From here to… fraternity

From here to… fraternity

Imagine working for a company where you decide your salary, where you review your boss’s performance, where you could walk in at any time, where there is no dress code. Imagine working for a company where you have complete access to the account books, where it is mandatory to take a vacation. Sounds too good to be true, isn’t it? Yet, this is how a Brazilian company is run.
 
The man behind this radically human way of conducting business is Ricardo Semlar and the company is called Semco. In his book "Maverick", Semler tells how he touched off a chain reaction that transformed a stagnating, old-fashioned company into one of the most dynamic and innovative companies in the world. When Harvard-educated Semler returned to Brazil, he found out that the company his father had founded was in mayhem and on the brink of bankruptcy. The first thing he did was "flattened" the organisation – he trimmed down the hierarchy from twelve levels down to just three levels. Instead of a pyramid, he made a circular organisation where people are cross-trained for multiple jobs, where they rotate jobs every two to three years.

Democracy at its best
Semco, one may say, is the ultimate democratic organisation. Semco’s standard policy is no policy – instead of corporate governance, it advocates self-governance. All employees are treated as mature adults.

Workers set their own production quotas as well as their own wages. Workers have access to the corporate records, and are taught to read financial reports. Profit-sharing is democratic – profits shared are negotiated with workers, who then decide how to split the money. Unions work with management and employees come in when they want to. The workers have a labour union that works in cooperation with the management of the company.

Before people are hired for or promoted to leadership positions, they are interviewed and approved by everyone who must work for them. Every six months, managers are reviewed by workers and results are posted for everyone to see. Not only that – bosses with poor evaluations are actually fired!

Each worker votes on major decisions, such as buying another company or moving a factory. Workers are responsible for their own quality control, eliminating the quality control department.

And look what Semco has got in return for such employee empowerment: A set of highly motivated, quality conscious employees who are driven by their own initiative. The employees are so mature, the management so empathetic and their communication so open that no union is required. Each employee is fully aware of his role in the organisation and is completely committed to company goals. And employee turnover is tending to zero.

In a recent poll of Brazilian college graduates, by a leading Brazilian magazine, Semco was voted as one of the most sought after employers. 25% of men and 13% of women said Semco was the company they most wanted to work. A recent newspaper ad generated 1400 applications, and Semco has gone from 56th to 4th in its industry.

Semler on India
The list of the unusual, innovative initiatives that Ricardo Semler took seems mind-blowing. Yet this "Semco Work Culture" wasn’t a premeditated plan or a strategy. It evolved after many traditional efforts at reviving the company had failed.

In a recent interview with Corporate Dossier (The Economic Times), Semler advised that copying Fortune 500 companies is a bad idea for companies operating in countries like Brazil and India. He encouraged businesses to look for "new architectures" that can be "built around our cultural background."

When asked how should one tackle resistance and go about changing mindsets, Semler replied, "You’ve to remember that the only resistance of any importance comes from the middle managers. About 80 per cent of the company, i.e., everyone who is not a manager or a supervisor, take to this like fish to water, in the sense that it doesn’t take very much to convince people that they should have more freedom to come and go when they want, dress the way they want, spend more time with their kids."

Ricardo ends his book Maverick with these inspiring words, "I hope our story will cause other companies to reconsider themselves and their employees. To forget socialism, capitalism, just-in-time deliveries, salary surveys, and the rest of it, and to concentrate on building organisations that accomplish that most difficult of all challenges: to make people look forward to coming to work in the morning."

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