Abstract
For the Ford Motor Company and the United Automobile Workers Union, fifty‐six pivotal events over three decades add up to a transformation in organizational and institutional arrangements. Compared to much of the literature on critical moments, which involves micro analysis of turning points in a single negotiation, this is a meso and macro study where deeply embedded cultural assumptions were “on the table” and, where effectively resolved, constituted an organizational or institutional pivot. Many pivotal events were planned, either as part of a formal negotiation or a large‐scale change initiative, requiring intentionally orchestrated critical moments. Others were unplanned and called for improvisational critical moments. The pivotal events also included situations where transformative potential was present, but the results fell short of the potential—a circumstance (noting what could have happened, but didn’t) that is not usually documented in the literature on critical moments. Not all critical moments in negotiations result in a pivotal event, let alone an organizational or institutional transformation, but this paper documents ways to connect the dots across these micro, meso, and macro levels of analysis.
Introduction
In the book Inside the Ford‐UAW Transformation: Pivotal Events in Valuing Work and Delivering Results (2015), which I coauthored with Dan Brooks and Marty Muiloy, we documented fifty‐six events over three decades that were pivotal in the history of Ford Motor Company and the United Auto Workers Union (UAW). These pivotal events added up to three transformations: one within Ford Motor Company as an organization, another within the UAW as a union, and a third in Ford and the UAW’s labor–management relationship. The aim of this article is to connect the data from this macro transformation case example, with its sequence of pivotal events, to the micro negotiation literature on critical moments.
Ford and the UAW
When the Ford Motor Company rejected the 2008 recessionary bail‐out package from the U.S. government, avoiding the bankruptcy faced by General Motors and Chrysler, it was a major news event. Less visible was the contrasting downsizing by the three domestic auto manufacturers—each had to cut its workforce by about half. While GM and Chrysler had massive involuntary layoffs imposed during bankruptcy, Ford and the UAW agreed on a plan in which over 50,000 people left the company with voluntary packages. It is perhaps not surprising that Ford gained market share during the recession and saw no decline in quality, even with the large‐scale disruption. Turning down a bail‐out package, avoiding bankruptcy, and navigating a recession without involuntary layoffs were all pivotal events for Ford and the UAW, contributing to a broader set of organizational and institutional transformations.
This article connects the data from this macro transformation case example to the micro negotiation literature on critical moments. Most of the literature on critical moments centers on turning points in a given negotiation, with micro‐level analysis that focuses on precipitating factors, the departure itself, and the consequences (Druckman 2004). By contrast, the focus here is at the meso and macro levels (noting throughout the paper what is at each level of analysis). Malcolm Gladwell’s work on tipping points (2000) is cited by Druckman and Olekalns (2013a) and Green and Wheeler (2004) as an example of a study of critical moments at the macro level. Gladwell’s book does provide analysis of a set of macro critical moments that are highly consequential, with cascading dynamics that follow. In reviewing the sample of fifty‐six pivotal events in our study there were a few Gladwell‐style tipping points, but there were other types of pivotal events as well. More common were pivots in relationships at the meso level that shifted core assumptions, similar to relationship shifts in documented studies of critical moments involving institutional actors (Leary 2004), but without the same cascading quality.
Before turning to the data, a few words are in order on terminology. Critical moments in negotiation go by many names: punctuations, transitions, turning points, tipping points, focal points, and more. At the meso level, we use the term “pivotal events” since a potential or actual change at organizational or institutional levels of analysis is often understood as a pivot, with appropriate connotations of overcoming inertia and a strategic change in direction. At the macro level, multiple pivots add up to a transformation. In the 2015 book, we defined a pivotal event as “a time‐bound situation with highly consequential potential.” We did not specify the organizational or institutional level of analysis in the definition, but that should be added here. An updated definition might be “a time‐bound situation with a highly consequential potential for advancing or undercutting an organizational or institutional transformation.”
Note that the definition specifies the potential for the results to be highly consequential but not whether the results are actually consequential. This contrasts with some of the micro critical moments literature where a critical moment is viewed as such only if it proves to be consequential. In identifying pivotal events to document for the book, we avoided selecting exclusively on success by identifying nine instances where there was the potential for a transformational impact but such potential was not realized.
