Q & A – Bernice Samuels interviews Ricardo Semler

Bernice Samuels of FNB talks to Ricardo Semler the President of SEMCO, and executive ranked by the World Economic Forum in 1983, as Global Thought Leader of Tomorrow, about his advice to achieve success in innovation, develop a robust participatory management model and grow a company during difficult economic times whilst managing by omission.

About Bernice Samuels

Bernice SamuelsFNB’s Chief Marketing Officer, Bernice Samuels, has made a great success of the position in the time she has held it. Her journey from telecommunications and media to banking has had interesting turns and fascinating challenges. Spearheading the repositioning of FNB, Bernice Samuels was named the 2012 Marketing Personality of the year at the Sunday Times Top Brand Awards.

With more than 20 years’ experience in business, marketing strategy development and implementation, Samuels has been a key driver behind developing well-known corporate brands in South Africa and Africa including MNET, MTN and now FNB. Since her appointment at FNB in January 2011, she has been responsible for the management of FNB’s brand and overall marketing across the business. Bernice holds a BSC Honours degree from UCT in genetic engineering and an MBA from Wits Business School.

She absolutely loves what she does and is curious about the role of emotion in influencing buying decisions. She believes that in our world of overloaded channels of communication and the general lack of trust with advertising messages, finding your brand’s true emotional core and expressing it through your brand’s story is essential.

About Ricardo Semler

Extraordinary CEO, Best Selling Author and Global Leader of Tomorrow. Ricardo is known around the globe for his extraordinary success spurring SEMCO South America to success achieving 41% return on capital for 25 years. His innovative employee centric workplace democracy arguably saved SEMCO from bankruptcy. He has authored 2 best sellers – Maverick and The Seven Day Weekend. Leaders the world over admire how he relentlessly invents and champions his causes.

Ricardo Semler will present his unconventional leadership model to South African leaders and managers at The 2nd Annual FNB Progress Conference on Happiness@Work on the 17th September 2013.

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Q & A

? – BS – Your unconventional management model and democratic organisation has amassed SEMCO unprecedented success with growth at around 27% each year for the past 25 years. You have been a committed champion of your cause to change rigid, dehumanising workplaces into engaging, productive ones since the 80’s. It is only now, that a handful of businesses are starting to realise that “happiness” is not a “nice- to- have” but rather a “need- to –have”. In your opinion why has this become a strategic priority the world over?

RS – standard industry practices have run out of steam. This seemed evident 30 years ago, but these changes take anthropologic time, not business cycle periods. Letting people set their own modes of work, times and form has led to growth for us, but it also fits the bill of business requirements: our rate of return on capital has been 41% for 25 years, every year. Giving up control works, and well.

? – BS – Having recently won the award for the Most Innovative Bank, we place a high price on innovation. Similarly you place a high price on innovation within SEMCO. How have you achieved innovation within SEMCO?

RS – By stepping aside. Letting people set up their own solutions and even business units, and setting only the mutual goals, instead of working on structures and controls.

? – BS – How do you reward innovation?

RS – By letting people set up a mix of 11 different ways to remunerate themselves, from salaries, commissions and the usual solutions, all the way to percentages on sales, or royalties over product lines, and much profit distribution. Of course, this is in addition to the basic assumption of freedom to work anyhow, anywhere, any time.

? – BS – Your decision to apply a participatory management model took place at a time when SEMCO was facing bankruptcy. During your tenure Brazilian banks failed and countless companies collapsed. The future of the South African economy is dependent on small and medium business growth. Currently South African companies are facing some of the most difficult economic challenges. It is further estimated that South African productivity has hit a 46 year low. What would your advice be to business leaders in South Africa today?

RS – By giving up control, which is all they do not want to hear – but maybe should. It is the management of staff, assets and business plans that places the most constrictions on the ability to navigate troubled waters. Setting the course and controlling it to the hilt is what makes inevitability reign over opportunity.

? – BS – Most recently the South African mining industry has experienced broadly publicised industrial action. At SEMCO you were not immune to a volatile unionised business environment. Had you been advisor to the CEO of Lonmin in October last year, what would you have advised and how do you think that could have avoided the bloodshed and violence?

