Ricardo Semler and Semco

'When I took over Semco from my father, it was a traditional company in every respect with a pyramid structure and a rule for every contingency. Today our factory workers sometimes set their own production quotas and even come in their own time to meet them without prodding from management or overtime pay. They help redesign the products, the make and formulate the marketing plans. Their bosses for their part can run our business units with extraordinary freedom determining business strategy without interference from the top brass. They even set their own salaries with no strings. Then again everyone will know what they are since all financial information at Semco is openly discussed. Our workers have unlimited access to our books. To show we are serious about this, Semco with the labour unions that represent our workers developed a course to teach everyone, including messengers and cleaning people, to read balance sheets and cash flow statements. We don't have receptionists. We don't think that they are necessary. We don't have secretaries either, or personal assistants. We don't believe in cluttering the payroll with un-gratifying dead-end jobs. Everyone at Semco, even top managers, fetch guests, stand over photocopiers, send faxes, type letters and use the phone. We have stripped away the unnecessary perks and privileges that feed the ego, but hurt the balance sheet and distract everyone from the crucial corporate tasks of making, selling, billing and collecting. One sales manager sits in the reception area reading newspapers hour after hour, not even making a pretence of looking busy. Most modern managers would not tolerate it. But when a Semco pump on an oil tanker on the other side of the world fails and millions of gallons of oil are about to spill into the sea he springs into action. He knows everything there is to know about our pumps and how to fix them. That's when he earns his salary. No-one cares if he doesn't look busy the rest of the time. We are not the only company to experiment with participative management. It has become a fad. But so many efforts at workplace democracy are just so much hot air. The rewards have already been substantial. We have taken a company that was moribund and made it thrive chiefly by refusing to squander our greatest resource, our people. Semco has grown sixteen-fold despite withering recessions, staggering inflation and chaotic national economic policy. Productivity has increased nearly twenty-fold. Profits have risen ten-fold. And we have had periods of up to fourteen months in which not one worker has left us. We have a backlog of more than 2,000 job applications, hundreds from people who state that they would take any job just to be at Semco. In a pole of recent college graduates conducted by a leading Brazilian magazine, 25% of the men and 13% of the women said Semco was the company at which they most wanted to work. Not long ago the wife of one of our workers came to see a member of our human resources staff. She was puzzled about her husband's behaviour. He was not his usual grumpy autocratic self. The woman was worried. What, she wondered, were we doing to her husband? We realised that as Semco had changed for the better, he had too'.

Sources: Ricardo Semler (1993) Maverick Century Ricardo Semler (2003) The Seven Day Weekend Century