How to Manage Digital Transformation and Innovation at Nucor Steel [Large Company Case Study]

at uh 2 p.m eastern time so uh mark your calendars anytime you want to hear conversations like these were we're live every friday so i'm excited to have everyone here today that that's joining us and uh we're streaming here live today on a few different platforms we're streaming on linkedin youtube twitter and here on crowdcast is where we're actually broadcasting from so if you're if you're watching on any of those platforms i encourage you to ask questions along the way any comments you have we'll get to those questions here uh throughout i'm just i'm gonna start off with a few questions but we encourage the audience uh to ask questions as we go that's where the the real interaction the interesting stuff uh comes up so i'm excited for today's guest uh it's one of my favorite clients and individuals that i've worked with in my career to be honest um and i really enjoy every time i talk to him i learn something new and he's always got a lot of really good nuggets of lessons learned and um not just in the transformation that he's going through right now but in his in his career and uh dan krug is uh here with us today from new core steel so dan thanks for being here thanks for having me looking forward to this yeah likewise you're you're always a big hit when we have you at any event so i always appreciate your time you're very busy you have you guys have a lot going on being the industry that you're in which i want to get to here in a second so i know you're very busy your out here right organization that's correct correct demand is good steel right now yeah so uh as we're getting settled before i uh asked dan to introduce himself if you don't mind i'm keeping an eye on the different streams here so if you see me looking around i'm looking at different devices that have the multiple streams up and we're gonna have questions here uh or i'm gonna encourage the audience here to ask questions but in the meantime if you don't mind just putting in the chat box where you're where you're dialing in from or where you're joining us from here today i'd love to hear just to get a sense from from where the audience is um so if you don't mind doing that that will help us just understand the audience a little bit better as we're getting settled and getting introduced so while the audience is doing that dan maybe just tell us a little bit if you don't mind maybe to start just tell us a little bit about new course steel and then i'll ask you a little bit more about your role just for people that may not know who new core is sure yeah new core is the largest producer of steel and steel products in north america so uh any end market that steel would go into our our steel finds its way into we're very diversified so whether it's a a car a bridge a building furniture hot water heater an appliance if it's an end market that consumes steel we're likely in it um one of the other things that we always like to mention when we talk about ourselves is that we're north america's largest recycler as well so oftentimes when people think of the steel industry they think of big blast furnaces and miles and miles of rolling mills and that that's not us um we run electric arc furnaces which about 80 of the material that we melt is recycled steel and uh we recycle over 20 million uh tons of steel each year that would otherwise likely go into a landfill so um given the world of sustainability that we live in we're particularly proud of that we've been making steel since 1969 and they've had a long history as a company of not laying off teammates paying for performance we like to think of ourselves as a small company that just has a lot of places to it um and our culture is really really important to us we're a flat organization uh where we would hope every teammate shows up every day feeling like they have an opportunity to make a difference and change how the company operates so um i personally feel real fortunate to to be a team member with this company it's a great place to be yeah and it's it's interesting here you describe it as a as a company that feels like a small company and i totally agree with that as a as an outsider that has sort of been outside looking in helping you guys over the years it i would never guess if i didn't know who you were i would never guess that you were you know fortune 500 company very you know america's largest steel producer one of the us's biggest companies it just doesn't have that feel not that you don't know you don't have a good uh scalability and that sort of thing but just the the culture i think is a big part of it it's a very customer-centric and small team feel to it which is very unique i think for a company your size yeah yeah so uh to do with the small towns that we're in we feel like a small town company probably yeah yeah and you have a way of retaining that that feel when you when you acquire companies too which uh we'll come back to that point so what is your what is your role at uh new core you know what it would maybe talk about maybe start off with where you how you started your journey core okay so uh i joined the company almost 20 years ago um and i was uh my history before nucor was was in operations and and human resources and new core hired me into an hr role and i became the the general manager of human resources in 2016 my my career path changed considerably and i became the general manager of digital innovation um we are a very decentralized company so that that role really had a lot to do with leveraging um a data platform to build bi and digital experiences for our customers so i was in that role for a few years and then consumed um the overall i.t function for the organization which was really surprising to me since i did not have a technology background but has been just a fantastic experience i've learned so much and it's just been a great journey um and then last year um under our new ceo uh i assumed uh in addition to my i.t responsibilities responsibility for talent management across the company as well so i've got both the technology and the talent side which is you know you and i have talked a lot about eric you know if you're engaged in technology and you're not engaged in people it's not going to go very well so it's an interesting combination to work across those functions