In Germany, Union Culture Clashes With Amazon’s Labor Practices

But across the Atlantic — nein, non, no.

Even as President Obama spoke about middle-class jobs last week at an Amazon warehouse in Tennessee, Amazon was facing strikes at warehouses in Germany, its second-biggest market. Unions there say the company has imported American-style business practices — in particular, an antipathy to organized labor — that stand at odds with European norms.

“In Germany, the idea that warehouse workers are going to be getting opposition from an employer when it comes to the right to organize, that’s virtually unheard-of,” said Marcus Courtney, a technology and communications department head at Uni Global Union, a federation of trade unions based in Nyon, Switzerland. “It puts Amazon out in left field.”

Amazon is hardly out there alone, however. Large American technology companies are increasingly running into obstacles as they expand in Europe. For Facebook and Google, the running issue is privacy. Google was fined this year by German authorities for illegally collecting personal data while creating its Street View mapping service, after facing minimal sanctions over Street View at home. Meanwhile, European privacy regulators are considering tough regulations to protect consumers on the Internet, a direct challenge to Google, Facebook and other online companies that mine personal data.

Antitrust officials in Europe are scrutinizing Apple’s relationships with wireless carriers, as well as Google’s competitive practices. And Google, Apple and Amazon have all been criticized by European lawmakers for tactics that help them minimize their tax bills.

Amazon has been criticized for its working conditions in the United States — but not nearly to the same extent as in Europe. On the surface, Amazon’s labor problems in Germany revolve around wages.

The union says workers in warehouses in two small German cities are properly classified as retail employees, and should be paid at the higher rate required for people who work in department stores and other retail outlets. Amazon says they are more properly classified as warehouse workers, and paid at a lower rate.

The subtext, though, is Amazon’s opposition to unions in its warehouses as a general principle, because the company fears unions will slow down the kind of behind-the-scenes innovation that has propelled its growth.

Dave Clark, the company’s vice president of worldwide operations and customer service, says Amazon views unions as intermediaries that will want to have a say on everything from employee scheduling to changes in processes for handling and packaging orders. Amazon prizes its ability to quickly introduce changes like these into its warehouses to improve the experience of its customers, he said.

Last year, the company spent $775 million to buy a manufacturer of robots that it plans to eventually deploy in its warehouses, though it has not said when they would come to Germany. The last thing it wants is to have to get approval from unions for such changes.

“This really isn’t about higher wages,” Mr. Clark said. “It isn’t a cost question for us. It’s about what our relationship is with our people.”

“We’re still a developing industry,” he added — despite the fact that Amazon posted revenue of $15.7 billion in the last quarter and the company is enjoying a buoyant stock price.

In the United States, Amazon successfully thwarted efforts to unionize. Over a decade ago, Mr. Courtney of Uni Global led an unsuccessful effort in the company’s home state of Washington to organize Amazon’s customer service representatives.

Two years ago, an investigative article by The Morning Call newspaper in Pennsylvania’s Lehigh Valley chronicled poor working conditions in an Amazon warehouse in the state, including instances where it stationed paramedics outside to take heat-stressed workers to the emergency room. Amazon says it has addressed the problem by installing air-conditioning in all of its facilities.

More recently, a firm that provides temporary employees for Amazon warehouses is defending itself in a class-action suit that claims the firm shortchanged workers on pay as they waited in security lines to exit warehouses.

Jonathan Barnes, a spokesman for the staffing firm named in the suit, Integrity Staffing Solutions, declined to comment.

But it is a different story in Germany, where the powerful labor movement behind the Amazon strikes traces its roots back more than two centuries.

Mr. Courtney, the Swiss-based head of the federation of trade unions, said other American tech giants, including I.B.M. and Hewlett-Packard, have been more tolerant than Amazon of unions in their European operations.

And the strikes in Germany raise especially knotty problems for the company, which has ambitious expansion plans there.

