The Seven-Day Weekend

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.
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We believe that the shortest distance between two points is a straight line; however, sometimes it is a curve. According to John Kay, many goals are achieved when pursued indirectly: The most profitable companies are not the most aggressive in chasing profits, the wealthiest men and women are not the most materialist, and the happiest people do not pursue happiness.
This is the concept of obliquity. John Kay, in his book “Obliquity: Why our goals are best achieved indirectly” tries to evaluate rational thinking processes versus obliquity.
He gives several interesting examples.
Happiness is not achieved through the pursuit of happiness. Mountaineering is one of the most difficult sports, seldom bring medals and often requires much money and effort and sometimes at the cost of one’s life. Raising a child is very similar to mountaineering; 95 percent of the time parents put a lot of effort into dealing with the needs and problems of the children and only 5 percent of the time can they feel the joy of having children.
There are three phases of happiness. The first phase is a momentary feeling. It is like eating the cake, for which the taste is fleeting. The second phase is the state of the mind, like feeling good when you help somebody. In this phase the period of happiness lasts a little longer, however, it is still very short. The third phase is eudaimonia, which is the happiness we feel when we fulfill our potential. It is something akin to being a good parent or climbing a mountain. With reference to this model, an oblique-indirect approach might provide more and long lasting happiness for people. It is best to prefer fishing as an experience rather than the outcome of catching 100 fish because the journey is more important than the destination.
Kay claims that the greatest paintings are not the most accurate representations of their subjects. In the case of Picasso he is right because none of his paintings are accurate representations.
In general, planning is something like drawing a straight line between two points; however, the performance of classic planning is very poor. The oblique way of planning looks much better. Soviet planners managed the economy far less successfully than the adaptive, disorganized processes of market economies.
Most of our objectives are specific. Even if they look good, specific objectives can create limitations. For example, if you plan to eat a fish for dinner and if you cannot eat it you will be disappointed. However, if you only aim to eat dinner, there are unlimited options available to you. The best available meal might be something different and if you insist on the fish, you may end up having to settle for ordinary or low quality fish.
Kay mentions that the consequences of our actions depend on the responses of other people, and these interact. So, in an incident where you might be angry, if you choose to be positive and kind, you will find people might be willing to help you. But in the direct way, if you are angry you become aggressive and it won’t help solve your problem.
According to Kay, in obliquity there are no predictable connections between intentions and outcomes. The caterpillar and the butterfly have nothing in common in their appearances; however, the caterpillar is the starting point of a butterfly.
Kay mentions that good decision makers are eclectic and tend to regard consistency as a mark of stubbornness, or ideological blindness, rather than a virtue. Eclectic thinking means connecting and adding different concepts in order to create a better model to solve a problem. In order to solve a problem, a decision maker may use some concepts that seem to be conflicting. Ordinary people might evaluate this approach as irrational; however, at the end it might provide the desired results.
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Immunity to change

People and organizations resist change in different ways. Harvard University professors Robert Kegan and Lisa Laskow Lahey have analyzed the sources of resistance and explained the methods to overcome them in their book “Immunity to Change: How to Overcome It and Unlock the Potential in Yourself and Your Organization.”
Kegan and Lahey start the book by referring to a recent study which showed that when doctors told heart patients they would die if they didn’t change their habits, only one in seven patients was able to follow the changes successfully.
The authors make an interesting analysis of mental development, of which they say there are three phases. The first phase is the socialized mind. Even though the word “socialize” has become popular recently, in this book it has a negative meaning. When one is trying to become a part of a group the person tries to take on the characteristics of the group. This person tries to be a team player, a faithful follower — he tries to align. For instance, if the person is trying to join a group, instead of making his own personal decisions, he adapts his thinking to the group. For example, many drivers swear in traffic: When a polite person sits in the driver’s seat, he becomes a rude person in traffic. Without being aware of it, the person has socialized his mind.
The second phase is the self-authoring mind. This phase looks more individualistic, and it is. In this phase the person becomes a leader and sets his own agenda and solves problems independently. He has his own point of view, instead of aligning with others he expects others to align with him. A typical autocratic leader might be a good example of this mental development phase.
The third and the last mental development phase is the self-transforming mind. In this phase, the person goes beyond the ordinary lines of leadership and discovers that developing and mentoring others is more important than their obedience. The leader in this phase gives a compass to followers instead of orders. The most important characteristic of this phase is multi-framing. Many people spend their lives as if there is only one truth. It is right to advocate your own opinion; what is wrong is to assume that your thoughts and opinions are always true. In the third phase of mental development, even at times when it may appear to be contradictory, the person embraces different thoughts and approaches.
The authors further explain that everybody with immunity to change has two types of commitment: visible commitment and hidden commitment. Visible commitment is what we express as our commitment, while the hidden commitment is our inner desires and our assumptions that support these desires. The third element is the behavior that is working against the change. The authors define this as doing, or sometimes not doing, something. The simplest example to illustrate this theory is weight loss. The visible commitment of somebody is to lose weight. The behavior requiring change is overeating or eating when the person isn’t hungry. If the person wants to lose weight, why does he behave in the opposite way? Because there is a hidden commitment. The person may want to be full of energy, may believe that eating is fun or doesn’t give value to being physically attractive.
The authors argue that people cannot change because of their hidden commitments: If we can think and talk about our hidden commitments and supporting assumptions then, we can keep up with our visible commitments. 19 December 2010
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The future of management