in our company um and it's it's it's been a great combination a lot of fun more more synergies than what people might might think yeah and you have you have such a unique background that's really well suited for for that role it and i think a lot of people will learn from that a lot of organizations could learn from that and the fact that you came in and whatever was 2016 i think you said and didn't have a bunch of i.t background i remember at the time you saying you know i know very little to nothing about about technology you were the first to admit that and i think that actually worked your advantage because you didn't you didn't get sucked into some of the techno speak and the uh the common traps that you know a lot of tech focused people will fall into you were thinking of it more from a operations and a people perspective first and then technology was just sort of something that was along for the ride that you had to learn about along the way which i think is you know really important nuance that has made you successful in this role well it didn't it didn't feel helpful at the time it would have felt better to know more at the time but in retrospect i do think it was probably helpful um you know when you're when you're new in a role like that and and people know that you're inexperienced you do get to ask a lot more questions i think and you can ask dumber questions and i i got to ask a lot of questions about what people inside the company needed and i asked a lot of very simple questions to our customers too and um i think a lot of those questions i asked people were like wow i can't believe he's asking such a simple question but in some cases those simple questions were really helpful for us to think through things differently so it was it was it was good um but it was uncomfortable it was definitely uncomfortable yeah yeah absolutely well i i want to ask you a couple questions here in a second but in the meantime just to give you a sense of where uh people are joining from they're really all over the place we've got uh someone from the uk uh minnesota texas los angeles california i know we've got someone from spain here on crowdcast um and uh so far on youtube i'm not getting a read over there on youtube but we've got a global audience here right now so appreciate everyone that's joining and um feel free to chat a question at any point along the way i'm gonna keep an eye on those and it won't interrupt us at all and i'll sort of moderate and fire away with questions here for dan as you guys pop them into the chat boxes here but in the meantime i have a few i wanted to start with just to set the context and get a feel for transformation at at new core and i i want to focus quite a bit of time talking about the current journey you're going through the you know the seven year journey you're going through now that um that we'll talk about but even before that maybe just to preface that i think if we back up and just look at new core as an organization i don't know if a lot of people know this about new core but new core is a well studied organization as it relates to innovation disruption uh particularly in steel and not just in the steel industry but in just in general how to build a business that can be disruptive and innovative and maybe could you talk a little bit about the whole you know how new core really burst onto the scene and that was it the 80s when the whole mini mill concept sort of you guys disrupted the us steel market with the mini mill concept maybe talk about that and i think that leads us into this history of transformation and disruption and innovation that you guys have always had but maybe start there if you don't mind just give us a little bit of history sure sure yeah happy too so that actually goes back to the 60s um we had a brand new ceo in the late 60s and the company was a conglomerate at that time and it was not a profitable conglomerate and he stripped away all the pieces of the company except a steel joist plant in florence south carolina and if you don't know what a joist is if you walk into home depot or walmart and look up and you see the zigzag thing that holds the roof up that's a joist made out of steel and he got frustrated that he couldn't get a reliable supply of steel from the big integrated steel makers like u.s steel and bethlehem so he decided to integrate backwards and he didn't have the capital to enter the traditional steel industry so he used an innovation that others were unable to commercialize and nucor grabbed it and was able to make it work and that's the electric arc furnace and that's where the mini mill comes from an electric arc furnace is is what's used to make steel in what we now call a mini mill and we were able to make all of the products that fed the joy's plant and that model expanded where you'd have more joist plants more steel mills sell the excess steel on the open market and in the 80s there were a couple other transformative innovations in very different types of steel products one of them was around a continuous slab processor which allowed us to enter the flat rolled steel markets these are the big coils of steel that you would make the shells of cars from and all kinds of construction applications that really allowed us to begin taking a lot of market share from the big integrateds and we also levered a new technology that others were unable to use in making wide flange beams for construction so um at that point in the 80s those innovations really launched us in into a different category of steel production and by the time we were in the early 2000s we had surpassed all of our rivals to become the largest steel company in north america wow yeah and it's uh i forgot what the name of the book was there's a book i read when i first heard of new core um there's a book about disruption i don't know if his uh innovator's dilemma i want to say was that that's it yeah clayton christensen wrote that book clay christensen yeah he talks a lot about new core in that book and who does um even when i was getting my masters i remember studying new course so it was fascinating to now be working with you guys over the years and seeing how you've continued that that history of innovation disruption um challenging the status quo that sort of thing so maybe fast forward to the journey you're in the midst of right now and maybe give us a little bit