Out of This World: Doing Things

the Semco Way RICARDO SEMLER

The Brazilian company Semco may be one of the flour, biscuit, beer, and car dealership businesses.
world’s most unusual workplaces. Instead of a mis- When we first met he was already a billionaire, and
sion statement, business plan, and long-term budget, by the time I was invited to speak at the conference
it has relied on democratic processes and employee in question, he had earned my utmost respect.
autonomy to produce a two-decade record of envi-
able growth and profits. Its cardinal operating phi- Most people would allow themselves to be insulted
losophy? Harness the wisdom of the people. Em- by such an exchange. At first blush, you too might
ployees control their work hours, location, and pay think I should have considered Senator Macedo’s
to achieve the work/life balance they need, and par- question an affront. After all, I had just finished
ticipate in all decisions, including what businesses giving an hour-long presentation in a hot, humid
Semco should pursue. By continually asking why, auditorium and deserved to be afforded the respect
they avoid the trap of fixed assumptions, opening of an honored guest. Surely, I didn’t deserve to be
the organization to learning and the discovery of laughed at for being different.
new approaches and opportunities. © 2006 Hewitt
Associates. The thing is, though, my company, Semco, is differ-
ent. We have no official structure, no organizational
“Mr. Semler . . . can you please tell us what planet chart, no business plan or company strategy, no two-
you’re from?” I had just finished giving a speech or five-year plan, no goal or mission statement, and
at a conference in the far north of Brazil and was no long-term budget. And while many journalists
preparing to field questions from the hundreds of and commentators brand me “CEO” when describ-
people in attendance when a man seated in the front ing the company, the fact is that Semco doesn’t have
row posed this provocative question. Before I could a fixed CEO. We also have no vice presidents and
open my mouth to reply, the crowd erupted in gales no chief officers for information technology or op-
of good-natured laughter, and it took several min- erations. There are no standards or practices, no
utes for the room to quiet down enough for the human resources department, no career plans, no
Q&A portion of the session to continue. job descriptions or employer contracts. No one ap-
proves reports or expense accounts, and supervision
Who would have the audacity to pose such or monitoring of employees is a rarity.
an inflammatory—albeit, humorous—question? Be-
lieve it or not, it was the man who invited me to Semco’s history can be traced back to my father,
speak at the conference—Senator Jose Macedo, a Antonio Curt Semler, a Viennese immigrant. Shortly
prominent Brazilian politician and wonderful self- after moving to Brazil from Argentina in the mid-
made man. Senator Macedo began his working life 1950s, he patented a centrifuge for separating oils.
as a soap salesman before branching out into the Building on his invention, my father founded a small
machine shop, which quickly became a $2-million-a-
This article is reprinted from the book, Workforce Wake-Up year business. In the late 1960s, he grew the business
Call: Your Workforce Is Changing, Are You? edited by Robert
Gandossy, Elissa Tucker, and Nidhi Verma (New York: Wiley,
exponentially when he formed a partnership with
2006). two British marine pump manufacturers, making

c 2006 Hewitt Associates. All rights reserved. Reprinted with permission of John Wiley & Sons.
Published online in Wiley InterScience (www.interscience.wiley.com)
Global Business and Organizational Excellence • DOI: 10.1002/joe.20161 • July/August 2007 13
 Semco a major supplier to the Brazilian shipbuild- weekend.” Operating under the conviction that peo-
ing industry. Over the next quarter-century, Semco ple are the best judges of where and when they can
built marine pumps and its name became synony- best get the job done, we give our employees the free-
mous with the shipping industry. dom to customize their workdays. For Semco em-
ployees, the hours they work are determined by their
As far back as I can remember, my father assumed own self-interest, rather than by company mandates.
I would accept responsibility for managing Semco
when I got old enough. As for me, I wasn’t so sure I
wanted to take the reins of a company I considered Operating under the conviction that people are the
too rigid and steeped in tradition. After all, I was best judges of where and when they can best get
having too much fun playing in a rock band to con-
the job done, we give our employees the freedom to
template spending my life doing what I considered
customize their workdays.
babysitting people just to make sure they clocked in
on time.

