I translate the beginning part of an article from "Sein", an inspiring German print and online media:
"Managers from everywhere look amazed at the Brazilian Company Semco, a very broad-based service company, which operates in fields ranging from industrial equipment up to post solutions in various fields: What happens there contradicts everything they believe in. The 3000 people of the staff select their superiors; determine their own working hours; also their own salaries. There are no business plans, no HR department, and almost no hierarchy. All profits are divided by vote, the salaries and all business books are visible for all, but the email is strictly private and everyone decides on his own how much money to spend for a business trip or a computer.
What may sound for today's human resource managers as an anarchic nightmare is actually a success story. Since the company’s owner, Ricardo Semler, introduced this changes, profits rose from 35 million to 220 million dollars. And not just the numbers indicate Semler right, but also the staff: The staff turnover rate at Semco is below one percent.
The recipe is simple: Treat your employees like adults, then they behave that way. The more freedom you give them, the more productive, happier and innovative they are. A company consists of adult and equal human beings, not labor. Everyone has the right to express themselves freely and to find a healthy balance between work and private life. Contrary to present ideas on the topic, pressure and stress make people not productive, but quite simply broken. The company ultimately loses, as well as their people do.”
(If you understand German, it may be worthwhile to read to complete article. You find it here: http://www.sein.de/gesellschaft/neue-wirtschaft/2010/die-befreiung-der-arbeit-das-7-tage-wochenende.html . There is also a lot of English literature available; I recommend specially the books Ricardo Semler himself wrote).
When I put this link on Twitter, by brother Bruno answered soon:
"20 Years ago I read the book ‘The Semco System’ of Ricardo Semler with admiration, and today wonder why this is still not applied in all places where possible.”
Bruno is orchestra conductor and has had, according to what he tells, similar experiences within the music world, as I have had in the little less contemplative environment of the automotive trade. I shall now briefly answer his question with the conclusions I attained during many years of pondering this issues.
If we look at animals living in groups, whether they are chickens, baboons and wolves, we find there pyramidal hierarchies, status, pecking orders – the same we do in our Dow Jones companies and opera houses. Everyone fights to keep his position or to get higher, following the rule “be nice upwards and step on the ones below”. According to some researchers, even hormonal changes occur on the leading alpha animals, so that they respond disproportionately snappy to those who dispute their role.
Strict hierarchy and clear division of labor – the ones above think, the ones below execute - is apparently a law of nature.
But just this very nature has granted us a special right: Besides the usual instincts and hormones for behavior steering we got in the toolbox for our life a particularly high developed front cortex, with which we can, in a relatively sober way, think through controversial things. For example, we are able to consider whether the traditional patterns of collaboration are still purposeful in our present society and, if not, start to ponder more effective strategies.
Larger companies have long found out that for this action is required. For more than three decades, the candidates for a higher management position will be asked to attain some management training courses where this is explained in detail before they will get higher ordinations. However, you do not find in practice so much of what the theory teaches so diligently.
It takes a lot of time, patience and determination, but also a good deal of power to actually achieve changes here, and even in small doses, on little step at a time. As you can read in his interesting books, Ricardo Semler accomplished with Semco only gradually the improvements, to finally arrive at what the company is today. On the way they made many mistakes, they often followed for long false leads. And, most important, he had what many others do not have in an organization: the power, because he was the owner, receiving the company very young when his father died.
Semco is by far not the only enterprise that had success with such a change in labor conditions. However, until now, only few have been so consistent in doing so. Another example of how the employee including management attitude gives strong pushes for improvement and profits in a medium-sized industrial company, describes very merry Detlef Lohmann in the German book “Und Mittags gehe ich heim”. ("At noon I go home - the completely different way to lead a company to success." See also the German article here: http://www.brandeins.de/archiv/2012/das-gute-leben/der-beta-chef.html). His company, Allsafe Jungfalk, would not have been able to survive in a high labor cost environment like Germany without gradually developing into an organization with stripped-down hierarchy. I am convinced that throughout the world there are many more organizations on this path.