of context of what is this current digital transformation that you're on and what triggered it and what what uh you know what are the components what are the major components of that sure sure and you know you you're using the word transformation eric and um that's a word that we we used to use we don't we don't use it so much anymore especially when it comes to digital and and the reason is um when you look at what's happening to our overall business our overall business is changing the story that i just articulated about our history um those innovations allowed our organization to have tremendous cost advantages in the marketplace those cost advantages led us to build an organizational structure that was really based on a very decentralized regional model where mills ran very very decentralized they had their own market carved out and you know probably before 2000 those mills if if the cord was severed between that mill and charlotte north carolina they could keep running just fine and and as we got bigger and more sophisticated and began to make more sophisticated products we became a bigger component of the steel supply chain we began to have uh overlapping regions multiple products going to the same customer far more complex products that that required a much more sophisticated approach with our customers as well and by the time you got to 2005 678 our customers were really demanding something different from us they didn't want to work with the collection of autonomous mills they wanted to work with with the steel producer that was strategic and in how we would engage them they wanted a supply chain partner and we didn't have a history in that we didn't really know how to do that so we we began down a journey to really begin transforming ourselves commercially how is it that we engage in the supply chain in a more strategic way to provide solutions rather than just commodity products you know we we have a more diverse offering of steel than any other producer in north america and we also make steel products that go into construction applications that allow for solutions different than what anyone else can provide so if you're going to take advantage of all of those synergies across your business you got to integrate in some way you got to create the connections um to take advantage of of that diversified product offering the other thing we did is we vertically integrated we we uh we vertically integrated both upstream and downstream raw materials and and we went deeper into downstream products like tube and grew our metal buildings business things like that so as the the business was transforming it became obvious that we needed a different set of information inside of the company to make decisions vertical integration always sounds good it's hard and having good information to make better decisions throughout those vertical chains matters and as our relationships with our customers became more sophisticated the things they were asking for from us changed and evolved so when it comes to digital i.t business systems erps the strategy there really ended up following um you know what what the market was asking from us and what our transformation as an organization set up for us to really be able to do with with our customers and in the marketplace so we we really talk about our transformation of being more of a business transformation digital and i.t follows that and and we see it as a as a supporting mechanism one of many mechanisms to actually enable the business intelligence we need inside or to enable the customer experience that we're trying to create with our customers those are the drivers technology enables it so um it's uh it's really been a unifier in some cases of a broader strategy right right yeah it's funny you mentioned that you don't really use the word digital transformation and you mentioned the the culture you have a unique culture you have a strong culture and i've learned the hard way over the years working with you guys there's certain words that you just you guys just don't like uh consultants is one of them organizational change management the the term not the concept but the term change management you guys don't like centralization i think i use that word once in a meeting and it and i got there's an instant vibe off of that i'm sure yeah nails on a chalkboard do not say the word centralization they don't do much but i think it's interesting because um one of the challenges that you see with a lot of organizations that we do not see with nucor is that a lot of companies don't have a clear vision of what they want to be when they grow up whereas you guys for better for worse whether you like or not you guys have a very clear vision of who you are and what you're trying to be where the warts are what your strengths are and i haven't really seen that level of alignment and focus uh from many companies over the years and i think that's something that has served you well not just in this journey but just as a company overall would you agree with that or does that make it more challenging at times or what are your thoughts yeah i i definitely agree with that and i think you know one of the things that that why i'm proud to be a part of the company is is that the folks in our company are really dedicated to the success of our company and our customers there's a lot of ownership and and we're a group of folks who who like to win we want our customers to win um and you know i i think our leaders are really serving the 27 000 people who who want success they feel obliged to chart a path that people can follow so that we can do it together in a decentralized company you know we have fewer structural mechanisms to tell people here's how you do your job so if you don't have a vision then you really don't have an opportunity to harness energy and get people moving in the right direction and um i i would say we we probably uh view um you know vision and communication as the mechanisms to harness energy and get people moving together far less than structure control and things like that we do have incentive systems that that pay for performance that we think are very important but we would say those really supplement the ownership towards the vision that that our leaders really work towards in the organization yeah yeah absolutely so in this journey you're in now this business and technology