2. RICARDO SEMLER
Writer by Passion, Imagineer by Intention, Teacher by Interest and
CEO by Profession
Featured in Times Global 100 young leaders, Nominated in World
Economic Forum, Wall Street Journal America Economia, The Wall
Street Journal's Latin American magazine
A Harvard Graduate, Author of International bestsellers Maverick &
The Seven Day Weekend
Fired 60 % of all top managers on his very first day in office and began
work on a diversification program to rescue the company
In 1990, leading to hyperinflation in Brazilian Economy, faced a tough
time by cutting the salaries by 40% but offered 39% profit share to
them and sailed smoothly
3. THEN AND NOW
COMMUNICATING STRATEGIES
Withhold and Uphold - traditional autocratic style of management, orthodox
pyramidal hierarchy.
Underscore and explore - Democratic style, unorthodox trust – operatives,
managers, major decisions and factories; ‘amoeba’ treatment.
TYPE OF CHANGE
One – way turnaround – Corpocracy , ‘more people, more plants, more
products, more revenue'
Charismatic transformation - ‘a business that wants people to think,
innovate, and act as human beings’; each unit got a democratically agreed
23% of any profit and was free to allocate the money as the members
decided ;letting people decide on issues cuts out forests of complication and
bureaucracy ; one-page memos with newspaper-style headlines; 'hollowing
out' the corporation, subcontracting everything possible
LEADERSHIP STYLE
Commanding Style
Inspirational and Supporting Style
4. CHANGE CONVERSATION SKILLS
TALKING IN STAGES
Initiative Conversation
Declaration - One-page memos with newspaper-style
headlines ('New Toaster Will Sell 20,000 Units for $2 Million Profit')
Conversations for understanding
Enables Participation – rotate managers between functions,no vice
presidents, no chief officers for IT or operations, no HR department, not
even a fixed CEO.
Confirms the interpretations - subject managers to six-monthly appraisal
by their subordinates with 'multiple choice questions, passing grade of
70%.
ALIGNING LANGUAGE WITH THE DESIRED CHANGE
Transformational Imagery of Change
Demolish the pyramidal structure; go 'circular', with directors becoming
'counsellors', unit heads 'partners', other managers 'coordinators', and
everybody else 'associates’. The core preserved
5. for Semco is 'applications engineering and final assembly'. In these core
activities, there's a 'distinct hierarchy and leadership. On issues like what
product to make, or the control of sales and distribution, the leaders have
'very clear responsibilities‘.
absolute integrity of management, the introduction of trust and delegation,
the abolition of futile restraints and complications, and the whole-hearted use of
modern manufacturing methods and people policies
Prime Philosophy – ‘Changes in mentality do affect the numbers’.
'to shift the centre of gravity towards the middle’
'boundary-less' company
6. ACTIONS TO CONSOLIDATE CHANGE
Redesign Roles - Top management abolished central roles;
new culture in which people made their own rules. No ‘macho
culture’.
Redesign Reward system – - subject managers to six-monthly
appraisal by their subordinates with 'multiple choice questions,
passing grade of 70%.
Encourage ‘voluntary acts of initiative’ – An experienced early
retiree reckoned he could raise the productivity of Semco’s
gear cutting machine ,his reward will be 20% of the first two
years' savings.
Measure Progress - In 1993 he hadn't hired anybody, fired
anybody or signed a cheque for eight years, 'remove this
burden from the company so that self-confidence grows’ ;
mission - creating a 'self-powered organisation'