After much debate and negotiation, I agreed to take Don’t get me wrong. The seven-day weekend isn’t
over Semco and my father agreed to step back and about giving employees permission to play hooky.
allow me to make over the company as I deemed fit. It’s about creating an atmosphere and culture in
Within just days of accepting the reins, I had fired which employees have permission to be whole peo-
two-thirds of my father’s most senior managers. ple seven days a week. We humans are complex
Sure, it was a risky move, but one I felt was necessary creatures with many facets, interests, talents, and
to quickly implement reforms without having to en- personalities. If forced to shut off any portion of
dure the inevitable foot-dragging of long-entrenched ourselves from Monday morning until Friday night,
executives. My reinvention of dear old Dad’s com- we are not living truly fulfilling lives. No one should
pany didn’t end there. I spent the next two decades feel they have to leave half of themselves in the park-
questioning, challenging, and dismantling the tra- ing lot each and every day. It’s a lousy way to live
ditional business practices my father had spent the and a lousy way to work.
previous three decades instilling at Semco.
At Semco, we not only allow but also actively en-
Starting to think Senator Macedo was justified in courage our employees to pursue their interests,
asking me what planet I’m from? It’s okay if you leaving it to them to perform their work duties where
do. You wouldn’t be the first and you most certainly and when they feel they are likely to deliver the
won’t be the last. I guess you could say I come from best results. If a Wednesday morning rock-climbing
the planet Semco because life sure is a lot different expedition is more inviting than a budget-planning
here than it is just about any other place on Earth. meeting, then by all means, break out the rope and
pitons! If lighter traffic on a Saturday afternoon
makes the commute to the office more bearable, then
The Seven-Day Weekend feel free to spend a few hours at work. We don’t care
I’ll be the first to admit that Semco is one of the when you get your work done, just as long as you
world’s most unusual workplaces. Many of our ba- get it done. It’s up to employees to decide when they
sic tenets fly in the face of even the most progressive will best be able to perform their duties.
owners or managers. For starters, we don’t do the
standard Monday to Friday workweek. Instead, we One of the best examples of living the seven-day
operate in a fashion that I like to call the “seven-day workweek can be found in Jose Carlos Reis de

14 July/August 2007 DOI: 10.1002/joe Global Business and Organizational Excellence

Magalhaes (known as Zeca to his friends and col- friend (another favorite pursuit) doesn’t make him
leagues), who came to work at Semco at the age of any less effective of an employee. In actuality grant-
23. A recent graduate of one of Brazil’s top business ing him permission to be a whole person 24/7 makes
schools, Zeca had been employed by an important, him a better employee—not a lesser one. The free-
aggressive investment bank, where he managed its dom to pursue his hobbies and spend time with his
Internet ventures in the construction industry. When girlfriend allows him to create balance in his life.
I first met Zeca, I quickly realized that he reminded
me of myself at his age. Immediately recognizing his The pursuit of personal interests isn’t the only reason
passion for work, I asked him to help launch Semco to allow for elastic work schedules. If an employee,
Ventures, our new high-tech unit. by nature, regularly sleeps until 9:00 A.M. and I
demand she reports to work by 8:00, then all I’ve
As luck would have it, shortly after Zeca started accomplished is securing myself a couple of hours
working at Semco, Brazilian tennis champion of her least productive time. At the other end of the
Gustavo Kuerten reached the finals of the French spectrum, if I insist on closing down operations at
Open—France’s Wimbledon, if you will. An avid 6:00 P.M., I’m forcing her to leave work just as she
tennis fan, Zeca made it clear he’d be home watching may be hitting her stride. By insisting upon standard
Kuerten’s televised matches during the day and per- work hours, I end up sacrificing a certain amount
forming his work for Semco at night. He didn’t ago- of employee potential each and every day. The
nize over the decision, and he didn’t ask permission. trade-off for uniformity is lost productivity. Who
“Only because I work at Semco,” he says. “Nowhere in their right mind could make a justifiable case for
else could I do that without feeling guilty.” that?

When Zeca tendered his resignation at the invest-

ment bank to accept my job offer, his infuriated Naturally, there are those who argue that such free-
bosses couldn’t understand why he would leave an dom only leads to disaster.
established, venerable organization for a start-up.
In spite of his youth, Zeca already possessed one
priceless piece of knowledge that the older execu- Naturally, there are those who argue that such free-
tives obviously had yet to learn—that status, power, dom only leads to disaster. They assume that chaos
and even money are sometimes not enough to make will ensue if people are given some latitude when
a job fulfilling. it comes to designing their own work schedules. To
them, I say: nonsense. I simply cannot believe that re-
As the French Open drew to a close that year, Zeca sponsible adults would simply fail to show up when
hadn’t missed a match. He also hadn’t missed an they are needed—that a journalist who undoubtedly
opportunity to impress me, performing all his duties understands the urgency of deadlines would go to
in an exemplary fashion. You see, Zeca brings the the movies rather than putting the finishing touches
same passion to Semco that he feels for his beloved on a critical story . . . that an anesthesiologist would
tennis. It’s not at all unusual to find him working pull up the covers and roll over in bed, leaving a
12-hour days. No one tracks when he puts in those crew of surgeons standing around the operating ta-
12 hours, mind you, and they are often in the middle ble . . . that actors who spent years honing their craft
of the night. would leave their public waiting anxiously for the
curtain to rise. The fact that anyone could have such
The fact that Zeca tailors his work schedule around a disheartening view of humankind fills me with pro-
tennis tournaments or long lunches with his girl- found sadness.

