The Soft Side of a Steel Company
In a tough, unforgiving industry, Ken Iverson achieved remarkable
success by bringing out the best in people
by Tom Terez
On a steamy summer afternoon in 1988, I was driving the streets of Charlotte,
North Carolina, trying to find the Nucor corporate headquarters. I had written down
the address and double-checked the directions -- the last thing I wanted was to be
late for my meeting with then-CEO F. Kenneth Iverson. But when I pulled up to the
building, things just didn't seem right. I expected fancy digs with a big sign --
something befitting the home office of a major steel company. What I saw was a nondescript,
four-story building plopped amid other nondescript buildings, strip malls, and a
few fast-food joints.
I parked and entered the building, still skeptical. Then I saw a small front desk
with a Nucor sign. So this is their headquarters! I thought. Maybe all this
talk about a down-to-earth company really is true.
At the time of my visit, I was 25 years old and working on a big research project
on change management. Nucor had recently purchased a bearings manufacturer, and most
of my research questions had to do with the challenge of bringing a new and very
different culture to a tradition-laden organization. Ken Iverson could have had an
assistant's assistant show me around and provide a few canned answers, but he took
the time to welcome me, give me an office tour, and respond thoughtfully to all my
By day's end, I had an insider's look into a remarkable company and a deep respect
for Ken Iverson and the Nucor way. As the years unfolded, I heard more about him
and his empowering, egalitarian, employee-focused approach. Nucor pioneered the concept
of minimills, and combining this with a penchant for finding and filling lucrative
niches, the company became a financial powerhouse.
Mr. Iverson passed away in April at age 76, but he left behind a legacy of proof
that a great workplace is great for business. While profits fell last year by 63%,
pushed down by the downturn in the economy and a rise in cheap imports, the company
still had net earnings of $113 million -- a stellar performance in a tough year that
saw most integrated companies losing big bucks. The company is the largest steel
producer in the U.S., with over $4.5 billion in annual sales.
There's no easy formula or program to achieve Nucor's level of success. Here are
the principles they steadily pursue:
TURN EVERYONE INTO A DECISION-MAKER
The company consists of very decentralized business units, and the managers run their
operations with minimal meddling from the home office. On the operations floor, production
workers, engineers, maintenance staff, and others routinely make decisions that shape
how work gets done. With goals and measures well understood by all, the effort stays
MINIMIZE THE LAYERS
Mr. Iverson's straight-talking, no-frills style shows up in the company's management
structure. The small corporate headquarters I visited in 1988 hasn't changed much
at all. About 50 people make up the staff there, and in most cases, there are no
more than four management layers between the CEO and the front-line worker. This
for a company with some 8,000 workers.
TREAT PEOPLE AS EQUALS
While many companies lavish their senior executives with corporate jets, country
club membership, free cars, special parking, and other perks, Nucor is a company
of equals. The same benefits and policies apply equally to everyone. All executives
fly coach, and when people from different levels get together, the conversation is
ENCOURAGE AND REWARD INNOVATION
Nucor has always led the way with new technologies. In fact, by adopting minimill
technology when everyone was still thinking big, the company gained an efficiency
edge that's still paying off. These innovations are the sum of thousands of small
inventions emerging from everyone in the workplace. People are urged to try new methods,
learn from their failed efforts, and leverage their successes. As a part of this,
the company's bonus system lets employees share in the wealth when they've improved
return on assets and other key measures.
Back in 1965, things couldn't have been more different. Then called Nuclear Corp.
of America, the company was looking down the barrel of bankruptcy. That's when Ken
Iverson, then 39 years old, was appointed president.
He got busy bringing about change -- even ending the tradition of different-colored
hard hats, which had become a status symbol that widened the divide between functional
areas. In an Industry Week article (June 8, 1998), he recalled the reaction:
"I got all kinds of flack from our foremen. They said, 'You can't do that!'
So we held training programs to explain that their authority didn't come from the
color of the hat that they wore."
As people learned and adjusted, so did Mr. Iverson, even when it required him to
set aside his ego. For instance, the simple change to green-only hard hats was causing
confusion. "In an emergency," he said in 1998, "you have to be able
to spot the maintenance people quickly. So we changed the policy, which now requires
everyone to wear green hats except for maintenance people, who wear yellow, and visitors,
who wear white hats."
The company is under new leadership now, with Daniel DiMicco serving as CEO, vice
chairman, and president. But the company remains remarkably similar to the place
I visited in 1988, right down to their minimalist headquarters at 2100 Rexford Road
In a recent article, Mr. DiMicco summed up what makes the company a year-after-year
success: "We are low-cost focused, highly efficient, and our culture actually
works to bring out the best in people."
Nucor's products couldn't be more inanimate: cold drawn steel bars, hot rolled sheet
steel, carbon steel beams, galvanized sheet metal. But for employees and investors
alike, it's the focus on people that most benefits work lives and the bottom line.
ABOUT THE AUTHOR
Tom Terez is a speaker, workshop leader, and author of 22 Keys to Creating a Meaningful
Workplace. His Web site, http://BetterWorkplaceNow.com,
is filled with tools for building a great work environment. Write to Tom@BetterWorkplaceNow.com
or call 614-571-9529.
Copyright 2002 by Tom Terez Workplace Solutions Inc.