For example, in 1982 the leading Japanese expert in what was termed “total productive maintenance” was invited to brief senior Ford executives on an approach to machine maintenance that utilized the collective knowledge of workplace teams, driving continuous improvement. The information was rejected for the worst possible reasons—anti‐Japanese sentiments and distrust of front‐line workers. It wasn’t until a decade later, in the mid‐1990s, that front‐line teams began assuming systematic responsibility for some aspects of maintenance and it would be two decades later, in 2002, that a joint UAW‐Ford Total Productive Maintenance revitalization initiative was launched at the enterprise level. Both the 1982 briefing and the 2002 revitalization were pivotal events with transformational potential. In the first case, the potential was not realized and it was a failed pivot, while the second pivot accelerated the role of front‐line workers in driving continuous improvement around what had come to be termed the Ford Production System.
The ultimate transformations over three decades were both organizational and institutional. This builds on and extends Putnam’s analysis of critical moments and transformations (2004). While Putnam was focused on the micro role of critical moments in transforming a given dispute, our focus is on how pivotal events add up to larger meso and macro transformations. For Ford Motor Company as an organization, the transformation was from the iconic mass production system, with a command and control hierarchy, to a team‐based, knowledge‐driven, high‐performance production system. For the UAW as an organization, the transformation was from a highly centralized political structure to systems in which union officials were assigned to address quality, safety, and other matters on the basis of skills and merit, with an increased commitment to diversity in the workplace. For the labor–management relationship, as an institutional arrangement, the transformation involved moving from what might be termed an arm’s length adversarial relationship to a labor–management partnership employing interest‐based, problem‐solving approaches in negotiations and conflict management. In all three cases, the transformations were not complete at the time we wrote the book and, in some cases on some dimensions, there has been some deterioration in the years since. Still, what we termed deeply embedded “operating assumptions” in the respective cultures, using Edgar Schein’s concept of culture (1985), was “on the table” in these pivotal events. Over time, the sequences of successful pivots shifted in substantial ways, representing organizational and institutional transformations. Table One provides a few examples of traditional and transformed meso‐level operating assumptions in the UAW‐Ford system.
Traditional and Transformed Operating Assumptions
Traditional Operating Assumptions . | Transformed Operating Assumptions . |
---|---|
Deliver immediate measurable results | Reduce variation before improving |
Problems contained | Problems shared |
Expert and managerial knowledge | Expert, managerial, and distributed knowledge |
Positional bargaining | Interest‐based bargaining |
Just‐in‐case training | Just‐in‐time training |
Safety by inspection | Safety by prevention |
Traditional Operating Assumptions . | Transformed Operating Assumptions . |
---|---|
Deliver immediate measurable results | Reduce variation before improving |
Problems contained | Problems shared |
Expert and managerial knowledge | Expert, managerial, and distributed knowledge |
Positional bargaining | Interest‐based bargaining |
Just‐in‐case training | Just‐in‐time training |
Safety by inspection | Safety by prevention |
There were some cases where the negotiation over these operating assumptions was explicit—such as the “bargaining over how to bargain” discussed below in advance of the 2007 UAW‐Ford national negotiations. In other cases, it was more of a tacit series of negotiated changes, such as the many shifts associated with placing increasing value on the front‐line knowledge of the hourly workforce—knowledge that was based on workers’ lived experience. Front‐line knowledge previously had been minimally valued relative to the training‐ or position‐based knowledge of experts and managers.
One way of visualizing the relationships among critical moments, pivotal events, and larger transformations is illustrated in Figure One.
As Figure 1 suggests, a meso pivotal event may include one or more micro critical moments—some orchestrated and some improvised. The pivotal events might be planned or unplanned. Multiple pivotal events can add up to a macro transformation. Not all critical moments add up to a pivotal event and not all pivotal events add up to a transformation, but when there is a macro transformation there will have been meso pivotal events, and when there are meso pivotal events there will have been micro critical moments.
Methods for Classifying Pivotal Events
There are many definitions of critical moments, most of which are at a micro level and as Druckman and Olekains (2013a) note, most definitions are retrospective. For example, in research on critical moments in intercultural dialogue, Beth Fisher‐Yoshida (2015) states that “[c]ritical moments, also known as turning points, are moments in a conversation in which a comment or action is decisive in determining the flow of the rest of the conversation or interaction.” Classification as a critical moment, in keeping with this definition, is only possible if what follows is known. A moment is recognized as critical only if there has been a shift with a sufficient degree of salience and intensity (Druckman and Olekains 2013a). It must have sufficient importance, creating some degree of path dependency in what follows.
The methods we used in the Ford–UAW book for classifying meso‐level pivotal events included time‐bound events with the potential to be highly consequential in advancing organizational or institutional transformation, some of which failed to deliver on that potential. Instead of defining it after the fact, we instead focused on whether a potential transformation (a macro‐level outcome) was “on the table” in the event. In this sense, the above definition of a critical moment could be expanded to include “a comment or action that has the potential to be decisive.”