RS – After 25 years of regular industrial action from brazil’s fiercest union i took a step as soon as I began my cycle at Semco: visiting the unions headquarters. That was the first time they had ever been visited by a businessman in their history. We then opened all doors to sit-ins during strikes, gave out free lunch and set up platforms for union leaders to address workers. We then took whatever communication action we could to say that we understood, respected and would even agree with many union issues if we were workers. We then would explain why we disagree but respect the strike, and started teaching workers to read our financials. I would always advise any and every businessman to be 100% open with unions and never coerce or confront – we are no longer in the 1880’s…

? – BS – I believe you personally have a “long service award” for “not making a decision” and even though you have the controlling stock in SEMCO – you have never used your VETO power in the past 25 years? Have you ever regretted this?

RS – I’ve disagreed with many a decision, and had many pet projects sent to file, but the gain of independent thinkers and self-propulsion has always paid off in the balance.

? – BS – You will be a headline speaker at our 2nd Annual FNB Progress Conference on Happiness@Work on the 17th September 2013. Can you give us some insights as to what you will be sharing with the South African audience. In particular, how do you define happiness@work?

RS – I plan to speak about the reasons organizations are such shabby career decisions, and how businesses can change this quickly. Happiness in life, or at work, are similar, and they involve freedom to choose (like in a marriage, or buying a house, or having kids – I have 5!), getting management off your back (much as a spouse!) And feeling that your talents and emotions are aligned with your day to day. Easier said than done, but can be done, and is (mostly) at our companies.

Ricardo Semler – Maverick or Lateral Thinker?

By Nicola Tyler | 31 July 2013

“If we have a cardinal strategy that forms the bedrock of all these challenges, it’s “Ask Why?”.    Ask it all the time, and always ask it three times in a row.  This doesn’t come naturally.  People are conditioned to recoil from questioning too much.  First, it’s rude and dangerous.  Second, it may imply we are ignorant or uninformed.  Third, it means everything we think we know may not be correct or true.  Fourth, management is usually frightened by the prospect of employees who question continually.  But, mostly, it means putting aside all the rote or pat answers that have resulted from what I call ‘crystallized’ thinking, the state of mind where ideas have so hardened into inflexible and unquestioned concepts that they are no longer of any use.  Employees must be free to question, to analyze, to investigate, and a company must be flexible enough to listen to the answers.  Those habits are key to longevity, growth and profit. 

We don’t know if Semler ever attended a lateral thinking seminar, but what we do know is that Edward de Bono introduced us to a deliberate lateral thinking tool called Challenge.  A tool that asks the question “why?” – three times!  The challenge tool is brilliant for questioning businesses’ processes and systems, but can be applied to any traditional thinking.

Challenge is designed to question the status quo in a deliberate way but without attacking it.  The technique is simple to learn, yet despite its simplicity, we still tend to give up before the end.  In the de Bono approach, we would list our traditional thinking about a situation, what he terms a “Checklist of Current Thinking”.  Once you have that, you then ask Why in the same style that Semler does, but in a slightly more deliberate manner.

The first approach is to ask Why C?  The C stands for Cut.  Here we are questioning the necessity of something – do we really need it or could this be “cut” out so to speak.  If you consider a chair, you might challenge the legs of the chair.  Can we “cut” the legs?  In my work, I generally find that there are few things people are comfortable cutting:  often the Why C naturally leads the thinker to the next Why in the process.

Why B?  The B stands for Because and is intended to highlight the reasons why something is done in a particular way.  We do this ‘because…’.  Considering the chair example, chairs have legs because they provide support for the seat:  it’s a way of keeping the seat off the ground and creating height for comfort and style.    In the Challenge process, de Bono also encourages us to question the validity of these reasons.  Is style a valid reason?  Perhaps not.  Is a way of creating a height a valid reason?  Yes it is.  If it weren’t for the legs, the chair would be called a cushion.  It would just be a seat on the floor, and if it was a moulded seat, might even be more uncomfortable.

Which bring us to the last Why – Why A?  Here the A stands for Alternatives, and de Bono asks us to question is there another way – is there an alternative to legs, or could we seek to satisfy the reason in a new, different or better way.  The deliberate search for an alternative requires a positive mental attitude, (the basic belief that there may be a better way), as well as deliberate effort.  All too often we don’t even consider alternatives, for the same reasons that Semler states – you may be proven wrong, or perhaps even right.

João Vendramin, our 60-year old director emeritus, once asked a worker if he’d ever considered a different approach to his job.   ‘He answered that his boss told him to do it that way,’ Vendramin remembers.  ‘So I insisted.  He told me that once he had done this job differently, but his boss reprimanded him.  While trying to explain to his boss what happened he said, “I was thinking that….” To which his boss instantly replied, “Thinking?  You are not supposed to think.  I am the one who thinks here.”’

