Nucor has always played a prominent role when I cite companies where culture has been the major driver of its success and CEO Dan DiMicco is the poster boy for what a CEO should be/do.

Since 2000 DiMicco increased sales fivefold and gave shareholders a 464% return, but keeping and developing the culture put in place by Ken Iverson is his greatest claim to fame as well as the basis for Nucor’s phenomenal success.

Nucor is living proof of a mantra in which I totally believe, i.e., people are intelligent, motivated and honestly want their company to succeed, and that, given the opportunity, all employees, no matter their level or education, will use their brains and skills to make success happen whether they are told to or not.

Read this short overview to really understand the difference between Nucor’s approach to things like pay for performance, empowerment and ‘ownership’ vs. the emptiness of those words at most companies.

DiMicco is moving up to Executive Chairman and President John Ferriola is being promoted to CEO, but don’t expect the culture to change any time soon.

The CEO-in-waiting, Ferriola, has said “I consider myself an apostle” for the gospel of Ken Iverson.

Flickr image credit: Nucor

Let’s skip all the guru talk and in vogue words and go straight to the crux of the matter.

You want a

• productive, creative, committed workforce; and
• loyal customers.

That pretty much covers it, but buying a bunch of new apps won’t really cut it (as yesterday’s Wordless Wednesday so elegantly pointed out).

Changing how you communicate isn’t quite as simple as throwing software at the problem, but it works better and is a lot cheaper.

Here is a simple way to start.

• Internally, develop a strong sensitivity to people, all people, not just stars and acknowledge that hiring all stars (even if it was possible) won’t guarantee your company’s success.
• Externally, treat all your customers the same as you would your favorite relative.

Steve Harrison, author of The Manager’s Book of Decencies: How Small Gestures Build Great Companies., says “…decent leaders all have one common trait: humility. Unlike star CEOs who seek the limelight, these low-key leaders are ambitious for their companies, not for themselves. They avoid executive pomposity like the plague. All that stuff about pretentious perks and rank having its privileges – for them, that’s not what leadership is about” and cites Colgate-Palmolive Co. chairman Reuben Mark; Nucor Corp.’s former CEO Kenneth Iverson (who died in 2002); Campbell Soup Co. president and CEO Douglas R. Conant; Southwest Airlines Co. chairman Herbert Kelleher; and Dial Corp.’s former president and CEO, Herbert Baum as executives who get it, but there are many more.

What better, simpler, cheaper approach can you find?

Think about it.

All you have to do is be considerate and respectful of others and practice the kind of manners and politeness that seem to be out of date.

In other words, learn to think them, them, them, instead of me, me, me.

Image credit: Warning Label Generator

Richard’s recent posts (here and here) questioned what happens to culture and people as assets during a tanking economy.

Is culture anything more than lip service? Glib words to throw around during an expansion, but hollow and valueless otherwise?

Yes—and no

Unfortunately, too many executives still see people as an expendable resource—interchangeable and replaceable.

But not all.

The companies with strong, innovative cultures where executive action supports an environment that challenges and encourages growth will come out of this stronger and miles ahead of their lip-synching competitors.

They also know that keeping their people motivated and as happy as possible is the only option if they want to keep their customers happy.

Think Apple, Nucor, IBM and dozens of others, large, medium and small, where the execs practice what they preach.

But no matter how authentic the culture, the economy happens and companies have to deal with it—and even the best may face layoffs.

Today I’m going to share with you articles about three folks whom I consider superb leadagers.

Let me know if you agree.

First is Dan DiMicco, CEO of Nucor Steel, who was just named Businessperson of the Year by the Charlotte Business Journal. I’ve followed Nucor for a long time and DiMicco just keeps impressing; more so since he always sidesteps taking personal credit, focusing instead on his senior staff and employees. He’s also produced one of the most forward thinking cultures in the corporate world, especially considering he’s heavy industry, producing a real product that has neither chips nor software, and created the largest steel company in the country by successfully acquiring and integrating 22 companies over the last eight years.

Next up are the collective CEOs of Corning, who, for the last 157 years, have nurtured and facilitated a culture of innovation allowing Corning to reinvent itself time and time again and thumbing its nose at every analyst and pundit who predicted its demise. Whoo hoo, these guys rock!

Third is Idris Jala, CEO of Malaysia Airlines, who did an initial turn around of the state-owned airline in three-and-a-half months because that was all the operating cash he had and no bailout was offered. I wrote about him a month ago and there’s a link to the full McKinsey interview (requires free registration) in the post. Well worth reading if you missed it the first time.

Finally, 24 short CEO profiles offered up by Business Week; their selection includes a dozen of the best along with a dozen of the worst. I think you’ll enjoy them.

