Http://groups.yahoo.com/group/hrcommunity 1 Maverick ! Maverick ! Amazing Real Life Story of a Young man Amazing Real Life Story of a Young man Ricardo

http://groups.yahoo.com/group/hrcommunity

1

Maverick !Maverick !

Amazing Real Life Amazing Real Life Story of a Young Story of a Young

man man

Ricardo Semler Ricardo Semler

And his company And his company


2

Introduction of SemcoIntroduction of Semco

Was Founded by Antonio Was Founded by Antonio Semler in 1952 on his Dining Semler in 1952 on his Dining Table(contraction of Sember Table(contraction of Sember & Company as Semco)& Company as Semco)

Started business by Started business by manufacturing oil separating manufacturing oil separating machine and soon entered machine and soon entered into Marine and related into Marine and related sectorssectors


3

CV of Ricardo SemlerCV of Ricardo Semler

Was not a Bright Was not a Bright Students(Passed mostly with Students(Passed mostly with D Grades)D Grades)

Liked rock n rollLiked rock n roll

Served in Army for an Served in Army for an Year(compulsory in Brazil)Year(compulsory in Brazil)

Developed a Genuine Interest in Developed a Genuine Interest in BusinessBusiness


4

Management of SemcoManagement of Semco

Pyramidical Pyramidical StructureStructure

Was being run Was being run by selected by selected lieutenants of lieutenants of his fatherhis father

Semco was not Semco was not doing welldoing well


5

Management of SemcoManagement of Semco

It was primarily a Rule It was primarily a Rule Book Drive CompanyBook Drive Company

For his father personal For his father personal and business life was and business life was intertwinedintertwined

Was investing money in Was investing money in Marine Business without Marine Business without any returnsany returns


6

Ricardo SemlerRicardo Semler

Had serious differences with Had serious differences with his fatherhis father

Joined Semco.but was not given Joined Semco.but was not given and decision makingand decision making

Was exploring the possibility of Was exploring the possibility of buying some sick company buying some sick company and starting his own businessand starting his own business

Had finalized the contract to buy Had finalized the contract to buy a sick companya sick company


7

Vital ChangeVital Change

Curt Semler finally hands Curt Semler finally hands over the reins of the over the reins of the company to his son Ricardocompany to his son Ricardo

Gives him a free hand to run Gives him a free hand to run the companythe company


8

Clearing the PathClearing the Path

First Emergency Surgery(15 First Emergency Surgery(15 topmost managers of Semco topmost managers of Semco fired by Ricardo in half a fired by Ricardo in half a day)day)

Ernesto appointed as new Ernesto appointed as new key managerkey manager

Customer could do not Customer could do not digest this great and sudden digest this great and sudden changechange


9

Difficult TimesDifficult Times

Running from one Running from one bank to another to bank to another to arrange casharrange cash

Ernesto trying to Ernesto trying to putting in place “a putting in place “a system”system”

Appointment of some Appointment of some other key managersother key managers


10

Hard ToilingHard Toiling

Looking around for new Looking around for new business to acquire business to acquire

A couple of AcquisitionsA couple of Acquisitions

Stress takes its toll on Stress takes its toll on RicardoRicardo

Faints often and has other Faints often and has other health related problemshealth related problems


11

Change in ApproachChange in Approach

Decides to re-organize Decides to re-organize himself firsthimself first

Makes a strict plan for his Makes a strict plan for his personal and profession personal and profession lifelife

Tried all the tricks in the Tried all the tricks in the books to keep people books to keep people motivatedmotivated


12

Winds of Change starts Winds of Change starts blowing!blowing!

Carefully watched the Carefully watched the oppression of workersoppression of workers

First Move:Removal of First Move:Removal of necessary security check necessary security check at the gate for the at the gate for the workersworkers

Next goes the strict dress Next goes the strict dress codecode

Individual cabins and Individual cabins and work stations converted work stations converted into open spacesinto open spaces


13


Ricardo’s own office becomes Ricardo’s own office becomes smallersmaller

Workers to decide their own Workers to decide their own dress and colordress and color

No individual parking(first No individual parking(first come first serve basis)come first serve basis)


14


Goes for the first time to the Union Goes for the first time to the Union office to negotiateoffice to negotiate

Encourages workers to make their Encourages workers to make their own committeesown committees

