In 1965 Nucor didn’t manufacture an ounce of steel & made no profits…
But 30 years later they were the 4th largest steel maker in the world and by 1999 made greater profits than any other American steel maker.
So, how did they achieve this?
Well it started through great leadership, which resulted in building the right team.
Ken Iverson was promoted from within, and rather than setting out his own strategy, he first concentrated getting, not just the right people is his team, but in the right positions.
Once completed, Iverson then became the moderator in a series of heated management debates that stretched over years, to find what the company could be best in the world at.
Which led to Nucor to begin manufacturing their own steel, and eventually investing in their first mini mill, then a second and a third.
And it wasn’t just the executive team Iverson focused on, it was the entire workforce.
Nucor wanted to create a strong work ethic culture to drive it’s economic engine, and quickly came to the conclusion that they couldn’t teach traditional steel workers to work as hard as farmers, but they could teach farmers to become steel workers.
Which is exactly what they did, building their steel making plants in traditional farming locations, where the people were used to rising early and working hard until the sun went down.
This created the strong work ethic Nucor was searching. They put steel workers in groups of 6 and put stretch targets in place, with high financial rewards for achieving them.
Expecting a group of 6 of their steel workers to work like 10 normal steel workers, whilst Nucor would pay them well, as if they were a group of 8.
This drove Nucor’s economic engine forward and fueled their growth. Their steel workers were so driven, they’d show up well before work started to get their equipment ready to blast off the starting blocks.
As the story goes, they were so driven to hit targets, one group of steel workers once chased a team member out of the building with an angle iron, because he wasn’t pulling his weight.
Nucor grew into a $3.5 billion company with only four layers of management and a corporate headquarters team of less than 25 people, covering all management and operational functions.
Front line workers were treated the same as executives. When Nucor had a highly profitable year, everyone in the company would have a very profitable year.
On the flipside. When Nucor faced difficult times, everyone from top to bottom suffered. But front-line workers pay would reduce the least, with top executives losing the most.
This led to Nucor’s front-line workers being extremely loyal and fanatical, helping Nucor to post 34 years of positive profitability, with a world leading profit measure per each front line employee.
Yes, this is on a large scale and an extreme example, but there is nothing stopping you creating a committed and winning team like Nucor did.
We’ve taken the lessons learned with Nucor’s success, and for us, it’s all about having the right people in the right seats on your bus.
…before you can head off in your chosen best in the world direction.
