Author: Ricardo Semler
Reviewed By: Nishant Kumar
About the Author: Mr. Ricardo Semler is the CEO of SEMCO SA, the company originally a shipbuilding supplier, now produces more than 2,000 products including dishwashers and digital scanners, as well as diversifying into banking and environmental services and managing non-core business of multinationals such as Wal-Mart and Carrefour. Apart of a successful business man, Mr. Ricardo Semler also writes books. His first book became the bestselling non-fiction book in the history of Brazil. He has since written two books in English on the transformation of SEMCO and workplace re-engineering: Maverick, an English version of "Turning Your Own Table" published in 1993 and an international bestseller, and The Seven Day Weekend in 2003.
Review: Maverick is book written by Mr. Ricardo Semler on SEMCO, the company founded by his father Mr. Antonio Curt Semler. It is one of the most read an inspiring management book. It is a story of how Mr. Ricardo Semler led his company business from an autocratic industry structure to a democratic industry structure. This book describes how he changed the company’s hierarchical structure to a three level structure. SEMCO is a Brazilian manufacturing company, formed in 1952. After 10 year of its start up, the company has grown to 110 people and had annual revenue of $2 million per year. With the start of ship building industry in Brazil, SEMCO became a major supplier of marine pumps. Ricardo took control of SEMCO at an age of 20 and by that time ship building industry had stabilised with a lesser demand of products of SEMCO. Since the dependence of SEMCO on ship building industry was too much, the company was exposed to a lot of problems like lack of market for its product. The other issues which young Ricardo faced were that he was in disagreement with the way of thinking of the company senior management. As a result of which he fired most of the senior management and went on hiring a completely new team which has similar thinking like his. He started acquiring companies and progressed for a few years. His work style was in synch with other CEOs which generally put the management in central position from where they can watch out activities going in the company. But, with time Ricardo realized that the company was not doing well and the employees of the company hardly cared with the company’s success or failure. This thought process going inside the company’s employee worried him and as a result he got stressed. He was advised to do some changes in the company which was a source of his stress. Semler decided that he will bring a change in the company where the employees will work hard, will be innovative and also will work freely without getting stressed. The employees in the changed company will work hard, set their own goal and standards. They will be not be watched upon by their boss which is a source of stress among the employees. Every employee will bill themselves as per their own calculated value and they will have the complete freedom to hire and fire their managers.
The book describes SEMCO Company and its progress through the company owner himself. Thus the reader gets to know about the actual happening of a company and the changes taking place through a man who himself brought upon this changes. Throughout the book Semler describes the way the company SEMCO evolved from a conventional business model to a niche model which brought SEMCO again to success and limelight. He changed the company from a management run company to a worker run company. He introduced the concepts of industrial democracy and corporate reengineering. Due to his radical ideas he was able to turn around the fortunes of the company and make it an ideal of organisation structure for other companies. On making his changes functional in SEMCO, SEMCO grew six times of the one he took control on. The employee productivity is over seven hundred percent. There is long list of people across world who wants to join SEMCO. Executives from world’s best company like Nestle, FORD and GM visit SEMCO to get inspiration and learning on how to run the company is similar line. This book is great source for budding entrepreneurs also who wants to run a successful company and think about the workers welfare at the same time. What Semler did was to install a culture in SEMCO where worker feel a sense of pride in living life, to lead their life and also the company. In a car accident, when Semler was out of office for few months the company did as good as when it was running with him. This was the magic created by the owner of the company.
Key Ideas Highlighted by Ricardo Semler through Maverick
A. Company Philosophy
· Business Focus: SEMCO focused on four principles of business, Manufacturing, Selling, Billing and Collecting.
· Use of Good Common Sense: They didn’t applied any rules like dress code, travel restrictions etc.
· Transparency: They made public every strategy, salaries etc. Also employees were encouraged to ask everything going on in company.
B. Company Management
· Corporate Hierarchy: They have slashed the layers of management from a big number to a small number of three. They consider management layers as deadlock creating situation wherever it becomes tough going on top. Main layers in new management are: Counsellors, Partners, Associates, and Co-ordinators.
· Reduction of support staff: They have reduced support staff by 75%, somewhere eliminating complete departments. They encourage that each employee should take part in all operations of department.
