There are certain people, those special whatever-it-takes people, who almost regardless of the incentive system would still do the right thing because it’s the kind of people they are. They learned it from their mom and their dad or their military experience or the Boy Scouts or their friends in high school. I don’t know where they get it—maybe they’re born with it. But it’s just who they are.
And so, the Nucor people didn’t try to incentivize lazy people into becoming hardworking people. They created an incentive system in which the lazy people got blown out of the system, and the people who just fundamentally would work hard anyway because it’s who they are flourished and would never want to leave. And so, again, it’s the who; incentives are a what. The incentives to keep the right whos is a who. So, that’s number one.
I think it’s the same with the Level 5. I don’t think Level 5’s became Level 5 because they were paid to do so. I think they became Level 5’s because they were the kind of people who, through experiences or development, were going to become that way.
Second, succession. How would I identify people for positions of responsibility based on our research? Again, I always have to go back to data, because unlike you folks, I operate in the world of looking through data versus having had the pleasure of the experiences that you folks have, so I don’t have the same kinds of hard knocks. What the data would suggest is that you look for people who have the following basic empirical facts about them. #1: That whatever span of responsibility they held, they produced results. And that may sound simple, but truly, they produced results. Somehow, the accounting department worked better, a facility worked better; when they became responsible, you could actually see that there was improvement. Results were delivered.
The second question is, are they the kind of person who was standing forth to take excess credit for those results? There are some people who deliver results, but it’s about their wanting to receive the credit for those results. They’re looking in the mirror. And there are other people who when achieving the same results point out the window; they talk about the people who helped them or the good fortune that helped them or the other factors that contributed to it. They really try to help shine the light on other people. I would look for evidence of people doing that.
But here would be the third, and I think this is the real litmus test if I were picking successors for key positions. Did the results continue when they moved to do a new responsibility? Let’s say they were running a particular facility and they did a superb job. When they left, did that facility continue or even improve its results because they had considered that their sense of responsibility was not just for when they were there but also for when they were gone?