Interview with Nancy Tuor
Former Group President
Leaders Speak Series
CH2M HILL, founded in 1946, is a global provider of consulting, design, construction, and operations services for corporations and governments. Headquartered near Denver, the employee-owned company has revenue of over $6 billion and employs over 30,000 people worldwide.
CH2M Hill manages large, complex projects around the world such as reconstruction efforts in the wake of Hurricane Katrina, relocation of American military bases in Korea, expansion of the Panama Canal, and projects for the London Olympics. In 2013, the firm was named by Fortune as one of the “100 Best Companies To Work For” for the sixth time and was named one of the “World’s Most Ethical Companies” by Ethisphere Institute for the fifth time.
In 2005, leaders from CH2M Hill successfully closed the Rocky Flats toxic nuclear facility near Denver in record time, at record-saving costs, and with aggressive environmental standards achieved or exceeded. It was an extraordinary accomplishment.
From the 1950s through the 1980s, Rocky Flats produced 70,000 plutonium triggers for the U.S. nuclear arsenal. This top-secret complex, occupying three million square feet in eight hundred buildings, was surrounded by razor wire, and patrolled by armed guards with shoot-to-kill authority. At its peak, the site employed more than 6,000 workers, including almost 4,000 members of the United Steelworkers of America.
Nancy Tuor, a senior leader at CH2M Hill, worked at Rocky Flats throughout the closure and was CEO at its culmination.
Here are edited and recently updated excerpts of our interview with Nancy Tuor about the remarkable Rocky Flats turnaround for Triple Crown Leadership:
When did CH2M Hill get involved in Rocky Flats?
Tuor: We were awarded the first performance-based contract for the complex from the Department of Energy in April 1995 and took over site operations in July 1995. The workforce had worked for a series of government contractors since the site began manufacturing the triggers for all of the atomic weapons in the U.S. arsenal in the early 1950’s. It was basically the country’s blue-collar bomb shop.
Our company was a joint venture, called Kaiser-Hill, consisting of Kaiser Engineering and CH2M HILL. We bid to replace the existing management company. Under this contract structure, the government hires a management company to manage the facility, becoming the employer of the existing site’s workforce
The plant had been shut down since 1989, when the FBI raided it after allegations of environmental problems by the contractor that was running the facility. When the Cold War ended in 1992, the production mission ended, and the site began to plan for environmental cleanup and closure. However, after 3 years of spending around $850 million per year, no noticeable cleanup progress had been made, and the government decided to change both contractors and the contract mechanism.
Traditionally, these contracts had covered costs incurred, and profit was based on a quarterly subjective evaluation of how happy the government was with the contractor’s performance. Under the new “performance-based” contract, profit was to be based on the accomplishment of quantitative performance metrics, including cost control and schedule adherence.
We won the new contract in a national competition and brought a management team of about 200 to the site in July 1995. This was a significant departure from past practice, as previous contractors usually brought only about 20 people to manage the staff of over 6,000. We believed that culture change would be the key to our success and knew that we needed a stronger leadership contingent to accomplish that goal.
Their schedule was that the cleanup would take seventy years and cost $36 billion.
Why did they think it would take 70 years?
Tuor: This type of work at this scale had never been done anywhere in the world. Neither the environmental capabilities nor the project management capabilities existed at the site to know how to proceed. They really didn’t know how to do it, and they placed a lot of constraints on themselves. For example, they assumed that they would have no control over the identification and readiness of receiver sites for the 21 tons of weapons grade plutonium and that the government would take decades to get this done. Given the inability of the U.S. to open a disposal site for commercial nuclear waste over the past 30 years, that was not an unreasonable assumption. With the annual operational cost over $500 million needed to keep the decaying, contaminated buildings safe for people to work in and to keep the weapons-grade plutonium out of the wrong hands for decades before real cleanup could begin, the costs racked up pretty quickly.
The workforce there had produced highly proficient products. The quality of the work they did, as we came to know later, was really top notch. But in 1995 a lot of people hadn’t worked for seven years since the FBI raid and shutdown. They literally sat in the cafeterias each day doing nothing. We came into an environment that was totally broken. Payroll was the only thing you could count on working. The organization had forgotten how to succeed. Because there was no clear path forward, plans changed constantly. As a result, the staff was incredibly demoralized, and many stopped doing good quality work. They just delegated upward, figuring by the time it got to the top it wouldn’t be needed anymore.
What was your role in this joint venture?
