138 Jim Collins
Nucor took extraordinary steps to keep at bay the class distinctions that eventually encroach on most organizations. All 7,000 employees' names appeared in the annual report, not just officers' and Everyone except safety supervisors and visitors wore the same color hardhats. The color of hardhats might sound trivial, but it caused quite astir. Some foremen complained that special-colored hardhats identified
them as higher in the chain, an important status symbol that they could put on the back shelves of their cars or trucks. Nucor responded by organizing a series of forums to address the point that your status and authority in
Nucor come from your leadership capabilities, not your position. If you don't like it-if you really feel you need that class distinction-well, then,
Nucor is just not the right place for In contrast to Nucor's dental suite-sized headquarters, Bethlehem Steel built a twenty-one-story office complex to house its executive staff. At extra expense, it designed the building more like across than a rectan- gle-a design that accommodated the large number of vice presidents who needed corner offices. "The vice presidents. had to
have windows in two directions, so it was out of that desire that we came up with the design" explained a Bethlehem In his book Crisis in Bethlehem, John Strohmeyer details a culture as far to the other end of the continuum from Nucor as you can imagine. He describes a fleet of corporate aircraft, used even for taking executives' children to college and flitting away to weekend hideaways. He describes a world-class eighteen-hole executive golf course, an executive country club renovated with Bethlehem corporate funds, and even how executive rank determined shower priority at the We came to the conclusion that Bethlehem executives saw the very purpose of their activities as the perpetuation of a class system that elevated them to elite status. Bethlehem did not decline in the sands primarily because of imp rts or technology- Bethlehem declined first and foremost because i was a culture wherein people focused their efforts on negotiating th nuances of an intricate social hierarchy,
not on customers, competit rs, or changes in the external world. From 1966 (at the start of its buildup) to 1999, Nucor posted thirty-four consecutive years of positive profitability, while over those same thirty-four years, Bethlehem lost money twelve times and its cumulative profitability added up to less than zero. By the
Nucor's profitability beat Bethlehem s every single year, and at the end of the century, Nucor-which
Good to Great had been less than a third the size of Bethlehem only a decade finally surpassed Bethlehem
in total Even more astounding,
Nucor's average five-year profit per employee exceeded Bethlehem by almost ten And for the investor,
$1 invested in Nucor beat
$1 invested in Bethlehem Steel by overtimes. To be fair, Bethlehem had one giant problem not faced by Nucor: adversarial labor relations and entrenched unions. Nucor had no union and enjoyed remarkably good relations with its workers. In fact, when union organizers visited one plant, workers felt so ferociously loyal to
Nucor that management had to protect the union organizers from workers who began shouting and throwing sand at But the union argument begs a crucial question Why did Nucor have such abetter relationship with its workers in
the first place Because Ken Iverson and his team had a simple, crystalline Hedgehog Concept about aligning worker interests with management interests and-most importantly- because they were willing to go to almost extreme lengths to build the entire enterprise consistent with that concept. Call them a bit fanatical if you want, but to create great results requires a nearly fanatical dedication to the idea of consistency within the Hedgehog Concept.
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