2. Semco Now
Founding
Implementing Change
Strategy & Organizational Structure
Semler Was Not Alone
Conclusion
3. 30% of employees choose their own
salaries
7 day weekend
No job titles
All employees share company profit
All employees have access to financial
statements and balance sheets & are
given classes to understand them
4. 24% annual sales growth since 1980
3000 employees
Employee turn around rate of less than
1%(Industry average just under 20%)
Employee turn around rate of less than
1%(Industry average just under 20%)
Title of CEO is rotated every 6 months
between 6 executives
Managers chosen by vote
5. Founded in 1912 by Antonio Semler
Hierarchical & patriarchic structure
Known for manufacturing marine pumps
90% of sales went to Brazilian shipbuilding
industry
6. Employee Participation
Information Transparency
Profit Sharing
7. “Idid try to reconstruct the company so
that Semco could govern itself on the basis
of three values: employee
participation, profit sharing, and open
information systems.” “Participation gives
people control of their work, profit sharing
gives them a reason to do it
better, information tells them what’s
working and what isn’t” (HBR, p.4).
8. “The key to management is to get rid of the
managers.
The key to getting work done on time is to stop
wearing a watch.
The best way to invest corporate profits is to
give them to the employees.
The purpose of work is not to make money. The
purpose of work is to make the workers,
whether working stiffs or top executives, feel
good about life.”
Ricardo Semler
9. Initial goals
• Abolish the existing hierarchical and patriarchic
structure
• Diversify Semco’s line of products
One of the first things Ricardo Semler did was fire
2/3 of executives and got rid of all but three layers
of management.
10. PYRAMID SYSTEM VS
3-CONCENTRIC CIRCLES-MODEL
11. Recession in 1980
In 1985 a manager suggested putting
together self-managing teams of 6-8
workers – cut management costs.
Semler introduces profit sharing
President Collor introduced new regulation
that limited access to liquid assets
Second major recession in Brazil
12. Onlyoption left was layoffs
Two year severance pay
Worker’s committee approached Semler
Would take pay cut if;
• Increase in profit-sharing percentage
• Management take 40% pay cut
• Workers must approve every expenditure
13. Semco’s transformation from an autocracy
to an entrepreneurial democracy took
fifteen eventful years. In the words of
Semler, the change proves “that worker
involvement doesn’t mean that bosses
lose power;” it merely strips away “the
blind irrational authoritarianism that
diminishes productivity.”
14. “Not long ago, the wife of one of our workers
came to see a member of our human resources
staff. She was puzzled about her husband’s
behavior. He no longer yelled at the kids, she
said, and asked everyone what they wanted to
do on the weekends. He wasn’t his usual
grumpy, autocratic self. The woman was
worried. What, she wondered, were we doing to
her husband? We realized that as Semco had
changed for the better, he had too.”
