This presentation describes unique values and HR strategies followed at Semco.

2. “At some point, you have to make a
decision.
Boundaries don’t keep other people
out.
They fence you in.
Life is messy. But that’s how we are
made.
So, you can waste your lives drawing

3. “We’ve all learned to go on to
email on Sunday and work
from home. But very few of
us have learned how to go to
the movies on Monday
afternoon”
-Ricardo Semler

4. LETS TAKE A
TRIP UP THE
MEMORY LANE
1953
ANTIONIO
CURT SEMLER
FOUNDED
1960-1970’s
SEMCO WAS A
MAINLY A
MANAFACTURER
OF MARINE
PUMPS
1960’S
HIERARCHICAL
ORGANIZATION
WITH 12 LEVELS
OF
MANAGEMENT.
“FEAR WAS THE
GOVERING
PRINCIPLE”
1980
ENTER RICARDO
HE CHANGED
THE ENTIRE
STRUCTURE OF
THE
ORGANIZATION

5. CHANGES
People set their
own working
hours
Workers choose
their managers
and evaluate
them twice in a
year
21 page “Survival
Manual”
Profit sharing
No receptionists,
secretaries or
personal
assistants
No headquarters,
No job titles
No mission
statement
People set their
own salaries

6. SBU’S OF SEMC

7. Manufactures pumps, industrial dish washers, cooling units,
industrial machinery
Runs office buildings’ data centers
Provides consulting services on environmental issues,
Creates software for Internet applications, ATM services and
Manages human-resources activities for major companies.
What Semco does?

8. HOFST
EDE
MODE
L

9. RICARDO SEMLER

10. LEADERSHIP
STYLE
• Democracy in the organisation
• Rotating the CEO position
KEY
STRENGHTS
• Recognizing that the people are the most
creative and productive when they have a
say in the running of the company
BEST
DECISION
• To introduce the boldest experiment in
management ever successfully taken.

11. Management Style of Semler
Participation Ownership Performance
Discipline Empowerment Authority
Accountability

12. ORGANIZATION STRUCTURE
"It's a system that puts a lot of weight on leaders because then
can no longer simply protect themselves with symbols of
power like closed offices or special parking places. They have
to rely exclusively on their ability to generate respect."

13. PARTICIPATORY MANAGEMENT
FUNCTIONAL
STRUCTURE
MATRIX STRUCTURE
LATTICE STRUCTURE
Counsellors
Partners
Associates &
Co-ordinates

14. "Semco's ongoing
transformation is a
product of a very
simple business
philosophy: give
people the freedom to
do what they want,
and over the long haul
their successes will
outnumber their
failures."

15. A bonfire of
bureaucracies
Spin off new
satellite
suppliers
Rounding the
pyramid
Set your own
salaries and
bonus
Appraise your
boss
Small,
symbolic
changes
that make a
big
difference
Workers’
committees
take on a
managerial
role
A new
leadership
network
Profit
Sharing
Information
Sharing
THE NEW
SEMCO

16. Ask someone at Semco “who’s in
charge?” and the most likely
response will be “no one.”
Semco doesn't plan which
businesses to enter. Instead it
'rambles' into new areas by trial,
error and argument
ORGANIZATIONAL
CULTURE

17. Core Values
Linking pay with performance
Autonomy given to employees
Wednesday Voucher
Freedom & Accountability
Three step test for starting a new business

18. "Rather than
force our
people to
expand a
business
beyond its
natural limits,
we encourage
them to start
new
businesses."

19. “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.”

22. “Employees can wear
whatever clothing makes
them comfortable. They can
do whatever the hell they
want. It’s up to them to see
the connection between
productivity and profit and to
act on it.”

23. ADVANTAGE
S
DISADVANT
AGES

24. Implications
• Ricardo Semler doesn’t have a current title. The company recently
held a party to commemorate the tenth anniversary of the last time
he made any decision at all.
• The only real rules at Semco - is huge peer pressure and self-
discipline.
• Semler is more worried that the company's uniqueness will be
diluted if it grows too fast or makes too much money.
• Semco’s products are so good and its customer service so efficient
that 80 percent of its yearly revenues come from repeat customers.

26. Semler's Rules for Management
Without Control
Forget about the top line.
Never stop being a start-up.
Don't be a nanny.
Let talent find its place.
Make decisions quickly and openly.
Partner promiscuously.

27. Can Semco’s culture work for Indian
Companies?
• First, to copy Semco's structure, you need to:
• Be convinced that it will work for your company
• Be able to change your company's structure
• Make it work in practice, with your own people
• In the Semco case, the transition worked because the leadership (Ricardo
Semler) owned the company, was young and he found the right associates
to lead the change.
• Above all it requires smart, humble and daring managers, willing to change
their minds often.

28. • One of them is the relationship between the boss and subordinates. The
general belief is that in India the relationship is very formal and
hierarchical.
• There are instances of companies with the traditional hierarchical
model moving to a more decentralized way of functioning.
• Not all of them may be able to make a transition to the "boss less"
model.
• A lot of Indian startups are coming up with the flat organizational
system.

29. Thank You