However, there is no general recipe. Going here by the manual, if there is any, would only go wrong. The ideal form of organization is determined by the tasks to be fulfilled and the people involved. The world is full of colors and shapes! But even in situations in which strict limits are set within the organization, anyone who has to manage employees can, for example, do the following:
- Let his people decide without interfering. Many roads lead to Rome, not just the one of the boss.
- Teach his people to take responsibility. Give them the responsibility.
- Do not withdraw this responsibility when something goes wrong.
- Build the organization around the people - instead of cramping people in the boxes of a preconceived organization chart.
- Let his people determine the working hours, as long as the job allows this. If the responsibility question was handled properly, then this will always work for the benefit of the company. An owl works not so well in the morning, an early bird starts to yawn at the early afternoon.
- Respect people, making sure that everyone does the same.
- Give trust in advance. This attitude is usually respected by most people, their pride and personal honor will very seldom allow them to misuse it.
- Open the information flow to everybody. In most cases, secrets are kid stuff.
- Eliminate forms, regulations, fixed procedures everywhere, when they are not really necessary. Most rules and regulations are unnecessary. Let everyone use common sense. Everybody has it.
- Help all to heed the affairs of the client as if it were their own.
- Keep the doors of the office are always open. Everyone should be able to come in without being asked.
- Take look at everyone, at least once a day and preferably at the people workplace. Remain friendly and courteous. Praise clearly what is to be commended.
- The rigid hierarchies are not just there because some power-hungry leaders hold it for the best. They exist also because subordinates prefer to play the subordinate, leaving responsibility and decision-taking to the alpha animal. This later one should never accept that some task delegated returns in a hidden form, so that the real responsible does, at the end, not decide. Do not accept a template for a decision without the choice being done by the responsible previously.
- People get tasks assigned for which they are good. People get training in the fields they excel. It is easier and more efficient to make the good better than the weak. It usually does not help anyone to be send to learn something in an area in which he is not very good at.
- Tasks with their associated responsibility are assigned, not positions. No written job descriptions.
- People set their goals. They should include always a date, in which the goal should be achieved. If there is a team working on something, only one (only one!) person gets the responsibility assigned. Nobody can follow effectively more than 5 goals at a time.
- Better to have few good people than many weak.
- No critic of others is permitted. Critical opinion about another should preferably be handled in a face to face conversation without any other person present. If there is no agreement, the superior or another colleague that both trust should be present.
- Engage early and vigorously in conflicts between peers. Best with all involved in the room. Again, do not allow criticism of the other, but accept a problem description. In most cases, the situation is cleared after a debate. However, peer conflicts will usually continue to fester, because rivalry is a hard thing to tackle. If the hierarchical thinking is on demise, these conflicts disappear faster. The biggest leadership error is to foment such conflicts, saying something like "let us see who the better one is." This usually becomes expensive.
- Ensure and look for loyalty. But not against a person but against the company.
I have applied these little "tricks" always successfully for the organizations I was in charge of, even under very difficult circumstances, like in underdeveloped countries. I got people assigned to me with the description of "lazy workers", "prone to thieving" or, more simply, "stupid". Actually they turned out to be very effective professionals, once treated as they deserve. The most important yardstick of economic success in my industry, revenue and income, always rose remarkably fast and high in those companies. "Lucky", was certified to me. I do not believe this, as a permanent luck stream does not exist. However, it was not my merit. It was the merit of the employees that, after internalizing the new rules, started to work very effectively and with full dedication to do what most humans want to achieve in their lives: Having success in their work, being appreciated and receiving respect and gratitude for it.
Of course, in a big corporation, you may walk on thin ice with such a program. You may easily slip, break in or even collapse and be drowned. Unconventional measures, opposed to normal intuition, will seldom be understood by the supervisors. They might not wait until success shows up, but send you as crazy revolutionary to the desert.
Anyway, I observe everywhere a lot is changing; things are going slowly in this direction. Nowadays, very seldom pure Taylorism for work structuring is really successful. This way of organizing common tasks is no longer appropriate or effective. Increasingly, expertise is shared; bosses become coaches; people define in flexible ways what to do and how to do it; they work in groups on specific tasks; they motivate themselves with the work they are doing. Things are getting better, companies earn more money, people like their jobs. In some decades, brother, you will find many Semcos, I bet.
