Business Special: Management Strategy
The Liberation of Work – A Case Study of Semco
Recently I had a very inspiring conversation with an HR director of a well known corporation.
During this conversation it became pretty clear that the current strategy of reaching higher and
higher profits is a suicidal paradigm in the long run; suicidal both for the employees as well as for
the corporation as a whole. Actually an overall change is necessary, away from pure profit
thinking towards appreciation thinking. But how could it be possible to get out of the profit turmoil,
which has been determining our thinking since the industrial revolution started?
On the one hand such a radical change can certainly not happen overnight. Established
companies that have been successful for year and are following a strategy that is based on value
creation and profit are comparable to a huge super tanker on the ocean. When you want such a
tanker to do a rectangular turn, it will go straight for quite a while due to its mass, before it slowly
turns towards the newly entered course.
On the other hand, there is one thing that is pretty certain: to change a company’s strategy
fundamentally, needs a lot of courage. A redirection would mean to no longer follow the common
laws and rules of competition, but to establish new company values instead. Is this in fact
possible? Yes, it is. The company Semco from Brazil shows how it goes. In the following I would
like to share an interesting article about Semco with you that was published.
The liberation of work: the 7-day weekend
Around the world managers stare stunned at the organization Semco: What happens there
contradicts everything they believed in so far. The 3000 employees vote their bosses on their
own, determine their own working hours as well as their salaries. There are no business plans, no
HR department, and almost no hierarchy. All profits are shared based on voting, the salaries and
all account books are visible for everybody, the Emails are instead strictly private, and the how
much money the employees spend on business trips or their computer is up to them.
Respect as recipe for success
What might sound like an anarchic nightmare for today’s personnel managers is in fact a success
story. Since the company has been converted by owner Ricardo Semler profits rose from 35
million to 220 million dollar. And not only have the figures proved Semler right, but especially the
employees: the labor turnover rate at Semco is below 1 percent. The recipe is simple: Treat your
employees like adults and they behave like adults. The more freedom you give them, the more
productive, satisfied and innovative they become. A company consists of adult, equal human
beings, not of labors. Each one has the right to freely develop and to find a healthy balance
between job and private life. Against everything people currently seem to believe, pressure and
stress do not make people productive, but simply destroy them. Thus the company loses just like
the people. For Semler it is about a new understanding of work: a company is a common project,
in the best case a shared passion. However, society taught us differently. We are supposed to
regard ourselves as chiselers, painters and laborers, not as creators of a cathedral. At Semco the
employees are essential part of the whole, they are co-creators, not just a small wheel in the
system. They have ideas, understand their work, and know what they are worth.
Trust instead of control
But our personnel managers still believe that you have to control employees, using attendance
clocks, fixed working times, productivity reports and email spying. Semco abandoned all this and
replaced control by trust – and seriously: Who actually wants to work with people you cannot
trust? For Semler the control delusion of most of the companies is simply crazy. His employees
educate their children and vote for governors, they are adult human beings who know themselves
best, what they want and need. “It is totally crazy, this idea that people are still so focused on how
something is done. At our company nobody says: ‘You are five minutes late’ or ‘why does this
factory worker again go to the toilet?’ [...] when you look around in Semco’s office, there are
always a lot of empty places. The question is: Where are these people? I don’t have a clue and I
am not interested in that. It is not of interest to me in the sense that I don’t want to make sure that
my employees come to work and give a certain number of hours per day to the company. Who
needs a certain amount of hours per day? We need people who deliver a certain result. With four,
eight or twelve hours in the office – coming in on Sunday and staying home on Monday. It is
irrelevant for me” Semler explains evidently.
No hierarchy but teams
Semco is something that according to the idea of men of today’s managers cannot exist. And if it
still does, it shouldn’t work. But it does. There are three questions Semler hears over and over
again: Do you really do it like this? Does it really work? And: What now? The first two questions
are easy to answer: “We have been doing this for 25 years now and pretty much everybody who
was really interested in it came here to see if it is true. And our figures are above doubt“ says
Semler self confident. Right from the beginning, it has never been a dream world for him to break
up the company structure, but rather the only possible answer to our inhuman working
environment. He learned it the hard way, woke up himself only when he collapsed and was
brought to hospital with complete burnout. That was the point when he decided that he would
never again subordinate his mental and physical health to the job – and to neither require it from
his employees. That the insanity hast o stop. „When you take a closer look you have to realize
that the traditional system doesn’t work. And this is the incentive to look for something else”
according to Semler. Yet many companies struggle with letting go of control. Because today’s
companies are not set up like places of creation, but like the military: with a hierarchical power
structure, with people giving orders and order receivers. Semco is instead set up in concentric,
penetrable circles, there are no working titles, no determined offices. Nobody has to come to
work. Whether people work at home, in the jungle or in a café at the seafront is up to the
employees and teams. The teams are the heart of Semco. People work in groups, who finish a
product or intermediate product on their own. How they do it, in which time and with which money
is up to them. If somebody wants to take a nap in between, he goes to the company garden and
lays in the hammock for a couple of hours – those who are tired produce mistakes anyway.
