Ricardo Semler: Creating Organizational Change Through
Employee Empowered Leadership
The Semco Survival Manual
Organization Chart
Semco doesn’t use a formal organization chart. When it is absolutely necessary
to sketch the structure of the company they always do it in pencil and dispense with
it as soon as possible.
Hiring
When people are hired or promoted others in that unit have the opportunity to interview
and evaluate the candidates before any decision is made.
Working Hours
Semco has flexible working hours and the responsibility for setting and keeping track of
them rests with each employee. People work at different speeds and differ in their
performance depending on the time of day. Semco does its best to adapt to each person’s
desires and needs.
Working Environment
We want all our people to feel free to change and adapt their working areas as they
please. Painting walls or machines, adding plants or decorating the space around you is
up to you. The company has no rules about this and doesn’t want to have any. Change the
area around you according to your tastes and desires and of the people who work with
you.
Unions
Unions are an important form of worker protection. At Semco workers are free to
unionize and the persecution of those connected with unions is absolutely forbidden.
Unions and the company don’t always agree or even get along but we insist that there is
always respect and dialogue.
Strikes
Strikes are considered normal. They are part and parcel of democracy. No one is
persecuted for participating in strikes as long as they represent what the people of the
company think and feel. The workers’ assemblies are sovereign in this respect. 11
Participation
Our philosophy is built on participation and involvement. Don’t settle down. Give
opinions, seek opportunities and advancement, and always say what you think. Don’t just
become one more person in the company. Your opinion is always interesting, even if no
one asked you for it. Get in touch with the factory committee and participate in elections.
Make your voice count.
Evaluation By Subordinates
Twice a year you will receive a questionnaire to fill out that enables you to say what you
think of your boss. Be frank and honest and not just on the form but also in the discussion
that follows.
Factory Committees
Employees at Semco are guaranteed representation through the Factory committee of
each business unit. Read the charter, participate, and make sure your committee
effectively defends your interests, which at times will not coincide with Semco’s
interests. We see this conflict as healthy and necessary.
Authority
Many positions at Semco carry with them hierarchical authority. But efforts to pressure
subordinates or cause them to work out of fear or insecurity, or that show any type of
disrespect, are considered unacceptable use of authority and will not be tolerated.
Job Security
Anyone who has been with us for three years, or has reached the age of fifty, has special
protection and can only be dismissed after a long series of approvals. This does not mean
that Semco has no layoff policy but it helps to increase the security of our people.
Change
Semco is a place where there are big changes from time to time. Don’t worry about them.
We consider them healthy and positive. Watch the changes without fear. They are
characteristic of our company and its culture.
Clothing and Appearance
Neither has any importance at Semco. A person’s appearance is not a factor in hiring or
promotion. Everyone knows what he or she likes or needs to wear. Feel at ease – wear
only your common sense.
Private Life
Semco has no business interfering with what people do when they are away from work as
long as it does not interfere with work. Of course, our human relations department is at
your service for any help or support you may need.
Company Loans
The company loans money to its people in unforeseen situations. Thus, loans to cover the
purchase of homes, cars, or other predictable expenses are not included. But the company
wants you to know that the day you run into difficult and unexpected financial problems
that it will be here for you.
Pride
It’s only worth working in a place in which you can be proud. Create this pride by
insuring the quality of everything you do. Create pride by insuring the quality of
everything you do. Don’t let a product leave the company if it’s not up to the highest
standards. Don’t write a letter or memo that is not absolutely honest. Don’t let the level
of dignity drop.
Communication
Semco and its people must strive to communicate with frankness and honesty. You must
be able to believe fully in what is said to you by your co-workers. Demand this transparency when you are
in doubt.
Informality
Promoting a birthday party at the end of the workday, barging into a meeting where you
are not invited, or using nicknames are all part of our culture. Don’t be shy or stick to
formalities.
Suggestions
Semco does not believe in giving prizes for suggestions. We want everyone to speak out,
and all opinions are welcome but we don’t think that it is healthy to reward them with
prizes of money.
Semco Women
Women in Brazil have fewer employment, promotion, and financial opportunities than
men. At Semco, women have various programs, run by women that seek to reduce this
discrimination. They are known as:
Semco women.
1. If you are a woman, participate.
2. If you aren’t don’t feel threatened and don’t fight against this effort.
Vacations
Semco is not one of those companies that believe anyone is irreplaceable; everyone
should take their 30 days of vacation every year. It is vital for your health and the
company’s welfare. No excuse is good enough for accumulating vacation days for “later”
(Semler, 1993, Pg 299).
