Many years ago I heard a story of a certain Ricardo Semler. The story went that within his company there were no executives, employers could come and go when as they pleased and they could determine their own salary.
I heard this story before Social Business was a thing, before many software companies and consultancy firms jumped on the band wagon. And, honestly, I forgot about it quickly. Back then I a minion, I did my job without thinking about it too much, other than worrying whether or not I would get that 1.2% raise (which I didn’t, obviously).
Anyway.., now Mr. Semler popped up again, he landed in my Facebook feed. Apparently he visited the Netherlands. And, apparently, he’s still doing very well, his company is still growing, and not only that, other companies are following in his footsteps. This is happening in the Netherlands too, traditionally a traditional country. Sure, we like to think we are liberal, but hierarchy and status are still very important.
So, what is it that makes Mr. Semler and his ideas so special?
In a nutshell, old man Semler was a traditional, old school leader. Not wanting to give up, or change anything, young Ricardo disagreed with this almost a 100%.
When young Semler threatened to leave, his father made the uncharacteristic decision to step down and relinquish command over the company to his son.
Ricardo Semler was 21 years of age, revenue since then has grown from 4$ to 212$ million dollar. Not bad for a radical thinker.
In 1990 Semco survived a major crisis, one where many other companies filed for bankruptcy. The remodelling of the company by Semler made this possible.
By this time employees were invested in the company.., you could say that “employee engagement” was at an all time high. I believe in this particular case, you could say 98%. Semco has a 2% employee turn over.
The employees helped make decisions, took payment cuts, and (dis)approved spending. The reason why they were able to do this is because they were involved in the business, they had job diversification, they learned all they could about most of the business.., not just their small little kingdom.
And they shared all this knowledge. They had learned to care.
During a talk (in the video below) Semler takes the car industry as a metaphor, I like that, I like cars and of the use them as a metaphor myself (great minds…).
Semler stated that in the past 100 years, not much has changed in that industry. Once it was developed, or designed.., that was it.
We have cars which are basically the same as 100 years ago and a distribution system that is also practically the same. One hundred years, and nothing has changed (other than that you have an iPod connector).
Why? Why do we not evolve, why do we not have flying cars?
In essence, when you join a company (any company), you have to conform. Everything is either designed (on purpose or organically) to suit a certain philosophy. Usually a very traditional one and usually a very restrictive one.
When you have a company with, say, 1000 people, and you have about a dozen highly paid managers on whom you rely. Everybody expects those 12 to carry the company, to come up with all the ideas and innovations.
But, they too will be restricted, maybe it’s their reputation, sometimes it’s simply their ego, and sometimes it’s their own lack of development.
The point here is, that you have 987 people in your company who can come up with ideas, provide suggestions, and change the company. But, they don’t know the company, they don’t dare to speak up, that’s not how it’s done…
That’s not how we do things here.
The proof is in the pudding. After 30 years Semler’s company is still flourishing, still growing. Whatever he came up with clearly works. 30 years of success is very hard to argue with.
No, you do not have to be as extreme as Semler (although it would be an excellent challenge), but there are elements you could implement to your benefit.
Trust is one thing, you do not need extensive software platforms to enhance collaboration and stimulate innovation through communication and proper documentation… No.
Remember the good old Suggestion Box? Well, that’ll work, when backed up with trust and transparency.
One of the reasons why that box doesn’t (or didn’t) work is because people were afraid to stand out.., and having ideas (and sharing those) tend to make you stand out.
When you create an environment where people are not afraid to share, even applauded, chances are more people will. You could even organise “Suggestion Box” after noons. Where an X number of people come together with the sole purpose of putting something interesting in the suggestion box. All you need is paper, a pen and a box, oh.., and an idea of course.
The afore mentioned environment should be one of transparency, trust and reward.
As opposed to secrecy, fear and punishment.
See the difference between the two.., don’t you think people in one environment would be happier, more productive and more innovative than in the other? I do.
Watch the video, start to think, be inspired.
2 thoughts on “Social Business as an Extreme Sport”
The interesting thing for me about the Semco story is that it has been enormously popular with management thinkers and students for 20 years or more now. MBA students would flock to Brazil to experience that environment and learn from the man himself.
Yet we haven’t seen Semco like behaviours popping up throughout the world in that time. It underlines the challenge that exists in changing the orthodoxy.
Yes Adi, I found that amazing too. It’s still a long way from knowing the path, and walking the path.