Defining a transformation in the context of social systems is challenging. There is a large literature on the transformation of disputes (generally a meso‐level phenomenon) through micro moves, such as reframing the issue or generating new options (see Druckman and Olekalns 2013b); but this is not the focus here. In these cases, it is the character, nature, focus, or intensity of the dispute that is transformed. I am more interested in the way micro and meso dynamics add up to a macro transformation, such as the transformation in social and regulatory regimes signaled in The Transformation of American Industrial Relations (Kochan, Katz, and McKersie 1986). Currently, there is a growing set of historical studies of societal collapse, most of which are motivated by current instabilities (Diamond 2005; Turchin 2006; Middleton 2017; Bardi 2020). While some argue that collapse can be beneficial for renewal, even seeing collapse as a “turning point” (Diamond 2019), transformation signals the potential for change from within—a synthesis rather than an antithesis. In the case of a transformation, it is a bundle of deeply embedded cultural assumptions, legal constraints, economic incentives, institutional arrangements, and other elements that shift in combined, interdependent ways.
In the Ford‐UAW book, we identified pivotal events and transformations based on a set of participant‐observer roles. My coauthors were institutional leaders in the UAW‐Ford system (note that “Ford” is first in our hyphenated book title, while the joint programs lead with “UAW” in the hyphenated titles of these programs). Marty Mulloy retired from Ford as the vice president for global labor affairs—Ford’s top negotiator and leader of employment relations with unionized workforces around the world. Dan Brooks retired from the UAW as the head of UAW‐Ford National Joint Programs and as the union’s leading expert on the Ford Production System. I had served as a consultant to Ford and the UAW for three decades, beginning at the plant level, then working at the divisional level, and ultimately at the enterprise level. During this time we all worked together closely. The only published work to come out of the collaboration was an article in Negotiation Journal on what turned out to be one of the fifty‐six pivotal events—a 2011 article on “Bargaining When the Future of an Industry Is at Stake” that documented unique dynamics during the 2007 and 2009 auto negotiations (Cutcher‐Gershenfeld 2011). Otherwise, I separated my consulting work with the UAW and Ford from my scholarly work. It was with the pending retirements of my coauthors and a desire to document lessons learned that the idea of a book took shape.
Many years earlier, in 1987, I had written a case study for the U.S. Department of Labor on a transformation in the relationship between Xerox and the union representing most of its production workforce in Rochester, New York—the Amalgamated Clothing and Textile Workers Union. I identified seven meso‐level pivotal events that added up to a macro transformation in both the labor–management relationship and the production system in a single manufacturing plant. (This was my first use of the term “pivotal events”). In the UAW‐Ford case, we began the project by identifying twenty‐five pivotal events in which one or more of us was directly involved. We then set about interviewing forty people at all levels of the UAW and Ford who were also associated with these pivotal events. At least two of us conducted each interview—with one leading the questioning and the other primarily taking notes. In the process, people would often point to other pivots that we might also want to document. For example, when we interviewed a Ford executive who had been instrumental in one pivot—the launch of employee affinity groups in 1999—he asked if we were interested in the story behind the selection of the first female plant manager, which occurred in 1996. That was an important pivot and not one that had been on our list. As it turns out, it was nearly a failed pivot, its success requiring considerable leadership from a number of individuals, including, of course, the exceptionally talented woman who was ultimately the first in Ford to be given responsibility for what was a multibillion‐dollar manufacturing operation.
Most of the pivotal events documented were at the enterprise level—such as a national collective bargaining negotiation (meso level) or a system‐wide quality initiative (macro level). Some, however, were at the plant or divisional level, such as the first female plant manager just mentioned or a transformative plant‐level negotiated agreement that proved influential across the enterprise (still meso and macro levels). Further, some of the pivots were planned events or initiatives, including a number of events associated with the development of what is now the Ford Production System. Other pivots were unplanned, such as the global recession that began in 2007. What was planned for some stakeholders, such as Ford’s decision to sell three glass plants, was unplanned for others, such as the union and the workers. Of the fifty‐six pivotal events, thirty involved formal union‐management collective bargaining negotiations or the formal drafting of joint charters (at national, divisional, or plant levels). The remaining twenty‐six involved informal negotiations primarily within management or the union, rather than formal bargaining between labor and management. Table Two shows the breakdown of the pivotal events by level and whether they were planned or unplanned.