Encourages self Management by the Encourages self Management by the workersworkers


15

Results start coming Results start coming ininWorkers on their own design and develop a Workers on their own design and develop a

new slicernew slicer

Sales shots upSales shots up


16

CHALLENGESCHALLENGES

Strong presence of HP ,Epson Strong presence of HP ,Epson in the field of printersin the field of printers

Price War led by LG in Digital Price War led by LG in Digital CameraCamera

Xerox having stronghold in the Xerox having stronghold in the field of photocopierfield of photocopier

Canon late entry in field of Canon late entry in field of ProjectorProjector

Distribution networks only in Distribution networks only in large citieslarge cities


17

Sweeping ChangesSweeping Changes

Encourages employees to visitEncourages employees to visit

30 nearby factories to compare 30 nearby factories to compare skills,responsibilities and pay skills,responsibilities and pay chequescheques

Consequently staff turnover goes Consequently staff turnover goes downdown

Recognizes the existence of the unionsRecognizes the existence of the unions

Treat everybody as an adultTreat everybody as an adult


18


During the strike periodDuring the strike period (a)continues all the benefits(a)continues all the benefits (b)Never call the police(b)Never call the police ©Tell the strikers that no one ©Tell the strikers that no one

will be punished when they will be punished when they return to work.Then don’t return to work.Then don’t punish any onepunish any one

(d)Don’t fire anyone during or (d)Don’t fire anyone during or after the strike,but make after the strike,but make everyone see that a walk out everyone see that a walk out is an act of aggressionis an act of aggression


19


Workers take charge of theirs Workers take charge of theirs work placeswork places

““Paints the walls around them Paints the walls around them in their favorite colors”in their favorite colors”

All rules and rule books are All rules and rule books are discardeddiscarded

Common Sense is given more Common Sense is given more importanceimportance


20

ChangesChanges

Dividing Businesses in smaller and Dividing Businesses in smaller and manageable unitsmanageable units

Giving autonomy to units to run their own Giving autonomy to units to run their own shows with minimum of shows with minimum of – InterferenceInterference– Economy and dis-economy of scalesEconomy and dis-economy of scales


21

ChangesChanges Search committee of workers formed to Search committee of workers formed to

search a suitable place for the companysearch a suitable place for the company

Workers as a part of the whole(anti Workers as a part of the whole(anti Taylorism)Taylorism)

One Person can’t overrule everyoneOne Person can’t overrule everyone


22

ChangesChanges

All financial information All financial information made available to made available to everybodyeverybody

Workers decide their own Workers decide their own profit sharing cheuqes(after profit sharing cheuqes(after 40% tax+25% SH+12% 40% tax+25% SH+12% reinvestment)reinvestment)


23

Miles of filesMiles of files

One of the meetings reqmt of $50,000 One of the meetings reqmt of $50,000 worth Filling cabinets.worth Filling cabinets.

Birth of the great “File Birth of the great “File Crunch”(Bianneal Semco File Insp and Crunch”(Bianneal Semco File Insp and Clean out).Clean out).

Post cleanup dozens of extra cabinet Post cleanup dozens of extra cabinet auctioned off ( Compulsion to Collect).auctioned off ( Compulsion to Collect).

Led to cutting down of Secretaries.Led to cutting down of Secretaries. ““Headline Memo”.Headline Memo”.


24

Affirmation ActionAffirmation Action Laura Barros-HR Head-traditional Laura Barros-HR Head-traditional

background-instrumental in “The Semco background-instrumental in “The Semco Women”.Women”.

Lunch time mtg of women employees of Lunch time mtg of women employees of all levels- outpouring of grievances.all levels- outpouring of grievances.

First demand-modernization of rest First demand-modernization of rest rooms as per women reqmts(Howls from rooms as per women reqmts(Howls from menfolk).menfolk).

First Semco Women Convention -1986-all First Semco Women Convention -1986-all women outing at a hotel in Sao Paulo.women outing at a hotel in Sao Paulo.


25

Affirmation ActionAffirmation Action Role play to bring out the ills in the Co.Role play to bring out the ills in the Co. Second convention- concept of “Wailing Second convention- concept of “Wailing

Wall”.Wall”. Moral support to the cause, for gaining Moral support to the cause, for gaining

power the onus to convince the male power the onus to convince the male workers with them.workers with them.

