Those who stood out (3): Ken Iverson

The entrepreneur

Kenneth Iverson was born in September 1925 in Downers Grove, IL. He received a Bachelor of Science degree in Aeronautical Engineering from Cornell University and later on he earned a master’s degree in Mechanical Engineering at Purdue University. He worked for several companies before he was hired in 1962 by Nuclear Corporation of America to run its steel production business. Despite the good results that Iverson was able to achieve in his division over the following three years, the Corporation was destined toward bankruptcy, due to the fact that all the other divisions were losing a significant amount of money.

In 1965, in a desperate attempt to save the company, Iverson was appointed CEO and President of the Corporation. He accepted the challenge and was able to build, almost from scratch, one of the most successful manufacturing businesses in modern US history.

The Company: NUCOR CORPORATION

Nucor is headquartered in Charlotte, NC. The Company became known worldwide as one of the most audacious and innovative in the manufacturing industry. Iverson was able to develop a new steel production system based on the “mini-mills” concept. As opposed to companies operating integrated steel production with blast furnaces, Nucor started using electric arc furnaces to melt recycled steel scrap. The company installed its first electric arc furnace in a new plant in Darlington, SC in 1968 and Iverson was able to rapidly expand the business across the country. Today the company operates 23 steel production mills, with a capacity of up to 25 million tons a year.

With $19.4 billion USD of revenues, $510 million USD of net income and 20,400 employees, Nucor is currently the largest steel producer in the USA.

Key takeaways

Iverson has been credited for establishing a set of values that were essential to succeed. Let me present those which I consider to be the most relevant:

Lean corporate staff. While most big companies end up bearing heavy corporate structures, Nucor sets up new standards and manages the whole company with no more than 50 corporate staff. It is one of the leanest corporate set ups of any of the fortune 500 companies.

Decentralized leadership. Each Nucor facility operates with significant autonomy. Each plant is accountable for its own results with minimum interference from the corporate head office.

Compensation - highly dependent on performance. This concept is implemented at all levels with top executives having the highest percentage of their pay at risk. If the company performs far beyond the industry standard, employees, from top to bottom, get paid accordingly. Historically speaking, the company has been able to attain an incredibly high productivity ratio (tons of steel produced by employee), leading to the employees receiving an incredibly high compensations for reaching the objective.

No privileges for anyone. No executive dining room, no parking spaces, no company cars, no special treatment… Everyone is in the same boat, rowing in the same direction, at the same pace with the same goals.

These guys are a worldwide reference. I have to admit, that coming from the manufacturing industry, I cannot feel anything but admiration for this company and particularly for the entrepreneur who thought up a utopian vision and was able to make it real.

I invite you to visit its web page and enjoy learning a little more about it: www.nucor.com