Three suggested solutions ... simple but not easy
As we approach Christmas, Hanukkah and New Year holidays, we have a postal strike timed during a most busy period when many Canadians businesses and households still rely on Canada Post to serve them. Very bad timing from Canada Post, an Agent Crown Corporation of our Federal government. On one hand the Federal Government is relieving the GST/HST for 2 months to help Canadians and on the other hand its own Crown corporation is causing adverse help on Canadian business and households.
Strikes have of course a negative economic impact with drop of output (GDP), lower earnings for workers, unnecessary delays, lost productivity and much more. They also increase social tensions, especially when mail, schools, hospitals, ports, long commute, travel and business and households in general are negatively affected. The hardship of Canada Post strike is very high on many northern and remote communities across Canada who rely on Canada Post.
According to Statistics Canada, the number of person-days not worked due to labour disputes in 2023 rose to its highest level since 1986. Canada lost in 2023 a whopping 2.5 Million days of strikes. The highest number since 2005! I do not want to bore you with the long list of strikes that include ports in the East (Montreal – 2023) and in the West (Vancouver - 2024), CN Rail (2024), LCBO (Liquor Control Board of Ontario – 2024), Ontario Teachers (2023), and even CRA (Canada Revenue Agency - 2023)
Canada needs to reverse this alarming trend. Three key questions: Why all these strikes? What is behind them? How can we reverse this course?
To answer these questions, I searched for the common thread. What shared themes connect these labour disputes. Not surprisingly, most if not all, occurred in government or related organisations and all involved unions? But to say government and unions are the cause is an oversimplification. The root cause is how the government is run and how the relationship between employers and employees is managed. The difference between a symptom and a root cause is that a symptom is an indication of a problem, while a root cause is the underlying reason for the problem.
Here are three suggestions.
1. Aiming for to be Profitable
A famous Warren Buffet quote says “ The first rule of an investment is don't lose (money). And the second rule of an investment is don't forget the first rule. And that's all the rules there are." Whether you run a business or a not-for-profit organization, don’t lose money. Aim to make money.
Canada Post is reported to have lost more than $3B since 2018 and a ridiculous $315M in the first 9 months of this year. How can Canada Post lose money when demand for the delivery business is booming? Just ask Amazon, Walmart, Costco and Loblaws. Amazon is ready to deliver from a 3-ton powered lathe machine to a 7 oz can of shaving cream within 48 hours. Walmart delivers groceries daily to your doorstep and Costco is happy to ship you furniture fully assembled. How can any company outperform Canada Post? They have 5900 distribution points (post offices) covering every tiny inch of Canada and their “Daddy” is The Canadian Federal Government that print the country money? They have access to capital, people, technology and skyrocketing demand. What else do they need? Instead of balancing their budget they are busy arguing about defining who is full-time and who is part-time. Should they work 6 days or seven days a week? I say respectfully... “ You look stuck in the weeds “. Last year, UPS Net Income was $6.7B, FEDEX $4.3B and DHL $3.9B. Royal Mail in the UK is profitable. Deutsche Post makes a profit. CTT (Portugal) and Japan Post make a profit too. The CEO’s and senior team of all crown corporations must have the objective of making a profit or said differently “balance your budget”. Aim to make a profit! Period.
2. Taking care of the customer:
You can substitute the word customers with general public (for a public service), congregation (for a church), members (for an association), donors (for a non-profit) etc. but the concept is the same: Please do not ever forget who is the customer. Who you are serving and who pays. I was administrator of a charitable not for profit organization for 14 years and every year we had a balanced budget, every year equity was up and every year debt was down. Making an honest profit or achieving a balanced budget (Revenues in excess of expenditures) allows you to deliver on your mission and vision. Allows you to make investments to do a better job serving your customers and all stakeholders. Losing money breeds a hand-out mentality and a pitiful attitude. Never forget who is the customer!
3. Taking care of your employees:
Union or no union is not the question. “Human capital is the most important investment we can make" (McKinsey). Walmart employs 2.1M people, Amazon 1.5 M and Costco 330,000. Have we ever seen them go on strike? Respecting our employees, providing training, giving them the resources to get the job done and rewarding them are the “how to’s” to compete successfully and serve customers profitably. I headed two companies that were in trouble and needed serious turnarounds. Both were unionized. Partnering with the unions made the turnarounds not only possible but successful and in record time. Work with your people. You have the same objectives. Canada Post is focused on protecting their 50’000 employees when they should be focused on growing their business and hiring 50’000 more. The 3 US corporations I mentioned in this article appear to have taken the sweet cream and left Canada Post with the sour cream of delivering a 30-gram envelope at 99 cents from anywhere to anywhere in Canada.
I admit that my three suggestions are simple but may not be easy. Start at the top and aim for the right objectives. Do not get stuck in the weeds and miss the forest for the trees. My golden rule is... Happy employees make Happy customers and Happy customers make Happy profits. Let’s go to work Canada!
W (990) BLOG 12-2024