Nucor is different.
Pick up a copy of their annual report. You see a dozen pages listing the names of every one of over 20,000 employees. Those employees generate more revenue than any other American steel company.
Visit their corporate headquarters. Less than a hundred people work there. US Steel is trimming back its headquarters staff to 800 for the move to a new building.
Nucor makes steel at the lowest cost per ton in the industry, but their production workers are the highest paid. That’s possible because production workers get weekly bonus based on production targets everyone knows in advance. They are very efficient.
This is a steel company with no Research and Development Department. It does have a yard out in back of every facility with the relics of ideas that didn’t work. They figure half of everything new they try won’t work, but they don’t throw away the learning. The idea is try things out and if they don’t work, learn what you can and save the equipment in case there’s more to learn later.
All of those things are fascinating, but they’re probably not enough to make you want to read Plain Talk. Here’s the big idea.
At Nucor, everyone is treated as a valuable teammate and human being. It’s a place where salaries get cut at the top before they’re cut anywhere else, where there are no executive parking places, company cars, executive dining rooms, or other common executive perks. The culture is egalitarian and performance based. It’s the kind of place where you’d probably like to work if you could handle the accountability that goes with the freedom.
Ken Iverson is the person who did as much as anyone to put that culture in place. Plain Talk is his book about how it works.
Let’s be clear. Creating an egalitarian, performance-based culture is hard in a small company. It’s monumentally hard in a large one. When you read Iverson’s book it will all seem logical and commonsensical. It is both of those. It’s also incredibly hard. That’s why common sense doesn’t turn into common practice very often.
A sample of what you’ll find in Plain Talk
The only way I could think of to give you a sense of what the book is like is to share a long exerpt. Here it is.
You must attack hierarchy. You have to destroy it.
I sensed an opportunity to do just that, a few years back, when I read an article in the Wall Street Journal about a Canadian company where everyone wore the same color hard hats. That intrigued me. In Nucor plants, like most hard hat environments, workers, supervisors, department managers, and the general manager of the facility all wore different color hard hats, signifying their place in the hierarchy. And a high-ranking executive visiting from headquarters might be given a gold hard hat to wear, as a symbol of his lofty status. This was in keeping with industry tradition, but it seemed so contrary to our goal of maintaining an egalitarian culture, I decided right then and there, without consulting anyone, that all Nucor personnel would wear green hard hats, and all visitors would wear white, from then on, no exceptions.
The phone didn’t stop ringing for a week! I’ll bet fifty supervisors called or wrote me to protest the move. “You can’t do that!” they’d say. “That hat shows who I am. It makes me proud. I put it in the back window of my car when I drive home, so everyone one knows I’m a Nucor supervisor. On the job, it’s my badge of authority. Why are you taking it away?”
I could see their point, but it didn’t seem a good enough reason to continue a practice that was so clearly inconsistent with our goal of an egalitarian culture. We ran a series of informal seminars for managers and supervisors at different Nucor facilities ties to help them make the adjustment. We worked hard to convince them that their authority and status didn’t come from the color of their hat. It came from who they are and how they act and all they had accomplished. On balance, I’d say we gained grudging acceptance from most of them, and after a few months everybody was pretty comfortable with the new policy.
My hard hat policy did prove flawed in one significant respect, though. Maintenance people needed to be spotted quickly when there was a problem with equipment. In my haste to sweep away a symbol of hierarchy, I’d ignored this very sensible reason to have some people wear a different colored hard hat. One of my favorite sayings is, “Good managers make bad decisions.” Forgetting to set apart maintenance people was a mistake. When it was pointed out to me, I admitted as much and agreed that the maintenance crews would wear yellow hard hats.
Reality is that it’s hard to establish an egalitarian culture. It’s even harder to maintain one. But if you want to know how, buy a copy of Plain Talk by Ken Iverson.
I couldn’t figure out a way to put these in the review, so here they are. The only book I’ve ever read that is similar to Plain Talk in point of view and tone is Ricardo Semler’s Seven Day Weekend. It’s also worth reading.
I read Plain Talk for the first time in a second (perhaps third) hand hardback version. Then I spent $30 for a Kindle version. I’d read the book and I knew that Plain Talk was easily worth two or three times the price of normal business books.
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