Maverick Amazing Real Life Story of a Young

Maverick ! Amazing Real Life Story of a Young man Ricardo Semler And his company 1 http: //groups. yahoo. com/group/hrcommunity

Introduction of Semco Was Founded by Antonio Semler in 1952 on his Dining Table(contraction of Sember & Company as Semco) Started business by manufacturing oil separating machine and soon entered into Marine and related sectors 2 http: //groups. yahoo. com/group/hrcommunity

CV of Ricardo Semler Was not a Bright Students(Passed mostly with D Grades) Liked rock n roll Served in Army for an Year(compulsory in Brazil) Developed a Genuine Interest in Business 3 http: //groups. yahoo. com/group/hrcommunity

Management of Semco Pyramidical Structure n Was being run by selected lieutenants of his father n Semco was not doing well n 4 http: //groups. yahoo. com/group/hrcommunity

Management of Semco It was primarily a Rule Book Drive Company n For his father personal and business life was intertwined n Was investing money in Marine Business without any returns n 5 http: //groups. yahoo. com/group/hrcommunity

Ricardo Semler Had serious differences with his father Joined Semco. but was not given and decision making Was exploring the possibility of buying some sick company and starting his own business Had finalized the contract to buy a sick company n 6 http: //groups. yahoo. com/group/hrcommunity

Vital Change n n Curt Semler finally hands over the reins of the company to his son Ricardo Gives him a free hand to run the company 7 http: //groups. yahoo. com/group/hrcommunity

Clearing the Path n First Emergency Surgery(15 topmost managers of Semco fired by Ricardo in half a day) n Ernesto appointed as new key manager n Customer could do not digest this great and sudden change 8 http: //groups. yahoo. com/group/hrcommunity

Difficult Times n Running from one bank to another to arrange cash n Ernesto trying to putting in place “a system” n Appointment of some other key managers 9 http: //groups. yahoo. com/group/hrcommunity

Hard Toiling n Looking around for new business to acquire n A couple of Acquisitions n Stress takes its toll on Ricardo n Faints often and has other health related problems 10 http: //groups. yahoo. com/group/hrcommunity

Change in Approach n Decides to re-organize himself first n Makes a strict plan for his personal and profession life n Tried all the tricks in the books to keep people motivated 11 http: //groups. yahoo. com/group/hrcommunity

Winds of Change starts blowing! n n Carefully watched the oppression of workers First Move: Removal of necessary security check at the gate for the workers Next goes the strict dress code Individual cabins and work stations converted into open spaces 12 http: //groups. yahoo. com/group/hrcommunity

Winds of Change starts blowing! n Ricardo’s own office becomes smaller n Workers to decide their own dress and color n No individual parking(first come first serve basis) 13 http: //groups. yahoo. com/group/hrcommunity

Winds of Change starts blowing! Goes for the first time to the Union office to negotiate Encourages workers to make their own committees Encourages self Management by the workers 14 http: //groups. yahoo. com/group/hrcommunity

Results start coming in Workers on their own design and develop a new slicer Sales shots up 15 http: //groups. yahoo. com/group/hrcommunity

CHALLENGES Strong presence of HP , Epson in the field of printers n Price War led by LG in Digital Camera n Xerox having stronghold in the field of photocopier n Canon late entry in field of Projector n Distribution networks only in large cities n 16 http: //groups. yahoo. com/group/hrcommunity

Sweeping Changes n Encourages employees to visit 30 nearby factories to compare skills, responsibilities and pay cheques Consequently staff turnover goes down Recognizes the existence of the unions n Treat everybody as an adult http: //groups. yahoo. com/group/hrcommunity 17

Sweeping Changes n n n During the strike period (a)continues all the benefits (b)Never call the police ©Tell the strikers that no one will be punished when they return to work. Then don’t punish any one (d)Don’t fire anyone during or after the strike, but make everyone see that a walk out is an act of aggression 18 http: //groups. yahoo. com/group/hrcommunity

Sweeping Changes n Workers take charge of theirs work places n “Paints the walls around them in their favorite colors” n All rules and rule books are discarded n Common Sense is given more importance 19 http: //groups. yahoo. com/group/hrcommunity

Changes n Dividing Businesses in smaller and manageable units n Giving autonomy to units to run their own shows with minimum of – Interference – Economy and dis-economy of scales 20 http: //groups. yahoo. com/group/hrcommunity

Changes n Search committee of workers formed to search a suitable place for the company n Workers as a part of the whole(anti Taylorism) n One Person can’t overrule everyone 21 http: //groups. yahoo. com/group/hrcommunity

Changes n All financial information made available to everybody n Workers decide their own profit sharing cheuqes(after 40% tax+25% SH+12% reinvestment) 22 http: //groups. yahoo. com/group/hrcommunity

Miles of files One of the meetings reqmt of $50, 000 worth Filling cabinets. n Birth of the great “File Crunch”(Bianneal Semco File Insp and Clean out). n Post cleanup dozens of extra cabinet auctioned off ( Compulsion to Collect). n Led to cutting down of Secretaries. n “Headline Memo”. n 23 http: //groups. yahoo. com/group/hrcommunity

Affirmation Action Laura Barros-HR Head-traditional background-instrumental in “The Semco Women”. n Lunch time mtg of women employees of all levels- outpouring of grievances. n First demand-modernization of rest rooms as per women reqmts(Howls from menfolk). n First Semco Women Convention -1986 -all women outing at a hotel in Sao Paulo. n 24 http: //groups. yahoo. com/group/hrcommunity

