Alistair Schofield, Managing Director, Extensor Limited
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History shows us that human beings are naturally gregarious, living and working together in groups. But it is only since the industrial revolution that those groups have exceeded more than a handful of people. As Anthony Jay observes in his book The Corporation Man, ‘…we have been hunters for 5 million years, farmers for around 300 generations and industrialists for a relative blink of an eye’. Yet we have come to accept the hierarchy, with its top-down command structure, as being the usual way to structure our organisations.
In Maverick, Ricardo Semler describes how he transformed the company that he inherited from his father at the start of the 1980’s from a conventional hierarchical structure into a business with a circular structure in which there are only three levels, where business units are broken down into small autonomous units, shopfloor workers set their own production targets and schedules and where managers even determine their own level of pay and benefits.
In reading this you may think that this organisation sounds like some sort of whacky experiment, the sort of organisation that grew and disappeared during the lunacy of the dot-com bubble, but it isn’t. Semco is a Brazilian manufacturing company producing industrial pumps, food mixers, dishwashers and industrial cooling units. It has survived the turmoil of the Brazilian economy and is today one of Latin America’s fastest-growing companies whose work practices have admirers amongst the executives of some of the world’s largest and most successful corporations.
The book is semi-autobiographical in style, a sort of ‘Catcher in the Rye’ meets Peter Drucker, in that it plots the course of the Semco company through the eyes of Ricardo Semler and reveals the fascinating events that shaped his thinking and the impact those changes had on the company he led.
The company Ricardo inherited was not without its problems, the shipbuilding industry it relied upon was heading for recession and Ricardo’s strategy of diversification was at odds with the thinking of the senior management team. He therefore sacked most of the management team and set about buying companies and establishing partnerships in complementary markets. In traditional management style, he kept control over this diverse business empire by devising and rigorously implementing a command and control system that enabled him to keep tabs on all business units from the centre. But despite the controls, Semco was constantly missing its targets and, as Semler observed, the ‘workers just didn’t seem to care’.
The situation came to a head when Semler collapsed during a business trip to North America. At the age of just 25 he spent several days in a Boston clinic and was diagnosed with an ‘advanced case of stress’. Recognising that something dramatic needed to change, Semler set about transforming Semco into a decentralised organisation in which workers would work hard, innovate and set high standards because they wanted to, not because they feared the supervisors who watched over them.
Throughout the rest of the book Semler describes an evolving process of democratisation that began with symbolic gestures such as the removal of uniforms, progressed through allowing workers to effectively hire and fire their managers and ended with Semler’s own removal as Chief Executive and his replacement with a committee of Counsellors.
The book was described by Robert Heller as being ‘irresistibly stimulating’, which I believe sums it up well for those people who are interested in looking beyond the traditional hierarchy for new and better ways of running their organisations, for others I am sure that they will find plenty of reasons for writing Semco’s approach and success off as a novelty.
However, for the skeptics, don’t forget that in the UK the John Lewis Partnership is organised along similar (although not quite so radical) lines, it is still growing on the high street while most other retailers are having a torrid time, its Waitrose stores and Ocado online food businesses are amongst the most highly rated by shoppers and it is a short-listed finalist in the 2006 Customer Service Excellence Awards.
Rating a book like this is difficult as it is very subjective. It is written in a style that some will enjoy and others will not, but I feel it justifies a maximum 5 Star rating because it challenges most of the conventions that lie at the heart of the way in which today’s companies are based. I would defy anyone who approaches this book with an open mind not to leave with something that will improve their own organisation or management style.
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