transformation journey you're on now uh or business transformation driven by or enabled by technology i should say right um what it sounds like i know there's a bunch of things you guys are trying to address i mean you had grown over the years through acquisition you wanted to retain a certain amount of decentralization and independence of those acquisitions but yet provide a more consistent customer experience to customers that might be ordering from different or ordering products from different uh divisions or groups within the the organization um and i know just having better visibility with something too that you guys were working on as far as getting visibility into what exactly is happening in all these different parts of the business maybe just explain to us a little bit about what are the major buckets of stuff that are part of this overall journey sure and um i'll i'll start with our our steel group which is the largest part of the organization we're quite frankly um the a lot of the changes occurred we see change across the whole organization um but if you if you go back to just 2016 i'd have to add it up to be sure but we had over 30 erps across the organization um and we are a company that has grown in cases by acquisition and if you you do an acquisition you you acquire erps and um if you have different erps that means you have different technology but you also have different business processes different business practices and if you have different business practices they generate different types of data and you know if you've got disparate data that makes it harder to make decisions so as i talked about some of those things that we were working towards having business intelligence intelligence to make better decisions and also having the people process and technology place to create the the customer experiences that we want that number of erps was really a representation of the disparity of business processes across the company it represented not just decentralization of technology but decentralization of process so we we really viewed the technology component hand-in-hand with putting business processes in place business systems in place that would create better alignment of behavior to create a common set of data and also to create a common set of behaviors to give our customers more consistent experience and that is one of the things we heard over and over from our customers is we want a more consistent experience we heard over and over from our customers you guys have the best people we love your people we love working with new core folks we've never heard people say you got the best systems um our people did a great job overcoming the inconsistencies and the lack of sophistication of our systems they did a great job overcoming that but to be world class and customer experience and and to really be the partners that we want to be uh with many of our customers that that had to change so there is a major erp overhaul going across the entire steel making group we've got 30 steel mills we've got half of them integrated onto oracle part of that is is creating a more uniform platform of level 3 manufacturing systems across our shop floors so that part of our business is roughly a 20 billion dollar chunk of business that's getting an entire um business system and manufacturing system overhaul sushma walker who i work real closely with who might might be watching right now is leading that effort and um you know the i think she would say that the biggest challenge to that is is the alignment of the process it's not not the technology um so that that erp platform creates better consistency in our business systems we we've had a major data transformation effort that that we've been going through and uh you know if you've got you know 30 erps just in the steel mills that you start with that's 30 different sets of data to work with we didn't have time to wait for a unified erp before we could start leveraging bi and digital solutions we built the data platform that actually allowed all of our erps to send information to charlotte um and create a commonized platform that actually allowed us to have a consistent bi uh platform and then it also allowed us to have a much more consistent interface with with our customers so that's really probably the you know the the piece that i think really began to make sense in the company if you're creating consistency with business systems and manufacturing systems you're harnessing the data well if you don't do anything with that then you've just put in new systems well we actually want to consume that information differently create more transparency so that people can see that information and make better decisions uh all the way through our vertical chains and how we take care of our customers and we've been able to do a completely different set of of things with our customers we we can do things now with that data platform to create a much more unified experience across the diversity of products we offer so if you can't provide a more consistent experience and make it easier for people to consume your diversity of offering then what's the value of the diversity it's it's just as easy to get it in other places so that whole chain of events from business system level three data platform to internal bi and the deliverables to the customers has really created an opportunity for us to have a very integrated platform of people process and technology and as i say it you know it it sounds awesome and it we're very happy with how it's going um doing all of those things at the same time is is really challenging it's really especially at a time where you know we were talking right before we started uh filming this that uh demand for steel right now is through the roof so your operations now in parallel are taking off and blowing up and you know testing your capacity and all that good stuff and at the same time you're trying to continue this journey has it has this uh project or this overall stream of the business and technology journey has that been disrupted at all by the the fact that your business is taking off again um you know kovid made it challenging we've had some minor delays but overall things have kept moving um you know and when covet occurred many of our end markets basically stopped the auto plants stopped construction stopped and our demand plummeted and it's