SGS Incorporated (Société Générale de Surveillance Inc., Japan)
SGS is a worldwide inspection company based in Switzerland. It has quality/quantity inspection/assurance and control services in sectors such as mineral, petroleum, petrochemical, industrial and consumer products. There are also laboratory services.
I learned of Mr. Nevins and first met him in 1987, however more in depth projects started from February 1993. By 1993 we had grown to about 500 employees, with just over 300 of them working as contracted temporary hires. The SGS environment was rather influenced by the presence of two unions. Traditionally unions had been quite strong at the branch. There had been prolonged strikes in 1958 and 1968.
A K.K. (Japanese incorporated entity) had been started in the late 1980’s. The idea was to use the K.K. to make acquisitions and find some good, profitable firms to buy or tie up with. One of these businesses that was launched hired young high tech software and IT engineers. This unit was to handle, and develop computer networks, develop software, and help maintain computer systems for the outside companies who would entrust it with their computer networks and systems.
This new business unit was not doing very well. There were about 15 people in this division, which we were planning to close down. It was losing money, and the employees were not making sufficient efforts to keep it solvent. In July 1993, when we told the staff about this closure, they dug in their heels, and tough radical outside leaders of our more radical union were aggressively backing these people up.
All this was taking place before we called in Tom Nevins to focus on this problem, and to largely handle the stalemated negotiations with the union. We were offering three months severance, and a chance to have salary continuance until the end of that year. Our first negotiation and announcement of closure was in July 1993, so this was the equivalent of an 8 or 9 month extra severance package. Even though the group of people were young, and supposedly had good IT skills, they were stubbornly insisting on 17 months extra severance plus the salary continuance until the end of the year. Our own 15 employees were even more radical and unreasonable than the outside union. The upper body non-employee union leadership told them to ask for 12 months extra severance, not the 17 months.
The union had been using tape recorders at the negotiations which had been going on for four months since July 8, 1993. When Tom took over the negotiation and first met the 15 employees on November 11, 1993, he would have none of that. “No tape recorders,” he told them. The employees stood up and left the room. On their way out, Mr. Nevins said, “Great, it will save time, save SGS my hourly consulting fee, and we will move ahead with a plan of letting you sign for the three months severance, or staying on as inspectors with a 60% pay cut. SGS will train you. It’s your choice.”
That got their attention and some of them drifted back into the room. Mr. Nevins confirmed with them what the game plan would be. He also drafted for them a letter which the outside non-employee union leaders should be asked by the 15 employees to sign. It basically guaranteed the employees that the union would make up for any financial loss to the individuals if the individuals risked not cooperating with the company by not signing for the company’s severance offer.
Mr. Nevins made it clear the 3 month severance package, plus salary continuance up until February 1, 1994 (about a 2.5 months period) would only get smaller, or the 40% pay cut would only get larger, if they kept resisting and would not resign and sign their letters.
Apparently the union would not sign the pledges guaranteeing there would be no loss on the above company offered conditions and packages. In any case, with just that one brief message from Tom at the negotiation with the union on November 11, 1993, multiple negotiations and an impasse since July 8, 1993 immediately ended. All 15 of the staff signed by the November 24th, 1993 deadline Mr. Nevins gave them — just 13 days after Tom got involved.
Tom Nevins delivered exactly what he said he would, and it went exactly as he said it would go. Problem instantly solved with his single, final appearance, his strategy, tactics, execution and clarity of communication. We at the company also had no further negotiations with them. As instructed by Tom, we just waited for them to sign within the 9 days Tom gave them. The fifteen people who were determined to get 17 months severance had to resign and sign for 3 months severance. Only one or two of them instead opted to stay on and learn the inspection business with a 40% pay cut. Because of their greed and stubbornness they lost the chance to be on paid vacation from July, or to have double income during the five month period, if they had moved on with their life and found another job. Our first and final offer of the 8 months extra severance support had been more than generous, hadn’t it?
An impressive piece of work from Mr. Nevins, but not the only one I remember.
Either before or after the above, Mr. Nevins also helped us with the base-up negotiation for the hundreds of unionized employees in our main inspection operation, at our main Yokohama office.
On this base-up negotiation we asked Tom to help us. In the one negotiation session he attended, and in about an hour he got us, both parties, to where we were planning to settle. Using the traditional process of labor relations at SGS it would have probably taken us four or five more long, grueling sessions to get there.
Mr. Nevins’ methods were simple. He got our boundary conditions — worst case, and best case from us, so he wouldn’t step out of line. He was “the facilitator and of course would not make the final decision.”
He also met alone with the union officers and went back and fourth between us a couple times. Through his experience, style and quality of communications he saved us a lot of time. He was also ever mindful to coach up the union officers, so they would look good to their own rank and file membership, in spite of the unexpectedly low settlement that was so quickly reached.
Mr. Nevins saved us all a lot of time, unnecessary rancor and ill-will. He handled this base-up negotiation with persuasion and humor. The union and management understood each other better and got closer together.
The differences in style and approach taken by the same Consultant in the same company, perhaps during the same month was fascinating to watch.
The first case of the greedy, young computer/software people required tough tactics, tough talk, and overpowering tactics and force.
Mr. Nevins style in the second case of base-up negotiations was to first, question the union, listen, understand, and then sell, persuade, convince, cajole, and get everybody excited about not wasting their precious time with unnecessary KABUKI acting, and posturing. The end result for the company was just as favorable as it would be using the toughest tactics that we, or Mr. Nevins could have employed.
Mr. Nevins is excellent at what he does. Anything he says he will do, he will make happen. There is no risk, only results. Clients who do not believe in him, and do not work with him on their most difficult problems are the ones who lose. Even when all your other advisors and internal people say “very difficult,” “illegal,” “can’t be done,” trust in Mr. Nevins.
Other companies that do not “fix the foundation,” as Tom often says, or do not bother to gain the more effective solutions and approaches TMT offers, will continue to pay for that decision — day in and day out.
Nick T. Nybida
(former) Executive Vice President
SGS Société Générale de Surveillance Inc., Japan