Appendix B
The rules created with regard to union relations are totally humanistic and takes
seriously the position that the decisions of unions are also to be respected. For instance:
1. Treat everyone as an adult.
2. Tell the strikers that no one will be punished when they return to work. Then
don’t punish anyone.
3. Don’t keep records of who came to work and who led the walkout.
4. Never call the police or try to break up a picket line.
5. Maintain all benefits.
6. Don’t block workers access to the factory or the access of the union
representatives to the workers. Insist that the union leaders respect the
decision of those that want to work, just as the company respects the decision
of those who don’t.
7. Don’t fire anyone during the strike, but make sure everyone sees that a
walkout is an act of aggressiveness.
Why is it that so many smart, ambitious professionals are less productive and satisfied than they should or could be? Why do so many of them find their upward trajectories flattening into a plateau? In our experience—Tom’s as a business school professor and consultant and Sara’s as a psychiatrist—high achievers often let anxiety about their performance compromise their progress. Because they’re used to having things come easily to them, they tend to shy away from assignments that will truly test them and require them to learn new skills. They have successful images to preserve, so instead of embracing risk, they hunker down and lock themselves into routines—at the expense of personal growth.
We’ve seen this time and again with the executives and managers we’ve counseled—between us, some 600 professionals over a combined 35 years. Many high performers would rather do the wrong thing well than do the right thing poorly. And when they do find themselves in over their head, they’re often unwilling to admit it, even to themselves, and refuse to ask for the help they need.
Consider Ted, a highly successful sales executive at a major enterprise software firm. He excelled at the huge deals that were the revenue engine for the company. He knew the product inside and out, understood the pain points of his customers, and could unerringly sniff out and connect with the real decision maker in a deal. After years of praise and enormous commission checks, Ted began to sense that something was off. The company had expanded in a new direction, shifting to a software-as-a-service business model. Though the majority of revenue was still coming from the legacy products, all the innovation and energy were focused on the subscription offerings. At first, Ted was contemptuous—selling software as a service was all about small transactions and high volume. “Just get some telemarketers for that nickel-and-dime stuff,” he’d say. “I’ll handle the big boys.” Soon, though, he began to see the writing on the wall: He was becoming increasingly marginalized in the company—and in the industry. But he was paralyzed by fear and self-doubt. His professional identity and self-esteem were wrapped up in his success as a salesman.
Consider, too, Kurt, a lawyer known for his trial skills and intellectual heft; he was a natural in the courtroom and a skilled writer with a keen sense of nuance. When he was assigned a case that required combing through thousands of technical documents, he believed it would just be a matter of rolling up his sleeves and getting to work. But early on, he realized he didn’t have enough content expertise and couldn’t make sense of the casework his associates delivered. He began to find himself alone in his office, late at night and on weekends, wading through and deciphering the facts. It wasn’t until almost the eve of a trial that Kurt finally asked for help—which didn’t endear him to colleagues who suddenly found themselves joining him in the office after hours.
Of course, leaders within organizations bear some of the blame for this mind-set. They don’t always want to hear that somebody’s struggling, nor do they necessarily reward new ways of doing things, despite the lip service they might pay to innovation and prudent risk taking. As one executive we worked with pointed out, “My boss wants innovation as long as it’s done perfectly the first time.” Another confided, “We tell our people over and over again that we will support their professional development, but if a new project doesn’t work out immediately, we basically push them over the cliff.”
However, it’s possible to break this cycle and make the next move toward professional growth. First, you have to take a hard look at yourself and identify the forces that escalate your anxieties and cause you to turn to unproductive behaviors for relief. (See the sidebar, “The Curse of Being a High Achiever.”) Then you must adopt counterintuitive practices that give you the courage to step out of your comfort zone. This won’t happen overnight. It requires acknowledging vulnerability, something that driven professionals don’t like to do and that runs counter to their obsession with managing their image at all costs.
To achieve continued success, you must open yourself up to new learning experiences that may make you feel uncertain at best and incompetent at worst. Remember that those feelings are temporary and a prelude to greater professional ability.
Let’s look at steps you can take to get past self-imposed limitations.
Put the Past Behind You
No doubt you’ve had negative experiences when it comes to taking on new challenges. Research shows—and our experience bears out—that most of us tend to make irrational comparisons between a past bad experience and a current situation. But painful memories don’t have to remain obstacles to change.
One exercise we use successfully with our clients can help you distinguish between reality and perception, with regard to both your own past behavior and the way your organization responds to honesty and risk taking. Think about a time when you tried something new and were disappointed with the result. Why did you take the assignment on? Why did you struggle? Did you ask for help? Did your perception of your performance match that of your colleagues? Knowing what you know now, what would you have done differently? Write down in two columns the similarities and the differences between a risk you are currently contemplating and that past negative experience. Identifying the key differences will make it easier to move forward.