fascinating to watch what happens to a two-month disruption in your end markets the supply chains don't just magically start back up so uh we're rushing to catch up with with those lags in the supply chain and we are exceptionally busy and it is it does create challenges as i've said i've said the term several times people process and technology and if our folks are are running very hard just to keep up with the basic demands of the current state of the business there's there's less time there's less energy to allocate to the changes and for the people on this call and i know you know it as well as anyone when you're changing your business systems you're putting in a new erp when you're changing how you interface with your customers that's not light work it's heavy work and it can be frustrating at times it's taxing on people as as they learn new processes and um it it is challenging i was just sitting with our digital solutions team the other day and said tell me what you guys are feeling right now how does this look and feel across the company and they talked about the fact that our sales teams our inside sales teams do such a great job of servicing our customers is that they're so busy you know it's it's hard it's hard to catch up uh with their pace of work right now so uh we're making it work and we're largely staying on on target um but we got a lot of people working hard to do it working a lot of hours yeah yeah absolutely so when you look at this project so far this this journey that you're on which in some ways is a you know i hate to call it a project cause it's almost like an ongoing continuous journey that you guys have uh embarked on here but when you think about this journey what what have some of the biggest challenges been so far that you've run into yeah well i think you you you kind of hit on it earlier eric um you know for us uh in our culture the idea that that people are owners of their of their jobs they take personal responsibility for for their work and the output of their work and you know i feel really lucky and blessed to work in this company our biggest challenge is oftentimes people are fighting for ownership you know um don't take that from me that's mine i want to make that work that's my team's responsibility so um when you're putting in these new systems and these new processes there are occasions there's many occasions where uh someone's level of ownership of that process is diminished a single plant erp that's been home grown that local i.t team can pull all the levers and push all the buttons to make as many custom configurations changes systems changes that they want to make they can customize it the the sales team whether it's a level three system an operator comes down says i want this tweak i want this change they can make it well when you're putting a more unified erp across the set of businesses to get those economies of scale and those synergies it's not as it's not that simple and um you know i think that's the real that's the biggest challenge for us how how do we help um how do we move this forward in a way that that optimizes ownership of a broader system um to where people feel is engaged as they always have in the organization that they can show up and make a difference and um you know i think the way we've gone at that is is continuous education and communication around the vision and what we're working to accomplish around it and that's helpful it's not a perfect silver bullet because if you show up and you work a 10 11 12 hour day and you're working long hours because you're changing what you do and you may not have as much control over it you might be bought into the vision it's still frustrating and you know that that we care about that and we worry about that and and we we talk about that and that's that's a constant balance and challenge that that we we deal with every day every day regardless of the part of that chain erp level 3 data bi digital solutions for our customers every part of that chain we feel that yeah absolutely well i want to come to some other questions i have for you here in a second but in the meantime a couple of comments and questions that have come from the audience here on the different uh streams we have um over on uh starting here on crowdcast just a couple comments uh from sam graham uh thanks for joining again today sam um his comment is great to hear the computer systems are about people and not not technology so i think it's you know you're one of the few people that i haven't had to prompt or convince that that is the case and so you believe that you might believe that even more than i do just based on your your background and your experience right now oh i i yeah i uh i think that's something that we we've always believed and we believe it we believe it more today with with what we've gone through and you know the thing that i see is if if people want to make technology work they'll figure out how to make it work if they don't want to make it work or they're not interested in it it's not going to work very well yeah so um you know attaching that technology to an outcome that matters to the organization and the people doing it really seems to matter a lot yeah yeah absolutely um let's see so here's a question from from roy over on linkedin uh and his comment is that um his organization is about enabling digital transformation at scale even for small and mid-sized companies the challenge today is the cost of adoption it's too difficult for most to cross the chasm what percentage of your projects fail or fail to succeed to scale across your enterprise so are there i guess just thinking about scale maybe that's an interesting thread given that you the comment we had earlier the discussion we had earlier about how you're this big massive company but you don't act like one in some ways and you try to act like uh you know a decentralized company for like a better word um are the do you have trouble scaling um some of these efforts and some of these projects given that that sort of in some ways that's a competing uh priority there so what how do you guys handle scale versus that decentralization well we we do and unfortunately you know i i can say that on the erp front we've not experienced failures when we've decided to put in an erp and take it live we've done that and we've been able to do that without disrupting our business so in