III. New Technology and Reengineering
A. Gordon Young, CEP, Local 4, Saskatchewan
Reengineering in Saskatchewan has been the subject of much media attention: national radio interviews, an article in The Globe and Mail (October 25, 1996). Why has it captured the media's focus?
1) It's the first time that reengineering went through a process where it was documented. There was a hired person to evaluate the project stepby step.
2) A very large number of people who participated in the project became ill, some of them so severely that they may never work again. Some are still being treated for posttraumatic stress injury.
We lived and breathed this project for two years which actually started in the late eighties, when our union then, Communication Workers of Canada, introduced a policy called Work place Reorganization. There were bitter debates, nationally and in Saskatchewan. At times, we thought the union was coming apart. Probably the most important piece: we had to have this debate. Even though the debate was very contentious, it identified in our minds very clearly what was at stake.
The decision was made to introduce a policy on the bargaining table to work jointly with the company. The company introduced the matter as a small project on service orders. This is not unusual. The company indicated to the union that it would be sixtoeight weeks long. They asked for union participation. So I commuted from Moose Jaw to Regina for a sixtoeight week project to work on service orders.
I very quickly realized that this was not shortterm service order project, but it was a fullblown reengineering program with consultants brought from the United States to manage this.
I belonged to a team which was known as a crossfunctional team. Some people would call it a dysfunctional team. It was a joint union/management team with people from various departments and different levels of management. The Vice President of Finance was on the team. There was also a steering committee in place. Ron Carson of CEP District 3] was on the steering committee, along with some members of the bargaining team.
When I got to the head office in Regina, they had us in a room with windows papered over. There was no access. We were told we had to leave our stripes at the door. That was to indicate that in some way we would be equal in this room.
We had consultants come in, in a very strange vendor relationship. These consultants managed the entire project. We knew from the beginning that something was not right. They came in and talked about union involvement at the highest level.
We had a decision to make. Do we walk away from this right now, knowing they had these American consultants? Do we participate and try to gain as much knowledge as we can? Do we participate and see if we can either kill it or make it work? We decided that it was better to participate to try to control it, so we could protect our members.
The consultant group was called Symmetrics. They're from Boston, Massachusetts. I'm sure they go by other names depending on where they work. We knew they had worked in the insurance industry and telephone industry in the United States, but we could never find any information on these people.
They were going to reengineer the entire company. These consultants were a group of MBA grads from Harvard. They had been at SaskTel for 12 months prior to our knowing they were here, doing what they call a "flyby." They got access to every part of the company. They had the company president's card.
They got to come in: determine scope, what they're going to do, when and how they're going to do it and we would write the check. They got paid lots.
The union was not involved in choosing the consultant, or the scope of what we work on. The consultants never brought us a plan, never told us the plan. They told us information on a needtoknow basis. They taggedteamed us.
We worked very long hours. We'd work through dinners, coffee breaks. They did whatever they could to segregate us from other workers. We found out later they'd call this "the greenhouse effect."
They work on a very high return on investment. As we all know, ROI is a shortterm management tool. A way to raise ROI is reduce labor costs. This was strictly going to be a downsizing, to slashandburn program.
They had us do a lot of meaningless work, just pushed us, pushed us to do this work. They had us input data into spreadsheets. They'd call this project: Symmetrees. In a very humiliating way, they'd chastise us for not imputing the data in the proper way. They were going to do stair charts: white space, black space, think "out of the box," blue sky. It was really quite incredible.
The team dynamics or the crossfunctional team, was originally placed on teams with managers. We were not equal in numbers, nor in power. Even though they told us we could leave our stripes at the door, we all know for you to take on an opposing view with your manager at the table is not easy unless you're very strong. This teams received no prior training, no prior introduction to the project, no documentation, no long view at all. It was all daybyday, what you need to know.
We were not told up front about the long working hours we would have to put in. Some of the people on our team still had to their normal work. This was true of both managers and union employees. A particular manager, who is now very sick, was working on the program; they gave us another project and she still had to manage another group even in the evening.
We were told in the group that we were not to be concerned about the decisions we made. You had to dream and think and not be concerned about the decisions we make. That's other people's job.
They attempted to get us out of Regina, Saskatchewan and to Boston, Massachusetts. It took a lot to fight that. It took us a while, but both union and management learned these people were very vicious. They did not have the telephone company's interest in mind nor its employees. Within our team, we started to communicate at night between union and management about what these guys were doing with us. We knew we had to survive this without the damage being done.
What we did early on, as a team, is we actually kicked the consultants out of the room. It was very dangerous for the managers when they took the workers' view. We set terms of reference that we would work by. We forced the CEO to sign it. The company, however, never lived up to the terms of reference.
We went through a very long process of trying to gain control. It took us 18 months to get them out and put together a process under which the union would properly participate.
That was the second stage. We instituted equality on the committees in both numbers and power, a fulltime union person, paid by the company, to look after the healthandsafety of the workers on a daytoday basis and to communicate to the national union and members. When we gained this control, the roadblocks came up. The project folded when the union said, "We won't participate any more." But that has not stopped reengineering at SaskTel. It just takes on different names.
People may argue that we failed. Some of us might argue that we succeeded in preventing mass layoffs. We will never become involved in reengineering again. Do you ever need a name to work with your employer? We do it every day.
This project has left us with some very sick people. Certainly, many bitter people. We have a worse relationship between the union and the company. I don't think we can chalk this up as a very positive experience for us. Though some paid a high price, we probably saved a lot of anguish for people.