· Reverse feedback and evaluation: Employees are encouraged to evaluate managers through questionnaires. They are evaluated on technical ability, competence and leadership aspects. On employment of new managers, employees take interview of candidates and decide whom they want to follow.
· Optimum business unit size: At SEMCO it is believed that larger centralised organisations breed bureaucracy and alienation. Hence no business unit exceeds size of 150.
· Open Management style: Company believes in open management style and reducing barriers between employees. They propagate no walls in offices and people are separated only by plants. Employees should be open to each other on their thought process.
The prime focus in running SEMCO is as follows:
A. Business Focus: At SEMCO, everything focuses on the four business activities that make the company money:
· Manufacturing
· Selling
· Billing
· Collecting
Anything that isn’t directly associated with these four activities is deemed a distraction and is eliminated if at all possible.
B. The Use of Good Common Sense: The abiding corporate principle at SEMCO is that employees and management are expected to use their common sense. Therefore, there are no dress codes, no regulations on travel, no internal departments to check if employees are obeying the rules, etc.
C. Transparency: SEMCO makes public all corporate information -- from salaries to strategies to productivity statistics and profit margins. Employees are taught how to read financial statements. Employees are free to question managers on any aspect of the business at any time. Employees can talk to the media whenever and wherever they like.
Many companies allow office workers to decide what hours they work. Relatively few extend this same courtesy to factory workers. However, in SEMCO every factory worker still works 8-hours per day, but can arrive at any time between 7 and 9 am, and leave accordingly. At SEMCO, strikes, while not encouraged, are considered to be part of the democratic process at work. During strikes, no one is punished or fired for striking and no records are kept of who went on strike and who did not. The police are never called to break up a picket line. Benefits continue to be paid, as if the worker was absent and the rights of those who choose to work are respected. Employees are encouraged to move on to another job within SEMCO every two to five years. It stops them becoming trapped in a job and encourages the development of new skills. SEMCO employees are encouraged to take a 2-month sabbatical every couple of years to learn new skills, redesign their job or to rest. They are told to imagine they have hepatitis and have to take 2 months off to recover.
The company decided that its profits would be allocated:
-- 40-percent for taxes
-- 25-percent for dividends to shareholders
-- 12-percent for reinvestment
-- 23-percent for profit sharing with the employees
Each business unit then decides how to allocate the profit share amongst its employees, which in practice always ends up being an even split, which makes profit sharing more valuable to those on lower salaries than on higher salaries.
C. Democracy in the workplace:
The Company follows a policy where there is democracy at all levels of the hierarchy. Each and every employee is free to express their opinions without any fear of expulsion. The factory committees in the Company look after the labour and the union relations. There is a system in the Company which gives preference to those employees who work in their Company and deliver 70% of their goods to promote to the next level rather than someone from the outside. There are manufacturing cells in the Company which allows access its end products to all its employees irrespective of their domain. The Company also follows a satellite program which allows its employees to become owners in their own domain. This provides an insight into the owner’s perspective. The Company also allows the employees to work at home which makes them productive.
D. Concepts and ideas:
The Company follows certain concepts which are:
· It allows the employees to clean out all the unnecessary documents with them as that will result in more concentration and less distraction.
· The Company is a strict no to corruption in any form of it.
· It uses a head line memo in its meetings which results in less wastage of paperwork and direct point discussions.
· The Company does not include any restrictions for those who joined it for the first time and allows them to practise in all the 12 departments.
· The Company hires certain group of people who are solely meant for the purpose of innovation. If the Company makes profits, they are given special incentives.
The main idea of the SEMCO Company can be captured from the following lines:
- Each Company should trust employees as its destiny.
- Employees should be treated as adults rather than children pestering them with rules.
- Each Company should provide flexibility to its employees. They should abide by their common sense rather than rule books.
- Employees are more productive when they work in an environment suitable to them.
- The motto of a Company that wants to be successful should be sharing information rather than making money.
This book will be an inspiring factor for those who believe in the fact that potential of a person can be increased if he is put in a relaxed condition. This book is a must for all who wants them to be successful as well as democratic in ideas. No wonder this is one of the most sought after and read books among the students who have aspired to be great business leaders of tomorrow.