that case um you know we've largely been able to do what we initially set out to do where where i've seen us have some failures and and have to learn from them is is really on the data platform how quickly we can harness data and how quickly we can use it the bi side of it to me has been also very challenging a need may pop up in the organization to say we want this type of information to create this type of visibility okay well you don't snap your fingers and get that instantly the question becomes you know where do you stand that up you stand that up across the enterprise so that it's uniform for everyone to see in a common way and if you do that that's that's likely going to slow you down that's more data you got to put under control and that's more data that you have to stand up in a bi platform and whether it's bi or whether it's trying trying to harness you know buckets of data for our customers there there are times where we have misjudged at what level of the organization we should be doing that at i think initially our initial bi efforts were probably overly ambitious we tried to scale too broad too fast and we were too slow what we stood up was spectacular the organization loved it but you know when you give somebody something they like they want more of it and we're learning from that now and recognizing that that we can deploy things in smaller instances at different levels of the organization more quickly and we we don't have the full answer on that that's another thing that we're debating on a daily basis where does that sit who should own that how much consistency do we need how fast does that need to iterate and change and um i was talking to someone the other day and they said the challenge with bi and data is you you're always a step behind it doesn't seem like you can ever really meet um you know the the demands that you face and i think in some regards that's that that's true um being as close to it as you can be matters so um that's where i think in in from a customer's standpoint you know uh we've we've got you know thousands of customers and um you know how do you sort through what's needed what's wanted where there's most value with your partners we've missed in terms of really fully understanding in some cases where we can add the most value with our partnerships with our customers and we put a lot of work in some things that turned out to be okay and after we did it we were like wow i i don't know that that's adding a whole lot of value so um you know when you talk about scaling stuff you know if you talk about scaling technology all right good scaling solutions especially with your customers to me is a better way to look at that we've scaled some technology and processes that did not lead to a scaling of solutions and you know you we've learned from that you know you put all this work into something and you say oh that did that didn't get us what we wanted to um that that changes how we approach things is that helpful yeah it helps me and uh roy if you follow questions on that question let me know but i think that that's a it's a great question and a great response because it it shows a couple things one is you know how you how you balance sometimes competing priorities and this is just one example that we're talking about here but you also bring up a good point which is that there is no one-size-fits-all answer even within the same organization we always say that to our clients like hey what worked for new core isn't necessarily going to work for you over here you've got to sort of tailor that but even within new core different work groups different parts of the organization different levels are going to have different needs and uh you know you you handle that accordingly one thing i've noticed about your team in general i'd say is that it's it's a very fascinating phenomena that that i don't know if you observe it being part of it but being outside looking in i'm always fascinated by how fast you guys are able to at least those of you at the executive and management levels are able to go from the strategic way of thinking and just go straight down into the details and then bounce back up to strategic thinking and you guys do a good job whereas most organizations are stuck or most people a lot of people are stuck on one another they're too high level or they're too far in the weeds and they don't know how to pivot or adjust and you guys seem to know how to when you need to micromanage when you need to roll up your sleeves and when you need to back up and look at the strategic aspects of a project which i find fascinating well i think i think some of that eric is um inherent in in our structure so um you know as we talked about the history of the company and um i talked about the business some you know our structure is is very very different i think i'd have to look i think we're like 120 on the fortune 500 that might have moved up or down i don't i don't remember um but here in charlotte at our corporate office we have about 140 people and there's 27 000 of us around the company so it's a really really small corporate office yeah that's really cool it is and we really only have four levels of management in in the company you got supervisors managers uh vpgms and evps we only have seven of those and a ceo um it's a very very lean organization and it's interesting that our our first ceo or cfo used to hand out this book it's called parkinson's law you can't even get get it digitally and by the shape of this book you can tell and it basically talks about um in in some regards how lean structure forces you to focus on the right things but it also keeps the organization from sprawling in ways that keep people um from being connected from strategy to execution and i see that there's pros and cons to that i think there's times where senior level leaders do spend more time in in tactics than what might be optimal of course there's benefit in that and staying connected and understanding how strategy moves to execution i don't know that we got it balanced perfectly but i do think our senior leaders stay more closely attached to execution than what you would see in other organizations i get pulled into if i'm chatting with uh heads of i.t and other companies the level of granularity that i get pulled into is very different than what they get pulled into right yeah yeah and i i think one of