|Ricardo Semler is a bestselling author, but more important than this, he is the CEO (“Chief Enzyme Officer”) of Semco. He is the author of “Maverick: The Success Story Behind the World’s Most Unusual Workplace” and “The Seven-Day Weekend: Changing the Way Work Works.”|
|In both books Semler tells of extraordinary practices at Semco. The business of the company cannot be described simply. They are into producing water pumps, chewing gum mixers, big scale air conditioners, as well as being involved in the management of buildings and the building of hotels, plants and hospitals. It is extraordinary for a company to have such a wide diversity of businesses. But all these businesses had developed with a set of principles: the business should be complex, their services should be high cost and provide high margins, and they should be in niche markets. Semler questioned all of the common business practices and invented a new model of working when he came to the top position after his father. He made some certain changes: He removed security checks at the gate for the workers; he changed the dress code; everybody was free to choose what to wear and formal dress was only option for business meetings with other gatherings; he removed all individual offices and work stations and converted workplaces into open spaces. He personally moved to a smaller office.
He also changed the parking policy. In the new order there were no reserved parking places and everyone operated on a first come first served basis. This way the early birds in the company were rewarded.
His human resources policy is quite extraordinary. Semler encouraged his employees to visit 30 nearby factories to openly compare skills, responsibilities and pay checks. He was prepared to change conditions based on their research. Instead of paying fixed salaries, all employees share in the profits and employees decide their own profit sharing. These practices reflected in decreasing staff turnover.
Many management books favor the concept of self-managed teams. But it is hard to find in practice. At Semco there are real self-managed teams. Semler divided the businesses into smaller manageable units which really do make their own decisions about everything. He provided autonomy to the units to run their own show. There is no central and coordinated purchasing. Everybody buys whatever he or she wants. It might be computer, a file or any other staff needs; whether it is cheap or expensive it isn’t questioned. The readers of this column might be skeptical in this practice. However, with autonomy comes auto-control. If one employee goes off track with an unreasonable purchase his colleagues are the first to warn him.
Semco has strict adherence to the practice of job rotation. Around 20-25 percent of managers are rotated each year. An employee can stay in a position for a minimum of two years and a maximum of five years. This rotation provides skills enhancement and a broader vision for the business. Through this rotation program the organization is depersonalized as there is more than one person for a job.
At Semco there is also a unique system of subordinate evaluation of managers. Based on a rating questionnaire which covers both soft and administrative skills, a manager is evaluated by his subordinates. More interesting is that new manager candidates are interviewed by department employees. The role of the human resources department is only to suggest candidates for the management position but the final decision is made by team.
You may be wondering if this company is successful with such unorthodox practices. When I last checked, I saw that their turnover was more than $150 million.
Another organization, Whole Foods, has similar practices and it is one of the most successful retail chains in the US with turnover of $20 billion.
The “The Seven-Day Weekend: Changing the Way Work Works,” is an extraordinary and revolutionary book that will truly make you think.