I have to say Rupert did a good job guessing Ricardo Semler was the entrepreneur behind the 6th episode of the everyday more famous “Guess Who?” week-end game.

Ricardo Semler is a special figure in the world of management science. I really admire his achievements, based on values such as trust, strong work ethics and a sense of responsibility. Ricardo Semler knows what it takes to empower one’s employees, for the sake of the company and, bottom line, the Society. I wish Ricardo Semler’s concepts applied to other fields (politics, etc.). Information Technology has a role to play in the bottom-up approach (e-voting, 360 feedbacks, etc.). Well, to get back to the initial topic of this post, here’s a little bio of Ricardo. Enjoy!

Born in Sao Paulo in 1959, from Austrian parents, Ricardo was a D-grades student, only interested in rock & roll; he was however, a natural leader in sports and enjoyed some tremendous business flair (running a snack stand for a fundraising purpose, he managed to make all his classmates fly for free out of yearly revenues). Although he started Law School, he found no interest in law matters and, after being refused at the brazilian army, Ricardo accepted to work with his father at engineering company Semco.

Tensions started right from the beginning: his father was opening the partition door between their offices during his son’s meetings, which was the perfect way to deter their relationship since Ricardo didn’t feel he was trusted. It is obvious he and his father had, let’s say, different managing ‘methods’: Ricardo was very laid back whilst his father was from the ‘old school’ (regimented schedule, military way of giving orders, etc.) and unwilling to cede authority to his son.

Frustrated Ricardo started looking for another job, and during one full year negotiated a company to purchase: from $1m down to $1! As Ricardo was about to leave for his own company, his father transferred his shares to him, ceding control effectively, saying he was going on a trip: « if you want to make changes, make them now » Ricardo’s father said. By 6:00pm on the same day, 60% of the Semco top management was fired.

From then on, Semco became a remarkable socio-corporate experiment. Ricardo tried different organization schemes: matrix (confusion of reporting lines), autonomous BUs (too much dispute amongst fiefdoms), before finally settling on a lattice model in which small teams are responsible for the whole production process, including controlling of their own budget & …targets!

Between 1985 @ 1987, 1/3 of the middle management left; unit cost went down; production soared. During the 1990s economic downturn, some severe cost-cutting measures were taken in agreement with the workforce; all salaries (including management) went down 40%; productivity, and performance bonuses went up. Ricardo still felt that wasn’t enough. He decided to push further participation and ‘worker empowerment’ further…He considers employees as adults, and the company as a place that should be a democracy rather than a monarchy.

So, Ricardo Semler set up what he called autonomous teams (based on product lines), which could recruit & fire their own employees; including their bosses!

Semco’s activities field became unrestricted. All decisions were taken democratically, involving every worker (down to maintenance and cleaning people). Everybody takes part of a monthly meeting that analyses the numbers. Ricardo also came up with an idea that would totally modify the way Semco handled innovation: ‘Satellite organizations’. An employee willing to leave to start his own business could use the company’s resources against a percentage of her/his bottom line. Nowadays, satellite companies today account for 2/3 of revenues accounted by Semco!

Until now, believe it or not, everything you read on this post was the tip of the iceberg. Semco has no secretaries or receptionists; your make your own coffee and handle your administrative chores yourself (actually, I remember seeing the same sort of situation at the World Economic Forum in Geneva). People had no job title at all; all information within the company (including salaries) is freely available; management salaries are capped. All noncore competencies were outsourced, often to satellite companies. Employees define their own salaries, decide whether or not to recruit someone (as a boss or not).

Positions are (re-)bid every 6 months for 6 months: people make a democratic decision based on skills & salary. All managers rated out of 100. Below 75, they lose their position.

Employees also define their own time table (no control at all even in the old-fashioned industrial department). There is no business plan at Semco, no nominative office as well: you get yourself where you can.

For bright people that didn’t exactly know what they wanted in their job, Ricardo invented the ‘Lost in space’ program: freshmen migrate through the company before choosing where they fit best. “It’s better to beg forgiveness than to ask permission”: the learning curve was steep thanks to a learn-by-making-mistakes policy.

Of course, there is no computer restriction policy at Semco. Employees may go for the Rush Hour MBA: an evening courses internal programs from volunteers for volunteers. Not convinced yet about Semco’s uniqueness and Ricardo Semler’s genius? Here are some explicit figures:

- Between 1990 & 1996, sales grew from $35m to $100m;

- Today: sixfold sales growth, sevenfold increased productivity, fivefold profit rise: Semco’s revenu: x 40;

- 2000 job applications per month whilst Semco’s headcount amounts to 3,000.

- In 1998, Ricardo Semler said: « the corporate revolution is only 30% complete »;

- He has given 300 lectures around the world and is a visiting scholar at Harvard;

Last but not least, Semco enjoys a hyper low worker turnover: a dozen employees per year.

Food for thought, uh?…If you want the full story, I strongly recommend you read a book I LOVED: “The Seven-Day Week-End“, by..Ricardo Semler.

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