the uh benefits of of that approach and that mindset and that structure that you have as it relates to some of the erp projects you're going through and bi and you know this this overall transformation is that you guys have this uh degree of ownership which you were talking about a minute ago as well you have a degree of ownership that is extremely rare and you tend to you know everyone says the the old ronald reagan term trust would verify you guys have a it's um it's like trust me verify on steroids like you you know when to verify and you know when to trust and you just have this sixth sense almost as an organization and one example that uh comes to mind is you know i know uh working with sushma on the erp project you guys have a pretty uh healthy support from outside consultants but you guys have been very active in sort of rationalizing the use of outside consultants and and you you don't just take advice from outsiders or from anyone for that matter blindly you kind of you have to see it you have to believe it you have to feel it experience it all that stuff and so i think it's a combination of that ownership the flat structure your culture and i think that all translates into some good lessons for people going through transformations where you have to know first of all you have to recognize that it's your project it's your transformation it's not the consultants it's not the technology providers it's not anyone's but yours and you guys are really good at that and so i don't know if you have any advice for people you know how do you sort of just sort of overhauling your culture and becoming more like new core which would take decades and it took you guys decades to get to where you are what what sort of tidbits of advice could you give to an organization where maybe they are not that's not an inherent part of their culture organization but maybe they could apply some lessons to their to their transformations yeah so i think you know one of the things that that is very true in new core is is that um you know folks are are expected to to the owners of their jobs and and we hire folks that i think in general are very personally responsible people and if if you ask someone to be responsible for for something you have to give them the freedom in in the leeway and the bandwidth to take ownership and you know i've i've worked in other organizations and seen companies um that that want to hold people accountable and that person doesn't really have all of the levers and freedom um to to to be fully responsible for the outcome so um you know i i see i see a question on the screen that karen wrote how do you help people deal with the loss of what they've been doing that gives them a sense of their contributions that's an awesome question i hope we're doing you know we really work at this we are a results driven organization results matter and we're making these changes to get better results and if we help people see that those changes are leading to better results that matters a part of that is how we get paid every human in this company gets paid for performance everyone is on an incentive system and it's not an individual incentive system it's based on the team so you rise and fall with your team we've talked for years about sharing the gain and sharing the pain and um you know i if if your boss allows you to have the responsibility if the organizational structure allows you to have the responsibility and you yourself and your team can benefit from being successful with that responsibility if you hire the right people they will take ownership and they'll fight for the ownership so um you know again i think the folks in the company today were fortunate benefactors of how the company was set up you know um we inherited it from ken iverson and the people who built built the company and and they did build the the organizational structure around disruptive innovation and that structure was just as innovative as the technology that made the steel and we're lucky to have received that and we're just doing our best not to mess it up and keep it going i think all right yeah hopefully hopefully make it even better and just keep building on what what they've done yeah and and one one example that i hope you don't mind sharon is is uh just building on uh the story with with sushma and you on on the transformation and the outside consultants i remember there was a point uh not too long ago in the project where um the run rate you know the monthly run rate had reached a certain level and the project was extending and you guys sort of called an audible or a time out and said hey hold on let's rethink this plan and you you guys took that on yourself and said here's how we're going to use the consultants here's how we're going to recast the plan and that you know quite frankly um not many organizations we work with have the guts for like i guess i'll use the word guts as it was not many people have the guts to to take that bold of a stance and and back to the ownership and you know just the um yeah just the ownership of that i found that very interesting as well yeah and i think that fits into some of what i just shared you know it's it's it's about the results um if you're putting in business systems and level threes across your facilities you're impacting their operations we yeah not only does that need to get done well you're spending money as you do it um putting in erps in and of themselves don't generate profits we're consuming the profits of the company as we do it um and the people doing that get paid based on the profitability of the businesses they're serving they want to see those businesses run so i think there's just a natural pull in the company towards results when you're paid on the results that scorecard shows up you know if you're paid every two weeks or every month you know there's a score card in your paycheck and and that that matters yeah the other thing about the pay is if if you have your hands in each other's pockets if what i do impacts how you get paid you're more inclined to to work more closely with that person feedback becomes more transparent your willingness to help that person be successful i think i think matters i think it pulls people together um and uh people are folks we hire are competitive they they want to be successful and they're willing to help each other be successful yeah absolutely