Classification of Pivotal Events in the Ford‐UAW Transformation
. | Plant/Division Level . | Enterprise/System Level . |
---|---|---|
Planned pivotal events | 8 (3 formal negotiations) | 34 (18 formal negotiations) |
Unplanned pivotal events | 9 (7 formal negotiations) | 5 (2 formal negotiations) |
. | Plant/Division Level . | Enterprise/System Level . |
---|---|---|
Planned pivotal events | 8 (3 formal negotiations) | 34 (18 formal negotiations) |
Unplanned pivotal events | 9 (7 formal negotiations) | 5 (2 formal negotiations) |
Source: Adapted from Cutcher‐Gershenfeld, Brooks, and Mulloy (2015).
It is not surprising that a set of organizational and institutional transformations would include many planned events at the enterprise or system level. These planned pivotal events did feature critical moments, some anticipated and some emergent. An example of an unplanned pivotal event featuring a number of emergent critical moments was the 1999 explosion in the River Rouge Plant. It was a tragic accident in which six people died and twenty‐four were injured. As soon as the then‐Ford CEO and Chair, Bill Ford, learned of the explosion he rushed to the scene of the accident (just a few miles away). This was before the area was secure and against the recommendations of security officials. Ignoring the recommendations, he went right to the site of the explosion. UAW vice president Ron Gettelfinger and UAW Local 600 president Jerry Sullivan immediately joined Bill Ford and together they comforted the workers involved, personally reaching out to the families who had lost loved ones. The event has assumed near legendary status in the UAW‐Ford system, though when we interviewed Bill Ford for the book, he indicated that he didn’t want to “make a big deal” out of this. He simply said, “When that event happened, my first thought was, what can I do—how can I help.” We classified it as a pivotal event because the leaders made a pact (an emergent negotiation) in that moment to hold system‐wide “safety stand‐down” meetings. What came to be the safety operating system, accelerated in development by these meetings, revealed the need for something more systematic, structured than a prescribed set of safety practices. The explosion was an unplanned pivotal event that required improvisation similar to what has been observed in many critical moments (Green and Wheeler 2004; Menkel‐Meadow 2004; Susskind 2004).
The pivotal events documented in our book did not happen in isolation—often there were sequences of linked events. An example of linked meso‐level pivotal events began first with a pivotal event in 2003 with the UAW demand, during national collective bargaining negotiations, for hourly workers to be able to earn a six sigma black belt (a measure of accomplishment in quality systems). At the time, many hourly workers in roles dealing with product quality had earned green belts (a lower level of accomplishment) and had made important contributions to black belt projects. Still, Ford’s global head of quality could not envision an hourly worker capable enough to successfully direct managers and engineers in the execution of a black belt project (typically a project with potential savings of $1 million or more), let alone to master the requisite statistical tools and methods. This was a potential pivot that failed to shift practices or underlying assumptions. Yet, in 2007, after considerable thinning of the salaried workforce, the demand was again raised in a second pivotal event and this time there was agreement. The first cohorts of hourly workers to receive the training began in 2008, with approximately twenty to thirty‐five earning a black belt each year since. The comments of one of the first hourly workers to earn a black belt, Armentha Young, are instructive:
Black Belt training has empowered me. People in management do respect you more. Some didn’t believe a person without a statistics background could pass. When I did pass, some begrudgingly shook my hand. You could see it in their faces: they were amazed. I thought, “You’ve got to be kidding me.” They were, like, “Oh my god, she passed and did it on the first time.”
The comment is a little insulting—there are plenty of people who could do this. People have skills that managers don’t know anything about. One should never be comfortable making an assumption about another person’s skill set or talents simply by their classification, association with a group or a particular organization and/or appearance. (Cutcher‐Gershenfeld, Brooks, and Mulloy, 2015: 53)
This quote illustrates the depth of change needed to dispel embedded operating assumptions and to transform a failed pivot into one that is successful.
Connecting Organizational and Institutional Pivots with Critical Moments in Negotiation
Within each of the UAW and Ford’s fifty‐six pivotal events, there were critical moments that were turning points. For example, in advance of the 2007 national collective bargaining negotiations, a turning point was the parties’ decision to conduct a series of workshops, ultimately involving over 300 negotiators, focused on bargaining over how to bargain. This was preceded by a secret meeting (at a Catholic seminary) of the lead negotiators from Ford and the UAW that I attended, where it was observed that “the definition of insanity was doing the same thing over and over while expecting a different result.” On the brink of a global recession, it was noted that bargaining in a traditional, adversarial way would likely send the company into bankruptcy. This discussion and the subsequent sessions resulted in the adoption of an interest‐based approach for the national negotiations, a first for a full national negotiation in the industry. In this case, the turning points added up to a pivotal event—a collaborative national negotiation that helped Ford avoid bankruptcy.