Source: The Seven-Day Weekend by Ricardo Semler

Want to know more?  Ricardo Semler, Author of The Seven-Day Weekend and Maverick and CEO of Semco, one of Brazil’s top performing, privately owned companies, will be sharing his innovative thinking.  Visit www.theprogressconference.com for more information or call Ingrid on 011 463 9898.

Ricardo Semler – Maverick or Lateral Thinker?

by Nicola Tyler | 31 July 2013

 

“If we have a cardinal strategy that forms the bedrock of all these challenges, it’s “Ask Why?”.    Ask it all the time, and always ask it three times in a row.  This doesn’t come naturally.  People are conditioned to recoil from questioning too much.  First, it’s rude and dangerous.  Second, it may imply we are ignorant or uninformed.  Third, it means everything we think we know may not be correct or true.  Fourth, management is usually frightened by the prospect of employees who question continually.  But, mostly, it means putting aside all the rote or pat answers that have resulted from what I call ‘crystallized’ thinking, the state of mind where ideas have so hardened into inflexible and unquestioned concepts that they are no longer of any use.  Employees must be free to question, to analyze, to investigate, and a company must be flexible enough to listen to the answers.  Those habits are key to longevity, growth and profit. 

 

We don’t know if Semler ever attended a lateral thinking seminar, but what we do know is that Edward de Bono introduced us to a deliberate lateral thinking tool called Challenge.  A tool that asks the question “why?” – three times!  The challenge tool is brilliant for questioning businesses’ processes and systems, but can be applied to any traditional thinking.

 

Challenge is designed to question the status quo in a deliberate way but without attacking it.  The technique is simple to learn, yet despite its simplicity, we still tend to give up before the end.  In the de Bono approach, we would list our traditional thinking about a situation, what he terms a “Checklist of Current Thinking”.  Once you have that, you then ask Why in the same style that Semler does, but in a slightly more deliberate manner.

 

The first approach is to ask Why C?  The C stands for Cut.  Here we are questioning the necessity of something – do we really need it or could this be “cut” out so to speak.  If you consider a chair, you might challenge the legs of the chair.  Can we “cut” the legs?  In my work, I generally find that there are few things people are comfortable cutting:  often the Why C naturally leads the thinker to the next Why in the process.

 

Why B?  The B stands for Because and is intended to highlight the reasons why something is done in a particular way.  We do this ‘because…’.  Considering the chair example, chairs have legs because they provide support for the seat:  it’s a way of keeping the seat off the ground and creating height for comfort and style.    In the Challenge process, de Bono also encourages us to question the validity of these reasons.  Is style a valid reason?  Perhaps not.  Is a way of creating a height a valid reason?  Yes it is.  If it weren’t for the legs, the chair would be called a cushion.  It would just be a seat on the floor, and if it was a moulded seat, might even be more uncomfortable.

 

Which bring us to the last Why – Why A?  Here the A stands for Alternatives, and de Bono asks us to question is there another way – is there an alternative to legs, or could we seek to satisfy the reason in a new, different or better way.  The deliberate search for an alternative requires a positive mental attitude, (the basic belief that there may be a better way), as well as deliberate effort.  All too often we don’t even consider alternatives, for the same reasons that Semler states – you may be proven wrong, or perhaps even right.

 

João Vendramin, our 60-year old director emeritus, once asked a worker if he’d ever considered a different approach to his job.   ‘He answered that his boss told him to do it that way,’ Vendramin remembers.  ‘So I insisted.  He told me that once he had done this job differently, but his boss reprimanded him.  While trying to explain to his boss what happened he said, “I was thinking that….” To which his boss instantly replied, “Thinking?  You are not supposed to think.  I am the one who thinks here.”’

Source: The Seven-Day Weekend by Ricardo Semler

 

Want to know more?  Ricardo Semler, Author of The Seven-Day Weekend and Maverick and CEO of Semco, one of Brazil’s top performing, privately owned companies, will be sharing his innovative thinking.  Visit www.theprogressconference.com for more information or call Ingrid on 011 463 9898.

A Case for Workplace Democracy

A case for workplace democracy – relevance for 21st century managers and leaders operating in a new world order.

By Ingrid Ashwin | 10 July 2013

Challenging South African Business Leaders to leverage their influence to achieve workplace democracy
According to two of the world’s most powerful business leaders, Ellen Kullman and Dominic Barton, the business leaders most likely to succeed are those that expect and plan towards a business environment that will be very different in two years’ time, never mind a decade or half century.
There is also further growing pressure from the Gen X and Gen Y talent in your organisation who are no longer willing to accept a career that does not firmly embrace their values and emotions.