The Haggler: At Quicken Loans, a Culture Geared to Customer Service

REMEMBER the recent column about DailyCandy, the e-mail service for discount deals, and the customer who sent e-mails for six maddening months, trying to get an $85 refund?

Well, after the matter was thoroughly investigated, we learned that an employee at Group Commerce, which handles DailyCandy’s order fulfillment, had marked the refund as paid, even though it wasn’t.

This explanation, of course, explains very little. What we still want to know is why so many companies, in similar circumstances, fail to deliver. Time and again, you get the sense that these companies are filled with employees who are trained to keep their heads down and keep stamping. Or perhaps communication has broken down. Or it’s always someone else’s job.

How did so much customer service become so wretched? It’s a mystery that hangs over nearly every one of these columns.

Not long ago, the Haggler got an idea of what is going wrong after a close look at a company that is getting it right. It was during a trip to Detroit where the Haggler — or, rather, his duller, windier alter ego — reported a story about Dan Gilbert, the founder of Quicken Loans, a privately held mortgage lender. The article looked at Mr. Gilbert’s efforts to revive downtown Detroit, but while there, the Haggler got a close look at a company that has thought seriously about how to keep customers happy.

The thinking has paid off. Quicken Loans was rated highest in customer satisfaction among mortgage originators in 2010, 2011 and 2012, according to J. D. Power & Associates. The company has also been ranked in the top 30 of Fortune’s “100 Best Companies to Work For” for 10 consecutive years.

What is Quicken Loans doing to earn such accolades? It boils down to culture.

Mr. Gilbert and Bill Emerson, the chief executive, spend a lot of time and energy instilling a very particular work ethos into employees. For newcomers, this involves a daylong speech/indoctrination led by Mr. Gilbert, who, on the day the Haggler caught his act, spoke for eight hours, with a break for lunch, wearing a clip-on red bow tie. (Presenting the serious in the guise of the slightly comic, with plenty of punch lines, turns out to be one of his specialties.) The speech occurs once every five weeks or so and is delivered to recent hires, usually in a conference room of a hotel.

You can learn a lot about Quicken Loans from this presentation, which revolves around the company’s “isms,” a set of pithy summations of principles. Some, like “Responding with a sense of urgency is the ante to play,” are self-explanatory. Others, like “Every client. Every time. No exceptions. No excuses,” come with their own wittily phrased elaborations. (“Clients don’t care how much you know until they know how much you care.”)

And many, like “We’ll figure it out,” make sense only with elucidation: “Not everything comes with a set of instructions. The innovators of the world are often exploring uncharted territory.”

Let’s stipulate that none of these ideas are blazingly original, and some are so obvious that one wonders why it’s necessary to say them aloud. (“It’s not about who is right, it’s about what is right.”) But what Mr. Gilbert and Mr. Emerson have done is create a set of expectations as well as a sense of community and mission. Employees at Quicken Loans have it hammered into them: care about the customer, sweat every detail, improvise when you need to, always deliver.

These employees are also encouraged to enjoy their jobs; they work in an atmosphere so buoyant that the Haggler was not surprised to find a karaoke machine in a room filled with a few hundred mortgage bankers.

“If you don’t create a culture at your company, a culture will create itself,” Mr. Emerson said in a phone interview. “And it won’t be good. I sometimes hear people say ‘We don’t have a culture at our company.’ They have one. But if it hasn’t been nurtured, if no one has spent on any time on it, you can assume it’s the wrong culture.”

THE Haggler can think of a dozen problems brought to this column that it’s hard to imagine could have emerged from Quicken Loans. And here is just one small piece of evidence:

A few weeks back, when the Haggler was trying to get the attention of DailyCandy, he turned to Twitter. Using his Haggler account, he sent a post into the ether, asking someone at DailyCandy for a call. No one ever replied.

