Management: A little humanity goes a long, long way

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The Independent Online
Business schools and management consultants go to great lengths to convince us how complex and fast-changing life is. And they may be right - about the increasingly hard-to-understand markets in which many organisations find themselves. But, as every coffee-machine preacher knows, the actual practice of management is really not that difficult.

For all the "empowerment" initiatives, incentives and other fancily-titled programmes that are dreamed up, getting the best out of people - who, in theory, anyway, are companies' most important assets - boils down to treating them properly. Perhaps because it is so obvious, many organisations and so-called leaders seem to miss it.

But it is the basis of the success enjoyed over the past three decades by Ken Iverson, who in the United States at least, has become a legend for the way in which he has stood the steel industry on its head. Now in the twilight of his fascinating career, Iverson has put pen to paper and written down some "lessons from a business maverick" in Plain Talk (John Wiley & Sons, pounds 17.99).

Iverson is noted for transforming a basket-case of a company originally known as Nuclear Corporation into a Fortune 500 business called Nucor Steel. Becoming chief executive at 37, he pioneered the "mini-mill" approach to steel-making, and showed the large "integrated" mills that were bleeding to death in such states as Ohio and Pennsylvania that money could be made out of steel provided executives did not remain stuck in their thinking. Other companies have followed his route to profitability.

But, in many ways, what he has achieved is less interesting than how he - and, he would stress, his colleagues - got there. As he writes, "We're big on informality, caring, freedom, respect, equality and the simple truth. We have little tolerance for the politics, the pettiness, the fixation on rank and status and the insensitivity to employees' legitimate needs that people in most big companies endure as a matter of course."

Accordingly, the company has no executive dining rooms, reserved parking spaces, company cars or corporate jets. Even more radically, he describes how there is much greater alignment between the pay of himself and other executives - of whom, it has to be said, there are not that many - on the one hand, and that of employees in general.

Pointing out how it has not all been plain sailing at Nucor, he relates how in the early-1980s downturn the company was forced to cut the working week and the average worker's pay fell by a quarter. "You know that had to hurt," he writes. "Still, as I'd walk through our mills and plants, I never heard one employee complain about it." Why? Perhaps because their department heads took pay cuts of about 40 per cent and general managers earned 50 to 60 per cent less than in the previous year. Iverson says his own pay dropped from $450,000 to $110,000. "We not only shared the pain, we doled out the lion's share to the people at the top," he writes.

Management, he adds, cannot "expect employees to be loyal and motivated if we lay them off at every dip of the economy while we [executives] go on padding our pockets".