Semco then was an autocratically styled company. The powerful ruled, and the wise obeyed. There was a fixed hierarchy, huge power distances, and no room for people to use their creativity. Highly bureaucratic in nature, Semco had lots of “confidential” information that the privileged few used to play power games. In short, it was a “regular” company.
The entry of Ricardo (The founder's son) signaled a new chapter – full of daring actions and transformation. The company earned world-wide renown for its unique management style. Way back in the 80s, Semco was one of the first companies to experiment with more democratic management principles. Resulting in an impressive business growth rate for the past 20 years of 46.5% average per year.
Ricardo Semler, and the leaders he recruited to help him turn things around, first studied who were the most motivated among their employees. They realized something very fundamental: The power to participate in decision-making processes held the key to loyalty and motivation.
To verify this concept applied to people across the board, they began experimenting with employee participation in decision-making. They started with small everyday issues that affected the life of employees, and from there they moved to a bigger program.
These simple issues included things like problems in the cafeteria, cleanliness of toilets, the colors of their uniform, and compensation for business days that fell between a holiday and a weekend.
The increase in morale this created led to participation on bigger and more expressive areas. For instance, employees
· Began offering suggestions to improve quality and the manufacturing process
· Were invited to set their own targets
· Decided where they wanted to work from
· Became involved in how the company selected their next boss and future peers
· Evaluated their managers
· Became involved in how the company sets their salaries
· Offered inputs on small investments
· Became involved in how the company shared its profits.
Today, the Semco Style reflects the learning from 35 years of trial and error. Their impressive growth rate (average 46.5% for the past 20 years), and extremely low employee churn rate (less than 2%), are testimony to the success of the new style.