Last month, the same experiment was tried with Quicken Loans, though the Haggler raised the degree of difficulty a little. A post was sent from a Twitter account opened by the Haggler with a name that was not the Haggler’s — or that of anyone he knows. The post had no hashtag and was not sent to Quicken Loans’ Twitter account. The message read:

“I am not happy with Quicken Loans! And you can tell because I used an exclamation point.”

A response arrived within hours. “How can I help?” wrote a Quicken Loans employee, identified as Bianca. “Please send me an e-mail,” she added, providing her e-mail address.

This turned out to be Bianca Mutti, part of a team that monitors the Twittersphere for Quicken Loans-related comments. The Haggler sent her an e-mail last week, from his Haggler e-mail account, and explained: “That tweet was a test. And you passed.”

“Thanks for solving this mystery for us!” she wrote back. “I mean it, and you can tell because I used an exclamation point.”

E-mail: haggler@nytimes.com. Keep it brief and family-friendly, include your hometown and go easy on the caps-lock key. Letters may be edited for clarity and length.

As Culture Moves Online, France Tries to Follow It With a Tax

PARIS — France’s “cultural exception” — the policy that creative works like books, music and movies deserve protection beyond what is accorded ordinary goods — is in line for a digital update.

A government adviser has suggested that manufacturers pay a 1 percent levy on the price of smartphones and tablet computers to help keep funding for such works alive, as more and more end up online and beyond the reach of existing taxes.

The tax, “painless for the consumer,” could also be used to ensure that artists are remunerated at a time when so much is downloaded free, said the report, which was presented Monday to President François Hollande and his culture minister, Aurélie Filippetti.

“Considering the weight of cultural content in connected devices, it is legitimate that those who make and distribute the equipment contribute to the financing of its creation,” according to the report, produced under the guidance of a former television executive and journalist, Pierre Lescure.

“L’exception culturelle” is no trifling matter: Nicole Bricq, the French trade minister, warned in March that it was “a red line” that could not be crossed in talks with the United States on a proposed free-trade area. France and 13 other European Union member nations insisted in a letter this week that the audiovisual sector must be left out of those talks, setting up a possible confrontation with the British prime minister, David Cameron, who has said that everything should be on the table.

In practice, the cultural exception means broadcasters must meet quotas for French music and television programming, for example, and prices for books are set by regulators. The effort stretches throughout the economy, requiring a system of taxes and subsidies for its upkeep, perhaps most visibly in the country’s film industry, which gets hundreds of million euros each year in subsidies — raised from taxes on movie tickets, television stations and Internet service providers — to defend itself from the Hollywood juggernaut.

But technology threatens to render such measures irrelevant, the report noted. The nature of Internet commerce means foreigners can have access to the French market without having to pay the levies that support French culture. And as more content is streamed online or stored in the cloud, a tax on recording media like blank compact discs and memory sticks will raise less money — and that is where the smartphone tax comes in.

Gilles Vercken, an intellectual property lawyer, acknowledged that streaming and the cloud would bring down those levies, which he estimated currently raise about €200 million, or $260 million, a year to support French authors, composers, actors, musicians and the like. But he expressed skepticism that the smartphone tax would see the light of day.

“I wonder what could be the legal grounds for such taxes,” he said, noting that the connection between hardware manufacturers and end users might prove a difficult one to defend in court. “I really don’t see it.”

Monica Horten, a visiting fellow at the London School of Economics who studies the politics of intellectual property rights, said that, in principle, such levies were possible under E.U. law, but that “the problem is in the implementation.”

The first issue would be drafting a law acceptable to the European Court of Justice, while another would be in actually getting device makers on board to pay the tax. “I think you can expect them to filibuster,” she said.

The report seeks to address a problem that is as old as the Internet, which has shifted the balance of power away from content creators in favor of newer actors like Google, Amazon and peer-to-peer downloading services, even as it gives creators previously unimagined opportunities to be seen or heard.