Formal employment is governed by businesses that lead workplace populations larger than some small countries
Governments are continually challenged to change, acknowledge and practise democracy. But when one considers that businesses lead and govern populations larger than some countries in the world we have to ask ourselves why we go to workplaces that still operate with a 20th century autocratic business model or perhaps a diluted version of a democratic workplace? 13 million people are formally employed in South Africa. Source: Free Market Foundation Bulletin March 2013. A vast majority of these people report into hierarchies that defy our political dispensation of democracy.
“Corporate pyramids are the cause of much corporate evil. Pyramids emphasise power, promote insecurity, distort communications and make it difficult for the people who plan and the people who execute to move in the same direction”, according to Ricardo Semler.

Building a better business with undiluted democracy
Ricardo Semler, acknowledged by the World Economic Forum as a Global Leader of Tomorrow, has championed his workplace democracy model for the past 25 years. He has constantly challenged 20th century management thinking and actively combats hierarchical business practise.
Think about this he says, “Outside the factory, workers are men and women, who elect governments, serve in the army, lead community projects, raise and educate families, and make decisions everyday about the future. Friends solicit their advice. Salespeople court them. Children and grandchildren look up to them for their wisdom and experience. But the moment they walk into the factory, the company transforms them into adolescents.”
Source: Harvard Business Review

Workplace democracy makes money and delivers record profitability
Since committing fully to a participatory management model, the SEMCO model has produced significant bottom line performance. Whichever way you slice- and- dice it, the people at SEMCO have come through achieving 27% growth for 25 years each year. What follows are just a few statistics to appease the cynics and evidence the hard core business value further:
– Heightened involvement in one facility led to double the sales, inventories fell from 136 days to 46 days, 8 new products that were previously stalled in R & D were unveiled. Quality improved from a one third rejection rate to 1%. Increased productivity led to a workforce reduction of 32%.
– In another facility, employees were given full rein to set up a new flexible manufacturing system. The units productivity in dollars, jumped from $14 200 in 1984 to $ 37500 in 1988 and the goal in 1989 was $ 50 000. Over the same period market share went from 54% to 62%.
– “People” turnover is just 2% in an industry with 18% of people turnover.
*At SEMCO they do not refer to workers or employees – they refer always to people

Still not convinced? An investment of $100 000 made in Semco, 20 years ago, would be worth $5.4 million today. All of this was achieved in a volatile Brazilian economy, with banks failing and countless business collapsing.
Semler says, “Rethinking ways of doing business will rarely be popular or easily adopted. But we like it our way, and hope that we will sow some seeds out there.”
Applying deep democracy in the workplace for a better South African future
Ricardo Semler asks, “Why do we demand and go to war for democracy as nations, yet accept with docility that no one has the right to choose their own boss?” We send our children, grandchildren and loved ones to war and yet we show up and spend the lion’s share of our time in a workplace willing to be dictated to and controlled by leaders, managers and employers who take control of our lives.

If we can agree that a better future for South Africa is firmly reliant on leaders wanting to start new businesses or grow the businesses they currently have, and, then agree further that aspirational leaders in both the private and public sector recognise that the business environment will be very different in the years to come, then we can surely remain optimistic that a better participatory workplace for ourselves and generations to come will deliver real economic and business success.

Ricardo Semler will present his unconventional leadership thinking at The 2nd Annual FNB Progress Conference on Happiness@Work on the 17th September 2013. Click here for more information.

A case for Workplace Democracy

A case for workplace democracy – relevance for 21st century managers and leaders operating in a new world order.

By Ingrid Ashwin | 10 July 2013

Challenging South African Business Leaders to leverage their influence to achieve workplace democracy
According to two of the world’s most powerful business leaders, Ellen Kullman and Dominic Barton, the business leaders most likely to succeed are those that expect and plan towards a business environment that will be very different in two years’ time, never mind a decade or half century.
There is also further growing pressure from the Gen X and Gen Y talent in your organisation who are no longer willing to accept a career that does not firmly embrace their values and emotions.

