Ricardo Semler: Is it time to run your company without rules?
Keynote speaker Ricardo Semler says:
If we were to start from scratch, would we design organization X the way we have done?
Ricardo Semler, the Brazilian business visionary, CEO and President of Semco, believes corporations should give up control and encourage gratification through work. This is how the bestselling author of Maverick (1993) and The Seven-Day Weekend (2003), transformed his company from a struggling equipment supplier to a democratic and resilient company, with a consistent annual growth rate of 27% and annual revenue of US$400 million (up from US$4 million in 1982).
After assuming control of Semco from his father in 1980, Semler began a decades-long quest to create a “corporate democracy” and the world’s most radically different company. He decided to give everyone the freedom to start doing their work, in a way they saw fit. He allowed employees to design their own jobs, define their own pay levels and decide how many hours they would work. Meetings were made voluntary and two seats at board meetings were made open to the first employees to arrive.
Today at Semco your peers hold you accountable for your work. So, if you pay yourself unfairly, you could be looking for a new job. Team consensus acts as the regulatory mechanism. Every six months a team chooses whether their manager retains his job or not. If redundancies need to be made, who is laid off is also decided democratically.
Semler believes that people have enormous potential when they understand what they are supposed to do and how it fits into the grander scheme. Therefore, all company information is made public, from individual salaries to the profitability of different departments.
Ricardo Semler – TED Talk ‘Radical wisdom for a company, a school, a life’
He discovered that devolving power to his employees and empowering them with information, encouraged them to be more responsible, productive and loyal. His radical approach attracts the best talent and Semco has an annual employee turnover rate of less than 2% in 34 years, compared to 20% plus at most other companies.
In addition to letting go of control, Semler believes in helping employees to achieve the ultimate work-life balance. “The purpose of work is not to make money”… but to help workers “feel good about life,” he says. He encourages this through programs like “retire-a-little”, which allows employees to buy back their Wednesdays for 10% of their salary and “use that time for active pursuits when their bodies can handle it”.
The inspiring, corporate rebel is now promoting the idea of designing other organizations – banks, schools and NGOs – in a more innovative way. Semler asks one question as a starting point: “If we were to start from scratch, would we design organization X the way we have done it?”