Global Business and Organizational Excellence DOI: 10.1002/joe July/August 2007 15

 Granted, such dire predictions are nothing new to from home or wherever else their hearts desired. In
Semco. I’ve been hearing them for 20 years, ever time, the trend trickled down to middle management
since we first proposed that people be allowed to and eventually to regular employees.
work away from the office. Once again, our crit-
ics were wrong. Two decades later, we’re not only Anyone who’s had his or her eyes and ears open
still here, but we’re thriving. Today, Semco employ- over the past decade and a half can readily tell that
ees work wherever they want—whether in Semco’s telecommuting is an inevitable part of our future. In
satellite offices or “at home,” which can encom- 1990, four million people worked from somewhere
pass a myriad of locations, ranging from their literal other than a traditional office in the United States.
home to a café or the park. Should they ever begin By 2000, that number had mushroomed to 23.6 mil-
to feel out of touch, they take it upon themselves to lion telecommuters. Considering the unprecedented
meet up with someone—or spend some face time in economic growth the United States enjoyed during
the office. the 1990s, it’s safe to assume the work still got done.

This incredible growth in telecommuting came amid

Today, Semco employees work wherever they want— yet more dire predictions, this time that giving em-
whether in Semco’s satellite offices or “at home,” ployees latitude in determining where they work
would result in the demise of the traditional office.
which can encompass a myriad of locations, ranging
While it’s true the number of people working else-
from their literal home to a café or the park. where is expected to continue to increase as far as
the eye can see, people need not worry that the tra-
ditional office will disappear completely. I tell you
Younger workers who’ve come of age in the era unequivocally that will never happen. In part, that’s
of Internet cafés and cell phones typically take to because there will always be a certain percentage of
the concept of working “whenever, wherever” quite people who cannot work at home. Either they don’t
readily. Among seasoned workers, however, it fre- have the space or they have kids in the house or
quently takes a little getting used to. I myself had someone’s always running a noisy appliance or they
a hard time not feeling self-conscious about work- simply don’t have the self-discipline to turn off the
ing poolside in a pair of shorts when I first started TV and get to work.
working three half-days from home during the early
1980s. In the beginning, I would rush to pull on a For those workers who really can’t work at home
pair of trousers whenever a messenger arrived with but don’t wish to be tethered to just one location,
the office mail pouch. In my mind’s eye, I pictured a decentralized system (such as Semco employs)
him returning to company headquarters, proclaim- with offices scattered around town is an effective
ing that the boss was sunbathing while everyone else solution. The advantages are numerous. Take,
was busy toiling away on one of Brazil’s sweltering for example, the employee who has a dinner date
summer days. planned with her husband and a group of friends.
If she were to work a full afternoon at corporate
Eventually, I came to the conclusion that everyone headquarters before hopping into her car for the
already knew I worked at a garden table in my shorts one-hour drive to the restaurant, she wouldn’t
with a stack of telex messages piled high by my arrive until 7:00 P.M. At Semco, she is free to leave
side. Clearly, I was still getting my work done. So I headquarters at 3:00 P.M., take a leisurely drive
stopped worrying about it. Soon, other Semco direc- to the satellite office nearest the restaurant, wrap
tors were taking a page from my playbook, working up some unfinished business, and then saunter