Gary Hamel, in his book “Leading the Revolution,” claimed that extraordinary and revolutionary companies would win in the 21st century. Companies like Google, Skype and Facebook did not exist in the 20th century and they came to the business stage unexpectedly.
Hamel, along with Bill Breen, also wrote the book “The Future of Management” in which they talk about the innovation and management models of companies.
According to the authors, management innovation is anything that substantially alters the way in which the work of management is carried out, or significantly modifies customary organizational forms, and by doing so, advances organizational goals.
Hamel describes innovation as a novel management principle, challenging some long-standing orthodoxy; systemic, encompassing a range of processes and methods; part of an ongoing program of rapid invention where progress compounds over time. He says that we have to make innovation everyone’s daily task and we have to create a highly engaging work environment that inspires employees to give the very best of themselves.
There are barriers for innovation in corporations. We have too much management and too little freedom. We have too much hierarchy and too little community. We have too much exhortation, too little purpose.
The authors give the interesting example of Whole Foods. Whole Foods is a hypermarket chain that specializes in providing organic and healthy foods. It is a large company worth billions of dollars. The management is quite revolutionary. All of the food prices are determined in a decentralized way. Each store’s management team makes its own decisions about the prices of foods to be sold in their market. Traditionally in the retail industry prices are set by the company headquarters. There is another interesting point in the human resources field. Each store hires new personnel with the approval of current staff. The team conducts the job interview, they decide on the salary to be offered. Each member of the team has only one vote in the decision process. Moreover, the teams in the stores decide on their own salaries, salary increases and bonuses. Under normal conditions, this approach looks unacceptable because if you give power to the people to determine their own salaries, the sky becomes the limit. However, people act responsibly at Whole Foods. It would be stupid to overpay themselves because everything is transparent and traceable by the headquarters. A sense of fairness is key in democratic organizations.
The famous professional outdoor equipment company Gore Associates, the producer of Gore-Tex Waterproof Fabrics, is another example of a democratic organization.
For Hamel and Breen, democracy and democratic management are the answers for new, innovative organizations. Ideas are produced, not at the top, but across the company. However, there must be systems supporting the concept of democracy within the organization. There should be love, autonomy, egalitarianism, a sense of mission and a sense of community. People should love their company and protect it like they protect their countries. The autonomy and power to take action is very important, otherwise people will not believe that they can control their destiny. Egalitarianism is important, because if there is too much hierarchy, autonomy is not possible. An organization’s existence is dependent on its mission because each organization is created to carry out a mission. Every organization needs a community to serve and protect itself. Without it, we cannot talk about an organization.
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The black swan

When Aise was born, she was 50 centimeters long. When she was 15, she was 150 centimeters tall. In 15 years she grew threefold. When she turns 30, how tall will she be? The answer based on experience is better than the one based on mathematics.
There was a turkey. She used to love Pierre, the farmer. Because Pierre loved the turkey so much, he provided her with the best fodder. He had nourished the turkey with great affection since she hatched. This turkey grew up to become the most beautiful turkey on the farm. All the other turkeys envied the farm’s star turkey, who was the happiest and healthiest turkey of all. One morning, the star turkey got up; the sun was shining and the grass was green; it was a perfect day. The farmer approached the star turkey — but with a knife in his hand rather than fodder this time. The turkey thought, “He would never chop off my head, I guess he is going to cut some branches from the trees.” This was her final thought.
Nassim Nicholas Taleb in his book “The Black Swan: The Impact of the Highly Improbable” gives interesting examples of unsuccessful induction and reasoning. We have difficulty in understanding what is happening at the actual time; most of the time we understand something only after it has occurred.
In the 1930s none of the French could conceive that Hitler would start a war that would result in more than 50 million casualties. Suppose that farmer Pierre is a happy farmer, visiting the town on his bicycle. Last year’s crop was very good, and Pierre is in good financial condition. Pierre and the turkey have much in common. Both of them think that the future is bright; however, it is not.
Taleb chooses an interesting example — the black swan — to describe the improbable. The animal most identified with whiteness is the swan. We suppose that all swans are white. There is no probability of other colors for ordinary people. They have visual evidence — all of the swans they have ever seen were white. In spite of these experiences, there are black swans in limited numbers in our world, too.
A black swan is improbable, and it turns all of our assumptions upside down. It catches us unprepared. The day the farmer comes with a knife in his hand is the black swan day for the turkey. On that day, the turkey finds out that all of her beliefs were false.
Taleb thinks that Sept. 11 is a black swan moment in world history. There are black swans in every field, such as technology, business and politics, and in our personal lives. The sudden crash of a stock exchange with a trend towards growth was a black swan moment. The bankruptcies of giant corporations in the United States were also black swan instances.
Black swans, however, are not always negative. They are sometimes positive. At the end of World War I, a military officer by the name of Mustafa Kemal founded modern Turkey from the ashes of the Ottoman Empire. It was a black swan moment for the Turkish nation. When everybody was pessimistic about the country’s future, Mustafa Kemal organized the nation and changed its destiny. European countries did not expect any leader from Turkey to be capable of foiling their plans for these lands. Barack Obama is a black swan, too. Nobody in the 20th century could have foreseen that one day an African-American could be the US president. The success of Apple iPhones and Samsung against Nokia are also black swans. Most of the people believed that Nokia was an unshakable giant in the communications market, till it was challenged by Apple and Samsung.
It is a very interesting book full of theories and fascinating stories. Together with this, the author warns us about stories. Although they may be very persuasive, they may be based on insufficient and unreliable data.
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Switch – How to change things when change is hard

