RSSFebruary 20th, 2008
Ricardo Semler - Catalyst for the 21st Century
Countless people around the world have fought and lost their lives in the name of democracy. Countries have been founded entirely upon the very ideals of freedom and democracy. Yet people around the world happily work in corporate dictatorships to this day. Have you ever wondered why there is such a disconnect? Ricardo Semler has.
Ricardo Semler is one of the true business leaders and innovative thinkers of our time. He is a strong advocate of workplace democracy, and a true master of harnessing the wisdom of people to build a great company. Ask questions. Give up control. Trust the resourcefulness and intuition of people rather than asserting authority and following rules just for the sake of history. These are only some of the ideas Ricardo has brought to light in his company, called Semco.
At the age of 21, Ricardo took over the relatively small manufacturing company from his father. Semco had peaked at $4 million in revenues during his father’s tenure. Ricardo immediately began asking questions about how and why things were done a certain way, and completely shook things up over the next two decades. Not only did Semco average 40% growth per year in a very unstable Brazilian economy, but in 1993 Semco revenues grew to $212 million. And Semco still enjoys great success, while fiercely protecting a democratic work environment with less than 1% employee turnover. It is considered one of the best companies in the world to work for, with literally thousands of applicants at any one time.
Here are just a few of the radical ideas implemented at Semco that brought such incredible success to their business:
- All meetings are optional, and attendees can come and go as they please. If no one shows up, then it is obviously not enough of a priority to warrant a meeting.
- Employees set their own schedules, and can work from home, or even a variety of remote offices.
- When hiring for any managerial position, qualified candidates are interviewed by the people that would be working for them. All hires are made through a lengthy process that is open to all employees.
- Company policies and major decisions are made collectively and democratically. Everyone gets one vote, no matter what their position in the company
- Many employees set their own salaries, and the company books are available for all employees to see. Semco even teaches classes to those that want to learn how to read the books.
- Employees on all levels are encouraged to rotate jobs and move into different roles or business units as often as every 6 months.
Most importantly, there is a method to the madness at Semco. His belief in some very foundational principles have resulted in radical change for the better, and organizations around the world now study his philosophies. The revenues are not nearly as impressive as the overall health and well-being of Semco today.
The Semco story is documented in two books by Ricardo Semler. Both are the most inspirational, life-changing books I have ever read. What I love about his writing is that it’s not instructional — it’s a way of life. It’s a mindset that Semler masterfully writes about while telling the Semco story. He simply says, this is our story; now take these philosophies and apply them to your business in whatever ways make sense.
The first of the books is called Maverick! — The Success Story Behind the World’s Most Unusual Workplace. It was first published in 1993. The book contains great anecdotes and ideas, all revolving around the Semco story and history. It is a fabulous introduction.
Ricardo Semler’s second book (published in 2004), The Seven-Day Weekend, is the slightly better of the 2 in my opinion. I feel it is a little better organized, and digs much deeper into his mindset. It asks great questions, and adds even further insight about applying his philosophies to your own business and personal life. Get ready to read each paragraph in the book a couple times, because it takes a minute for some of it to really sink in. Powerful stuff.
Practical Applications
Through reading everything I can get my hands on by this incredible leader, I came away with 5 main ideas:
1. Give up Control
Building a company much larger than yourself or your ideals means giving up control, and trusting those around you. If you hire someone, then you should trust them enough to make good decisions and give them a say in everything that goes on.
2. The Power of Intuition
There is no technological innovation that is more intelligent than human intuition. All people should be encouraged to make decisions based on their own ingenuity and intuition. By-the-book thinking actually discourages intuition and free thinking, thus leaving companies stuck to their old business models and ineffective procedures.
3. What it Means to be a Catalyst
Ricardo Semler is a catalyst, and he makes that clear in the second of his books. He asks questions, most of them beginning with the word “why”. He is constantly re-thinking the way they do things in his attempt to continue building a healthy company. He believes wholeheartedly in the process, so he never makes a decision on his own accord. Best of all, he leads by example, and constantly lives out the philosophies by which his company thrives.
4. Growth is not Synonymous with Success
The biggest companies are simply not the most successful companies. Companies that grow too fast get over-extended and don’t do anything very well. There is something to be said for companies that learn to grow at the right pace. Mergers also prove that bigger is not better. Combining 2 large companies seldom results in greater success, especially for customers.
5. True Leadership
True leaders think of those that they lead first, rather than themselves. They trust the people they lead, and share openly and honestly with them to encourage two-way communication.
Additional Resources
Below is a collection of additional resources from Ricardo Semler, all of which are fantastic.
Why My Former Employees Still Work for Me - This is an article Ricardo wrote for the Harvard Business Review years back, that has some great insights. It’s a good introduction into his writing and story.
Managing without Managers - Another Harvard Business Review article he wrote about the Semco management style and why it works.
Leading by Omission - This is an unbelievable talk that Ricardo Semler did at the MIT Sloan School of Management in 2005. His 48-minute talk is available by video or audio, and I would highly recommend watching or listening to it.
The SEMCO Survival Manual - This is the only set of written policies for the entire Semco family of companies. Printed out, it is less than 5 pages, and the original version in Portuguese is complete with cartoon drawings and illustrations. Pure genius.
Want a Copy of Maverick?
I have tried to order cases of each of Ricardo’s books, but they are relatively hard to find, at least in the US. I was able to get numerous copies of Maverick! from a seller in the UK. Email me your story and why you feel like you need this book, and I will send out copies for the 2 best responses.
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