Jun 08
26
Semco is a company that has been incredibly inspirational to me – I love it! However, some people get the creepy-crawlies when they learn about it and how the executives let go of control:
“Semco has no official structure. It has no organizational chart. There’s no business plan or company strategy, no twoyear or five-year plan, no goal or mission statement, no longterm budget. The company often does not have a fixed CEO. There are no vice presidents or chief officers for information technology or operations. There are no standards or practices. There’s no human resources department. There are no career plans, no job descriptions or employee contracts. No one approves reports or expense accounts. Supervision or monitoring of workers is rare indeed.
Most important, success is not measured only in profit and growth.Strange, eh?
My summary may make Semco sound like a company with an offbeat management style that wouldn’t succeed anywhere else. Nevertheless, hundreds of corporate leaders from around the world have visited Sao Paulo to find out what makes us tick. The visitors are curious about Semco because they want what we have–huge growth in spite of a fluctuating economy, unique market niches, rising profits, highly motivated employees, low turnover, diverse products, and service areas.
Our visitors want to understand how Semco has increased its annual revenue between 1994 and 2003 from $35 million a year to $212 million when I–the company’s largest shareholder– rarely attend meetings and almost never make decisions. They want to know how my employees, with a show of hands, can veto new product ideas or scrap whole business ventures.” (See below for links to a longer PDF article and to his book on Amazon)
Here are some more tastes of how things are different at Semco:
- Employees determine their own working hours
- Employees hire their bosses
- All employees rate their bosses twice a year and all ratings are published
- HR has been almost abolished, because leaders need to be able to treat their employees right themselves
- Employees choose their own salaries / comp structures
- ALL meetings are voluntary and open to everyone
- The Board meetings are open to everyone, and include employee representation
CEOFlow (though it’s early) will be a roadmap to the Seven Day Weekend.
A Semco-ish practice in my team at salesforce.com – transparent sales compensation
I discovered the articles and books about Semco before I joined salesforce.com, and really enjoyed having the opportunity to test out these kinds of ideas in a tangible way. They make transparency a fundamental priority. One example: they publish everyone’s compensation across the company! In that case, I could see the problems created by doing that in the US, but I appreciate the intention.
At salesforce.com, I published the compensation of everyone on my sales team (this wasn’t a practice across the company), so that:
1) They could verify the comp calculations were correct (reducing payroll errors and frustrations)
2) They could see where they stood and who they should be emulating
3) It increased transparency and trust in the team
Hmm – less frustration, more motivation, better culture. Works for me!
Now, this kind of comp transparency won’t work well if your comp plans vary per person or aren’t fair (usually because of special deals). People talk about comp anyway – it’s always best if you can avoid doing things in the first place that you don’t want to be discovered. This kind of transparent comp practice forces you to make your comp planning sustainable, fair, and without arbitrariness. As much as is humanly possible, avoid special tricks or custom deals for people – ESPECIALLY in sales!
UPDATE
My mom (who knows that I’m obsessed with Semco) found this excellent video documentary of a visit to their offices:
http://www.youtube.com/watch?v=gG3HPX0D2mU
More information on Semco
If the intro above, the appetizer, resonated with you, here’s a PDF with a little more information:
Download article on Ricardo Semler / Semco
His Books
And finally, for the main course, his book is called “The Seven Day Weekend”
http://www.amazon.com/Seven-Day-Weekend-Changing-Work-Works/dp/1591840260
Also, Ricardo Semler’s first book is Maverick: The Success Story Behind the World’s Most Unusual Workplace