Three months ago, Nucor Corp. looked like it might be in big trouble. The North Carolina-based minimill steelmaker, which recycles steel from cars, dishwashers and other items to make new steel, had lost power at its Hickman, Arkansas plant. Management anticipated it would be a full week before operations there would be back online.
Yet, within hours of hearing about the electrical grid’s failure three Nucor electricians performed the business equivalent of climbing Mount Everest: they drove from their plant locations in Alabama and North Carolina to the Hickman plant and worked 20-hour shifts until the plant was up and running again, only three days later. The unusual thing about this story is that these front line workers rose to the challenge of their own accord – no supervisor had asked them to make the trip. The really unusual thing is that this scenario is not viewed as all that spectacular among the folks at Nucor.
As Business Week noted recently, “Nucor’s flattened hierarchy and emphasis on pushing power to the front line led its employees to adopt the mindset of owner-operators.” This approach stemmed from the leadership model of former Nucor President F. Kenneth Iverson, who maintained that employees will continually go above and beyond for the organization if they’re duly rewarded, treated with respect and granted real authority.
Building an organizational culture that fosters progress through performance-based rewards and empowering employees at all levels allows companies to be more nimble and adaptable to change. In his recent book The Four Pillars of High Performance: How Robust Organizations Achieve Extraordinary Results, Paul C. Light brings this theory to the forefront in describing two of his pillars: Agility – giving employees the authority to make routine decisions, and Adaptability – changing with circumstances and taking advantage of new opportunities as they arise.
The government has also researched the benefits of empowering employees. In a 2005 review of 100 workplace studies, the U.S. Department of Labor examined the link between progressive employment practices and improved bottom line results. The Department found that a positive correlation exists between motivating and empowering employees and significant improvements in productivity, employee satisfaction and financial performance.
Roanoke, Virginia-based Advance Auto Parts, a leading provider of vehicle-related products and knowledge, has made good use of this correlation. Recently, after surveying the leadership team about the company’s workplace culture, the employee-centered values already in place were codified. The first value is now “We care about our team members/family/community”; the second value is “We have a strong focus on the customer.” In practice, these values are reflected in the basis for manager bonuses: employee engagement.
U.S. companies aren’t the only ones making use of employee engagement to reinforce organizational adaptability. Champion Compressors, an industrial air compressor designer and manufacturer with nine branches in Australia, uses the key concern of safety as a unifier for its 200 employees – and a conduit to grant them real authority. After all, their front line workers are the ones assembling components for Champion’s compressors, pistons, vacuum systems, filters and water chillers every day.
Champion’s environmental health and safety coordinator, Simon Meyrick, says the company aims to foster a workplace culture in which the prevention of unsafe practices becomes automatic. The organization achieves this by empowering its staff through regular training, reinforcement and equality. Staff are encouraged to provide their input at “tool box” meetings, which occur outside of designated training times. As a result of this attention to staff’s needs and talents, Champion earned the highest marks in the 2005 Australian Achiever Awards, which rate Australian businesses in criteria such as care and attention, value, attitude and communication.
While some organizations have looked inward and involved their employees in aspects of the business as much as possible to maximize its effectiveness, there is still room for improvement. In its 2005 Customer Experience Management Global Survey, The Strativity Group – a firm that helps companies create lasting, profitable relationships with their customers and employees –” found that only 33 percent of employee respondents affirmed that they have the tools and authority necessary to serve their customers. This represents a decrease from 37 percent in 2003.
Still, the dialogue among leadership and HR staffs is slowly but surely moving toward adaptability via employee empowerment. In an April 2006 article in Roanoke County, Virginia’s Blue Ridge Business Journal, the county’s Director of HR, Joe Sgroi, says he has seen “an expectation, especially among management, of cooperation, adaptability and flexibility. The reward is not pay, but having someone say, ‘We appreciate your idea and we’re going to put it in place.'”
Organizations should take notice of the model used by companies like Nucor. Although it’s a Fortune 500 company with more than 11,000 employees, its employee-centric practices can apply to any business – even not-for-profits. All it takes is a willingness on leadership’s part to give employees the mechanisms and ability, along with its blessing of trust, to provide excellent service. If more organizations took this leap of faith, they, too, could have what Joseph A. Rutkowski, a Nucor engineer who came up through the mills, calls a “magic” place.