semco - a maverick organisation

“At some point, you have to make a decision.Boundaries don’t keep other people out. They fence you in.Life is messy. But that’s how we are made.So, you can waste your lives drawing lines or you can live your life crossing them.” - Meredith Grey

“We’ve all learned to go on to email on Sunday and work from home. But very few of us have learned how to go to the movies on Monday afternoon”-Ricardo Semler

LETS TAKE A TRIP UP THE MEMORY LANE

1953ANTIONIO CURT SEMLER FOUNDED SEMCO

1960-1970’sSEMCO WAS A MAINLY A MANAFACTURER OF MARINE PUMPS

1960’SHIERARCHICAL ORGANIZATION WITH 12 LEVELS OF MANAGEMENT. “FEAR WAS THE GOVERING PRINCIPLE”

1980ENTER RICARDOHE CHANGED THE ENTIRE STRUCTURE OF THE ORGANIZATION

CHANGES

People set their own

working hours

Workers choose their managers and

evaluate them twice in a year

21 page “Survival Manual”

Profit sharing

No receptionists, secretaries or

personal assistants

No headquarters, No job titles

No mission statement

People set their own salaries

SBU’S OF SEMCO

Manufactures pumps, industrial dish washers, cooling units, industrial machinery

Runs office buildings’ data centers

Provides consulting services on environmental issues,

Creates software for Internet applications, ATM services and

Manages human-resources activities for major companies.

What Semco does?

HOFSTEDE MODEL

RICARDO SEMLER

LEADERSHIP STYLE •Democracy in the organisation •Rotating the CEO position

KEY STRENGHTS •Recognizing that the people are the most creative and productive when they have a say in the running of the company

BEST DECISION •To introduce the boldest experiment in management ever successfully taken.

Management Style of Semler

Participation Ownership

Performance Discipline

ORGANIZATION STRUCTURE

"It's a system that puts a lot of weight on leaders because then can no longer simply protect

themselves with symbols of power like closed offices or special parking places. They have to rely exclusively on their ability to generate respect."

PARTICIPATORY MANAGEMENT

FUNCTIONAL STRUCTURE

MATRIX STRUCTURE

LATTICE STRUCTURE

CounsellorsPartnersAssociates & Co-ordinates

"Semco's ongoing transformation is a product of a very simple business philosophy: give people the freedom to do what they want, and over the long haul their successes will outnumber their failures."

A bonfire of

bureaucracies

Spin off new

satellite suppliers

Rounding the

pyramid

Set your own

salaries and

bonus

Appraise your boss

Small, symbolic changes

that make a big

difference

Workers’ committees take

on a manageri

al role

A new leadershi

p network

Profit Sharing

Information

Sharing

THE NEW SEMCO

Ask someone at Semco “who’s in charge?” and the most likely response will be “no one.”

Semco doesn't plan which businesses to enter. Instead it 'rambles' into new areas by trial, error and argument

ORGANIZATIONAL CULTURE

Core Values

Linking pay with performance

Autonomy given to employees

Wednesday Voucher

Freedom & Accountability

Three step test for starting a new business

"Rather than force our people to expand a business beyond its natural limits, we encourage them to start new businesses."

“Participation gives people control of their work, Profit-Sharing gives them a reason to do it better, and Information tells them what's working and what isn't.”

“Employees can wear whatever clothing makes them comfortable. They can do whatever the hell they want. It’s up to them to see the connection between productivity and profit and to act on it.”

ADVANTAGES

DISADVANTAGES

Implications• Ricardo Semler doesn’t have a current title. The company recently held a party to commemorate the tenth anniversary of the last time he made any decision at all.• The only real rules at Semco - is huge peer pressure and self-discipline.• Semler is more worried that the company's uniqueness will be diluted if it grows too fast or makes too much money. • Semco’s products are so good and its customer service so efficient that 80 percent of its yearly revenues come from repeat customers.

Semler's Rules for Management Without Control

Forget about the top line.Never stop being a start-up.Don't be a nanny.Let talent find its place.Make decisions quickly and openly.Partner promiscuously.

Can Semco’s culture work for Indian Companies?• First, to copy Semco's structure, you need to:• Be convinced that it will work for your company• Be able to change your company's structure• Make it work in practice, with your own people

• In the Semco case, the transition worked because the leadership (Ricardo Semler) owned the company, was young and he found the right associates to lead the change.

• Above all it requires smart, humble and daring managers, willing to change their minds often.

• One of them is the relationship between the boss and subordinates. The general belief is that in India the relationship is very formal and hierarchical.

• There are instances of companies with the traditional hierarchical model moving to a more decentralized way of functioning.

• Not all of them may be able to make a transition to the "boss less" model.

• A lot of Indian startups are coming up with the flat organizational system.

Thank You