This evening, I finished “Maverick!: The Success Story Behind the World’s Most Unusual Workplace” by Ricardo Semler. Ricardo is a successful Brazilian entrepreneur and experienced keynote speaker. The book was published in 1993.
Maverick is the story of Semco, a manufacturing company that was started by Ricardo’s father. The book detailed the unorthodox and sometimes seemingly counterproductive management decisions of the company as it became one of Brazil’s biggest companies.
Prepared to be befuddled by this book. Ricardo’s management ethos is that no company can be successful, in the long run, if profits are its principal goal. He even posits that from his observation, money isn’t the only goal of workers, either. So he goes about running Semco using these two personal principles.
One of the things that jolted me was how forward-looking the management of Semco were in the 1980s. Some of the worker-centric decisions made in the 1980s, at a time when almost no company elsewhere in the world thought about them, are still a struggle for a lot of companies today.
Take for instance, Work at Home. Semco was structured in such a way as to encourage everyone who can work at home to do so. The company stresses to the workers that working from home enhances concentration and productivity and gives them more flexibility.
Do you know that at Semco, all memos, minutes, letters, reports, even market surveys, are restricted to a single page? This has not only reduced unnecessary paperwork, but has also helped them avoid meetings that were often needed to clarify ambiguous memos. Concision is worth the investment. The longer the message, the greater the chance of misinterpretation, they concluded.
The book has a lot of ‘What Did I Just Read’ moments, but one especially profound one is how one of the workers who felt cheated because he was not promoted (after his boss left) sued the company. The judge was stunned to find out that the worker was not sacked as soon as he sued. The case dragged for 6 months, the company won, but throughout this period, not once did the company think of sacking him. At the time of writing the book, the welder was still at the company.
This attitude is at the centre of the company’s dealings with the dreaded labour unions. While other companies avoid and stifle their workers from joining unions, Semco doesn’t mind. When the unions strike, Semco doesn’t call the police to break up a picket line, doesn’t fire anyone during or after the strike, and maintains all benefits after the strike. The company does none of this not because of morality or virtue signaling, but because it found out over time that treating everyone like adults pays the greatest dividends. It even allows striking employees enter the plant and use the company’s cafeteria for meetings.
While Ricardo talks up the value of the worker, he takes a swipe at Henry Ford and Alfred Sloan who he believed made their companies lag behind their competition due to their hardheaded dictatorship and inflexibility to workers’ demands. This was fun to read.
How is this for a quote to put in your CEO’s office,
“It usually doesn’t take much to evaluate a company’s commitment to fairness. Don’t bother with records and statistics. A look around the offices is often all that’s needed. If nearly everyone is white, or attractive, you can bet a company is biased.”
Damn! Ahead of his time.
At Semco, not only does everyone knows what everyone is earning, workers get to set their salaries. Yes, you heard that right! Workers set their own salaries. In fact, a worker once set his salary below what the company thought reasonable and he was advised to up the figure, two times. For Semco, transparency and reasonableness prevail among other reasons in the setting of these salaries because everyone knew what everyone else is paid and because of self-preservation.
One of the best #TSD for me in the book is Risk Salary. You have to read it. It blew me away. A Semco employee told a magazine: “The company became a paradise to work in. Nobody wants to leave.”
#NewWordAlert Obstreperous. I don’t get to learn this kind of obnoxious word in every book I read. So this deserves a mention.
Like a lot of people, Ricardo had an epiphany after he suffered from an advanced case of stress. As he passed out on a trip to the United States, the American doctor told him he had the most advanced case of stress he’s ever seen in a person of twenty-five.
So his attitude changed. At Semco, there is no organizational chart. I can’t say I fully understand what the circles and small triangles it was replaced with meant as explained in chapter 24, but consultants marveled at how such a counterproductive measure worked. At an executive program he went for at Harvard, Ricardo’s explanation of our circular organization amused them. This kind of management is just not one they are used to.
At Semco, it’s not only the bosses who interview candidates, those who will report to the potential hire also interview him. If they disapprove of the person, that’s the end.
Even today, not many companies take care of nursing mothers like Semco. As the company opened up to more ideas from minority groups, Semco females came up with radical programs for women and nursing. The program for nursing mothers is news worthy. Semco pays all day-care costs in a child’s first year, a little less in the second year, still less in the third, and so on until the sixth year, when children are in school full-time.
Workers at Semco don’t have corporate dresses. They dress in whatever they are comfortable in. As workers arrive in the morning, they can hang any of three metal tags on pegs on the board: a green tag stood for “Good Mood,’’ a yellow tag for “Careful,” and a red tag for “Not Today — Please.” What innovation!
A lot of the innovation at Semco were brought about by a group of employees with no job descriptions. They had no bosses. They reported to no one. All they did was think for a living. They became so successful that they attracted attention from outside the company.
At a point during a particular severe economic downturn, they came up with the idea of firing some of the workers, then help them use their severance to establish their own businesses, which would supply materials or services to Semco (and any other companies they want). To clinch the deal, Semco offered to lease the workers the very machines they operated in the plants, at no cost to start with and extremely reasonable terms later on, as their companies became profitable. Semco has so far helped form more than two dozen Satellite companies.
Did I mention the unique profit sharing scheme and the CEO rotational policy every six months? Well, too many ideas in just one book. Companies from all over the world took tours at the plant to see the inner workings of a democratic corporate institution.
Little wonder, many of Semco’s key people regularly spurn lucrative employment offers elsewhere. Semco has had periods of up to fourteen months in which not one worker had left the company. At the time of the writing of the book, there was a backlog of more than 2,000 job applications, hundreds from people who say they would take any job just to be at Semco. Almost 20% of all college students in Brazil said that they would like to work for Semco when they graduated. Brazil’s fearsome Marxist Union leaders said Ricardo is “the only trustworthy boss in the country”.
Ricardo was able to grow the company to such a level that he could detach himself from the company and spend his time reading 50 books a year. Goals! Can your CEO can.
This truly fascinating business book shows that it is possible to do business with a human face. That both the company and workers can be truly satisfied with their work.
In the 1980s, Semco had perfected employee-centric systems that most companies in 2020 struggle and fight against. And Ricardo has laid them all out in this all-time best-selling nonfiction book in Brazil’s history. Really remarkable!