Or, think of a risk you took that went badly and rewrite the story from another person’s perspective. Let’s say you obsess about a longtime customer who signed on for an engagement from your firm’s fledgling consulting division but then suddenly backed off and switched his business to a competitor. He’s a liar and a jerk; he made a fool of you. Now put yourself in his shoes and retell the story: Maybe his boss made some unexpected demands or his company had to revisit cost or feature trade-offs. You don’t have to believe that version, but acknowledging that a credible alternative perspective exists is a reminder that it’s not just about you.
Another simple but surprisingly effective strategy is to write down what happened in a difficult interpersonal interaction—one page should suffice—and then read it over, underlining just the facts. You will find that there are only a handful of underlined phrases—the rest is pure interpretation. The point is that when you shift the way you view a painful interaction, you can begin to put the past behind you.
This approach helped Joanna, a marketing manager at an international spirits company. Her particular talent was in creating sophisticated branding campaigns to appeal to big high-end retailers. When the company started selling directly to consumers over the web, an entirely new skill set was required. At first she dug in: She insisted that her marketing approaches would be just as successful online and refused to ask for help. She was faltering badly until she forced herself to think hard about why she was so afraid to adapt to the new medium. She thought back to her first job as an assistant at a publishing company. She had volunteered a risky idea for an author promotion, and the president, known for her temper, had thrown a pencil at her. A little older and a little wiser, Joanna could laugh at the story. But it was nonetheless a formative experience, and for years it subtly influenced her behavior at work. Upon reflection, Joanna realized that the incident was not about her poor judgment or misguided risk taking—it was about her erstwhile boss’s unprofessional behavior. The president was probably taking out her own deep-seated insecurities on Joanna, an easy target owing to her youth and inexperience.
It’s hard to exorcise past demons until you’ve looked at them dispassionately from multiple points of view. Almost without exception, overwhelming feelings of inadequacy are in our own minds. Our personal disasters are but tiny specks when it comes to other people’s reality.
Once Joanna realized how that long-ago episode had been holding her back, she challenged herself to volunteer for a task force exploring new channel opportunities. She also got up the nerve to ask a colleague to serve as a sounding board. The aim was not just to test the viability of her ideas but to bolster her courage. What began as a fairly stressful career-booster turned into a productive monthly dinner. In the end, Joanna moved on to a senior position at a global cosmetics company as the vice president for duty-free promotions. She surrounded herself with a team of smart, reasonable people and resolved never to let her own fears get in the way of embracing new ideas.
Use Your Support Network
High achievers are, as a rule, very independent and don’t like to think they need a lot of help. Even those who have been lucky enough to have good mentors think they’ve won them by being excellent contributors. As they rise to the senior level and become mentors themselves, they often become even more reluctant to confess to fear, confusion, or incompetence. Making matters worse, they confide in people who tell them what they want to hear, not what they need to hear.
A case in point is Catherine, a manager at a rapidly growing software firm, who was accustomed to having the high regard of her executive team. After a few years on the job, she found herself in charge of a presentation that included an overview of a project run by her previous boss, who was now in a more senior role. She put off her review of his slides because she was worried she wouldn’t be able to deliver the content as well as he would have. She was terrified of sounding stupid or embarrassing herself in front of somebody she truly respected. She kept procrastinating until the night before the presentation, when she finally reviewed the content and sent him an e-mail with some very cautious inquiries. He surprised her by answering her questions without defensiveness and offering suggestions for improving the presentation. Catherine felt as though a weight had been lifted from her shoulders. She realized how silly she’d been not to ask for his feedback sooner.
Many high achievers avoid other people’s opinions when they fear their work is not up to par. That kind of behavior is self-destructive. Challenge yourself to develop a support network and then regularly ask individuals to give you honest feedback, even if the process is painful. Ask key people to engage in what a former professor of mine, Phil Daniels, calls an SKS. It’s a process where you ask others what you shouldstop doing, what you should keep doing, and what you shouldstart doing.
When you review the answers, consider—or better yet ask—why people might suggest that you stop a behavior (it could even be a behavior you view as a strength). Think about whether you’ve been dismissive of certain skills or behaviors because they come easily to you. Consider why people may have suggested that you acquire other skills.
