On a clear day, you can just make out the skyline from the back porch of Denny Ferrera’s house in Louisville, Colorado. Not the skyscrapers of Denver, but the outlines of the industrial buildings at Rocky Flats, the former nuclear-weapons plant located just 16 miles outside the city. By the end of 2006, however — if not before — that entire skyline will be gone. And Ferrera hopes to be there to close the gates.
For Ferrera, Rocky Flats is very much a family affair. He has spent almost 30 years working at the facility, which is nearing the end of a cleanup process that began several years after it ceased production in 1989. He joined as a plutonium engineer; his current task is managing the teardown of all the “cold,” or non-nuclear, buildings at the plant. Ferrera’s twin brother, Kenny, a decontamination manager, has worked here for 30 years, too. Their father, Dominic, who still wears blue denim Dickies 20 years after retiring, started at the plant in 1953, a year after it opened. Denny’s wife works in accounting here, his sister-in-law works in shipping, and his nephew Gary is a firefighter. Even Denny’s two sons work at Rocky Flats. One is an engineer, the other demolishes site buildings, including one Nightline once called the “most dangerous building in America.”
And all of them are working their way out of their jobs. “How in the world do you get people to work as fast as they can to put themselves out of work?” asks Kim Cameron, a University of Michigan business-school professor, who has been studying the successes at Rocky Flats. “Well, incentive is one [way], meaning is one, symbolic leadership is one, and changing the nature of the culture is one.”
Kaiser-Hill, the company running the cleanup (a joint venture between two engineering firms), has done all of these things and more to turn around a toxic employee culture and try to achieve its audacious plan. Initial estimates pegged the cleanup at 70 years and $36 billion, but Kaiser-Hill embraced a goal to complete it in about 10 years and for less than $7 billion. If the cleanup of Rocky Flats continues apace, the facility, long seen by employees as a place of cradle-to-grave employment, will cease to exist in less than two years.
Although the dismantling of Rocky Flats is vastly more complex and dangerous than, say, launching a new flavor of popcorn or chasing the next consulting gig, Kaiser-Hill’s goals are something ambitious, innovative companies try to achieve every day: to capitalize on an opportunity in a new market by doing something they’ve never done before. To succeed, the company had to persuade employees to strive for seemingly impossible results, to stretch themselves in ways not thought possible, and to develop new procedures for working faster, safer, and smarter. For any company facing daunting circumstances, Kaiser-Hill’s experience offers some unusual lessons in managing with flexibility, sensitivity, and imagination.
For a long time, Kaiser-Hill’s goal seemed to many — not least of all the workers at Rocky Flats — as incredible as the end of the Cold War itself. Many of the site’s employees were proud Cold Warriors who had worked at the site making plutonium-based triggers for nuclear bombs — until an infamous 1989 FBI raid shut the place down. “[Workers] went overnight from being heroes to goats,” says Nancy Tuor, Kaiser-Hill’s CEO. Workers suffered from inertia, and the ranks were filled with rampant denial that cleaning up the site in such a short period was even possible. (Critics, including some employees, have charged that the company has shortchanged safety to speed up the cleanup.)
Even Kaiser-Hill had doubts that the monumental task could be completed on schedule. Indeed, as recently as late 2000, Kaiser-Hill gave the project only a 15% chance of completion by 2006. But by last August, the last of the weapons-usable plutonium was shipped off the site, and today, the company says the project is about 80% complete. The site is being handed over to the Fish and Wildlife Service to become a wildlife refuge.
How the company has gotten this far involves an array of factors — the Department of Energy, local governments, and other regulators have all played a role — but one of the biggest is how it has gotten employees to buy in. It has needed them to fulfill its own ambitions. The company stands to earn as much as $560 million if it completes the cleanup by the end of 2005 for a total cost of $6.1 billion. And with the success of Rocky Flats, one of Kaiser-Hill’s parents, CH2M Hill, is poised to compete for remaining nuclear-cleanup contracts in the United States and the UK. “I think it’s great,” says Ferrera, who hopes to latch onto one of the company’s new assignments. “Not great to work myself out of a job, but it’s great to be able to say I’ve been there through production and I was here to see the closure of the site.”