Recession ,women workers most affected Recession ,women workers most affected lot. Project seemed to go in vain.lot. Project seemed to go in vain.

““Haracio Incident”-Reconfirmed the faith Haracio Incident”-Reconfirmed the faith in coming of age of the “Semco Women”.in coming of age of the “Semco Women”.


26

Trading PlacesTrading Places Strict adherence to “Job Rotation”.Strict adherence to “Job Rotation”. 20-25 % managers rotated in a year.20-25 % managers rotated in a year. Min 2 yrs and max of 5 yrs in a job.Min 2 yrs and max of 5 yrs in a job. Semco benefited:-Semco benefited:-

– Skill enhancement.Skill enhancement.– Broader view of Co.Broader view of Co.– Discouraged Empire building.Discouraged Empire building.– More than one person for a Job.More than one person for a Job.– Depersonalize the Organization.Depersonalize the Organization.

““Hepatitis Leave” Concept.Hepatitis Leave” Concept.


27

Minding Our Own BusinessMinding Our Own Business Impersonal" Crime and Punishment” Impersonal" Crime and Punishment”

policy.policy. Benefit of doubt to the employees.Benefit of doubt to the employees. Impersonal view of Employee’s Impersonal view of Employee’s

personal life.personal life. No promises, no freebies, no soaps, No promises, no freebies, no soaps,

only sound financial advice.only sound financial advice. No Gyms, swimming pools,etc for No Gyms, swimming pools,etc for

warding off employee stress. Ensure warding off employee stress. Ensure “Stress is not caused at the first place”.“Stress is not caused at the first place”.


28

Hiring and Firing the BossHiring and Firing the Boss Unique system of subordinate Unique system of subordinate

evaluation for the Boss.evaluation for the Boss. Based on Rating Questionnaire (covers Based on Rating Questionnaire (covers

soft and administrative skills).soft and administrative skills). New boss selection also by New boss selection also by

subordinates.subordinates. 70% passing mark (<70% intense 70% passing mark (<70% intense

pressure to change working style).pressure to change working style). Productivity based bonus for the unit Productivity based bonus for the unit

ensures fair evaluation by subordinates. ensures fair evaluation by subordinates.


29

Rounding the PyramidRounding the Pyramid ““Pyramidical Structure”-unwanted Pyramidical Structure”-unwanted

levels, clutter at lower levels, levels, clutter at lower levels, insecure work environment.insecure work environment.

Created Created “Circular Organization”.“Circular Organization”. Free from hierarchical tyranny. No Free from hierarchical tyranny. No

intra reporting amongst same levels.intra reporting amongst same levels. Total absence of structure. Total absence of structure.

Employees free to write whatever Employees free to write whatever they deemed appropriate on their they deemed appropriate on their visiting cards. visiting cards.


30

Name your PriceName your Price Salary fixation by Employees Salary fixation by Employees

themselves.themselves. Reasons –Reasons –

– Transparency in letting known the top Transparency in letting known the top teams salary.teams salary.

– Letting each employee know others salary.Letting each employee know others salary. Half yearly target setting ensured no Half yearly target setting ensured no

exorbitant salary setting (adds on to exorbitant salary setting (adds on to expense in PBDIT).expense in PBDIT).

Concept of “Risk Salary”(25% : 50%).Concept of “Risk Salary”(25% : 50%).


31

Some more Unique Some more Unique PracticesPractices

““Zero Tolerance” for corruption.Zero Tolerance” for corruption. Head on approach to corrupt Head on approach to corrupt

inspector’s approach “Creating inspector’s approach “Creating difficulties to sell Simplicities”.difficulties to sell Simplicities”.

Suffered delays, bottlenecks-stuck to Suffered delays, bottlenecks-stuck to the policy-positive image of Co.the policy-positive image of Co.

““Thinking for Living”-Concept of Thinking for Living”-Concept of Nucleus of Technological Innovation Nucleus of Technological Innovation (NTI).(NTI).


32

Some more Unique Some more Unique PracticesPractices

““Flexitime” for employees.Flexitime” for employees.– Make them agree on common Co. goals Make them agree on common Co. goals

and let them loose to achieve them.and let them loose to achieve them.– Initial resentment from workers-took it Initial resentment from workers-took it

as Co. ploy to exploit workers.as Co. ploy to exploit workers.– Concept of work teams and Concept of work teams and

interchangeability of jobs ensured interchangeability of jobs ensured implementation of “Flexitime”.implementation of “Flexitime”.


