April 10, 15

Mikhail Semenov

Extraordinary Rational Company

The following article will disclose an unprecedented management strategy that was deployed in a steel producer company called Nucor. This strategy might seem nonsense
for founders or CEOs of any other companies in any field, however in has evolved a
small family company into the second largest steel producer in U.S. and the largest recycler of any materials in North America.
The unique management example of Nucor is referenced to the book Good to Great
written by James C. Collins published on October 16, 2001.
Nucor has broken into the Fortune 500 list in 1980. At that moment the company had
only four levels of managements, and only 25 executives in the head office, including
CEOs, financial department, secretaries, and so on. The entire team was jostling in a
meager rented room, which hardly had enough space for those people to physically be
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in a position to fit there. The office had a minimum of cheapest possible furniture. The
board of directors had no corporate dining hall for important guests, they were meeting
their billionaire guests in a small diner across the street.
All bonuses, additional payments, and other benefits provided to the management were
no higher than those for ordinary workers. In fact, management had even fewer bonuses. Thus, each worker of any level, except for management, could have a yearly subsidy of $2000 during four years to pay the higher education for each child separately.
Once was an occasion: a worker had come to one of the companys CEO Marvin
Pohlman and said. I have nine kids. Are you telling me that youll pay for four years of
school - college, trade school, whatever - for every single one of my kids? Pohlman
admitted that, yes, thats exactly what would happen. The man just sat there and cried.
said Pohlman. Ill never forget it. It just captures in one moment so much of what we
were trying to do.
Today, on the companys official website there is a notice: Nucor Foundation is established for teammates children. Since 1974, Nucor has contributed over 70 million dollars to Scholarships and Educational Disbursements. It is a source of millions of dollars
in education funding. To this day, every child of every Nucor teammate is entitled to educational funds from the company.
The company was paying extremely high wages. When Nucor had a profitable year, it
meant that everyone in the company had a profitable year. When the company had hard
times, everyone was suffering, starting with the top management. People on the top positions were suffering way more. For instance, during the recession in 1882, workers
had 25% cut from their salary, whereas managers and directors had 60% cut on their
salaries. The owner of the company had 75% cut from his salary that year.
Nucor was implementing outstanding strategies for erase any hierarchical differentiations, that are so common in almost all organizations. All yearly reports conclude names
of all 7000 employees, but not only names of managers and directors. All employees,
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Mikhail Semenov

except for those who are responsible for the safety of working place, wear casques of
the same color. It might sound unimportant, but when you work in a team it might be become a significant symbol of superiority that some workers can put in the window of
their cars and, lets say, and abuse some parking lab regulations.
Since 1966 ( the beginning of its raise ) till today Nucor reported each year with earnings, comparing to other similar companies from the same industry, which were more
concentrated on the luxury lifestyle of their top management, private jets sizes, and so
on. The extraordinary strategy used in this companys development was strongly preserving all aspects of human rights and strong inter corporate respect among all workers. And half a century of earnings, no loses, can stand for the highly beneficial result!

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