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Fluor President Takes Creative Route to Revival : Management: Leslie McCraw, open and highly inventive, is called one of the top management success stories in the country. And he doesn't believe in the adage 'If it ain't broke, don't fix it.'


IRVINE — Soon after Leslie G. McCraw Jr. was appointed president of Fluor Corp.'s main subsidiary in 1986, he invited a group of children to meet with his top managers to brainstorm solutions to a thorny problem confronting the company.

The fourth- and fifth-graders helped his managers become imaginative in developing fresh ideas about a large under-utilized building in Texas that was costing the engineering and construction firm millions of dollars a year.

This rather unorthodox management rap session was just one of many creativity sessions that McCraw has required his top managers and others to attend to develop the right--or creative--side of their brains.

That emphasis on creativity was an integral part of his endeavor to shape an innovative team that ultimately executed Fluor's financial rebound. And McCraw's success in helping Fluor return to profitability, after losing $694 million in 1985 and 1986, has catapulted him to chief executive officer.

On Jan. 1, McCraw, 55, will take over Fluor's day-to-day operations from David S. Tappan Jr. By the end of 1990, he will also become chairman when Tappan retires.

McCraw's open and imaginative style helped accomplish a renaissance at what some industry analysts said had become a stodgy and demoralized company. According to associates at Fluor, he championed new business practices and encouraged discussion of dissenting views by placing people with opposing styles on a single team.

"We wanted to move people in their thought process from accepting change to embracing change," said McCraw, a soft-spoken Southerner. "We see change and our ability to react to it quickly in an agile way as our great opportunity."

McCraw earned the top office at Fluor primarily by merging its two engineering and construction subsidiaries, Fluor Engineers and Daniel--no mean feat considering that the two units had very different business cultures and underlying rivalries. He also reduced the company's focus on the petroleum industry and turned it into perhaps the most diversified firm in its industry.

Three years after he was assigned the task of merging the subsidiaries--and with the help of a revival of the economy--Fluor is now profitable. The company returned to the black in 1987 with earnings of $26.6 million. The upward trend is continuing, with Fluor posting net earnings of $108.5 million for fiscal 1989, up 92% from a profit of $56.4 million last year. Fluor Daniel generates 85% of Fluor Corp.'s revenue, with the rest coming from coal and lead mining operations.

Boosted Morale

McCraw is given much of the credit by some industry analysts, who say he has boosted morale and creativity at Fluor. For instance, he has pushed an innovative program in which Fluor has entered into 15 or more partnerships with clients to help plan and work on their construction projects, eliminating the bidding process. These partnerships, McCraw says, remove the otherwise adversarial relationship between engineering firms and their clients. They also give Fluor insight into its clients' business, he says, which contributes to better service.

He has also supported the development of an employee-incentive program. On an increasing number of Fluor Daniel projects, everyone--from managers to designers and secretaries--share in the added profit by completing the projects under budget.

"To be able to change the total character of a company the way he has is one of the remarkable stories of management in the country," said David Bartlett, director of research for Sterling and Yorke, an investment banking and securities brokerage firm in New York, who has watched Fluor for more than 25 years.

However, McCraw emphasizes the importance of teamwork. The philosophy that guides him has the ring of the cheerleader he was in college. He frequently refers to mottoes. A favorite: "There is no limit to what you can accomplish if you don't care who gets credit."

Leads by Enthusiasm

Said Allen Dorsey, a securities analyst with the New York brokerage of Dillon Read: "Some people lead by their power and some people lead by a certain magnetic draw that comes out of their enthusiasm. People follow Les McCraw not because he tells them to but because his enthusiasm is infectious."

One of McCraw's first actions upon moving into his luxurious, mahogony-paneled executive office in Irvine was to replace the china in the tall cabinets next to his desk with mementos of construction projects: safety buckles, hard hats, photos of ground-breakings and a piece of steel welded by Fluor Daniel's first female welder. He said this and other memorabilia "warm up the room."

To illustrate the organizational model he wants for Fluor, McCraw keeps as a prop a sphere made of wood pegs and rubber bands, symbolizing the value of individual employees and their interdependence.

To manage the sprawling Fluor organization--the company has 18,500 employees in 89 countries--McCraw will need all the skills that the 67-year-old Tappan sees in him, and then some.

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