Tuor: I held numerous roles. When we bid the project in 1994, I came on to help with the bid. My original role was head of HR, labor, communications, workforce transition, training, and organizational development. The reason I was selected was because I had run a business unit for CH2M Hill. The team wanted a businessperson in this role because they viewed it as key to achieving culture change. Also, the relationships with the local stakeholders were abysmal. I’d had a lot of previous experience in working with difficult political and community issues in the hazardous waste business. I was in that role for two years, and then in 1997, I became head of strategic planning and project controls.
In 2000, I took over one of the major projects, which was the cleanup and demolition of about 700 buildings, site operational services, and all environmental remediation. In 2002, I became the COO, and in 2004 the CEO. Except for the health and safety position, I pretty much held every level of management position over the 10 years. I was the CEO when it was closed.
What was the leadership context early on?
Tuor: After we’d been there for about eight weeks, Bob Card, who became our COO and then CEO, walked into the office and said, “How can this possibly take this long? It’s not a project. This is a career. Our children will retire before it is done.”
Under his leadership, we put together a “skunk works” team, half internal people on the site, half external people we brought from our parent companies, plus one member of our client’s management team. They were told to assume they had $5 billion and five years with no rules or constraints. The challenge was to tell us how much work they could get done. They had eight weeks to develop a plan. At the end of their effort, they reported that for a total of $7 billion and seven years they we might be able to get it done.
They had some overly aggressive assumptions, but their effort totally changed the terms of the debate. All of a sudden, it wasn’t closure in 2065 anymore. It was, “Maybe if we put some constraints back on, it’s 2015.” So, we set a whole team aside to develop a detailed plan and determine what constraints would require resolution to achieve accelerated cleanup and closure.
How did the client react?
Tuor: The Department of Energy had recently changed leadership at the site. The new site manager was an African American woman, a nuclear engineer, very young for such a position, extremely visionary, and thoughtful. She was in strong agreement with what we wanted to do. She gave us a two-track mission: put the plant back to work, while developing a detailed accelerated closure strategy and implementation plan.
Getting the workforce engaged was job number one, as they had not been doing much in the way of meaningful work for a number of years. Given that we had the first performance-based contract the Department of Energy had ever awarded, it was critical to show that it would result in measurable progress. Our client and we set solid performance metrics for each quarter, like moving a number of waste containers to final disposal. Accomplishing and celebrating this work was vital to rebuilding workforce confidence and pride.
We went to what I would call a cottage-industry approach in which we’d focus a work team on a project, get them working well, then split that team up, and spread them out to other teams to change attitudes at the floor-level of the organization.
We did a lot of praising of success. I used a weekly public address system to get brief announcements out quickly, like: “Let’s congratulate this work team for having done this because it’s never been done before.”
We said, “We’re not going to do any slogans. We’re just going to focus on basics and safety first. We’re going to build an excellent safety culture.”
Once you teach an organization to be excellent in one area, it can’t just be excellent in that one area. You can actually map the improvement in our safety processes against the improvement in our schedule. As our safety improved, our productivity went up exponentially over the ten years. If you are working safely, it means you’re doing it right the first time.
At first we were really emphasizing schedules, because we had a schedule-driven contract, and then there was all this grousing that schedule mattered more than safety, and we were going to hurt people.
Finally, we said, “Don’t worry about the schedule. Have the crews do everything right the first time. No matter what that takes. No matter if that means you don’t start today because you discovered you can’t meet the procedural requirements or you don’t have the right equipment.
Do it right the first time and the schedule will take care of itself.
I’m sensing that this is a story of organizational transformation.
Tuor: Absolutely. They hated us when we got there. Hated us. Some of the people were third generation at the plant. They expected their children would work there. They expected they would retire from there. They thought the country had made a huge mistake in stopping weapons production and that any day there would be a change in policy, and they would be back to making weapons again. Then we show up and say we are going to accelerate the cleanup and closure and put them out of their well-paying jobs before they reach retirement age. They were angry and confused and faced with a mission that they didn’t believe in or support.
When we took over the management, we did not initially understand how much pride the workforce had in the role they played in the Cold War. They firmly believed that the reason there was no open warfare with Russia was because of the deterrent they produced. When we finally figured that out, we redirected that pride, focusing them on being the ones who brought the plant full circle, taking the environmental liability that had been left as the result of the Cold War and turning it into a community asset. We talked about going from “weapons to wildlife”.
That unlocking of pride gave us a tremendous resource.