Formal employment is governed by businesses that lead workplace populations larger than some small countries
Governments are continually challenged to change, acknowledge and practise democracy. But when one considers that businesses lead and govern populations larger than some countries in the world we have to ask ourselves why we go to workplaces that still operate with a 20th century autocratic business model or perhaps a diluted version of a democratic workplace? 13 million people are formally employed in South Africa. Source: Free Market Foundation Bulletin March 2013. A vast majority of these people report into hierarchies that defy our political dispensation of democracy.
“Corporate pyramids are the cause of much corporate evil. Pyramids emphasise power, promote insecurity, distort communications and make it difficult for the people who plan and the people who execute to move in the same direction”, according to Ricardo Semler.

Building a better business with undiluted democracy
Ricardo Semler, acknowledged by the World Economic Forum as a Global Leader of Tomorrow, has championed his workplace democracy model for the past 25 years. He has constantly challenged 20th century management thinking and actively combats hierarchical business practise.
Think about this he says, “Outside the factory, workers are men and women, who elect governments, serve in the army, lead community projects, raise and educate families, and make decisions everyday about the future. Friends solicit their advice. Salespeople court them. Children and grandchildren look up to them for their wisdom and experience. But the moment they walk into the factory, the company transforms them into adolescents.”
Source: Harvard Business Review

Workplace democracy makes money and delivers record profitability
Since committing fully to a participatory management model, the SEMCO model has produced significant bottom line performance. Whichever way you slice- and- dice it, the people at SEMCO have come through achieving 27% growth for 25 years each year. What follows are just a few statistics to appease the cynics and evidence the hard core business value further:
– Heightened involvement in one facility led to double the sales, inventories fell from 136 days to 46 days, 8 new products that were previously stalled in R & D were unveiled. Quality improved from a one third rejection rate to 1%. Increased productivity led to a workforce reduction of 32%.
– In another facility, employees were given full rein to set up a new flexible manufacturing system. The units productivity in dollars, jumped from $14 200 in 1984 to $ 37500 in 1988 and the goal in 1989 was $ 50 000. Over the same period market share went from 54% to 62%.
– “People” turnover is just 2% in an industry with 18% of people turnover.
*At SEMCO they do not refer to workers or employees – they refer always to people

Still not convinced? An investment of $100 000 made in Semco, 20 years ago, would be worth $5.4 million today. All of this was achieved in a volatile Brazilian economy, with banks failing and countless business collapsing.
Semler says, “Rethinking ways of doing business will rarely be popular or easily adopted. But we like it our way, and hope that we will sow some seeds out there.”
Applying deep democracy in the workplace for a better South African future
Ricardo Semler asks, “Why do we demand and go to war for democracy as nations, yet accept with docility that no one has the right to choose their own boss?” We send our children, grandchildren and loved ones to war and yet we show up and spend the lion’s share of our time in a workplace willing to be dictated to and controlled by leaders, managers and employers who take control of our lives.

If we can agree that a better future for South Africa is firmly reliant on leaders wanting to start new businesses or grow the businesses they currently have, and, then agree further that aspirational leaders in both the private and public sector recognise that the business environment will be very different in the years to come, then we can surely remain optimistic that a better participatory workplace for ourselves and generations to come will deliver real economic and business success.

Ricardo Semler will present his unconventional leadership thinking at The 2nd Annual FNB Progress Conference on Happiness@Work on the 17th September 2013. Click here for more information.

The Seven Day Weekend – Lessons Learned from Ricardo Semler

The Seven Day Weekend – lessons learned from Ricardo Semler – the corporate President who unconventionally saved a company from bankruptcy and created one of Brazil’s fastest growing companies with happy workers.

Aside from the hard work, Ricardo Semler, officially entitled Counsellor, attributes the success of SEMCO most importantly to the drastic changes in their concept of management. If doubling your sales, reducing inventory levels, improving productivity and reducing headcount are of interest to you, read on.

The first of SEMCO’s values is democracy or what he calls employee involvement. He says, “Workers who control their working conditions are going to be happier than workers who don’t. There is no contest between the company that buys the grudging compliance of its workforce and the company that enjoys the enterprising participation of its employees.” Democracy is linked to their 2 other values – profit sharing and information. These 3 values work in a complicated circle with each dependent on the other two.

Most people just talk about participatory management because it is complex, difficult and frustrating at times.

The 4 BIG Obstacles to effective participation.
SEMCO recognised the obstacles and tackled them head on. Here is what they learned and more importantly achieved.