Affirmation Action Role play to bring out the ills in the Co. n Second convention- concept of “Wailing Wall”. n Moral support to the cause, for gaining power the onus to convince the male workers with them. n Recession , women workers most affected lot. Project seemed to go in vain. n “Haracio Incident”-Reconfirmed the faith in coming of age of the “Semco Women”. n 25 http: //groups. yahoo. com/group/hrcommunity

Trading Places Strict adherence to “Job Rotation”. n 20 -25 % managers rotated in a year. n Min 2 yrs and max of 5 yrs in a job. n Semco benefited: n – Skill enhancement. – Broader view of Co. – Discouraged Empire building. – More than one person for a Job. – Depersonalize the Organization. n “Hepatitis Leave” Concept. 26 http: //groups. yahoo. com/group/hrcommunity

Minding Our Own Business Impersonal" Crime and Punishment” policy. n Benefit of doubt to the employees. n Impersonal view of Employee’s personal life. n No promises, no freebies, no soaps, only sound financial advice. n No Gyms, swimming pools, etc for warding off employee stress. Ensure “Stress is not caused at the first place”. n 27 http: //groups. yahoo. com/group/hrcommunity

Hiring and Firing the Boss Unique system of subordinate evaluation for the Boss. n Based on Rating Questionnaire (covers soft and administrative skills). n New boss selection also by subordinates. n 70% passing mark (<70% intense pressure to change working style). n Productivity based bonus for the unit ensures fair evaluation by subordinates. n 28 http: //groups. yahoo. com/group/hrcommunity

Rounding the Pyramid “Pyramidical Structure”-unwanted levels, clutter at lower levels, insecure work environment. n Created “Circular Organization”. n Free from hierarchical tyranny. No intra reporting amongst same levels. n Total absence of structure. Employees free to write whatever they deemed appropriate on their visiting cards. n 29 http: //groups. yahoo. com/group/hrcommunity

Name your Price Salary fixation by Employees themselves. n Reasons – n – Transparency in letting known the top teams salary. – Letting each employee know others salary. Half yearly target setting ensured no exorbitant salary setting (adds on to expense in PBDIT). n Concept of “Risk Salary”(25% : 50%). n 30 http: //groups. yahoo. com/group/hrcommunity

Some more Unique Practices “Zero Tolerance” for corruption. n Head on approach to corrupt inspector’s approach “Creating difficulties to sell Simplicities”. n Suffered delays, bottlenecks-stuck to the policy-positive image of Co. n “Thinking for Living”-Concept of Nucleus of Technological Innovation (NTI). n 31 http: //groups. yahoo. com/group/hrcommunity

Some more Unique Practices n “Flexitime” for employees. – Make them agree on common Co. goals and let them loose to achieve them. – Initial resentment from workers-took it as Co. ploy to exploit workers. – Concept of work teams and interchangeability of jobs ensured implementation of “Flexitime”. 32 http: //groups. yahoo. com/group/hrcommunity

FACING THE HARD TIMES n Pioneering steps to tackle Recession (19861990) – Active Cost slashing measures. – Sending workers to customers directly (ship parts at docks). – Workers taking on outsourced work in Co. as cafeteria. – “Robin Hood payment cuts”-More at higher levels, reducing with time (as things improved) 33 http: //groups. yahoo. com/group/hrcommunity

FACING THE HARD TIMES n Launch of “Satellite Programme”. – Instead of lay offs encourage employees to become entrepreneurs. – Initial leasing of machines , subsequent easy payments in reasonable terms. – Ensured “Self Sufficiency" of workers & supply of good quality inputs from trusted sources. “A Co. that can float on the roughest seas, without taking on water or having to force the crew to abandon the ship”. 34 http: //groups. yahoo. com/group/hrcommunity

FACING THE HARD TIMES Caused “Rebirth" of Semco. Redefined their business , leaner and more efficient product line. n Weeded outdated product , “A small hole can sink a big Ship”. n Essential for survival of Semco culture. n 35 http: //groups. yahoo. com/group/hrcommunity

Making the No. 1 redundant Ricardo’s “Circular Organization” vision behind the concept of making the Co. free from clutches of top management. n Took several steps to make Semco “Semler Proof”n – Decision making on Counselors. – Sporadic attendance in Co. meetings. – Inputs only when needed. – More time to chart the future of Semco. – Shutting out the option of automatic succession in the Semler family. n Wanted to relish other facets of life. http: //groups. yahoo. com/group/hrcommunity 36

Present Day relevance Numerous instances in all fields of turnaround by adopting Semco thinking. n As per Semler, man will always remain close to “Tribe Mentality”-affinity to like minded people. n Organizations redesigned to let the nature of “Tribes” be. Create fostering and congenial environment. n Discrimination as prevalent in tribes can be overcome by flattening the org structure. n 37 http: //groups. yahoo. com/group/hrcommunity

Semler’s last words in the Book “A Co. should trust its destiny to its employees”. n “Semco isn’t a model, with programmes to be followed with precision , it is infact an invitation for companies to consider themselves and their employees. Invitation to concentrate on building organizations that accomplish the most difficult of all challenges To make people look forward to coming to work in the morning…. . ” 38 n http: //groups. yahoo. com/group/hrcommunity