Become Vulnerable
Practice acknowledging uncertainty or confessing mistakes with people who are close to you or about projects that aren’t central to your professional identity. Admit to small failures—without rattling off a litany of extenuating circumstances. Consider another executive, who had joined the board of a local nonprofit. He believed in the cause and wanted to give back to his community. But realistically, with his day job, his children at home, and his wife also working full time, he didn’t have the bandwidth to keep up. He skipped board meetings, making excuses, and avoided duties that would expose his inability to fulfill his obligations. The commitment became, for him, a source of deep embarrassment.
He suffered quietly for nine months before telling his wife of 20 years that he thought he couldn’t do the job. Even then, he felt humiliated and was reluctant to admit that he’d bitten off more than he could chew.
But it turned out that just voicing his anxiety brought him a surprising degree of relief. He shared the same story with several close friends, and after a few days he decided to resign his directorship. He told the board quite simply that he’d taken on too many responsibilities and that, although he would still help with individual fundraising events, he could no longer commit to full board membership. His fellow members, who were by no means unaware of his struggle to keep up, were actually pleased to come to some closure and genuinely appreciated his commitment to contribute in a way that was manageable. Because of his honesty, his relationship with the board improved.
Consider, too, Anne, an executive who called in an analyst to demonstrate a sophisticated modeling approach to improve forecasting at her company. The analyst plunged into the material, using highly technical jargon to explain the model. Anne was reluctant to admit that she couldn’t follow the presentation, but swallowing her pride, she interrupted, saying, “I’m sorry—this is not a comfortable area for me—could you explain those terms and go a bit slower?” The analyst began to speak in clearer terms, and in doing so, some faulty assumptions came to the surface. The meeting took on a much more collaborative tone, and both left with a better understanding of the challenges facing the company.
Often the failure to admit vulnerability can have devastating consequences. Arguably, the recent financial crisis was exacerbated by the fact that some leaders were embarrassed to acknowledge that they did not understand the financial products they were selling. Things might have gone differently if somebody had had the courage to raise a hand and say, “I’m not getting this—could you please explain again the product you’ve created?”
Another way to practice vulnerability is to deliberately put yourself in situations where you literally know nothing. Take a language class unrelated to your heritage. Join a book group where you can’t control the selections—and force yourself to speak up at every meeting.
Most likely, your colleagues and acquaintances are also high achievers who hold back from sharing their concerns. When you take the bold step of being vulnerable, you send a powerful message to those around you that invites them to do the same.
Focus on the Long Term
Major goals can withstand interim setbacks. When you are looking at the big picture, you often give yourself more latitude to make a few missteps. One lawyer with a passion for civil liberties, Steven, told us of an experience writing a brief that was in an area of law that lay outside his experience. He was paralyzed by the prospect of looking incompetent to the members of the legal community he admired most. That the subject matter was only slightly out of his area of expertise made it all the more daunting—he felt he should know instinctively how to respond.
Steven realized that he had to grant himself the permission to be mediocre—an appalling prospect for achievers. He weighed the possible consequences of a subpar brief against the broader benefits of expanding his expertise and making an influential contribution to the case. As it turned out, his work on the brief garnered him additional respect from his colleagues. It was a solid effort that demonstrated his ability to stretch beyond his comfort zone.
Long-term success requires some willingness to commit to necessary short-term risks. High achievers often let their fear of failure stop them from taking those chances. That was the case with Rick, a respected professor but a dismal team player. His students loved him, but his peers were increasingly vocal about his refusal to contribute at an organizational level. He couldn’t be counted on to complete any work other than what was on his own to-do list. Rick consciously ignored his colleagues’ feedback, in part because he knew he was less talented at organizational tasks. Mostly, though, he was just too self-absorbed to pay attention to anything other than his own teaching, research, and publishing agenda. Unfortunately, Rick’s inability to see the big picture was his undoing, and his contract was not renewed.
In his next position, Rick resolved to do things differently. He invested time and effort in shoring up his organizational abilities. Though he worried initially about not focusing his all energies on teaching, his farsightedness paid off: He’s now one of the most highly regarded professors in his department—on all counts. He still feels anxiety about his weaknesses—that’s who he is—and in a way it’s what makes him great. He’s never satisfied.
Doing the right thing poorly is painful for high achievers. It’s much more satisfying to do something well, even if it’s not the best use of your time. Moving your A game to a new level or in a new direction takes humility, it takes practice, and it takes patience (not necessarily your strong suit). But it’s a necessary step on the road to doing the right thing well.
mas J. DeLong is the Philip J. Stomberg Professor of Management Practice at Harvard Business School and the author of Flying Without a Net (Harvard Business Review Press, 2011).
His daughter Sara DeLong is a psychiatrist in private practice and community mental health in San Francisco and an assistant clinical professor at UCSF’s Department of Psychiatry.