Management Philosophy Choices Practices and Actions

Management Philosophy

The company’s management pursues the hologram philosophy whereby each employee is a replica of the whole and understands management’s visions and the company’s daily business situation and long-term strategy. That allows employees to make independent decisions to implement corporate strategy, while taking into account short-term tradeoffs, broad business implications, and other consequences.

The management recognizes that people are “incredibly smart and innovative” and perform to succeed when (a) given the opportunity to perform; (b) having sufficient job-related and general knowledge; (c) being provided with detailed up-to-date information on the plant’s and company’s performance and constraints; and (d) being accountable for their actions.

1. The management believes that their employees must be better educated and have a better understanding of the operational, technical, and business aspects of operations than competitors. This is their basis for distributing decision making and enabling employees to act on their own.

2. Collaboration is essential and reinforced. Employees are not judged on their individual performance; instead, they are judged on the performance of the whole team and the company as a whole.

Management Choices

1. Decisions are delegated to the point-of-use to permit each operator to act immediately.

2. The company’s employees are salaried and divided into teams. Team leaders are rotated.

3. There are no individual department bonuses. Twice-yearly profit sharing is distributed to all based on the total company’s performance.

4. There are no production quotas —only a stated desire to produce as much as possible at the highest quality required by the present market.

5. Operations are closely integrated to break down barriers between departments.

6. Adjacent operations report to the same general manager to strengthen integration.

7. “Everyone participates in research.” The company has no separate R&D function but is still performing extensive R&D. Senior operators and engineers collaborate on the research and development of new operations methods, new designs, etc. Teams are allowed to experiment with different operating conditions to test improvements.

8. The company does not have a maintenance department per se. Operators are educated and expected to diagnose, troubleshoot, and repair the equipment. Maintenance people with special knowledge in electronics, computers, and so on, are part of operations.

9. The company’s plants are controlled by sophisticated process computers to reduce dependence on personnel for routine work and to achieve uniformity of operations.

Knowledge-Related Practices and Actions

1. All employees are provided with competence to act independently, intelligently, and quickly—although collaboration is widely encouraged.

2. Deliberate educational and knowledge distribution efforts ascertain that employees have access to the best possible knowledge available to handle situations.

3. The company uses outside experts whenever possible and frequently surveys worldwide what others do. “Not Invented Here” syndromes are not prevalent. “We are not large enough to have in-house experts in most of the areas where we need expertise.”

4. Information on operating and technical performance is shared widely. Competitively sensitive information is controlled, but technical and operating information is made available to everyone. The performance of operations and potentials for improving performance (quality, throughput, energy consumption, etc.) are constant topics for discussion among operators at all levels.

5. The company places extensive emphasis on education and provides education for high school equivalency for those without diplomas. Education is provided for all in metallurgy, steel chemistry, metals processing, control, electronics, and other relevant technical areas, as well as in basic business principles, customer requirements, people skills, teamwork, and other subjects.

Resulting Behavioral and Cultural Traits

1. All employees have a “can-do” mentality based on needs to pursue competence and innovation.

2. Individuals are not afraid to ask others for inputs and expertise. The company maintains a “safe environment” culture.

3. Peer pressure is very important to identify and weed out unwanted behavior.

4. Management is careful to not blame individuals. Operating problems are examined to find what can be learned —if it is technical or human. If technical, solutions are sought and corrections implemented. If human, management explores how it can change the situation through its own behavior, education, staffing, or perhaps by changing the operation itself.

The Company’s Business Results

Unless significant business results can be traced back to the way the company is managed, the management principles, corresponding practices, and actions will be without merit. However, for this company the results are significant.

1. It is able to produce higher quality steel at lower costs than its competitors, and it is a preferred supplier for many very large customers.

2. It uses less energy and time to melt and process steel than its competitors.

3. Its plants are run with fewer operators than their competitors.

4. The company is very profitable.