Video: The Caring Capitalist – Brazil (Ricardo Semler’s innovative way to run a company)

Updated 1/12/2012 7:03 am – Thanks to my friend Gio an Italian in Taiwan who posted this video in a discussion thread about work ethics, capitalism.  This is an excellent short video about Ricardos’ company Semco in Brazil.  His book The Seven Day Weekend looks like a worthy read.  Maybe I will track down a copy.  Need to add to my to-read list…

I should also mention WordPress is super awesome.  The “related articles” it generates at the bottom of the page are highly relevant and is worth following up.  I hope this type of information spreads more because I have worked in a traditional hierarchical corporation before and it was not pleasant at all.


Also, from wikipedia: http://en.wikipedia.org/wiki/Ricardo_Semler

Ricardo Semler (born 1959 in São Paulo) is the CEO and majority owner of Semco SA, a Brazilian company best known for its radical form of industrial democracy and corporate re-engineering.[1] Under his ownership, revenue has grown from US$4 million in 1982 to US$212 million in 2003 and his innovative business management policies have attracted widespread interest around the world. Time featured him among its Global 100 young leaders profile series published in 1994 while the World Economic Forum also nominated him. The Wall Street Journal America EconomiaThe Wall Street Journal‘s Latin American magazine, named him Latin American businessman of the year in 1990 and he was named Brazilian businessman of the year in 1990 and 1992. Virando a Própria Mesa (“Turning Your Own Table”), his first book, became the bestselling non-fiction book in the history of Brazil. He has since written two books in English on the transformation of Semco and workplace re-engineering: Maverick, an English version of “Turning Your Own Table” published in 1993 and an international bestseller, and The Seven Day Weekend in 2003. He was 21 years old when he received his MBA from Harvard Business School.

Semco 1982—90

Semler went to work for his father’s company, originally called Semler & Company, then a Mixer & Agitator supplier in São Paulo. Semler clashed with his father, Antonio Semler, who supported a traditional autocratic style of management while the younger Semler favoured a decentralised, participatory style. Further, Ricardo favoured diversification away from the struggling shipbuilding industry, which his father opposed.

After heated clashes, the son threatened to leave the company. Rather than see this happen, Antonio Semler resigned as CEO and vested majority ownership in his son in 1980 when Ricardo was 21 years old. On his first day as CEO, Ricardo Semler fired sixty percent of all top managers. He began work on a diversification program to rescue the company. A fainting spell when he was 25 inspired him to want a greater work-life balance for himself and his employees.

Attempts to introduce a matrix organisational structure in 1986 failed to achieve desired improvements.[2]

In the late 1980s, three engineers at Semco proposed setting up a Nucleus of Technological Innovation to develop new businesses and product lines which Semler endorsed. At the end of the first six months, NTI had identified 18 such opportunities. Following the success of this initiative, satellite units were encouraged throughout Semco. By the late 1980s, these satellite units accounted for two-thirds of its new products and two-thirds of its employees.

Semco 1990–2004

After dramatic restrictions on liquidity instituted by Brazilian president Fernando Collor de Mello to combat hyperinflation in 1990, the Brazilian economy went into a severe downturn, forcing many companies to declare bankruptcy. Workers at Semco agreed to wage cuts, providing their share of profits was increased to 39%, management salaries were cut by 40% and employees were given the right to approve every item of expenditure.

Performing multiple roles during the crisis gave workers greater knowledge of the operations and more suggestions on how to improve the business. Reforms implemented during that time led to 65% reduction in inventories, a marked reduction in product delivery times and a product defects rate that fell to less than 1%. As the business climate improved, Semco’s revenues and profitability improved dramatically.

As of 2003, Semco had annual revenue of $212 million, from $4 million in 1982 and $35 million in 1994, with an annual growth rate of up to 40 per cent a year. It employed 3,000 workers in 2003, as opposed to 90 in 1982. The company’s units include:

  • the industrial machinery unit, which now manufactures mixing equipment as opposed to pumps
  • Sembobac, a partnership with Baltimore Air Cooler making cooling towers
  • Cushman and Wakefield Semco, a partnership with Rockefeller property company Cushman and Wakefield managing properties in Brazil and Latin America
  • Semco Johnson Controls, a partnership with Johnson Controls, managing large scale facilities such as airports and hospitals
  • ERM, a partnership with Environmental Resources Management, one of the world’s leading environmental consultants
  • Semco Ventures, offering high technology and Internet services
  • SemcoHR, a human resources management firm
  • Semco-RGIS, an inventory control firm

As Semco grew, Ricardo Semler received a great deal of recognition. He was named Brazilian businessman of the year in 1990 and 1992, and the World Economic Forumnamed him as one of the Global Leaders of Tomorrow. A high profile committee appointed by CIO Magazine featuring Tom PetersJim Champy and Michael Hammerselected Semco as one of the most successfully re-engineered companies in the world. The BBC included Semco in its series on Re-Engineering the Business for creating one of the most successful management structures in business.

Other activities

Semler has reduced his involvement in Semco in the past decade to pursue other activities. He wrote a book Maverick on his experience at Semco which became a worldwide bestseller in 1993. A second book, The Seven Day Weekend: Changing the Way Work Works, followed in 2003.

He has appeared in the media around the world and speaks regularly to business schools, businesses and groups to promote his philosophy of industrial democracy. He has also been a visiting scholar at Harvard Business School.[3]

Semler has been Vice President of the Federation of Industries of Brazil and a member of SOS Atlantic Forest, the leading environmental defence organisation in Brazil. He founded The Ralston-Semler Foundation and the Lumiar School, a democratic school where children aged 0–14 are engaged in projects of their interest. There are three such schools — one in the city of São Paulo and two in the vicinity of Campos do Jordão, in the state of São Paulo.

References

Ralston-Semler Foundation

  1. ^ Wherrett, Rob The Compleat Biz (2009) Reroq Publishing ISBN 9780956130501, p. 94
  2. ^ Semler, Ricardo (1994) [1993]. “14 Too big for our own good”. Maverick!. London: Arrow. p. 108. ISBN 0-09-932941-7.
  3. ^ Weisman, Robert (9 May 2004), “An Iconoclast’s Ideas for Redefining Management”The Boston Globe

External links

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About GhettoRacer

racer, driver coach, taoist, yogi, dreamweaver, bballer, rebel, philosopher, entrepreneur, kiva, lonewolf, vagabond, photo/video shooter, storyteller
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