In addressing such matters, France has sometimes chosen to fight battles that other governments have shied away from. For instance, Google agreed in February to set up a €60 million fund to help French newspaper and magazine publishers develop their digital business, though it managed to fend off demands that it pay for the right to link to their content.

And the Lescure report comes less than two weeks after Arnaud Montebourg, the minister for industrial renewal, put the kibosh on a sale to Yahoo of a majority stake in Dailymotion, a French rival to YouTube, because the government had singled out the company as a national champion and did not want control falling into foreign hands.

The Lescure report also suggests that France throw out a “three-strikes” anti-piracy law that Nicolas Sarkozy, Mr. Hollande’s predecessor, had held up as one of his signature achievements and one that had been hailed by the global entertainment industry. Under the Hadopi Law, as it is known, illegal downloaders were to have their Internet access cut off if they failed to heed three warnings; violators were also to be subject to criminal sanctions and large fines. In practice, there has been little enforcement action, though proponents credit the law with helping to reduce Internet piracy.

If Mr. Lescure’s recommendations are followed, law enforcement will focus on the worst violators, and most people would face minimal fines. A proposed “Hadopi authority” would be eliminated, and responsibility for enforcement would revert to the national media regulator, the Conseil supérieur de l’audiovisuel.

Corner Office: Ryan Smith of Qualtrics, on Building a Transparent Culture

Q. What were some early leadership lessons for you?

A. I definitely had an interesting upbringing. There are five children, and everyone’s been pretty successful. My parents are both Ph.D.’s — they were in academia until the late stages of their careers, when they decided to go into entrepreneurial ventures.

They raised us with the mentality of “if you want it, you’ve got to go out and get it.” I remember when I was 13, my mother dropped us off in downtown Provo one summer, about two miles from where we lived, and said, “You guys are all paying for your clothes this year. Don’t come home till you have jobs.” They instilled in us the idea that “you can be anything you want to be, but you’re going to have to go do it.”

Q. How did you start Qualtrics?

A. I was a sophomore in college and working in L.A. for Hewlett-Packard on a summer program. My father was diagnosed with throat cancer, so I took a semester off school to be with him. He was always tinkering with technology to make the research world better. And when he would come home from his radiation treatments, he couldn’t speak. I bonded with him by helping him with his work. The cancer was very severe, and he needed something to look forward to. So we would work together, and by the time he recovered from the cancer, I had signed up 20 clients and we had formed a business. We’re 290 employees now, and we’ll probably double in size in the next 18 months.

Q. Tell me about the culture you’re trying to foster.

A. We’ve been extremely transparent, but not so that we can be cool. And it’s not about an open environment, because that’s not what makes a company transparent. It’s more around the fact that everyone needs to know where we are going and how we are going to get there.

So we want everyone to understand our objectives and make that available to everyone as we’re evolving, so people aren’t guessing and they’re not internally focused. That’s one obstacle a lot of companies fall into. I believe most companies fail because they’re not focused — they either get focused on other things in the market that aren’t important, so they’re thrashing around without a clear objective, or they’re focused internally on things like politics and bureaucracy. It’s not that these companies aren’t smart companies or lack good businesses. It’s just that there’s a lot of noise.

We want to be transparent because we want to encourage our people to have all the information to keep them focused on what really matters — our objectives and how they’re going to contribute.

Q. Can you give more details about how that works?

A. We took our best product guy and some of our best engineers and built a system internally to help scale our organization by knowing everyone’s objectives in the company. We have five objectives annually for our company, and everyone goes into the system each quarter to put in their objectives that play into those broader goals.

For one of the broader objectives, you might have 230 specific objectives. The reason we’re making all this available is, especially nowadays, you’re hiring individuals to think. We can’t control the way they think. All we can control or have an effect on is the environment around them.