OBSTACLE # 1 – Size
In large organisational units people feel tiny, nameless and incapable of exerting influence on the way work is done or their contribution to the profit made. Back in 1950, Antony Jay explained why human beings were not designed to work in large groups. For more than 5 million years our hunter gatherer ancestors refined their ability to work in groups of no more than a dozen people. The industrial revolution changed this and workers suddenly found themselves working in groups of 100’s and even 1000’s. At SEMCO they found the most effective production unit is made up of 150 people. Big groups have too many managers in too many layers and hold way too many meetings.

The 1st break up of a large group created a rise in costs due to duplication and loss in economies of scale but the heightened sense of belonging and involvement improved the results beyond our expectations.

OBSTACLE # 2 – Hierarchy – a corporate evil
Employees feel a sense of helplessness with managers who refuse to let their subordinates make decisions for themselves – sometimes even about going to the bathroom. Ricardo Semler views hierarchical pyramids as a corporate evil. They emphasise power, promote insecurity and make it difficult for people to plan and execute in the same direction. SEMCO reduced their management levels to 3. 1 corporate level and 2 operating levels. The corporate level includes a small circle of counsellors who integrate the company’s movements. The second level includes the partners who are the heads of the 8 divisions and the third circle, comprises the people they call co-ordinators or team task leaders. The rest are associates. They do research design, sales and manufacturing work and have no one reporting to them. Although they value leadership, a great associate can often earn more than a co-ordinator or partner. Associates decide on the appointment of partners and co-ordinators.

Letting people participate in decisions that affect their lives has a positive effect on employee motivation and morale.
A lot of decisions are made by company-wide vote. In one case the associates voted and made a decision the partners and counsellors did not particularly like. A test of their commitment to participatory management, SEMCO’s partners stood by the associates’ decision. They bought the building selected by the associates. This building was positioned in a labour unrest hotspot and the partners anticipated front row seats for every labour dispute. The workers designed the layout and hired a prominent artist to paint the whole thing inside and out – including the machinery. The division’s productivity in dollars per employee jumped by 250%.

Semler shares, “My employees outvoted me on the acquisition of a company that I really should have bought. I accepted I was outvoted so that I did not discredit our management system. Anyway, what is the future of an acquisition if the people who operate it don’t believe it’s workable?”

You hire adults – treat them like adults
“Outside of your workplace the people who work for you, elect governments, serve in the army, lead community projects, raise and educate children and make decisions every day about the future. Children and grandchildren look up to them for their wisdom”, explains Semler who goes on to say, “The moment they walk into the workplace the company transforms them into teenagers. They have to eat lunch when told, ask permission to go to the bathroom, spend longer than 5 minutes explaining why they were 5 minutes late. So I abolished rule books – rule books that justify the worst silliness people can think up.”
The rule books were replaced with common sense, personal responsibility and civil disobedience using people’s own judgement.

OBSTACLE # 3 – Ignorance
The reason participatory management programmes fail is often due to ignorance.
SEMCO takes things head on. Twice a year they ask employees, what would make them quit or go on strike?
To say “many profit sharing programmes are failures” is true. SEMCO recognised why and fixed it.

1. The company makes it easy for people to see how their own work is related to profits.
2. The company gets all their employees to attend classes to learn how to read and understand the financials.
3. Every month each employee gets a balance sheet, a P&L and a cash flow statement for his or her division.
4. Twice a year 23 % of after tax profit on each division is allocated to the profit share pool for each division. Then the unit meet and they vote on how it should be split. In most cases the guy who sweeps the floor gets as much as the partner.

Most executives are terrified of sharing the financial info because they have to disclose their earnings. As far as Ricardo was concerned, if execs were embarrassed by their salaries they were probably not earning them. He says, “Confidential payrolls are for those who cannot look themselves in the mirror and say, “I live in a capitalist system that remunerates on a geometric scale. I spent years in school, I have years of experience, I am capable, dedicated and intelligent. I deserve what I get.”.” When Ricardo Semler told the union and the workers at SEMCO what the executives made – they started calling them Maharaja.

OBSTACLE # 4 – Lack of motivation
The SEMCO model was hard work and this could have deterred their unconventional progress.
Still not convinced?
Results from that first break up at SEMCO: Within 1 year, sales doubled, inventories fell from 136 days to 46, SEMCO unveiled 8 new products that had been stuck in the R & D department for 2 years and their 33% rejection rate on inspected product dropped to less than 1 %. Increased productivity enabled a 32% reduction in work force through attrition and retirement incentives.

Ricardo Semler will be presenting at the 2nd Annual FNB Progress Conference on Happiness@Work on the 17th September in JHB South Africa.

Click here for the full event programme.