33

FACING THE HARD TIMESFACING THE HARD TIMES Pioneering steps to tackle Recession Pioneering steps to tackle Recession

(1986-1990)(1986-1990)– Active Cost slashing measures.Active Cost slashing measures.– Sending workers to customers directly Sending workers to customers directly

(ship parts at docks).(ship parts at docks).– Workers taking on outsourced work in Workers taking on outsourced work in

Co. as cafeteria.Co. as cafeteria.– ““Robin Hood payment cuts”-More at Robin Hood payment cuts”-More at

higher levels, reducing with time (as higher levels, reducing with time (as things improved)things improved)


34

FACING THE HARD TIMESFACING THE HARD TIMES Launch of “Satellite Programme”.Launch of “Satellite Programme”.

– Instead of lay offs encourage employees to Instead of lay offs encourage employees to become entrepreneurs.become entrepreneurs.

– Initial leasing of machines ,subsequent Initial leasing of machines ,subsequent easy payments in reasonable terms.easy payments in reasonable terms.

– Ensured “Self Sufficiency" of workers & Ensured “Self Sufficiency" of workers & supply of good quality inputs from trusted supply of good quality inputs from trusted sources.sources.

““A Co. that can float on the roughest A Co. that can float on the roughest seas, without taking on water or having seas, without taking on water or having to force the crew to abandon the ship”.to force the crew to abandon the ship”.


35

FACING THE HARD TIMESFACING THE HARD TIMES

Caused “Rebirth" of Semco.Redefined Caused “Rebirth" of Semco.Redefined their business ,leaner and more their business ,leaner and more efficient product line.efficient product line.

Weeded out outdated product , “A Weeded out outdated product , “A small hole can sink a big Ship”.small hole can sink a big Ship”.

Essential for survival of Semco Essential for survival of Semco culture.culture.


36

Making the No.1 Making the No.1 redundantredundant Ricardo’s “Circular Organization” Ricardo’s “Circular Organization”

vision behind the concept of making vision behind the concept of making the Co. free from clutches of top the Co. free from clutches of top management.management.

Took several steps to make Semco Took several steps to make Semco “Semler Proof”-“Semler Proof”-– Decision making on Counselors.Decision making on Counselors.– Sporadic attendance in Co. meetings.Sporadic attendance in Co. meetings.– Inputs only when needed.Inputs only when needed.– More time to chart the future of Semco.More time to chart the future of Semco.– Shutting out the option of automatic Shutting out the option of automatic

succession in the Semler family.succession in the Semler family. Wanted to relish other facets of life.Wanted to relish other facets of life.


37

Present Day relevancePresent Day relevance Numerous instances in all fields of Numerous instances in all fields of

turnaround by adopting Semco turnaround by adopting Semco thinking.thinking.

As per Semler, man will always remain As per Semler, man will always remain close to “Tribe Mentality”-affinity to close to “Tribe Mentality”-affinity to like minded people.like minded people.

Organizations redesigned to let the Organizations redesigned to let the nature of “Tribes” be. Create fostering nature of “Tribes” be. Create fostering and congenial environment.and congenial environment.

Discrimination as prevalent in tribes Discrimination as prevalent in tribes can be overcome by flattening the org can be overcome by flattening the org structure.structure.


38

Semler’s last words in the Semler’s last words in the BookBook

““A Co. should trust its destiny to its A Co. should trust its destiny to its employees”.employees”.

““Semco isn’t a model, with Semco isn’t a model, with programmes to be followed with programmes to be followed with precision ,it is infact an invitation for precision ,it is infact an invitation for companies to consider themselves and companies to consider themselves and their employees. Invitation to their employees. Invitation to concentrate on building organizations concentrate on building organizations that accomplish the most difficult of all that accomplish the most difficult of all challenges-challenges-

To make people look forward to To make people look forward to coming to work in the morning…..”coming to work in the morning…..”

Documents

Http://groups.yahoo.com/group/hrcommunity 1 Maverick ! Maverick ! Amazing Real Life Story of a Young man Amazing Real Life Story of a Young man Ricardo