Bringing Down Mahogany Row
Ferrera’s first task under his new boss was to help demolish the guard shacks that had been the entryway to the site for more than 30 years. Kaiser-Hill’s contract started on July 1, 1995, and the shacks were to be down by the time workers returned after the July 4 holiday. The idea: to show commitment to tearing the place down. Even more important was a literal and metaphorical tearing up of the management structure. Building 111, home of “Mahogany Row” — the executive-management offices of Kaiser-Hill and its predecessors — was one of the first buildings leveled.
But employees needed a lot more than symbolism. The most important early task, says CEO Tuor, was getting workers, who had been without a clear end goal since 1989, to remember how to succeed. Kaiser-Hill worked with the DOE to craft detailed performance measures so that bite-sized, identifiable tasks could be measured — and then celebrated. “We had to reinstate the pride and accomplishment that they’d had during the production days,” says Tuor, who ran human resources and then operations before recently taking the top spot. She began making a conscious effort — in meetings, during weekly announcements, in employee newsletters — to laud workers’ progress. Sound simple? It was. But in the context of an organization filled with denial, it worked wonders. “This place basically was subsidized by the government for 40 years,” she says. “Simple things that a good business does as normal practice still had room to have tremendous impact.”
Lead Gloves and Sludge Daddies
This would not have been as much of an issue had Kaiser-Hill replaced the production-era workers in the decontamination and decommissioning work, as contractors at some commercial nuclear sites have done. Instead, “we made the decision that the [workers] who made the weapons were also going to be the workers who made the environmental-restoration cleanup happen,” says Alan Parker, who preceded Tuor as CEO. The steelworkers, the company reasoned, had years of experience that would be crucial for the decontamination work at the plant: They were familiar with the hazards, they were used to the risks, and they knew the plant.
To broaden that expertise, Kaiser-Hill worked with the union to eliminate narrow job categories and place the steelworkers in flexible, efficient teams. That helped lead to countless innovations that have increased productivity dramatically. One steelworker developed a faster way to loosen the lead-lined gloves from the steel boxes in which plutonium handling once occurred. The tool shaved hours off removing each set of gloves. Another team designed a tool called the “sludge daddy,” which sped the loading of more than 200 drums with 12,000 gallons of sludge to be shipped off-site.
In this high-risk environment, though, there can be a downside to giving workers more autonomy and flexibility. After a fire in one of the contaminated glove boxes was mishandled last year, independent reviewers told Kaiser-Hill that it was too loose in defining workers’ authority. “They have confidence in their ability to solve whatever problem gets presented to them,” says Tuor. “The problem is we have to step back out and tell them when they’re right.” As a result, the company is refining workers’ scope on assignments and training frontline supervisors to better recognize when workers are straying from their tasks.
Turning Goats Back into Heroes
Kaiser-Hill also put its money where its mouth was. With overtime, for example, about 20% of the steelworkers make more than $80,000 a year. For salaried workers, the company crafted a financial incentive that is linked to shuttering the site. CFO Len Martinez, who is also the VP of administration, was the architect of a complex system that offers salaried employees an annual bonus in both cash and “safe units,” deferred compensation that won’t be paid until the site is closed completely. (The steelworkers also get bonuses, but they’re usually much smaller and paid entirely in cash.) The safe units’ worth is tied to the site’s schedule; their estimated value has more than tripled since the incentives began. “The difference between this incentive system and a normal incentive is that it’s paying you as if you have already succeeded,” says Cameron.
Each employee’s bonus is based on performance and contribution to the overall effort, which management ranks each year for every salaried individual. The result? Employees jockey for the jobs that allow the highest contribution levels. If the goal is met, more than $100 million of Kaiser-Hill’s final fee will go back to employees. Some employees could walk away with $200,000 to $400,000 in incentives, Martinez says.
Turning Down the Temperature
Even as the company gives employees incentives to work faster, safety must come first. But Kaiser-Hill’s safety performance has increasingly been called into question. Although the site’s safety record is statistically good, with an injury rate that’s among the lowest of all DOE sites, a recent $522,500 fine brought its total DOE safety-related fines to $1.7 million since 1995. The Defense Nuclear Facilities Safety Board, which oversees DOE’s nuclear sites, issued a report in December that said the site had a “wholesale breakdown” in safety management.