We have another system that sends everyone an e-mail on Monday that says: “What are you going to get done this week? And what did you get done last week that you said you were going to do?” Then that rolls up into one e-mail that the entire organization gets. So if someone’s got a question, they can look at that for an explanation. We share other information, too — every time we have a meeting, we release meeting notes to the organization. When we have a board meeting, we write a letter about it afterward and send it to the organization.

When everyone’s rowing together toward the same objective, it’s extremely powerful. We’re trying to execute at a very high level, and we need to make sure everyone knows where we’re going.

The point is that it’s not like we just said, “Hey, we’re going to be transparent.”  We look at every decision and then say, “Why shouldn’t we share this with everyone?” And we do that instead of the default reaction of saying, “We’re not going to share anything.” It might make some people uncomfortable, but that’s not a good-enough argument. 

Q. Let’s shift to hiring. How does the conversation go? What are you looking for? What questions do you ask?

A. We definitely want someone with a high trajectory. The organization is going to change quickly — we’re not perfect, and we make mistakes. We want to find individuals who align with that, who will add value to the company in whatever role they’re in. Part of that is the disposition to be willing to do whatever it’s going to take, because we feel that if we win as a team, we’re going to win together.

Q. Tell me more about how you get at those qualities.

A. From my standpoint, I’m looking to see if someone’s a “gamer” — that’s what I call it. I want to know the hardest thing they’ve ever done. So if you were in Korea, traveling by yourself, did you go home when things got tough? That’s what I’m trying to figure out because when the ship’s going well, everyone’s good. But when obstacles come up, we’ve got to sit back and rethink, how are we going to navigate these? Will some people want to jump off the ship? Or are they going to be a gamer and want to come in, roll up their sleeves and say, “Hey, this is part of it.”

That’s what I’m looking for. I want someone who’s going to roll up their sleeves when a little bit of challenge comes their way.

I think you can pick that up by looking at someone’s career. When times get tough, do they stick in? Because most good things happen after you hit a rough patch. If things are too easy, we probably didn’t learn enough.

The interview has been edited and condensed.

Midsize-Firm Study Suggests Culture Is a Big Selling Point

By Leigh Jones All Articles 

The National Law Journal

February 22, 2013

Maintaining a collegial culture is the key advantage that midsize law firms believe they enjoy in recruiting lawyers, according to a study by Georgetown University Law Center.

The study, a collaboration between the law school and law firm referral network TAGLaw, revealed that 70 percent of midsize law firms ranked having a strong culture as the first- or second-best way to woo prospective hires.

"Midsize firms are really seeing that as a competitive advantage -- particularly as large firms are having a lot of challenges managing their cultures," said Lisa Rohrer, director of executive education and a research fellow at the Center for the Study of the Legal Profession at Georgetown University Law Center.

The survey results, released Tuesday, were provided by leaders at 68 law firms with between three and 500 attorneys. The median size was 40 attorneys. Of those responders, about half were located in North America and one-quarter each in Europe and Latin America.

Culture can mean different things to different firms, Rohrer said. In general, it means the glue that holds a firm together, she said. "It's how they treat each other, how they think of themselves separately from their own individual books of business."

Among other findings, the firms tended to avoid relying on lateral hires and especially mergers as growth strategies, with 90 percent citing organic growth as a major future revenue driver. Some 57 percent planned to rely on lateral hires; only 19 percent expected to expand through mergers.

That lack of interest in mergers was partly due to a desire to remain independent, with many respondents citing preserving culture as an important reason not to merge.

Asked what measures they had taken since 2007 to improve profitability, 14 percent of the firms with revenue increases of 10 percent or more had done so by freezing or cutting associate pay. Of the firms that had increased revenue by 10 percent or less, 40 percent had frozen or cut associate pay. Ninety-two percent of the firms reported that most of their lateral hires lived up to expectations.

The strategic issues of the greatest concern to the firms was aging or retiring partners, particularly at firms with 10 percent growth or less since 2007. Of those firms, 45 percent reported that issue as the most worrisome.