Your comments—priceless

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According to Wikipedia, “An engaged employee is a person who is fully involved in, and enthusiastic about, his or her work.”

What I have for you today is employee engagement on steroids, in action at a place called Nucor Steel.

Way back in May 2006, Business Week wrote, “In an industry as Rust Belt as they come, Nucor has nurtured one of the most dynamic and engaged workforces around.”

I’ve written more about Nucor and its culture several times, but it’s come to the fore again.

On January 2, 2009, the Charlotte Business Journal named Nucor CEO Dan DiMicco Business Person of the Year for 2008.

First, a bit of history,

“Ken Iverson, Nucor’s pioneer and guiding spirit, stepped down as chief executive in 1996… Earnings remained flat through 1998, when board dissidents forced Iverson out of the chairman position and off the board. Nine months later, they ousted John Correnti, Iverson’s handpicked successor as CEO.

The board made DiMicco CEO in September 2000. Nucor’s four other executive vice presidents and CFO Terry Lisenby, were candidates for the top job that went to DiMicco. But all stayed, sharing his basic vision for a bigger Nucor built on reinvestment in mills, exploring new technology and market niches, strategic acquisitions and international growth through joint ventures.”

And a pay system that many (most?) companies should adopt, “…it’s not only the workers who get paid mostly on performance. Managers all the way up to the top executives have a relatively low base pay supplemented by specific performance goals.” But they won’t, because most management, as well as the rank and file, believe they should be protected from the results of their actions—unless, of course, they’re positive.

The team took over in 2000 just as the dot com bomb blew up the economy and now, just eight years later Nucor is the largest steel maker in the US.

It’s another economic meltdown; Nucor has $2 billion in cash, so I expect it will emerge even stronger.

All of this is still more impressive when you consider that Nucor actually makes something—as opposed to pushing money around—and their product contains neither chips nor software.

If you want to know more about what truly engaged employees do, how real leadagers act and what a culture should be. Take the time to read the articles—then tweak as much as possible to use in your company.

Image credit: flickr

Post from Leadership Turn Image credit: kishbee

Yesterday’s stats showed that lay-offs aren’t the smartest move a company can make even though they make Wall Street happy.

Bob Turek over at Project Management 411 says, “When the going gets rough, we go to the innovative companies who see reduced financing costs and lulls in demand as opportunities to upgrade their technology and get ahead of the competition.”

Internal innovation is good, but the smartest companies go further using one of two approaches. Both approaches succeed when management is comprised of passionate leaders who are long-term thinkers, know how to plan and are talented at executing.

First, there are the companies that see a downturn as an opportunity to grab the brass ring, ignoring the naysayers.

The example that always comes to my mind is Nucor Steel and its CEO Daniel R. DiMicco, who used the last crash (2001) to buy ten steel mills for pennies on the dollar. When the economy turned, as it always does, “Nucor’s profits soared seventeenfold, from the $62.8 million earned in 2003 to $1.1 billion in last year [2004]”

Then there are the companies that totally ignore economic ups and downs to always focus on innovation, large and small, inside and out.

My favorite example in this class is Amazon and Jeff Bezos—the CEO that Wall Street loves to hate. They hated it when he expanded out of books; they predicted Amazon’s demise when is used its expertise to do fulfillment for other companies and again when Amazon opened its vast computing power to developers and now to companies.

Bezos’ attitude is encapsulated in this short interview ending with a perfect wrap when asked if he feels vindicated by the company’s success.

‘No. I’ve taken plenty of criticism, but it’s always been about our stock price and never about our customer experience. After the bubble burst, I would sit down with our harshest critics, and at the end of the meeting they would say, “I’m a huge customer.” You know that when your harshest critics are among your best customers, you can’t be doing that badly.”

What’s your plan for innovating during this downturn?

Your comments—priceless

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According to Nestle SA Chief Executive Officer Peter Brabeck-Letmathe, “[Conductor] Claudio Abbado is an artist, but he’s also a good leader. And one thing that leaders have in common — whether in art, business, or politics — is an ability to be sensitive toward people. You have to have the ability to motivate people to do more. A good conductor can change the sound of a whole orchestra with a glance or a gesture.”“I had given a talk in which I compared the role of CEO to that of an orchestral conductor. I invited all the [Nestle] managers to sit next to the musicians of a French orchestra during a rehearsal. The orchestra also tried to play for a while without a conductor, so that they could see the difference, and it wasn’t long before the whole thing went astray. The quality of a performance depends on what the conductor does. There was a lot of discussion after that, they saw that if it is to work, the musicians also have to assume responsibility.”

The Lucerne Festival Orchestra, Abbado’s brainchild, is a hand-picked ensemble with the Mahler Chamber Orchestra at its core. Key positions are filled by leading orchestral musicians and soloists from around the world.

