting authority and control. People who have excelled in the old system are usually among the least likely to lead the way into the new. Their habitual "we" pronouns don't include front-line workers. L-S Electro-Galvanizing's plant manager told me of the initial skepticism of many executives in LTV. "I stuck my neck way out," he said.
No less of a barrier is the distrust felt by many front-line workers for any scheme that requires more responsibility but not necessarily higher wages up front. Unionized or non-unionized, America's front-line workers feel bruised and beaten by years of promises unkept, real wages and benefits reduced, and jobs eliminated. The head of the local steelworkers' union told me that he had been criticized by his brethren for entering into the L-S Electro-Galvanizing flexible agreement. One worker recalled taunting by workers at LTV's steel factory across the road. "They accused us of being scabs, and worse," he said.
Last and perhaps most important is the lack of information about how high-performance workplaces work and why they work well. Much research has been done, but it has not yet been widely disseminated (the Labor Department has just released a compilation). This week in Chicago, several hundred workers and managers who have made the transition shared their experiences with the rest of America.
The president's economic plan will improve the macroeconomy. Better education and skills will prepare Americans for the workplace of the future. But neither of these necessary steps will be enough to restore American incomes without a revolutionary change in how Americans work together.
The writer is secretary of labor.