Did you craft a new mission statement?
Tuor: Yes: “Make it safe, clean it up, close it down.” It was written at a large stakeholder meeting shortly after we began in 1995, as we were trying to focus the community on the outcome we all wanted.
What was the general leadership approach in this transformation?
Tuor: At first we fumbled around to figure that out. We brought together a collection of project managers. I was the lone non-engineer. None of us had ever tackled anything like this. Bob Card and I were both on CH2M Hill’s board of directors and had come up through the project management ranks. However, the organizations we had run were groups of highly skilled professionals. CH2M Hill typically takes the top 10% out of the graduate schools. Now we were faced with a workforce that included 2,500 unionized steel workers and another 1,000 construction trades.
We focused on getting people back to work and on employee communications. We totally revamped all of the communication mechanisms. We did a lot of random 10- or 20-people sit-downs over lunch to find out what they were thinking. We did all-hands meetings of 300 or 400 where they could ask a lot of questions. We tried probably every technique in the book over time to try to get people to talk to us. As we listened and understood, we became more sophisticated. The first few years were ugly, just ugly. About five years in, we really started to solidify our management and leadership approach.
The leadership approach was very strategic at the executive level, but all of the executives were expected to be hands-on with their workforce and very visible in the workplace. When Bob Card became the CEO about a year and a half after we took over, he was the first CEO who was actually certified to go into the building in a breathing-air apparatus to see how the work was done. Then we required that every one of our line managers spend at least half a day on respiratory protection on the work floor with the workers, understanding the work and solving problems.
There had always been an incredible disconnect between the senior leadership and the workforce.
We focused on building a safety culture, and then letting that safety culture flow over into the rest of the work. We expected the senior folks to really engage in the work and understand it because the only way we were going to continue to make these strategic leaps was to understand how the work got done.
How would you describe the organization’s culture?
Tuor: In the former days, it was a very collegial culture between mid-level management and the workforce. It demanded “command and control” because of the strict compliance nature of nuclear work, but it was very collegial with joint problem solving with the skilled steel workers.
After the FBI raid, they brought in a new site-management company with an approach that communicated, “Just sit down and shut up. Check your brains at the door. Don’t do anything I didn’t tell you to do.” There was no respect for the workforce. So, for over six years the people just sat around and played cards or read the paper, and when they were told to do something, they did it.
We instituted a real culture of respect. I had a management firm come in at the end of the project to analyze why we had been successful. They said, from the workforce’s perspective, the biggest thing we did was to respect them. That was evidenced by our 100% safety commitment and the way we brought them into how we achieved safety, not by telling them how to achieve safety, but by involving them in how we achieved safety.
We had a tremendous respect for their capability that unlocked their willingness to be problem solvers.
How was that culture built?
Tuor: The culture change started with us figuring out what it took to be an executive in that environment. We ran a fair number of people through executive positions in the first five years. We just couldn’t figure it out, because it was a strange set of skills we were looking for. You had to be really tough–I don’t mean tough in the way of behaving, just internally tough–because it was hard. Nobody had ever done this before. Trying to figure out how to get folks to engage and follow was demanding.
It started with really developing leaders who modeled the behavior that we wanted to see everywhere: respect safety, follow the rules, but be very creative in the strategy and problem solving. We needed leaders and managers who were constantly thinking about how to do it “better, cheaper, faster, safer,” yet who could instill in their workforce the demand that once work began compliance with safety and work procedures was mandatory. If you wanted to change anything in mid-stream or you came upon unexpected circumstances, you had to “back-out” and replan.
We had some work that was so exacting that you actually had a “procedure reader,” who read the procedure out loud, word by word, to the person doing the work to ensure that every step was done exactly as written. The leadership met a couple of hours every week just to review non-compliances and determine whether we were responding correctly.
At first, we couldn’t get them to work. Then we couldn’t get them to stop work.
This workforce was very skillful and developed great confidence in their problem solving skills. As they got better and better, they wanted to solve problems on the spot. We had to continually emphasize compliance and the need to stop work when conditions differed from those outlined in the work plans. We developed rapid-response teams in every building. If a team had to back out, the rapid-response team was to get there and within thirty minutes lay out a solution and get the paperwork signed so that the workers could get back to work.
What was the role of the board in this transformation?
Tuor: They were very engaged. At CH2M Hill, we distribute about 25 to 30% of our earnings to employees through incentive pay. CH2M Hill is employee owned and has a very strong corporate culture. We brought that culture with us.
