Kohler led new era of labor relations

Herb Kohler, who died Saturday, was a man of many dimensions, a genius businessman who grew his companies revenues to $6 billion, an environmentalist, a supporter of the arts, a demanding boss with his executives whom he called at all times of the night, an innovator with 200 patents, a philanthropist—especially in Wisconsin, a standard-setter for the golf and hospitality industries, a Steve Jobs-like master of design who turned ordinary products into art forms and a lover of a good time who was known to enjoy a stiff Bloody Mary at the nine-hole turn on his championship golf courses.

He died during Labor Day weekend, poignant timing for a man who changed the labor-management dynamics at the Kohler Company after he took over as CEO in 1972.

The plumbing products company was notorious for its highly adversarial dealings with its union. Two workers died and 47 were injured in a long 1934 strike; the National Guard had to be called out. Another long strike in 1954 lasted 11 years. The contentious labor management environment had lasted more than two decades.

After Herb Jr. took over, he established a more respectful stance with the unions. He signed a five-year contract with the union, and labor stability became more the order of the day. There were two more smaller strikes in 1984 and 2015, the year that Herb turned over the CEO job to his son David.

There are Labor Day lessons to be learned in this long history at the Kohler company. The main one is it that a collaborative model works far better than a top-down adversarial model. Both sides lose when they are strident.

I don’t know if Kohler learned that lesson at Yale University where he graduated with a degree in industrial administration. I graduated there with the same degree six years ahead of him and don’t recall many enlightened discussions about labor management relationships.

There was one distinguished professor, Chris Argyris, who propounded persuasive management rather than top down management. The good professor convinced me, and maybe Herb, that top-down models were becoming a thing of the past and that horizontal management structures were a better way to go.

More recent “learning organizations” have evolved to use respectful dialogue among sharp people from different disciplines and organization levels to arrive at more effective solutions to complex challenges, rather than relying on one person at the top to be the smartest guy in the company.

The U.S. Army and U.S. Marine Corps have evolved from top-down command-and-control models, which apply when it comes to grand strategy and objectives. But they apply a loose rein for junior officers, non-commissioned officers and troops when decisions by warriors have to be made in the heat of the battle.

I know this is a discursive Labor Day column but I have never been a fan of adversarial models between labor and management. That view has gained great post-Covid weight as labor shortages now trump all other workforce issues. The labor scarcity has created a new reality that requires companies to treat its people as treasures. Collaborative tools, such as profit-sharing, do an end run of adversarial wage and benefit bargaining.

Back to Herb Kohler, who led the company away from its history of adversarial relationships with its workers. He was a unique piece of work, a delight to watch in action and to cover as a journalist. He did call me “yellow journalist” in a press conference after my reporters broke a story that over-shadowed his press release of the day on a new two-tier wage structure. The Milwaukee Sentinel published his private company financials for several years after they were leaked to me by a shareholder. That did not make him happy.

But he was big-hearted and a big thinker, a visionary, and later invited me to the grand opening of his fabulous design center in Kohler. It was the most lavish and creative grand opening party that I have ever been to.

My favorite story about that charismatic man was that he told Kevin Costner, a golfing buddy, that he wouldn’t appear in his film “Open Range” unless he could shoot somebody. Kohler, who had thespian inklings as a young man, played the small-town saloon bartender and got his wish when he blasted one of the bad guys with a shotgun as he came to the defense of the lonely marshal played by Costner.

Obviously, another of his striking qualities, was an booming laugh and a rollicking sense of humor. May he rest in peace.

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