we're getting uh some questions over here on linkedin so maybe i'll pick a couple of them here um how about this this is a good one how can we keep up with project timelines if stakeholders are not responding all the time and this is by uh sean dunn i think i hope i pronounced that right over on linkedin okay project timelines if stakeholders aren't responding on time do you ever have that issue there new nicor um you know uh we we have a very organized project management system we actually brought in some partners to help us with that and we we do use in our all of our it and digital change efforts we we do use a third-party project manager and the reason why we use a third party is you know if if if the person running the project owns some portion of it it's it's a bit like the fox garden the hen house we actually were intentional in that we wanted an a non-partisan unbiased person who who did not have a stake in some part of the deliverable to help us see the project we've got some great partners that help us do that whether it's erp level 3 data digital we have the same format and framework for managing projects they do sit in big portfolios and we have a natural rhythm for how we examine the project and whether it's the first week of the project or the 50th week every week we have a stand-up call that takes no more than 30 minutes where all of the stakeholders get visibility and everything that's going on in that project and if there's a delay in one place everybody sees it and if you're delayed you account for it and this is not a shaming exercise this is not a blaming exercise um it's a group accountability thing uh to figure out what's working what's not and to create visibility across the team so you know i i just i don't i don't see instances in new core where where people are are just not doing their jobs i see instances where components of projects delay oftentimes for really good reasons sometimes it's confusion sometimes it's misalignment but if you look at it on a weekly basis you can ask the questions and help the team figure it out so i'm not sure that's a great answer i i would say that the way we deal with that is is really through transparency and frequency you know we're frequently digging into the depths of every project and it's expected every everyone participates in that we really do have a good spirit around it it's not it's not coming together to point fingers it's it's about the team operating together yeah yeah it's a great point um yeah and that and i think it's it's it's probably a little bit hard for you to answer because you've set up such a or the organization is set up for to mitigate that that risk that's that that the author of that question is asking there um so i'm gonna here's a question from uh sam graham over on crowdcast here um he said that given that new core doesn't like consultants why did they chose to work with third stage and and it's a loaded question but maybe just to broaden a little bit make it a little less commercial or less of a sales pitch for third stage how do you guys just in general how do you because you are i mean i think you would agree with this you're fairly picky about the types of partners you work with and people outside of newport they're gonna advise you how do you how do you balance that i mean how do you recognize the need for outside health how do you uh how do you find the right fit for a culture that that's that strong that really doesn't like consultants i mean how do you how do you balance that i think i think to say we don't like consultants might be a little strong it's a generalization we are we are really picky and uh we're really picky because we we have a very strong culture our organizational structure and the way our business runs is we think fairly different from other companies so one of the things that is just immediately off-putting to us is when somebody says i've worked with many companies like yours and their pitch as i understand your problem i can solve it and and um whether you're a consultant approaching us or whether you're a new core person approaching another new core person we would much prefer someone asked questions and understand the situation even if they understand it if you don't ask questions you're not sending the right message to the person you're dealing with so i see a lot of consultants who who don't approach the clients in a learning fashion um and then the other thing that's challenging to us is frequently consultants are are selling something beyond guidance and knowledge there's there's something else that they're selling and i think eric that's why our organizations have gotten along so well for so long you know you guys have done a great job of listening learning getting to know our people and how we operate and then we're always confident you're not trying to sell us something you're trying to help us make better decisions and i think you've always recognized we we accept the ownership of the decisions we want you to push on us um debate with us uh hold the mirror up to us and you you've been willing to to give us tough feedback when we've needed it and uh we want that um but we want to own the decision yeah and that i think that's the cue right there as long as you guys are owning it obviously you're looking for cultural fit the types of partners whether it's us or anyone else that fits you know your your culture and that aligns with that i think that's important a lot of people don't think about that because it's intangible you know it's hard you have to kind of feel it it's not a it's not a science by any means right right and concepts are good you pay consultants for concepts but you want folks who can partner with you and help you do things too and think through execution and that matters yeah absolutely um so we're up at the top of the hour so i might just ask you one more question here from the audience if you don't mind off of linkedin i'll pick one off here um there's a couple comments here you know

Channel: Digital Transformation with Eric Kimberling

Views: 5,113

Keywords: business transformation, digital transformation, cultural change, organizational change management, business intelligence, ERP implementation, customer experience, organizational structure, leadership, nucor steel, innovation

Id: H8GwB9-SiCg

Length: 54min 30sec (3270 seconds)

Published: Fri May 21 2021