Why my Former Employees Still Work for Me by Ricardo Semler

I love what Ricardo Semler is doing, just so we are clear on that one. I suggest you read Maverick by Ricardo Semler, a great read. But anyone. To start with this article, a short quote from the third line: _no one in the company really knows how many people we employ_.

First the employment and contractual relationships are very complex and second Ricardo believes it is useless information. They have employees, part-time employees, ex-employees, and other people on their premises. Some work for them, some for themsleves. Most on Semco’s machines. Others on othre machines. It can be frustrating as it is uncontrollable and requires a daily leap of faith and has serious implications for corporate security. It has been working very well for three years.

Ricardo goes on by saying: _I think that strategic planning and vision are often barriers to success._ He also believes in responsibility, disputes the value of growth, and doesn’t think you can measure success in numbers. He doesn’t govern Semco, owns the capital but not the company and it is run based on three values: employee participation, profit shring, open information systems. They are treating their employees like responsible adults. Participation gives people control of their work, profit sharing gives them a reason to do it better and information tells them what’s working and what isn’t.

This also means that they needed to accept democratic decisions they disliked. In general Semco survived because they surrounded themselves with people who look at everything they do and think about doing it better, cheaper, faster or just totally different.

The control part is interesting too. They have six counsellors, each acting as CEO for 6 months. They also do six months budgets and the CEO tenure is shifted 3 months to those budgets. Nobody can relax as everybody will be CEO again soon but at the same time, nobody is responsible on their own.

All meetings are open and optional and those that attend make decisions that those who don’t may simply have to live with.

Their first principle is the ultimate source of all power, and because of this, it is made available to everyone. The person who knows most about the subject chairs meetings. The second principle is that responsibility for any task belongs to the person who claims it. Third, profit sharing and success-oriented compensation spreads responsibility. People try hard to stay aware of everyone else’s performance.

Whoever holds the spear is completely in charge of bringing down the mammoth.

They might have to worry about leaks but it’s a waist of time. First competition comes from companies they never heard of before. Second you don’t win by knowing the other companies 10-K. Strategic Planning in his mind is useless as he believes that it makes things happen that fly full in the face of reality and opportunity. They found more things bottom up than they could with strategic planning he believes.

We have little control, even less organization and no conventional discipline at all. Yet they build rocket-fuel propellant mixers for satellites.