How would you describe the culture at Nucor?

Case 17.1: Nucor Corporation: Innovation, Change, and Motivation It was about 2 p.m. when three Nucor Corp. electri- North Carolina, boarded a plane that landed in cians got the call from their colleagues at the Hickman, Memphis at 11 p.m. Then they drove two hours to the Arkansas, plant. It was bad news: Hickman's electrical troubled plant. grid had failed. For a minimill steelmaker like Nucor, No supervisor had asked them to make the trip, and which melts scrap steel from autos, dishwashers, no one had to. They went on their own. Camping out in mobile homes, and the like in an electric arc furnace the electrical substation with the Hickman staff, the to make new steel, there's little that could be worse. team worked 20-hour shifts to get the plant up and run- The trio immediately dropped what they were doing ning again in three days instead of the anticipated full and headed to the plant. Malcolm Mcdonald, an elec- week. There wasn't any direct financial incentive for trician from the Decatur, Alabama, mill, was in them to blow their weekends, no extra money in their Indiana visiting another facility. He drove down, arriv- next paycheck, but for the company their contribution ing at 9 o'clock that night. Les Hart and Bryson was huge. Hickman went on to post a first-quarter Trumble, from Nucor's facility in Hertford County, record for tons of steel shipped.486 Part Five Organizational Design, Change, and Innovation What's most amazing about this story is that at Nucor on their ideas, and accepting the occasional failure. It's a culture built in part with symbolic gestures. Every year, try as Rust Belt as they come, Nucor has nurtured one of for example, every employee's name goes on the cover of it's not considered particularly remarkable. In an indus- the most dynamic and engaged workforces around. The the annual report. Compared with other U.S. companies, pay disparities 27,000 nonunion employees at the company, based in Charlotte, North Carolina, don't see themselves as are modest at Nucor. Today, the typical CEO makes worker bees waiting for instructions from above. Nucor's more than 400 times what a factory worker takes home, flattened hierarchy and emphasis on pushing power to Last year, Nucor's chief executive collected a salary and the front line lead its employees to adopt the mindset of bonus less than half that average. Paul Hodgson, senior research associate at the Corporate Library, an organiza- owner-operators. It's a profitable formula: Despite turbu- tion that researches corporate governance issues, and an lent market conditions in 2020, Nucor paid out a regular expert in the field who rarely has anything good to say quarterly cash dividend to shareholders for the 48th con- about CEO compensation, calls Nucor's system a "best secutive year. Nucor gained renown in the late 1980s for its radical practice." Adds Hodgson: "Not too many companies get pay practices, which base the vast majority of most work- my vote of approval." Executive pay is geared toward team building. The ers' income on their performance. This was a major, dra- matic change in pay systems at the time. An upstart nipping bonus of a plant manager, a department manager's boss, at the heels of the integrated steel giants, Nucor had a depends on the entire corporation's return on equity. close-knit culture that was the natural outgrowth of its Therefore, there's no glory in winning at your own plant underdog identity. Legendary leader F. Kenneth Iverson's if the others are failing. radical insight was: Employees, even hourly clock-punchers, This high-stakes teamwork can be the hardest thing will make an extraordinary effort if you reward them richly, for a newly acquired plant to get used to. David Hutchins, treat them with respect, and give them real power. a frontline supervisor or "lead man" in the rolling mill at Nucor is an upstart no more, and the untold story of Nucor's first big acquisition, its Auburn, New York, how it has clung to that core philosophy even as it has plant, describes the old way of thinking. The job of a grown into the largest steel company in the United States rolling mill is to thin out the steel made in the hot mill is in many ways as compelling as the celebrated tale of furnace, preparing it to be cut into sheets. In the days its brash youth. Iverson retired in 1999. Under chairman before the Nucor acquisition, if the cutting backed up, and CEO Daniel R. DiMicco, a 23-year Nucor veteran who retired in 2012, the company expanded to 23 plants Hutchins would just take a break. "We'd sit back, have a cup of coffee, and complain: "Those guys stink," he says. while still managing to instill its unique culture in all of "At Nucor, we're not 'you guys' and 'us guys.' It's all of the facilities it bought, an achievement that made him a us guys. Wherever the bottleneck is, we go there, and worthy successor to Iverson. Current President and everyone works on it." CEO Leon J. Topalian has worked for Nucor for more than 25 years in various positions-from a project engi- As Nucor grows, existing facilities making products that overlap with those of acquired plants may need to neer to a production supervisor to president of Beam find new businesses to branch into. Therefore, Nucor and Plate Products before becoming company CEO in employees have to innovate themselves out of tough 2020. He will only be the sixth CEO in the company's 50-year history as a steel producer. spots and into more profitable ones. Changes have to be made often to adapt to the environment. The Even in weak market conditions and economic head- Crawfordsville plant in Indiana is among those that have winds caused by COVID-19, Nucor's performance con- felt some squeeze. It's famous as the place that pio- tinues to be strong with 2020 net earnings of more than neered the commercialization of the thin-strip casting of the CEO of one of its rivals, Mittal Steel USA, remarked, $721 million. In terms of a successful business model, steel that made it possible for minimills such as Nucor to "They've won in this part of the world." compete with the industry's old guard. But Crawfordsville is not on a large waterway, a disadvantage at a time of At Nucor, managing and leading is about an unblink- high fuel costs. As Nucor's oldest sheet mill, it can't ing focus on the people on the front line of the business. make sheets as wide as many of Nucor's other mills, It's about talking to them, listening to them, taking a risk including a giant plant in Decatur acquired in 2002