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Participative Management

It is Monday morning, and you dont have to get up, just because you have decided that you are moreaffective after afternoon, thats why you go to work at that time

Sounds like sweet dream, but not for those working in Semco

Strict control, thats what makes employees work- thats how the most of employers think, Thank god thatnot all.

There are even some employers who think that control is not what makes workers work, it is even betterto let them decide when, how, and what for to work, how much should they be paid for what they havedone.

Yes there is one company where everything happens as it is described above. That is Mr.Semlers Planet,his company and his rules.

Mr. Semlers Planet

To see Semcos approach in action, just visit the companys pump plant on the outskirts of So Paulo.This operation bears about as much resemblance to a traditional factory as the rainbow hues of its walls the choice of the employees do to industrial gray. Forget about foremen barking out orders topassive proles. On any given day, a lathe operator may himself decide to run a grinder or drive a forklift,depending on what needs to be done. Joo Vendramin Neto, who oversees Semcos manufacturing,explains that the workers know the organizations objectives and they use common sense to decide forthemselves what they should do to hit those goals. Theres no covering your ass, says Mr. Neto. Theintent is to get straight to specific targets.

Semcos 3,000 employees set their own work hours and pay levels. Subordinates hire and review theirsupervisors. Hammocks are scattered about the grounds for afternoon naps, and employees areencouraged to spend Monday morning at the beach if they spent Saturday afternoon at the office. Thereare no organization charts, no five-year plans, no corporate values statement, no dress code, and nowritten rules or policy statements beyond a brief Survival Manual, in comic-book form, that introducesnew hires to Semcos unusual ways. The employees elect the corporate leadership and initiate most ofSemcos moves into new businesses and out of old ones. Of the 3,000 votes at the company, RicardoSemler has just one.

In Mr. Semlers mind, such self-governance is not some softhearted form of altruism, but rather the bestway to build an organization that is flexible and resilient enough to flourish in turbulent times. He arguesthat this model enabled Semco to survive not only his own near-death experience, but also the gyrationsof Brazils tortured politics and twisted economy. During his 23-year tenure, the countrys leadership hasswung from right-wing dictators to the current left-wing populists, and its economy has spun from rapidgrowth to deep recession. Brazilian banks have failed and countless companies have collapsed, butSemco lives on.

If you look at Semcos numbers, weve grown 27.5 percent a year for 14 years, says Mr. Semler over acappuccino at one of So Paulos sidewalk cafs on a lovely fall day. He conducts many work-relatedconversations here; the ultimate hands-off leader, Mr. Semler doesnt even keep an office at Semco.Heres why: Our people have a lot of instruments at their disposal to change directions very quickly, to

close things and open new things. Flexibility is the key, he says. If we said theres only one way to dothings around here and tried to indoctrinate people, would we be growing this steadily? I dont think so.

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Those four words, I dont think so, delivered with a Brazilian Portuguese lilt, represent Mr. Semlersstandard answer to corporate dogma, assertions that something he wants to do cannot be done, andeven overly doctrinaire interpretations of the participative management concept. Mr. Semler is not aparticularly self-effacing or humble advocate of human potential; his assurance in argument is legendary.In conversation, in teaching, and in his books Maverick (Warner Books, 1993) and The Seven-DayWeekend(Penguin/Portfolio, 2004), he puts forth participative management as not just a pragmatic pathto business success, but also a healthy and enjoyable way of life. Mr. Semler has a law degree he has

never used and no advanced business degree, but the success of his books and the entertainment valueof his message have helped him become a frequent guest lecturer at Harvard Business School and MITsSloan School. To executives and graduate students alike, Mr. Semler insists that his is not some quirkySouth American survival story, but a real-life lesson in making the work world work better.

To be sure, his message is not always well received, at home or abroad. What planet are you from? isone of the more polite questions Mr. Semler has fielded from Brazilian politicians. The Federation ofIndustries, representing Brazils corporate leaders, has publicly accused him of undermining managerialauthority. The local business press has both lauded him with awards for progressive leadership andblasted him for letting Brazils powerful unions gain the upper hand. In response, he says that managerialauthority is an illusion, and that since the influence of unions is a fact of life that isnt going to go away,Semco is the stronger for engaging them rather than fighting.

Even in academic circles, usually more accepting of radical innovation, hes met with some skepticism.He has reified all these precepts from the early days of participative management, the 40s, saysWarren Bennis, one of the most prominent scholars in the field of leadership and management, and anearly protg of Douglas McGregor. Letting the employees elect officers to the company with periodicvotes, almost like a true democracy this is the most advanced, progressive, and, to my view,problematic way to practice participative management. Theres nobody else I can recall at the head of acompany who has subjected himself so thoroughly to the most radical elements of that term.

And while Mr. Semler is accustomed to commanding attention, he has no illusions about easily winningminds. Semco is bucking not only the traditional business model, were resisting a code of behavior atthe very core of Western culture, he writes in The Seven-Day Weekend. No wonder our ideals are hard

for outsiders and other companies to embrace.

Sounds like fairytale, but it is Mr. Semlers way of turning resources into capital.

Prepared by Human Capital