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Ricardo Semler scares other companies

22 Nov

Studying management years ago I remembering coming across a Ricardo Semler in his book “Maverick”. I was putting together an assignment for college and what I read about Ricardo and subsequently have learnt from him puts him up there as my favourite CEO (if you could even call him that).

Ricardo’s father initially ran Semco in Sao Paolo in Brazil. At the age of 21 joined the company and began to instil a radically different way of thinking compared to the old style of management his father had worked with. He immediately sacked 65% of the middle managers and over the next twenty years began to turn what most people believed to be the way to run a business on its head. Here are a few of Ricardo’s achievements within Semco.

  • Workers can set their own salary
  • All staff are welcome to attend any meeting high or low level within Semco.
  • Workers decide on who their boss will be. They interview candidates and choose the best fit for them.
  • Employees can decide on which of the Semco offices across Sao Paolo they wish to work in.
  • If you fancy working a 4 day week. No problem you can give that fifth day back once a week when you retire.

Semco now employs almost 5,000 staff in comparison to the 100 people that worked at Semco when he took over. He runs quite a democratic ship which is something we rarely if never see within business. Providing his staff with the responsibility and trust to make the right decisions. I think Ricardo is better at explaining how he thinks. Here he explains his thoughts on trust.

Companies tell their employees they are all part of one big, happy family. How can they rationalize such sanctimonious sentiments when they frisk their workers on the way home? Or deduct vacation time when someone arrives 10 minutes late. OR audit petty cash account of someone who has been with the company for two decades. Or put padlocks on the storerooms to prevent the entry of “unauthorized personnel.” What family searches its members for silverware as they leave the dinner table?

On an average, maybe 2-3% of any work force will take advantage of an employer’s trust. But is this a valid reason to subject 97% to a daily ritual of humiliation? It’s a cost of doing business. I would rather have a few thefts once in a while than condemn everyone to a system based on mistrust.

Have thefts and time cards cheating increased or decreased? I don’t care and I don’t know. It is not worth it to me to have a company at which you don’t trust the people with whom you work.

But every responsible adult knows how to dress correctly for these occasions. We hoped eliminating the dress code would help create a company in which office doors would seldom be closed and it would be common for people to walk in, sit on a colleague’s desk, and eavesdrop on a meeting that had nothing to do with him. You cannot break down the walls until you actually break down the walls.

What if, before painting the walls, you actually took a survey of the workers to see what color they preferred?

Job security is always a concern. Committee members did not feel they could sit across the table from their bosses and speak freely if they could be fired for what they said. That seemed reasonable, so we guaranteed that they would not be sacked while they served on a committee and for one year forward.

The dismissal of any employee who had been with the company for more than 3 years or was over fifty had to be specifically approved by a long list of people.

Everyone on the committee gets ONE vote, including the president.

Why are we consistently attracted to ways of thinking that make no sense? Ricardo argues why do we still struggle to parallel park a car after 100 years of design? In all this time we have not come up with a parking model that allows us to simply drive with ease into a parking space without the need for reversing. It is his ability to questions what we take for granted as norms and ask why can it not be different. His follow up book in 2003  ” The seven day weekend ” asks us to question why we can’t play golf on a Monday morning if we take home work with us on a Friday night.

Many employers can learn from how thinking differently in business can benefit the way we   survive and grow in business.

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