Dofasco’s John Mayberry on going the distance to invest in people

John Mayberry, Former CEO Dofasco Inc.

John Mayberry, former chairman and CEO of steelmaker Dofasco Inc., knows from experience how much time and patience it takes for an essential skills program to take root in large companies. The best way to understand it, he says, is in terms of one of those high-profile, long-distance road races. At the outset, you have thousands of people at the starting line. They all have the potential to finish the course, though they have different abilities, different strengths and different weaknesses. When the starter pistol goes off, it takes time just to get them all under way. “You’ve got a marathon here,” says Mayberry, who retired from Hamilton, Ont.-based Dofasco earlier this year. “You may have started thinking about this three years ago, but some people are just hearing it for the first time. And you have to support them while they run the race. You’ve got a long journey, and it’s a lot of work, but the results are phenomenal.”

Canada’s largest integrated steel manufacturer has had an essential skills program for close to seven years, although it took about four years before employees really embraced it. The program came into being in the wake of a major shake-up in the company during and following the recession of the early 1990s, when Dofasco suffered three consecutive years of losses, the only losses in its 90-year history. “We had an industry in strife, low prices, we were losing money,” says Mayberry, who took over as president and chief executive officer in 1993. “We were improving, but we weren’t improving as fast as our global competitors. We were heading for more and more trouble. We had to change.”

Layoffs and attrition reduced the workforce by almost half over a four-year period, while a strategy was set to modernize Dofasco’s processes and shift its focus to higher value-added products that would help avoid the peaks and valleys that dogged the steel industry. It was a lot for employees to shoulder. Then, at one town hall-style information session, Mayberry remembers one employee “asking questions about things that we thought we’d repeated over and over again. We didn’t understand why he didn’t get it.” Kim Brooks, the company’s human resources development co-ordinator, was at the meeting too, and a possible answer suddenly struck her. Almost all the communication with employees had been in print. “Maybe,” Brooks thought, “he couldn’t read it.”

Brooks’ hunch led Dofasco to undertake a needs-assessment review, which clearly demonstrated that the company needed to make a tactical investment in its people to support its strategic vision. Participants in the review underscored the message that many employees could benefit from improving their reading, writing and language skills, upgrading their math or gaining some basic computer skills. When Brooks reported the conclusions to Mayberry, his response was immediate: “What do you need from me?” As a former chairman of the United Way in the early 1980s, he knew about literacy. “I was absolutely flabbergasted when I went to the Literacy Council,” he recalls. “The number of functionally illiterate people in our society was well beyond anything I had imagined.”

Responding to the needs it had identified, Dofasco set up an essential skills training program. The company received seed money from the province, although it dried up with the change of government during the program’s initial pilot phase. Dofasco already had one of the largest apprenticeship programs in Ontario, however, and because training was a $15-million-a-year priority for the company, the essential skills program, says Brooks, “was just another piece to the puzzle.” Today, with a workforce of about 7,200, Dofasco spends about $50,000 a year on the program.

Classes are free to employees, who are also paid for half their time spent in the classroom. The rest is on their own time. That formula is really important, Brooks explains, because it adds some value while employees also make a commitment. Employees enrol at the beginning of the spring and fall sessions, each of which consists of 12 classes. In all, about 350 employees have taken courses, some of them multiple sessions. Some of the more popular courses cover literacy, basic computing, keyboarding and business writing. The teachers, who are contracted from two boards of education and the Literacy Council, quietly incorporate a literacy component into all classes, so that Dofasco’s employees, many of whom may not have seen the inside of a classroom for 40 years, can brush up their skills. Initially, the employees themselves were skeptical about the program, though they have gradually embraced it, with the company building trust by keeping its confidentiality promises and sticking with the program. “With the employees, management, the team, if you blow it, you can’t come back three years later and say, ‘Let’s try that again,’” says Brooks. “They’ve stepped forward and said, ‘I can’t read.’ That’s huge, especially for an adult.”

Mayberry emphasizes that such programs have got to be viewed as long-term investments. “This isn’t like buying a new bearing and understanding your return on that investment,” he says. “I would caution people not to micromanage this activity. This is about the overall development and evolution of a workforce. It’s a piece of a puzzle, but don’t try to get a return on every hour that’s extended in educating people, because the results may not be evident for a while.” Dofasco’s Board, he adds, has also been sympathetic. “They understand the change we’ve been trying to make and they’re involved and supportive of it. They weren’t knee-jerky on quarterly results.”

Just as the essential skills program is part of the training puzzle, Mayberry believes the program’s effectiveness has played a part in the upturn in Dofasco’s overall performance. Last year, the company was the most-profitable steel producer in the world on a per-ton basis, and it is the only steel company, and the only Canadian-market sector leader, listed on the Dow Jones Sustainability Index. As well, Dofasco’s own score has been improving in employee surveys for the last four or five years.

When he retired in May 2003, Mayberry handed over the CEO’s reins to Don Pether. Since Pether is a 32-year veteran with the company, most recently as Chief Operating Officer, the transition was seamless. And Pether needed no convincing about the value of the essential skills program. “Our senior management team has been together for a long time,” Mayberry says. “We sat down together 11 years ago and asked, ‘How are we going to turn this sucker around?’ Across the board, we believed the people were the key to our success. Don shares the same set of values and principles. We’ve never discussed it. I know how he thinks, I know how he works and I know where his commitment is.”

Supportive as he is, Mayberry’s experience at Dofasco has taught him that while an essential skills program can have a real effect on business, a company cannot put such a program into place lightly. “If a company doesn’t walk the talk, this isn’t something they should try,” he says. “It will be seen as phoney. It will last six months. It’s got to be seen as staying the course in the natural evolution of the improvement cycle.”

THE BOTTOM LINE

Besides running the largest apprenticeship program in Ontario, integrated-steelmaker Dofasco Inc. also considers a company-wide, essential skills program to be a valuable component of its business strategy. To get the best payback from such a program, Dofasco’s experience shows that a company must:

• clearly indentify the needs
• structure the program to win employees’ trust and acceptance
• make a single-minded commitment to a long-term investment