B. Ron Carlson, CEP Western Region Administrator, Canada
In Canada we have ten provinces and two territories, within those provinces we have a variety of telephone suppliers. They vary from large American based Telephone Company Bell and GTE of British Colombia to the newly formed privatized company TelUS in Alberta to two publicly owned companies in the Province of Seskachwan and Manitoba to a large Canadian company Bell Canada in the Provinces of Ontario and Quebec. And we have Maritime T&T in the Province of Nova Scotia, Newfoundland Telephone in Newfoundland, and Newbrunsewick telephone in Newbrunsewick, and in Prince Edward Island there is a subsidiary of MT&T.
Bell Canada controls pretty much everything from Ontario east. Bell owns controlling shares in New Brunswick Tel and Maritime Tel & Tel. In Alberta, there is Telstra. There are two publiclyowned telephone companies. BC Tel is 50.1% owned by GET. These phone companies cooperate in longdistance service provision through what used to be called TransCanada Telephone Systems, but which is now Stentor. In 1994, long distance competition was introduced. Today, there is open competition in all provinces, except Saskatchewan, where there is "controlled competition" according to a previouslyagreed moratorium, which is effective until 1998.
Telephone companies follow the same or similar strategies as in the United States. There is industry reorganization, new technology, company restructuring with a focus in cost cutting. Though connected, these are each distinct items. Everywhere you see "downsizing," "rightsizing," early retirements. This can be seen at Bell Canada by the loss of 10,000 jobs, Telstra reduced its work force by 5,000. At Manitoba Tel and SaskTel, the goal is to reduce the work force by 25%. At BC Tel and in eastern Canada, there have been similar reductions, though no layoffs. BC Tel is growing in population; thus, there is some growth.
Companies are outsourcing, contractingout, shifting work to armslength subsidiaries. They are centralizing operator services, test centers, switching centers. Some of the change is technologydriven, but some of it is organizationallydriven. There is the exiting of a number of markets, including inside wiring, terminal equipment, phone centers, and even the possible exiting of operator service work.
The advance of software technology has led to switching data changes. Privatization of the business has prioritized needs to varying levels of service, depending on where the customer lives and the availability of service. Telephone companies are organizing their structures to have most multimedia activity through armslength subsidiaries. An example is the merging of Bell Atlantic and NYNEX in the US.
Stentor is more resourcebased and focuses on specific activities, such as research and development. AT&T is now also involved, as it effectively controls Unitel despite only having 25% of its stock. Unitel is seeking to expand its activities via cable companies and expansion of the local loop. The World Trade Organization may bring about more changes. Foreign ownership is currently restricted to 33%, but that could be relaxed, or even abandoned. This could result in buyouts of Canadian companies by large US. telcos or even precipitate some consolidation of the telcos in Canada.
$15 billion in new investment is expected. But where will the investment happen? And where will the jobs be? All indications are they will be in nonunion telephone company/cable company joint ventures and armslength subsidiaries, which are difficult to organize.
Organizationally, telephone companies are dividing up by divisions or department. This does three things:
1) Makes each division accountable to itself in terms of profit.
2) Creates an incentive to drive down costs, such as employee wages.
3) Gives the company the option to apply expenses to whichever department best suits the company when dealing with the CRTC regulatory agency.
In the field of new technology, there are also a number of developments, especially the following:
1) New wireless services: These include PCS (Personal Communications Services), directtohome cable, and voice, datatransmission services. The telephone companies' aim here is to be fullservice providers of both cable and telephone interactive services.
2) Some Canadian companies are buying American technology or are entering into agreements to adapt readymade technology. For instance, Bell Canada bought MCI's lockkey "enhanced billing program." or forming alliances with different companies such as NTM, an interactive media player in the US.
3) There is the BEACON initiative, a forerunner to the information highway in Canada. This is no longer at the top of the agenda. New switching technology makes copper wire viable for years to come. Services are being transferred to Stentor to coordinate and operate. The fiber network is run by telephone companies throughout the country. Most provinces have their own fiber networks. In Saskatchewan, they are currently installing a third round of fiber. Some of the new technology introduced in Canada is the ultra high speed switching technology and ATM (asynchronous transmission mode) switching technology. This allows you to simultaneously route voice and data at millions of bits per second, as well as the fiberoptics, the broad band and narrow band, wide band networks and digital transmissions.
The restructuring of the companies is coming about due to new technology, mergers, outsourcing, conversions,downsizing, trade agreements and the spreading of privatization. In Canada the last company to be privatized was in Alberta about five years ago. Manitoba is currently facing privatization. In Saskatchewan, there is discussion about SaskTel becoming a private company. This causes stress, uncertainty, tension, wondering whether companies really know what they're doing. Employers are not moving simply in one direction. Rather, they're spreading their risk as thin as possible by adopting several options. At times, they compete against themselves.
On employee issues, employers take much greater risks, take greater changes, and make greater changes through programs such as TQM, OWL, CQI, teams and other joint union/management ventures. Unions end up having to clean up the mess the company creates. Reengineering is one of these risks. The guru of reengineering, 34 years later, wrote a book condemning reengineering. Reengineering is not dying, but it's taken on new kinds of formats and new wording, such as "divestiture and restructuring", "business transformation" or "maximization 2000."
To respond, unions are going to have to fight to set conditions of services to keep the employment they have in Canada. Unions in Canada have been together for last 23 years working together on this issue. This involves the 1) setting the level of service in Canada to maintain it, and 2) maintaining our jobs by keeping them from being contracted out and take these recommendations to our regulatory agency.
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