======Ken Iverson======
F. Kenneth "Ken" Iverson (1925-2002) was the transformative CEO of [[Nucor]] Corporation, the American steel giant. While not an investor in the traditional sense, Iverson is a revered figure in the investment world, particularly among [[value investing]] adherents. He is celebrated for his revolutionary management philosophy that turned a struggling, near-bankrupt company into the most profitable and innovative steelmaker in the United States. His story serves as the ultimate case study in how exceptional leadership, a powerful [[corporate culture]], and perfectly aligned incentives can create astronomical shareholder value, even in a notoriously difficult and cyclical industry. Iverson proved that //how// a company is run is often more important than //what// it does. His principles of extreme decentralization, radical egalitarianism, and performance-driven compensation offer a timeless blueprint for investors seeking to identify truly world-class management teams.
===== The Iverson Philosophy: A Revolution in Overalls =====
Iverson's approach was simple, radical, and breathtakingly effective. He threw out the traditional corporate playbook and built a company based on common sense, trust, and shared rewards.
==== Decentralization and Radical Simplicity ====
Iverson despised corporate bureaucracy. He believed that the people closest to the work knew best how to do it. Under his leadership, Nucor operated with a skeletal headquarters staff—fewer than 25 people for a multi-billion dollar enterprise! Real power was pushed down to the individual plant managers and their teams. This fostered an intense sense of ownership, speed, and accountability that competitors couldn't match. There were no executive perks: no fancy jets, no special dining rooms, and no corner offices. Iverson himself answered his own phone. This lean, flat structure minimized overhead and maximized focus on the only thing that mattered: making steel efficiently and profitably.
==== "Pain and Gain" Compensation ====
Perhaps Iverson's most famous innovation was his compensation system, a masterclass in aligning interests. It was built on a simple premise: everyone shares in the company's success and its struggles.
  * **Low Base, High Bonus:** Nucor employees had modest base salaries but could earn massive weekly bonuses tied directly to their team's production output. It was not uncommon for a steelworker to earn more than a white-collar manager at a rival firm.
  * **[[Skin in the Game]]:** This system put every employee's "skin in the game." If you produced, you prospered. If you didn't, your paycheck reflected it immediately. This created an incredibly motivated and productive workforce.
  * **Share the Pain:** During industry downturns, there were no layoffs. Instead, everyone took a pay cut, with executives taking the biggest percentage hit. This built incredible trust and loyalty, proving that management wasn't insulated from the tough times.
===== Why Ken Iverson Matters to Value Investors =====
Studying Ken Iverson isn't just an academic exercise in business history; it provides a powerful lens through which to evaluate potential investments today.
==== A Case Study in Management Quality ====
[[Warren Buffett]] famously said he'd rather have a great manager in a so-so business than a poor manager in a great business. Ken Iverson is the poster child for this idea. He took a commodity business—steel manufacturing—and, through sheer force of management genius, turned it into an engine of immense wealth creation. For investors, studying Iverson provides a practical checklist for evaluating leadership. Does the management team...
  - ...run a lean, decentralized operation?
  - ...despise bureaucracy and unnecessary costs?
  - ...have a compensation system that aligns their interests with shareholders?
  - ...foster a culture of ownership and accountability?
Finding a management team that ticks these boxes can be the key to uncovering a truly outstanding long-term investment.
==== The Power of Corporate Culture ====
Iverson's greatest achievement wasn't a new technology; it was a culture. He built a system of trust, meritocracy, and shared purpose that became Nucor's most durable [[competitive moat]]. While competitors could eventually buy the same mini-mill technology, they could not replicate the Nucor culture. This intangible asset is what allowed the company to consistently innovate, improve, and outperform its rivals for decades. For investors, it’s a crucial lesson: a company's financial statements tell you where it's been, but its culture can tell you where it's going. A strong, positive culture is a powerful leading indicator of future success.
===== Fun Fact =====
Reinforcing his no-frills, anti-bureaucratic ethos, Ken Iverson located Nucor’s corporate headquarters not in a gleaming skyscraper, but in a modest rented office next to a sandwich shop in a Charlotte, North Carolina, shopping center.