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The Old Days: Carnegie and the Homestead Strike

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Andrew Carnegie is a great example of philanthropy and the ideal of leading with compassion and integrity. Leadership is complex, with many variables. Looking critically at key decisions Carnegie made that affected employees provides a teachable moment as well. Giving grace to leaders and moments where they falter is important. Learning lessons from poor decisions to prevent repeating them is critical in turning toward a new corporate culture built on compassion, equality, and inclusion.

Carnegie is arguably the most celebrated philanthropist of his ilk from the 20th century, and for good reason. His philanthropic contributions remain unmatched. He gave away over $350 million during his lifetime—by one estimate, that would be about $65 billion today.

I first became familiar with Andrew Carnegie through Napoleon Hill's book Think and Grow Rich and Dennis Kimbro's Think and Grow Rich: A Black Choice. Millions of readers like me saw Carnegie as a generous teacher sharing universal keys to success and giving new generations an understanding of how faith, determination, and belief in one's self outweighs obstacles. He did well financially, he made many investors wealthy, and he accomplished even more after his lifetime by directing his wealth to be used for good globally.

In his 1889 article, “The Gospel of Wealth,” Carnegie discussed the chasm between wealthy and working classes and how inequality can quickly become the norm in large corporations:

We assemble thousands of operatives in the factory, in the mine, and in the counting-house, of whom the employer can know little or nothing, and to whom the employer is little better than a myth. All intercourse between them is at an end. Rigid castes are formed, and, as usual, mutual ignorance breeds mutual distrust. Each caste is without sympathy for the other, and ready to credit anything disparaging in regard to it. Under the law of competition, the employer of thousands is forced into the strictest economies, among which the rates paid to labor figure prominently, and often there is friction between the employer and the employed, between capital and labor, between rich and poor. Human society loses homogeneity.24

Carnegie's historical writings on the relationships between owners and workers provide an important lens to view labor relations of the present day. That said, his theoretical ideas contrast starkly with the company's actions during a critical business negotiation just a few years later.

As Carnegie Steel Company ascended, Carnegie chose Henry Clay Frick as his business partner. Frick was known as a man who got things done and saw the benefits of authoritarian-style management. Carnegie largely favored unions and believed in partnering with workers to avoid breaking strikes and bloodshed, although he felt in some cases they interfered with efficiency and were “elitist” in their membership. Despite their differences in style, neither could have expected the deadly outcome at Homestead Steel Works in Homestead, Pennsylvania, in 1892.25

In this era, factory work was grueling and poorly paid, spaces were crowded, and tasks were repetitive. Working 12-hour shifts in physically dangerous environments was very common. From faulty equipment to the lack of alertness after the end of long shifts, the loss of a finger or even a life was a real concern. Workers organized to demand a wage that was fair for the extended hours and heightened risk of breadwinners whose families depended on them to put food on the table.

At the time of the Homestead Strike, Carnegie had traveled back to his native Scotland, leaving his company chairman, Frick, in charge. In his written correspondence, Carnegie assured Frick he had his confidence in resolving the situation.

But during negotiations for pay increases, Frick's proposal of a 22% wage decrease escalated into a full-blown strike. Frick brought in a group known as Pinkerton Detectives, a private, armed security force, to disrupt the strike. The armed Pinkertons faced off with striking employees and violent conflict ensued, resulting in the deaths of nine workers and seven Pinkertons. Dozens more were injured, and state militia ultimately intervened to end the standoff.

There are lessons to be learned about actions and reactions during crisis mode. In hindsight, it's easy to talk about de-escalation strategies, pay discussions, and seeing workers as partners. But, when you're in the midst of a heated exchange, and both parties have relevant points and arguments, the way forward may not seem so clear. It is in these seemingly impossible, no-way-out situations that compassionate leaders can aim higher and create solutions that may have a short-term business impact, but a longer-term benefit—a benefit that brings greater commitment from employees and shows how the company seeks to serve employees.

Corporations Compassion Culture

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