Imagine a place where you came and went on your own schedule, did performance reviews for your boss, negotiated your salary every 6 months, could be fired by your peers and were encouraged to work in a different place each day so your boss couldn’t find you. Sounds impossible? Well one incredible company in Brazil has made this model work for over 40 years. Wait there is more, they also support unions, provide mini-retirements, dating services for employees and 23% pre-tax profit sharing!
(If you know of other incredibly innovate companies please let me know in the comments)
Semco is a maker of industrial machinery with roots in building equipment for the naval industry. They have now diversified into education, consulting, real estate and other areas. There are over 3000 Semco employees. Key to their success however is their participative management style,
At Semco, people work with substantial freedom, without formalities and with a lot of respect. Everybody is treated equally, from high-ranking executives to the lowest ranked employees. This means the work of each person is given its true importance and everybody is much happier at work - Semco Website
I feel that our Canadian way of managing is outdated and backwards, causing major dissatisfaction and misery for so many. When I came across Semco my eyes lit up because it proved that it was possible to make work way better while still having a successful business. There is no good reason why this model of openness and respect can’t be applied to Canadian business.
You must be asking, but do they make money? From 1994 to 2003 Semco increased revenue from $35 M to $212 M, and grew at nearly 40% annually with NO public investment.
This video on YouTube only is a real gem and gives us a look inside this daring and innovative workplace. Surprisingly, it only has 59,405 views, about 20 of them are probably from me sharing it with my friends!
Semco Survival Guide
Semco has lots of great information on their website, including their Survival Guide. It’s quite long, but I had to pull out some of the more radical yet incredibly common sense ideas to share.
Evaluation by Subordinates
Here are a few more details on some of the radical policies at Semco which help drive innovation and openness. These are not taken directly from the website.
Peers Can Fire You
It goes on and on, but if you watch the video and continue reading you’ll see how different Semco really is!
Ricardo Semler, the man behind the magic
Ricardo Semler has written bestselling books including The Seven Day Weekend: Changing the Way Work Works and Maverick: The Success Story Behind the World’s Most Unusual Workplace. These are very high on my reading list and I can’t wait to read the story of how he turned a fledgling $ 4M industrial manufacturing into a $212 M (as of 2003) business with the most radical workplace on the plant.
He is a world renowned thought leader and regularly speaks to business schools and groups around the world to further promote the cause of participative management. As you can see from the video, he’s also involved in improving education in Brazil through the Ralston-Semler Foundation and the Lumar School.
To get a better understanding of his value system, here is an excerpt from Maverick:
To survive in modern times, a company must have an organizational structure that accepts change as its basic premise, lets tribal customs thrive, and fosters a power that is derived from respect, not rules. In other words, the successful companies will be the ones that put quality of life first. Do this and the rest - quality of product, productivity of workers, profits for all - will follow. At Semco we did away with strictures that dictate the “hows” and created fertile soil for differences. We gave people an opportunity to test, question, and disagree. We let them determine their own futures. We let them come and go as they wanted, work at home if they wished, set their own salaries, choose their own bosses. We let them change their minds and ours, prove us wrong when we are wrong, make us humbler. Such a system relishes change, which is the only antidote to the corporate brainwashing that has consigned giant businesses with brilliant pasts to uncertain futures. – Ricardo Semler
What is the Semco philosophy?
Semco is driven by a very clear philosophy, stop worrying about the bull shit control mechanisms, give people respect, empower them fully to do the work and the rest takes care of itself. Another great quote from CEO Ricardo Semler:
We don’t want to know what time people came, how many hours they work, we want to negotiate and contract with them for much more important things that have to do with our survival, which is, what are they going to do this month?What are we going to get from them, what do they get from us? Out of this salary or value were paying and what do they get out of us in terms of gratification for their life? The rest to us is secondary. – Ricardo Semler
The rest to us is secondary. This is so important! How many times have you been in a meeting or talk with your manager and you thought to yourself, why does that even matter? Why are you so focused on when I came to work, or what I did last night, or why my shirt isn’t tucked in perfectly? I got my work done, I play well with the team and I’m working hard every day! Here is another gem by Ricardo which really resonates with my personal views on how workplaces should be run:
30% of peoples time is spent trying to understand why people make more than they do, how come some people came late, why weren’t you at the meeting, can you do this by Wednesday at 6 o clock, it’s all very silly and there’s an enormous waste and of course at a certain point in time, people just start dumbing down and they say, this is just too much work, what do you want me to do? I’ll just do my 9 to 5 thing, i’ll learn how to survive in this environment – Ricardo Semler
This is really what bugs me the most, our traditional top-down management is not only bad for business and bad for employees health, it also sucks the life out of well meaning employees. Surviving instead of thriving and it’s probably the saddest aspect of our workplace culture today.
10 Reasons the Semco system works
These ideas of participative management and industrial democracy were made popular by great thinkers like Robert Townsend, Douglas McGregor and others but Semler brought them to life with Semco. Until Semco, the ideas were never put into practice on such a scale. Yet, nobody else has been able to recreate a similar work culture (if you know of one, please comment and let me know!) so why does it work for Semco and not others?
1 - Values
2 - Consistency
3 - Peer Pressure
4 - Profit Sharing
5 - Empowerment
6 - Small Business Units
7 - Total Transparency
8 - No Symbols of Inequality
9 - Purpose
10 - Long Term Thinking/Private Company
These are just some of the many reasons the Semco system works, but to me it’s just common sense. Cut the bull shit, give people the freedom, respect and tools they need to get things done and they will perform. Managers spend too much time focusing on controls, and it has led to an embarrassing amount of disengagement (only 1/3 of employees are actively engaged).
There is also far too much hand holding in our society. Not only do people not have the freedom to get things done, we have a nanny state of controls from the household to the government. Individuals are bound by rules, and a rules based society is always going to underperform a principles based society.
I’m not sure where 9-5, Monday to Friday originated from, but a person’s life is far too complex and dynamic to fit in such a rigid schedule. Everyone works a little differently, and with technology and the ability to telecommute, I don’t see why we can’t push for greater flexibility and autonomy at work.
Hopefully Semco can serve as a model for more organizations to emulate, if they did, the world would be a much, MUCH better place.
See more on why it pays to treat employees well:
Out of this world: Doing things the Semco way (Journal Article by Ricardo Semler); Global Business and Organizational Excellence (July 2007), 26 (5), pg. 13-21