Read the following sentences and decide whether you agree or disagree with each of them.
1. You are a certain kind of person and there is not much that can be done to really change that.
2. No matter what kind of person you are, you can always change substantially.
3. You can do things differently, but the important parts of who you are cannot really be changed.
4. You can always change basic things about the kind of person you are.
If you agreed with items 1 and 3, you are someone who has a fixed mindset. If you agreed with 2 and 4, you are some who has a growth mindset.
Written by Chip Heath and Dan Heath, “Switch: How to Change Things When Change Is Hard” is a book about personal and corporate change. The Heath brothers use a very effective analogy in their book. This likens the mind to a rider and our body to an elephant. Taking the above exercise into account, if you found that you have a fixed mindset, it means that the elephant in your body is stronger than the rider. In the morning, our minds say we have to get up, but our body tries to lure us to stay in the bed. At dinner our minds say we have to stop eating, while our body tempts us to keep eating. At the office our minds say we have to keep working, whereas our bodies entice us to take a break. The elephant is six tons and the rider is only about 100 kilograms. In this example, it is very difficult to control the elephant for the rider.
The metaphor of rider and the elephant is not limited to personal matters; the same metaphor is also used for organizational issues. Although a customer-focused, agile and democratic organization is far more desirable, it is can be difficult to be transformed such an organization. Acting slowly when making decisions and generally leaving the responsibility of the decision to the boss is much easier and this is what we are usually accustomed to in management.
The Heath brothers give very interesting examples of change in their book.
Milk is the single largest source of saturated fat in a typical American’s diet. In fact, calculations reveal something remarkable: If Americans switched from whole milk to skim or 1 percent milk, the average diet would immediately drop the level of saturated fat to levels recommended by the US Department of Agriculture. So how do you get Americans to start drinking low fat milk?
People will drink whatever is around the house — a family will plow through low fat milk as fast as whole milk. So, in essence, the problem was even easier than anticipated: You don’t need to change drinking behavior. You need to change purchasing behavior. What behavior do we want to change? We want consumers to buy skim or 1 percent milk. When? The answer is simple: When they’re shopping for groceries.
Researchers Bill Reger and Steve Booth-Butterfield launched a campaign in two communities in West Virginia, running spots on local media outlets (TV, newspaper, radio) for two weeks. In contrast to the bland messages of most public-health campaigns, the 1 percent milk campaign was punchy and specific. One ad trumpeted the fact that one glass of whole milk has the same amount of saturated fat as five strips of bacon. At a press conference, the researchers showed local reporters a tube full of fat — the equivalent of the amount found in a half-gallon of whole milk. Researchers monitored milk sales data at all eight stores in the intervention area. Before the campaign, the market share of low fat milk was 18 percent. After the campaign, it was 41 percent. Six months later it still held at 35 percent. This brings us to the final part of the pattern that characterizes successful changes: If you want people to change, you must provide crystal-clear direction.
The Heath brothers offer a model of change: To change behavior we have to direct the rider, motivate the elephant and shape the path. We can direct the rider by setting a goal, and we can motivate the elephant by using visual evidence and proof. Finally, we can shape the path by changing procedures. In the case of low fat milk, the target was low fat milk consumption. The motivation factor was the emphasis that “one glass of whole milk has the same amount of saturated fat as five strips of bacon” and the new path was about making low fat milk easily accessible on the shelves at markets. 12 December 2010
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