semco - a maverick organisation
TRANSCRIPT
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“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
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“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
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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
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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
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SBU’S OF SEMCO
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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?
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HOFSTEDE MODEL
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RICARDO SEMLER
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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.
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Management Style of Semler
Participation Ownership
Performance Discipline
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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."
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PARTICIPATORY MANAGEMENT
FUNCTIONAL STRUCTURE
MATRIX STRUCTURE
LATTICE STRUCTURE
CounsellorsPartnersAssociates & Co-ordinates
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"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."
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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
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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
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Core Values
Linking pay with performance
Autonomy given to employees
Wednesday Voucher
Freedom & Accountability
Three step test for starting a new business
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"Rather than force our people to expand a business beyond its natural limits, we encourage them to start new businesses."
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“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.”
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“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.”
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ADVANTAGES
DISADVANTAGES
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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.
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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.
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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.
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• 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.
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Thank You