By Roger L. Martin
‘We can’t have the inmates running the prison.” With those emphatic words at a National Football League (NFL) owners meeting in New York on October 18, Houston Texans owner Robert C. McNair set off a firestorm.
His All-Pro receiver DeAndre Hopkins skipped practice in protest, and the entire team threatened a walkout that was averted only by a 90-minute team meeting in which head coach Bill O’Brien managed to settle them down. Texans players described McNair’s comments as sickening and horrible.
Politicians, team owners and fans alike seem baffled and perplexed by what the players are doing. I am not.
During most of the 20th century, capital and labor battled for the upper hand in the economic battle for the spoils of their joint effort, with labor having the upper hand between the 1935 passage of the National Labor Relations Act and 1960, the peak of unionization in America. Between 1960 and 1980, capital battled back by moving to right-to-work states, mechanizing, computerizing and starting to outsource globally. Republican President Ronald Reagan drove the definitive stake into the heart of organized labor when he fired the air-traffic controllers in 1981.
While capital had won decisively over labor, it failed to notice that a new challenger had arisen to take labor’s place as its primary competitor. This force was the uniquely talented individual, without whom business could not operate. The difference between labor and talent is that labor has skills that are largely interchangeable, while talent has unique training and experience, and is indispensable.
Old-fashioned labor organizers might find irony in the Houston Texans players, who have an average annual salary of $3 million, threatening to walk out of their workplace. But that is the new world of talent management. Owners are going to have to get used to talent, not capital, being on top of the heap.
Roger L. Martin is a former dean of the Rotman School of Management at the University of Toronto.