As with all-star soccer teams, an orchestra made up of top musicians is not necessarily a top orchestra.

There are two main lessons you want to take away from this. Leaders need to retain a strong sensitivity to people, all people, not just the stars; and that hiring all stars (even if it was possible) won’t guarantee your company’s success.

Additional leadership guidance comes from Steve Harrison, author of The Manager’s Book of Decencies: How Small Gestures Build Great Companies., who says “that decent leaders all have one common trait: humility. Unlike star CEOs who seek the limelight, these low-key leaders are ambitious for their companies, not for themselves. They avoid executive pomposity like the plague. All that stuff about pretentious perks and rank having its privileges – for them, that’s not what leadership is about,” and cites Colgate-Palmolive Co. chairman Reuben Mark; Nucor Corp.’s former CEO Kenneth Iverson (who died in 2002); Campbell Soup Co. president and CEO Douglas R. Conant; Southwest Airlines Co. chairman Herbert Kelleher; and Dial Corp.’s former president and CEO, Herbert Baum as leaders who get it.

This is really simple for those of you who want to develop strong leadership skills. Think about it. All you have to do is be considerate and respectful of others and practice the kind of manners and politeness that seem to be out of date.

In other words, learn to think them, them, them, instead of me, me, me.

Want bottom-line proof that changing culture pays? How about nearly doubling the stock price in 12 months and a 387% return to shareholders over the past five years?

That’s what Dan DiMicco accomplished through hard work, including major cultural changes, at Nucor. He was cited in Business Week’s Best & Worst of 2006 – Leaders as quoted here,

“Good luck trying to give Dan DiMicco a compliment. True, the 56-year-old CEO of steel giant Nucor should have every reason to crow these days. Nucor’s stock is up 95% in the past 12 months thanks to hot steel demand, high-grade profitability, and well-performing acquisitions. In the first nine months of 2006 the company earned more–$1.35 billion on $11.3 billion of sales–than it did in all of 2005. And 2005 itself had been a record year. But steel is a cyclical business, and DiMicco is not interested in dwelling on past achievements. He would rather worry about the possible problems to come. “What I get paid for is not looking at yesterday, but looking at the future,” he says. DiMicco’s biggest concern: Beijing’s subsidizing of its own steel industry. The 23-year Nucor veteran, who has been boss for the past six, is more than happy, though, to dole out praise to all those he calls his teammates. Even as Nucor has grown to 11,600 employees (only 66 of them in the Charlotte headquarters), DiMicco has continued the practice of putting everyone’s name on the front and, now, the back covers of the company’s annual report.”

To learn more about Nucor’s enlightened approach to motivation, culture, and compensation be sure to read the profile written last May.

Awesome! Congratulations, Dan!

Culture matters! So say some of the most successful/innovative managers and companies on the planet, Lou Gerstner, BMW, Nucor, Immelt/GE, IBM, and more.

Google, one of the most written about, innovative, companies around, works hard on hiring people who are cultural matches, knowing that it’s not just what they know, but the way they think, their MAP, that matters.

Google’s head of HR, better known as the chief culture officer, says, “Our culture is one of our most valuable assets.”

I love hearing culture being talked about this way, since that’s always been my belief. Matching people to cultures is why, over my 25 years as a technical headhunter, around 75% of my recruits stayed four years or longer with my client companies.

In May I referenced an article I wrote way back in ’99 about using your culture not just to retain your people, but also as a recruiting and screening tool.

What an ego trip to see so many of the best companies doing exactly that!

Culture is on everyone’s mind these days. Starting with Lou Gerstner’s cultural turn around at IBM; Jeff Immelt over at GE working to change from a quantitative, Six Sigma culture to an innovative one; steelmaker Nucor built a culture that is fostering it’s success in one of the toughest businesses around; and, most importantly, innovative companies are learning to appreciate failure in order to innovate.

What’s the common thread? Is there one single thing that holds companies back from building successful cultures that juice innovation, spark creativity and empower their employees/customers/investors?

You bet there is: fear! Fear of being dumped/demoted; fear of being laughed at; fear of what bosses/employees/customers/investors will say when they have the chance; fear of being fired; and all of these fears boil down to one basic belief: the messenger will be killed.

The idea that the bearer of bad news should not be blamed dates back to Sophocles in 442 B.C. and has been reiterated often in the intervening years—obviously, without success, since it’s still an active, though unstated, policy for too many companies and/or managers.

Understanding the problem (why the messenger shouldn’t be blamed) and the solution (why this attitude needs to be in the cultural DNA) isn’t rocket science, so why is it so difficult to make happen?

Tune in tomorrow for ideas and approaches on how to kill the fear—not the messenger!