We made a commitment to share 20% of all our earnings with the employees. We distributed $100 million in employee incentives over ten years.
Originally, there was no incentive pay for hourly workers because the union wouldn’t consider it. In our first union negotiation, the one thing we cared about most was getting incentive pay into the union contract. It was based on our ability to accomplish our performance measures: if we accomplished 100% of our performance measures, then each member would get $1000. We wanted to give more, but the union was very cautious at first. Our board really drove us to focus on effective ways to distribute these incentives.
What else did you focus on as a leader at Rocky Flats?
Tuor: We didn’t do a lot of outside hiring. It was figuring out how to get the right people in the right job and then create a team environment, modeling the behavior you wanted to instill.
We tore down the central administration building and housed with our workers, trying to create that connection that was so important. I was the external storyteller and an evangelist, both internally and externally. All the leaders were culture officers. That was really a team role.
Was there a lot of leadership versatility involved?
I spent a year and a half in a trailer that had no indoor plumbing. I worked in jeans and work boots, spending the day with the laborers.
In their book, Making the Impossible Possible, Kim Cameron and Marc Lavine described the biggest leadership versatility we had to use: to be incredibly strategic, creative, constantly testing, constantly changing, no matter what the problem, never accepting boundaries; yet at the same time building a culture that was absolutely by the book. How do you create a culture that can do both of those extremes in the same business environment? We were doing that on a daily basis.
During management meetings, we closed the door and people would fight because we had a difference of opinion. But when it came to time to make a decision, I made the call, or Bob Card made the call, and you knew everybody in that room was going to do it. There was never a question.
When the management firm came in and did this analysis of why we were successful, one of the things they said was that they hesitated to use the word “love” because we had a bunch of real crusty field guys, but the trust level between the leadership team was stronger than any they had ever seen. Once a decision was made, everybody had the back of his or her counterpart. They made a commitment to them and were going to keep that commitment.
Were there any shared values that were developed by the group that helped build this trust and culture of pride?
Tuor: Safety was the first one, and then our continued mantra was “better, cheaper, faster, safer.” How do we do this better? Cheaper? Faster? Safer? Respect was so tied to safety that you couldn’t say safety without saying respect too, because safety was respect.
We did a lot of symbolic things. One of the first buildings we demolished was the administration building because it had been where the workers always clocked in. Management had been in that building for fifty years. One of the first things we did was to take the executive parking places away. We did that the first week because we wanted people to know right away that we were different.
The culture was: if you’re a leader, you got your name on a parking place. Oh, I’m sorry, not anymore.
How did you deal with people who didn’t fit the new culture?
Tuor: We brought in a couple of people who had enormous egos. We had some very significant conflicts with them. They stayed awhile and made some enormous contribution, but eventually we moved them out because the cost of the ego was overriding the value of the contribution.
It sounds like some people had a latent capability that wasn’t recognized until the culture had changed?
Tuor: Many of the managers that we inherited at the site now have key positions at CH2M Hill. One of them is now running one of thirteen business groups, and another was responsible for major elements of our work at the London Olympics. In 1995, we brought an entirely new executive team to the site. When I became CEO in 2004, almost every one of my direct reports was someone who had been in leadership at the site before we arrived. They had moved down a few rungs when we arrived at the site, and then worked themselves back up to the top due to their capabilities and commitment to the mission.
Was the leadership widely distributed or concentrated in a few key people?
Tuor: We distributed leadership fairly widely. It is a command and control environment in the sense that the key decisions had to go up the chain. There were certain requirements that only senior leadership could sign off on. But as we built capability, especially in the second- and third-level managers, we distributed authority very broadly, which was critical because those people had to be thinkers and doers.
We were constantly looking for innovation. There were so many unique circumstances that we needed people at the floor level to be creative problem solvers. For example, one of our schedulers was working with a team trying to accelerate removing large pieces of waste equipment out of the upper floors of a building with very narrow stairs. She was on an airplane one day and saw how they cater things up to the airplane door on a moveable platform. She brought the idea back to the site and we implemented that solution immediately.
We had an hourly worker who was laboriously dismantling equipment and putting the small parts into large containers for offsite shipment. The containers were becoming unbalanced due to the loose parts shifting as the container was moved. At home he figured out how to build interior boxes that would allow greater packing stability. With the scrap from every ninth box, we could make a tenth box. At first, he couldn’t get anyone to listen. He insisted I look. The next day we had a ceremony for him and handed him a $2,500 check. His manager apologized for not listening to him right away. I told him that if I’d ever had to be a prairie homesteader I would want him to be my neighbor.
