When a strike looms, these are the leadership qualities that matter most

A case from Spain’s ceramics industry shows how practical wisdom and prudent action — not quick fixes — are most effective when labor relations break down.

By Alejandro Moreno-Salamanca and Sebastian Hafenbrädl

For over 50 years, Ceramics of Andalucia (fictitious name of real company) had built up a solid reputation as a premier manufacturer of artisanal products, from decorative tableware to tiles, emblematic of the southern Spanish region. Spain’s homeware ceramics industry generated 1.5 billion euros in sales in 2023 alone. Ceramics of Andalucia was a market leader, standing out for its high-quality craftsmanship compared with cheap imitations. It had also responded to sustainability concerns by using more recycled materials and lowering its energy emissions through more efficient manufacturing processes. The local workforce had grown to 550 employees, becoming a source of national pride as it exported its trademark goods around the world.

But cracks were appearing, both literally and figuratively. The more they ramped up production, the more that workers complained they were being rushed. The glazers, especially, complained of being stressed out by tight time targets, compromising their attention to detail. As the quality of their work went down, customer complaints went up. On top of this, overworked machines began to break down with greater frequency, which negatively affected productivity. The workers were at breaking point, so they threatened to go on strike just as the busy summer season, a major source of revenue, was fast approaching.

If you were the manager in charge of production and personnel, what would you do?

This is the focus of a business case study we developed, which neatly encapsulates the multiple challenges and tricky trade-offs that many managers may likewise be facing today. Here, we offer some reflections for those who must tackle leadership and operations management challenges simultaneously. In such times, there is intense pressure on managers to act. But before stepping in, it’s important to step back.

What is the problem?

The prudent leader is one who not only moves people to action but also makes a good diagnosis of the problem first. In the same way that when you go to the doctor for a headache, a pill may help the headache go away but not address the underlying cause, many managers act by silencing headaches, when what they ought to be doing is understanding the root of the pain.

For example, is a workers’ strike a cause or a symptom? For whatever problem you face, start by asking yourself and your teams this powerful question: What is the problem? This is not superfluous — it focuses everyone’s attention on what truly matters.

In Ceramics of Andalucia, the workers threatened strike action because they complained they weren’t being paid fairly for the amount of work they were doing. So, is raising wages the answer? It may avert the strike in the short term, but does it solve the actual problem? Does a higher hourly rate solve morale problems if the production schedules remain unrealistic and customer complaints over poor quality craftsmanship continue? And if raising wages doesn’t solve the underlying problem, might it create cash flow problems later on? Then what have you really solved?

A leader invites people to think, to learn, to see more and see better. As with many business problems, there is usually not one single answer. A problem has many subparts, like the branches of a tree, and understanding each subproblem in isolation won’t allow you to make a proper judgment. You have to see how all the different branches are interconnected, to see the full system, and then you can interrogate that system. Doing this is what sets leaders apart.

It is also the hallmark of the general management perspective. There is not just one lever to pull, but multiple levers, each impacting the other, requiring a cross-functional view. Depending on the context, resolving operational tensions may or may not require the involvement of HR in addressing the erosion of trust between employees and their supervisors. Revising the incentive system is a financial matter on the one hand, yet it also impacts suppliers and may undermine morale in other departments that don’t get the same pay rise. And then there are reputational issues, as any loosening of environmental standards will expose the company to public criticism.

Practical wisdom, a process of seeing, judging and acting

Given such complexity, where does one begin? Although it depends on each decision-making context, what we can say is that it requires prudence and “practical wisdom” — the title of a book written on the occasion of IESE’s 50th anniversary and which distills what we feel is the very essence of management.

A strike is confrontational by nature, so naturally one may be tempted to react with fear or anger. The prudent manager knows not only when and how to act but when and how not to act, because reacting in fear or anger could end up making the situation worse.

The leader has to wear many hats. You are not going to solve the problem thinking only as an HR manager, a quality-control manager or a finance manager — you need to integrate all these perspectives. You need to be humble enough to acknowledge what you don’t know, and get the advice and understanding that’s missing around the table in order to make an informed judgment. It requires listening to diverse voices to help interpret reality, leading through asking questions, creating a space for conversation where dissent is not just allowed but actively encouraged in order to see reality more completely.