In 1965 the Nuclear Corporation of America was broke. The company had wandered from nuclear instruments into a grab bag of unrelated businesses, and in March of that year it filed for bankruptcy. Only one of its divisions was making money: Vulcraft, a small maker of steel joists in South Carolina. The man running that division was a soft-spoken engineer named Ken Iverson, and the board handed him what was left of the company.
Iverson was not a typical executive. He had served in the Navy during World War II, earned an aeronautical engineering degree from Cornell and a master's in mechanical engineering from Purdue, and worked as a metallurgist before joining the company. One of his first moves was to integrate the company racially, in the South, in the 1960s. He moved the headquarters to Charlotte, North Carolina, to be close to the joist plants, and he started thinking about a bold idea: if Vulcraft needed steel, why not make it?
In 1969 the company opened its first steel mill in Darlington, South Carolina. It was a minimill, a plant that melted scrap metal in electric arc furnaces instead of making steel from iron ore in giant blast furnaces. At the time, big integrated steelmakers dominated the industry, and few people expected a joist company to compete with them. In 1972 the company renamed itself Nucor, and Iverson set about building something the steel industry had not seen.
He started by stripping out the layers. Nucor had only a handful of management levels between the chief executive and the people on the mill floor, and the headquarters staff of a Fortune 500 company was famously small, about two dozen people. Executives got no company cars, no reserved parking, no executive dining room, and they flew coach. Iverson believed that the more layers and privileges you put between leaders and workers, the less they trusted one another.
Then he tied pay to production. Mill workers earned a modest base wage plus a weekly bonus based on how much good steel their team of twenty-five to thirty people produced above a set standard. When a crew performed well, bonuses could equal or exceed their base pay. The rules were strict: show up even five minutes late and you lost that day's bonus, and thirty minutes late meant losing the whole week's. The system demanded a lot, and many new hires did not last the first year. But those who stayed earned far more than steelworkers at many unionized mills, and they had a direct stake in every ton.
The real test came when the market turned. In the steel slump of the early 1980s, much of the American industry laid off workers by the thousands. Nucor did something different. Instead of cutting people, it cut days, moving crews to shorter weeks so the work could be spread around. And it cut pay from the top down, in steeper proportions the higher you sat. Average workers saw their earnings drop by about a quarter, department heads by roughly 40 percent, and Iverson and the other officers by more than half.
That was the heart of Iverson's leadership. Most companies in a downturn protect the people at the top and let the burden fall hardest on the people at the bottom. Iverson turned that upside down. If the company was going to ask workers to take less, the people who made the big decisions would take the most. Nucor's people came to describe the deal in a phrase that stuck: share the gain, share the pain.
The results reshaped an industry. In 1989 Nucor's plant in Crawfordsville, Indiana, became the first minimill in the world to make flat-rolled steel using thin-slab casting, breaking into a market the giants had considered theirs. Iverson received the National Medal of Technology in 1991. Long after he stepped down in the late 1990s, the culture held. In the 2008 to 2010 recession, when some Nucor mills saw production drop by half, the company again cut hours rather than people, while rivals such as U.S. Steel laid off workers. Today Nucor is the largest steel producer in the United States.
The system was not soft, and it was not for everyone. Pay swung with the market, so families felt the bad years in their paychecks. The company ran without unions and made no secret that it wanted to stay that way. Iverson's model asked workers to accept real risk. What made it fair was that leaders accepted more.
You may not control the pay plan where you work. But you control what people see when times get hard. When your team has to absorb a cut, a freeze, or a brutal season, do they see you protected while they take the hit? Or do they see you take the first and biggest share? Nothing you say about teamwork will matter as much as that answer.
Start on Monday by looking at the privileges that separate you from your people. Some are necessary. Many are habits. Each one you drop is a small signal that you are on the same side. And when you can, tie recognition to what the team actually produces, so people can see the line between their effort and their reward.
Ken Iverson took over a bankrupt company and built the biggest steelmaker in America without a layer of executive comfort to hide behind. When the bad years came, his paycheck shrank faster than anyone's. That is why his people believed him in the good years. If you want your team to share the pain with you, make sure they have seen you take it first.