And some workers do question whether safety is being pushed aside in the rush to meet the end goal. A group of them sued the company, alleging that they were moved to buildings with fewer overtime opportunities after reporting safety issues. (Kaiser-Hill won the suit; the workers have appealed.) “There were a lot of people who were afraid to say anything to management,” says Don Sabec, a 43-year plant veteran who was not part of the suit but who believes Kaiser-Hill once tried to move him out of a building for voicing too many safety concerns. Sabec admits, however, that safety has improved.
Parker and Tuor have battled this idea — schedule versus safety — for years. Halting work for an incident that shuts down the site costs $2.5 million a day. To prevent that, the company has started a number of safety initiatives, from installing an anonymous hotline for safety complaints to using safety records to help decide executive bonuses. In 2001, it took down all signs that referred to the closing date. Out went the letterhead emblazoned with 2006, the date-embroidered shirts and jackets, the posters picturing thermometers that measured building progress. But still, the issue remains. “There are people who feel if they bring up safety issues, they’re going to be moved, they’ll be targeted for layoffs,” Parker concedes. “I think we’ll fight that until the end.”
Building A Future Foundation
Still, the end is rapidly approaching, and that means some 3,000 workers at the site will lose their jobs over the next couple of years. Kaiser-Hill has created an elaborate program to ease the transition. “Yes, it’s the right thing to do,” says Martinez. “But it also plays into our business model. If you have people worried about what they’re going to do and how their families will be affected, they won’t be focused on being safe and doing the work.”
And so salaried workers, who once got the standard two weeks’ notice, now get four months. Kaiser-Hill takes out full-page color “reverse” ads in the local paper, advertising individual employees’ skills in hopes of landing them a job. Martinez and his team have met with dozens of local businesses and economic-development groups to market their workforce. When the union suggested appointing a member to act as a headhunter to find jobs for steelworkers, Kaiser-Hill paid. A company-run online job bank lets outside employers contact workers directly.
Help with transition is not just a nice perk. It has the potential, especially in this environment, to be a lifeline. “We’ve been so insulated here,” says Duronda Pope, a steelworker safety rep who’s been at Rocky Flats since she was 18. She’s attended classes at the program’s on-site Career Transition Center to get help writing a resume and begin the job search process. She believes she’ll be laid off early next year. “It’s like going through a major divorce. If you don’t have any foundation whatsoever, you’re not going to pull through it.”
Fast Take: Downsizing Decently
Major layoffs usually lead to a decline in productivity, quality, and morale, says Kim Cameron, a University of Michigan business-school professor who is studying Rocky Flats. Here are four Kaiser-Hill practices that led to better work and better attitudes.
Attach meaning to work
Giving employees a reason to work themselves out of a job was key to motivating workers whose public image had gone from patriots to polluters. Kaiser-Hill had employees envision a wildlife refuge — images of a cleaned-up site are used on many staff materials — and promoted that workers were doing something that hadn’t been done before. “All of a sudden you [have employees saying], ‘I can sign up for this,’ ” says Cameron.
Take symbolic leadership
For a workforce that didn’t believe the company’s goals were possible, symbolic steps were needed to fight denial. Dismantling site monuments, including a longtime management building, paved the way. “That’s where a lot of people were hired,” says Chuck Miller, a steelworker at the site. “When that went away, it seemed like they meant business.”
Smooth the transition
Kaiser-Hill’s Workforce Transition Program, on which the company will spend $5 million to $7 million, sponsors an online job bank, funds grants for entrepreneurs, and advertises its workers’ skills in newspaper ads.
Share the wealth
If Kaiser-Hill meets its goals, it will give more than $100 million back to employees. The incentives focus on success. Kaiser-Hill’s goal-based system is “different than other organizations that say, ‘You prove it, then I’ll pay you,'” says Cameron. “People are being paid on the assumption that they’re successful.”
Jena McGregor is an associate editor at Fast Company.
Interested in further exploring some of the ideas and issues in this article? Consider starting a Fast Company reading group. Here are some possible conversation catalysts:
The workers at Rocky Flats will be fired if they are successful in their job. How would you motivate a team under those circumstances? What potential morale problems would you face? Consider the case of IT professionals forced to train their overseas replacements — what incentives exist for them to do well?