However, not all critical moments add up to a pivotal event at the organizational or institutional level of analysis. There were countless business and labor negotiations over the three decades in the Ford‐UAW study that certainly involved critical moments, yet the agreements and other outcomes themselves were routine events in the life of the organizations. No deeply embedded operating assumptions were “on the table.” Thus, most or all pivotal events include critical moments, but not all negotiations that feature critical moments add up to an organizational or institutional pivotal event.
Further, although the pivotal events in the Ford‐UAW case may be individually interesting, they are only relevant in this context in how they add up (or fail to add up) to a transformation. Indeed the overarching point of our book is that organizational and institutional transformations are rarely if ever the product of a single event. Each transformation is a series of pivots, typically representing a winding path, that combines together—sometimes intentionally (with planned pivots) and sometimes in unexpected ways (both with unplanned pivots and with planned pivots that have unintended effects). In this sense, organizational and institutional transformation are the product of a sequence of negotiated change events, such as we saw with the hourly black belt example.
Including events that had the potential to be pivotal but were not raises a significant question for the literature on critical moments. Some of the scholarship on critical moments emphasizes the shared construction of the critical moment (McNamee 2004) and the shared recognition in the moment or afterward that a given moment was a turning point (Druckman and Olekalns 2013a). Our analysis of pivotal events adds instances where a pivotal event did not fully materialize, with parties who were sometimes aware of falling short of the potential and sometimes not. That a given moment may be critical even if it is not well navigated has been recognized (Green and Wheeler 2004). Of course, in a negotiation, it is much harder to identify what did not happen but could have happened than to identify what did. In this sense, the macro level of analysis is helpful since these lost opportunities are more readily documented. There are observable efforts that clearly fall short of their potential rather than elusive moments that could have been critical but were not.
In the planned pivotal events, the lead negotiators were mindful of the transformational potential of the moment. For example, prior to the 2007 negotiations, where a full interest‐based approach was adopted, the 2003 negotiations saw a small step in that direction. There are over two dozen subcommittees working on specific topics during an auto‐negotiation and Inside the Ford‐UAW Transformation coauthor Dan Brooks was co‐chair of the subcommittee on quality. Although there was no formal bargaining over how to bargain, Brooks took an interest‐based approach in his work on the committee. He was mindful that a larger transformation of the collective bargaining process was possible. Similarly, even after the bargaining over how to bargain in advance of the 2007 national negotiations, the parties still experimented unofficially with the interest‐based approach in two of the twenty‐six subcommittees prior to the formal opening of negotiations that year. In both cases, micro‐level behaviors and tactics designed to be critical moments contributed to a future pivotal event.
Conclusion
Pivotal events at the organizational or institutional level represent a meso‐level feature of the theory landscape associated with micro critical moments in negotiation. One or more micro critical moments will contribute to a meso‐level pivotal event (where organizational or institutional directions are “on the table”) and multiple pivotal events have the potential to add up to a macro organizational or institutional transformation. In this sense, micro critical moments, including micro transformations of disputes or negotiations, can be connected to meso pivotal events and, ultimately, macro transformations.
While this paper has focused on the sequence micro to meso to macro, other sequences are possible. For example, meso pivotal events can set the stage for future critical moments and macro‐level transformations can provide a forward frame for future pivotal events. This is similar to the “going up” (from micro to macro levels) and “going down” (from macro to micro levels) perspectives discussed by Druckman in his article for this issue. Thus, another topic for future research is to look at different combinations of multilevel sequences.
While critical moments are typically defined retrospectively, it is suggested here that there are micro interactions with unrealized potential to be critical moments. This parallels the notion that both successful and unsuccesful pivotal events can serve as pivots—the event is still important, even if the potential is not realized. In both cases, a topic for future research involves understanding better when a potential critical moment actually becomes critical and when a potential pivotal event actually becomes a pivot.
When a critical moment contributes to a meso pivotal event with transformational issues “on the table,” it is a fundamental leadership challenge. Whether the pivot will succeed and advance toward transformation requires that one or more parties take into account macro dynamics while operating at the micro level. This is a rare form of transformational leadership in negotiation, made visible when we add pivotal events to the theory landscape associated with critical moments in negotiation. But it is often essential when compared to the alternatives—stagnation and collapse.