CUNA Mutual: Not Al Dunlap's Transformation. Yet.

Sunday the Wisconsin State Journal had a story about the so-called transformation at CUNA Mutual Group, Streamlined for success? 

Lost in the thousands of words were some very telling numbers that say a lot about the culture of the organization. According to a CUNA Mutual spokesperson, Jim Buchheim, said "the company has about 1,700 contracted employees companywide, including 980 in Madison."

That number, 980 contracted employees in Madison, is just stunning, especially in light of the fact that CUNA Mutual employees in Madison has declined from 2,578 in 2004 when CEO Jeff Post arrived to 2,006 in 2007.

Its real simple. People were let go from positions as employees with full benefits while the company took on contracted employees who have no benefits, no rights, and can pack up the moment they hear, "You're fired."

It all brings to mind the debate within management communities about the way to transform a company. Curiously, years ago, CUNA Mutual was on the road towards total quality. The company had instituted quality circles and was making the difficult, hard, but very rewarding experience of a total transformation as envisioned by W. Edwards Deming.

There is another change agent for companies to emulate. Though we would like to, few us will forget 'Chainsaw Al' Dunlap. Dunlap  was the one who drove Sunbeam into the ground. 'Chainsaw Al'  Dunlap's tenure was marked by mass layoffs and dismissals and a sharp decline in morale.

This is not to suggest that the blood letting at CUNA Mutual is anything like what Sunbeam experienced, but it does demonstrate profound differences on how to transform a company.

Anyone who knows Deming's Fourteen Points, cannot help but recall the importance of:

Eliminate fear – encourage two-way communication, encourage employees to work in the organisation’s interest

You have to wonder how the morale is in an organization where the surviving employees see their co-workers discharged one day and replaced the next day with contracted workers.

You have to wonder what the implications are for a community when some workers are replaced so as to reduce overhead if some of those savings are going to managers in the form of significantly higher bonuses.

Update: February, 12, 2008: in some other presentations CUNA Mutual Group, I made some errors. An apology and correction can be found: An Apology TO CUNA Mutual Group and About those H1B's....

Comments

[Chris]

Maybe I'm cynical (oh I guess not maybe) but this is the standard for corporations isn't it? The goal is to maximize revenue now. Employees are just another resource that is priced and commoditized (hence human resources). How much does it cost to replace a worn out one and how is that cost amortized over the net production value of the employee resource?

You write as though this is somehow surprising when really it is an obvious result of attempting to extract optimal productivity. I think it should be expected. Any employee who does not expect to be treated like a replaceable part is living in fantasy land.

Now I'm not sure that is the best way to utilize your human resources. Perhaps committing to their ongoing growth, education and fostering an equality referred to by Deming is better. However it's not as easily measurable. Convert FTEs to contract employees and, poof, you've saved 25% per year.

[Geof]

"You have to wonder how the morale is in an organization where the surviving employees see their co-workers discharged one day and replaced the next day with contracted workers."

Just ask any state worker. We've been living with this situation since the early days of the Thompson administration. And it's gotten worse,not better, under the current (supposed) Democrat Governor.

[The World Sucks]

Yes, you heard me its unfair and you have to live with it. Bites balls doesn't it?

[ernie]

Regarding the Sunday Wisconsin State Journal story: Its not surprising CUNA's sending jobs to Iowa and Texas. The story says lower taxes are part of it but its also "lower pay scales." Maybe the Union brain trust in Madison ought to think more about how it can save jobs in Madison by sitting down with the company and talking turkey, instead of spending their time and money on billboards.
I know a couple who work at CUNA and compared to other employers around here, its a country club. Their pay and benefits, including the union, are outstanding. Appears the new guy is just making a smart business decision and bringing the company into the 21st century. Union seems to be stuck in the good old days and doesn't realize we all have to change with the times. It happened to me.
Wake up and smell the coffee.