Was this a high-performance organization? How did you measure performance?
Tuor: Definitely. The primary metric I would use is that we cleaned up the site to beyond the anticipated environmental standards in ten years for $7 billion (versus the original estimate of seventy years and $36 billion). We received a rebate on our worker’s compensation insurance for the last two years because our safety record was so phenomenal. We did not have a single lawsuit or labor claim at the closing. We received a $240 million lump sum fee payment thirty days after declaring physical completion. That was not a check the government really wanted to write, but we had done such a thorough job of organizing the compliance requirements that they couldn’t argue.
What else should we know about leadership at Rocky Flats?
Tuor: We grew and changed into different people. We’re tougher. We had to do hard things. You build courage doing that. I think courage becomes stronger by using it. If you never have to use it, you don’t know it’s there.
We learned the importance of modeling behavior. You’ve got to behave the way you want the organization to behave.
We learned about taking bounded risks, and that standing up for what you believe is essential, especially on ethics issues. You have to do right by the people. Sometimes you just have to step back and say, “You know what, what we really thought we wanted just isn’t going to work, because it’s just not the right thing to do.”
Every day was so much fun: the ability of the team to work together, the constant questioning and pushing, but knowing that if you chose to go right, 4,000 people would go right behind you, and also the camaraderie.
When we first got there, nobody would look you in the eye or smile at you. But it got to the point where everywhere you went people wanted to talk about what they were doing. They were proud; they were happy. It was also knowing that no matter what the problem was, people were going to take the responsibility to figure it out.
About six months before we closed, we were surprised to find a large amount of buried waste that nobody had known was there. It was a unique combination of waste materials that had no clear disposal solution. Nobody in the country had dealt with it before, and it had huge potential cost and schedule implications. I remember the leadership meeting in which the environmental team laid this bad news in front of us. Instead of laying blame for a last minute problem, the head of the waste organization said, “Okay, don’t worry about it. We got it, Nancy. Everybody, go do your job; we’ll figure it out.” And they did.
I think this demonstrated two important characteristics of the team: First, each member respected the difficult work their counterparts were doing and the commitment they each were making to get it done. Second, we had built a problem solving capability that they had confidence in.
The team really took ownership of problems. We always said it wasn’t about the first horse that got over the finish line; it was the last one because everybody had to get done. We all felt the responsibility to help figure out how to carry the last damn horse.
How would you define great leadership?
Tuor: It is the capacity and strength to conceive and deliver a vision.
What happened to the 8,000 people after the closing?
Tuor: It varied widely. We put together a very aggressive workforce transition plan. We got the government involved and the Chambers of Commerce. We did outreach to the industries. The governor wrote a letter to all the major industries in Colorado saying, “This workforce has contributed huge things. Let’s look for jobs so they can continue to contribute to Colorado’s future.” We set up direct access to job-search websites with major employers in the state. Every single one of our security police officers was placed at either another Department of Energy facility or locally. We provided tuition to many to get advanced degrees or technical training for new careers. The union worked in concert with us to help workers do financial planning. Many of the hourly workers were putting in lots of overtime. Union leadership encouraged them to pay off all their credit cards, put money in the bank for their kids’ education, and pay off their mortgages. We put early pension plans in place, including retiree medical programs. We tried to attack it from every possible angle. What we really tried to get them to focus on was not leaving Rocky Flats, but rather going to the next stage of their lives: “What next stage are you going to?” When the site closed in 2005, the average age of the workforce was in their mid-50’s so they had a lot of life left to live.
Supervisors knew it was their responsibility to stay connected to their workers and get help if someone was showing signs of significant stress. The doctor who led our medical program was particularly helpful in counseling individuals and getting them the help they needed.
How did the employees feel at the closure?
Tuor: Proud of what they had done and sad to be leaving the site and the people they had worked with for so long. We held a big final celebration to thank the community, the regulators and the employees for this incredible achievement. We had about 1,000 people in attendance.
I’ve never been in a room so electric. They were so proud of the job they did. We created a culture of respect where average people produced extraordinary results. We grew and changed into different people. It was not about me; it was about them. It was the job of a lifetime.
Bob and Gregg Vanourek, father and son, are co-authors of Triple Crown Leadership: Building Excellent, Ethical, and Enduring Organizations, a winner of the International Book Awards.