The company without HR department
Semco has 3000 employees but no HR department. Hearing this, traditional companies get cold
sweat on their fronts. Who hires these people? Who checks the performance? The employees do
everything themselves. If a team realizes that a new person is required, they publish a
corresponding meeting in the company’s Intranet. This is of course voluntary. Everybody can
come, nobody has to. “We don’t want that somebody gets involved in something he is not
interested in; that’s why all meetings are voluntary. This means that the meetings are published
and those who are interested can and will come and should leave the meeting room the moment
when they get bored“ explains Semler the meeting philosophy. People who leave a meeting,
because they are bored – this would drive many bosses crazy. But at Semco only those people
are supposed to make and carry decisions, who are interested and immediately affected. In such
a meeting it could for example be decided that a new employee is required and what kind of
experience he or she should have. Then a joint advertisement is written and as soon as
applications come in they are spread among the team: Everybody who wants takes some home
and comes back with the most interesting ones. Instead of job interviews there are group
interviews with all candidates at the same time – here also everybody who likes can join. The
only employees who are regularly rated in a formal way are those in decision positions – and they
are rated by all others. If a manager recurrently gets bad rates, he usually leaves himself.
Peer pressure
In fact the teams manage everything themselves. If somebody doesn’t do a good joy, it is
discussed in the team or a meeting is set up. If somebody assigns himself a higher salary,
automatically increases the expectations of the team and the pressure to perform. But also the
employees have a different relationship to work by now: If somebody earns a whole bunch of
money, plays golf actually the whole week, but still does a good job and gets his tasks done –
who cares? What counts is the result. A study by CNN revealed that employees at Semco have a
much healthier balance between private life and work, take more time for relationships, children
and hobbies, but at the same time show an unusual high commitment and remarkable job
performance. Not instead, but because of the freedom they have. For Semler this is not
surprising: People have to be able to unfold to fully bring in their potential.
And it works
Semler is sure: his concept works everywhere. He used it himself in factories as well as in IT
offices. It is in fact the other way round – it only works like that. Our current working environment
with its burnout syndromes, with mobbing, stress, stomach ulcers and depressions doesn’t work,
but is continued insanity. It is time that we create a society where job is again associated with
vocation and passion, not with slavery and exploitation. A society in which human beings can
make free decisions and are treated with respect; where private life and work life are equal – also
for bosses. It is time for the 7-day weekend!
Several books by Ricardo Semler have been published, among which is e. g. “The Seven-Day
Weekend: A Better Way to Work in the 21st Century” and “The Semco System: Management
Without Managers”.
Author: David Rotter
Source: http://www.sein.de/gesellschaft/neue-wirtschaft/2010/die-befreiung-der-arbeit-das-7tage-wochenende.html
So it is in fact possible to lead a company under new premises. Now some of the readers might
say: “Well this is wishful thinking. It is not that easy, when an established company has been
based on determined structures for years.” This may be true. To take this step radical rethinking
is necessary for all parties as well as the willingness to take radical responsibility for oneself and
one’s job. To establish a change of this scale only rudimentally in an existing corporation requires
new awareness; a new awareness in each single employee with regard to the game that has
been played so far and the new possibilities. It is about realizing what kind of interpersonal and
manipulative dynamics are at work and replacing them by new, sustainable soft skills, which
create a high degree of clarity and responsibility and improve and extend conventional behavior.
Like Einstein said, a problem cannot be solved on the same level it has been created. It is
therefore essential to get the employees on board and to enable them to reach a new level of
consciousness through clarity, distinctions and new skills.
The sickness rates in companies – especially the rapidly increasing burnout rates – clearly show
that a change is inalienable. To make this change happen we need CEOs, manager and
employees with the courage to go first. This does not mean that each company has to follow the
example of Semco right away. As mentioned earlier a super tanker has momentum. But each
change of direction starts with the first step.
(Author: Nicola Nagel)
EMPOWERING PEOPLE - FACILITATING CHANGE!
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