F. Kenneth Iverson Former chairman and CEO, Nucor Corp., Charlotte, N.C. Sept. 18, 1925 -- April 14, 2002
Education: Bachelor of Science in aeronautical engineering from Cornell University and a master's degree in mechanical engineering from Purdue University. Honorary Doctor of Engineering from Purdue University.
Career Highlights: 1943-1946: Served in the U.S. Navy, rising to the rank of lieutenant. 1946: Started career as a research physicist with International Harvester. Also held several technical and management positions in the metals industry. 1962: Joined Nuclear Corp. of America as vice president, running its Vulcraft division. 1963: Named group vice president of Nuclear Corp. of America. 1965: Named president of Nuclear Corp. of America. 1972: Changed name of Nuclear Corp. of America to Nucor Corp. 1984: Named chairman of Nucor Corp. 1991: Received The National Medal of Technology.
Surviving Family: Wife Martha, son Marc and daughter Claudia.
It's been six and a half years since Ken Iverson held the CEO reins of Nucor, but with his death this past April we're reminded of how his egalitarian management philosophy drove consistent, steady, double-digit, profitable growth during his tenure. Many executives say that their employees are their greatest asset, but nobody, it seems, believes it or acted on it -- or profited from it -- as fully as Iverson and the company he ran. In nearly every facet of leadership, his belief in the power of employees was evident. His company's success speaks for itself: From 1966 to 1996, Nucor grew at a compound annual rate of about 17%, turning a profit and paying a dividend each year. The following excerpts from Iverson's book, "Plain Talk: Lessons from a Business Maverick," (1998, John Wiley & Sons Inc.) feature a small fraction of his employee-centric management strategy.
Stressing long-term survival over short-term profitability; "sharing the pain" instead of lining the pockets of our executives; pushing decision-making authority down to the front-line worker; minimizing distinctions between managers and employees; paying people for their productivity. . . . These aren't part of some revolutionary new management concept. They're components of a very simple and very straightforward business rationale -- one that focuses employees on driving our bottom-line performance, and managers on removing obstacles from their path.
"Painsharing" has helped us get through the tough times without ever laying off a single employee or closing a single facility for lack of work, even when the industry overall was shedding thousands of jobs. During the first few months of 1982 . . . the economy was mired in a slump. . . . Nucor production was down by nearly half. . . . Cutting back to four-day or even three-day work weeks reduced the average Nucor worker's earnings by 25%. Still . . . I never heard one employee complain about it. Not one. Why? . . . Simple. No employee was being asked to carry more than his or her part of the burden. . . . their department heads had taken pay cuts of up to 40%, and the general managers and other officers of the company were earning 56-60% less than we'd made in previous years. We not only shared the pain, we doled out the lion's share to the people at the top.
Pay for performance:
The real beauty of Nucor's compensation system, in my opinion, it that there is nothing to discuss. Daily output and corresponding bonus earnings are posted, so employees know exactly what their bonus will be before they tear open their pay envelopes. No judgment. No negotiation. No surprises. The gist of that concept is that the company supplies the equipment, training, benefits program, and other fundamental support, and leaves the rest up to the group. So, in a sense, each group is in business for itself. Workgroups set their own goals for exceeding the baseline and work out their own ways of pursuing them, guided only by this certainty: The more they produce, the more they earn. They have a simple stake in the business. We take care to set a realistic production figure as a baseline for these teams -- a tonnage they have to work reasonably hard to achieve but which is definitely within their reach. We want the teams to get a taste of the bonus because, once they do, they always stretch for more.
On employee empowerment:
Shaping the work environment has always been an acknowledged part of the manager's responsibility. But to my way of thinking, it's the manager's primary job. Instead of telling people what to do and then hounding them to do it, our managers focus on shaping an environment that frees employees to determine what they can do and should do, to the benefit of themselves and the business. We've found that their answers drive the progress of our business faster than our own.
Adapted with permission of the publisher John Wiley & Sons Inc. from
Plain Talk: Lessons from a Business Maverick.
Copyright 1998 by Kenneth Iverson.