Why Semco Doesn’t Want Your Company To Be Like Semco
Back in the early 80s, Ricardo Semler was nothing but a spoilt brat: He was the son of Antonio Curt Semler, who owned Semco, one of Brazil’s most successful manufacturing companies.
Ricardo took over from his father while still a law school student and barely 21 years of age. He walked around the company, making observations and completely disapproving of Semco's work structure. As the new boss, he had tremendous power and very little respect for conventions.
Simply put, Ricardo had ideas for Semco’s future that were quite outrageous.
Counting the minutes
Clovis Bojikian came into the picture shortly after. He recalls one of the first observations Ricardo made: “People come here sort of crushed, as though they are carrying some weight. They sit on a table and keep performing tasks, counting the minutes until lunch time; and then counting the minutes until it’s time for them to leave. And, when they leave, it’s over.”
Adding that he didn’t feel any vibe, Ricardo wondered if the people had more to give the company than what they were. And, if that was true, he knew Semco’s leaders had to discover ways to reverse the current situation.
Not only was that an astute observation about Semco in the 70s and early 80s, it could equally be made about any other reasonably successful Brazilian company.
Moving From Ordinary To Extraordinary
Semco then was an autocratically styled company. The powerful ruled, and the wise obeyed. There was a fixed hierarchy, huge power distances, and no room for people to use their creativity. Highly bureaucratic in nature, Semco had lots of “confidential” information that the privileged few used to play power games. In short, it was a “regular” company.
Ricardo’s entry signalled a new chapter – full of daring actions and transformation. The company earned world-wide renown for its unique management style. Way back in the 80s, Semco was one of the first companies to experiment with democratic management principles: principles that put people before processes.
But when you think about it, the new style adopted by Semco was just simple, everyday, common sense. Ricardo Semler, and the leaders he recruited to help him turn things around, first studied who were the most motivated among their employees Invariably, the most motivated held managerial positions. They realized something very fundamental: The power to participate in decision-making processes held the key to motivation.
Opening The Floodgates Through Increased Participation
To verify this concept applied to people across the board, they began experimenting with employee participation in decision-making. They started with everyday issues that affected the life of employees, not with a big transformational program.
These simple issues included things like problems in the cafeteria, cleanliness of toilets, the colour of their uniform, and compensation for business days interspersed between a holiday and a weekend.
The increase in morale led to employee participation in bigger and more expressive areas.
- began offering suggestions to improve quality and the manufacturing process
- were invited to set their own targets
- decided where they wanted to work from
- selected their next boss and future peers
- evaluated their managers
- set their own salaries
- offered inputs on small investments
- became involved in how the company shared its profits.
Today, the Semco Style reflects the learning from 35 years of trial and error. Their impressive growth rate (average 46.5% for the past 20 years), and extremely low employee churn rate (less than 2%), are testimony to the success of the new style.
Why The World Needs No More Semco
The way Semco built its new management style wasn’t based on theory. It started the other way around, developing theory from practices implemented in the field. Which means it’s not a static or dogmatic methodology, but a live framework that is updated with new practices from all over the world. This learning offers an intercultural kaleidoscope of practices geared to empowering the collective.
The Industrial era might have defined corporate practices all over the world, but there are management styles that exist outside that definition. These are all united through the common thread of people centric thought. Although they’re interconnected, these styles aren’t replicas of each other.
They are unique interpretations by companies around the world, designed to fit very specific contexts.
In other words, these companies create a mix of styles suited to their singular needs. This says say something very simple: The world needs no more Semcos, but it definitely needs more companies who have built their own organizational models and management principles drawn from their real-life, in-the-field experiments.
The style they adopt needs to address their very specific problems – but it also needs to guard against the rigidity that can creep in silently. Instead, the aim should be to build something that coexists with most other people-centric management models.
Irrespective of the model that inspires you, choose to create a style that’s deep, simple and flexible enough for others to own. For that, your leadership style needs to shift to:
- Building trust and transparency as the core of your organization model and treating adults as adults;
- Busting silly bureaucracy with common sense and minimum alternative controls to help leaders be in control rather than controlling;
- Creating the space for self-management to flourish by empowering people and giving them autonomy to make decisions;
- Fostering extreme stakeholder alignment between all players through clear definition of roles, expectations and perspectives in daily work and, finally;
- Allowing creative innovation to flow from anywhere in the organization, supported by experimentation and continuous learning.
This is by no means the only way to go. It’s more like a vehicle that can get you where you hope to go; and an invitation to embark on a journey of change.
What’s Up Next
It’s old news that the future of work has no room for companies that are bureaucratic, command-and-control and hierarchical. Leaders and managers are increasingly moving towards a more humanistic style of management. What Semco did with itself is one among many examples.
However, it’s an incredible compilation of tried-and-tested practices for creating systemic change on a conventional canvas. Think of these as a source of inspiration, rather than a blueprint, one that allows you to explore ways to empower the collective over traditional hierarchies.
And then, develop something that fits your unique situation, testing its tenacity and allowing it to evolve at every opportunity.
This guest blog is written by Ian Borges. Ian is a co-founder of LeadWise and partner of Semco Style Institute helping leaders and organizations to change the way they work through training, practices & tools, coaching and consultancy. He also helps entrepreneurs to hack their lifestyle to live with more meaning and freedom at Lifestyle Hacking.