16 July/August 2007 DOI: 10.1002/joe Global Business and Organizational Excellence

over to the restaurant just in time for dinner. She time naturally peaks after 70. Basically, then, we can
would be better equipped to enjoy her meal, having conclude that you don’t have the money or leisure
completed her work for the day, but without the time to realize your dreams when you are most phys-
stress of enduring rush hour traffic. ically fit to pursue them. Conversely, you no longer
have the required physical stamina for such pursuits
when you have the most time and money to spare.
Isn’t that ironic?
Pushing the Boundaries
Semco’s dedication to flexibility and balance doesn’t
At Semco, we believe the current system of work
end there. We are experimenting with a variety of
and retirement should be replaced with one that
management approaches, all of which are designed
allows employees to better square their life cycle
to return to people control of their own destinies.
with their career cycle. Under our Retire-a-Little
One particular proposition, dubbed “Up ‘n’ Down
program, people are allowed to acquire from the
Pay,” literally allows employees to manage their
company as much early retirement as they wish—
own pay. This approach is built around the assump-
provided they repay that time later. An employee
tion that allowing people to adjust their pay and
may take Wednesday afternoons off, for example,
work hours to their changing life situations will pay
to pursue those interests that would ordinarily be
dividends all the way around.
reserved for retirement. The company “sells” the
employee that time by reducing take-home pay by
a small amount. In turn, the employee receives a
We are experimenting with a variety of management voucher for work to be performed after retirement.
approaches, all of which are designed to return to
people control of their own destinies. Say employees took off 100 Wednesday afternoons.
After retirement, they may redeem their vouchers
by offering to work every Wednesday for two years
This sort of program would allow people with tem- in exchange for proportional pay. Essentially what
porary problems or family issues to scale back their they’ve done is exchanged early retirement for later
work hours without derailing or endangering their work. When they’re young enough to go rock climb-
careers. Take, for example, a mother who wishes to ing each Wednesday, they go rock climbing. In 10
spend more time with her children. She could request years, when an arthritic knee or a bad back makes
that someone else assume 30 percent of her job du- rock climbing too much of a risk, they’ll spend their
ties for a designated time period. At the end of that Wednesdays contemplating new products.
time, she would then return to her full-time schedule.
It’s too early to worry about the what-ifs: What
Like many of our approaches, Semco’s Retire-a- if the company no longer exists when these people
Little program sounds a little off-the-wall at first. reach retirement age? What if too many people show
However, it’s carefully constructed to take life cy- up for work that we no longer have? Sure, there
cles and the curve of human health into account. are many reasons to hesitate before making such an
Few people would argue that the peak of physi- innovative idea reality. But that’s been the case with
cal capability typically occurs during one’s 20s and just about every other innovative idea we’ve put in
30s. Likewise, one’s health tends to take a down- place over the past two decades. Like everything
turn once someone passes the age of 60. At the same else we do at Semco, Retire-a-Little is designed to
time, one’s financial independence usually reaches push the boundaries and test the future. We’ll worry
its zenith between the age of 50 and 60, while idle about the potential consequences later.

Global Business and Organizational Excellence DOI: 10.1002/joe July/August 2007 17

 Semco’s Work ‘n’ Stop program allows employ- at work? Why can’t workers be involved in choos-
ees to take a sabbatical of up to three years for ing their own leaders? Why shouldn’t they manage
any given purpose. An internal committee seeks themselves? Why can’t they speak up—challenge,
out a temporary replacement, either internally—in question, share information openly?
which case, the employee taking the break would
be fairly certain of being able to reclaim the job at If we have a cardinal strategy that forms the bedrock
the end of the sabbatical—or externally, in which for all Semco practices, it’s this: Ask why. Ask it all
case, returning to the employee’s original job would the time, ask it any day, every day, and always ask it
be more problematic, but certainly not out of the three times in a row. Employees must be free to ques-
question. tion, to analyze, and to investigate, and a company
must be flexible enough to listen to the answers.
To finance these sabbaticals, Semco allows employ- Those habits are the key to longevity, growth, and
ees to set aside a portion of their monthly pay. profit.
The company acts as banker by keeping the money,
but releases it whenever employees feel they have Granted, constant questioning doesn’t come natu-
enough to underwrite their time off and want to rally for most people. As children, we question ev-
make a withdrawal. For the employee, this program erything repeatedly, often driving our parents to the
is a golden opportunity to balance their work and point of exhaustion. As we mature, however, we are
personal life. For the company, it pays for itself in taught to set aside the genuine impulse to question
productivity and longevity not to mention decreased things. On the surface, the rationale for doing so
turnover. seems to make sense. After all, peppering someone
with too many questions may be perceived as rude.
It can also be dangerous, tacitly implying that we’re
People are considered adults in their private lives, ignorant or uninformed. In questioning something,
at the bank, at their children’s schools, with family we also run the risk of discovering that everything
and among friends, so why are they suddenly treated we thought we knew we never really knew at all.
like adolescents at work? Finally, there’s the possibility that management will
feel threatened by the prospect of employees who
question continually.

Not so at Semco. In meetings, we address the same

The Whyway subject over and over again, asking “why” re-
At Semco, we believe that economic success requires peatedly. Nothing is ever carved in stone, either.
replacing control and structure with democracy in Granted, we jot down generic ideas and broad num-
the workplace. As you’ve probably already gath- bers to enable us to better visualize the dimensions
ered, we place an immense amount of power in the of a new product or service. But we throw those
hands of the workers. With a show of hands, our notes away. At the next meeting, we’ll start over—
employees can veto new product ideas or scrap en- without the benefit of the original notes. By so doing,
tire business ventures. When it comes right down to we ensure that we do not fall into the trap of fixed
it, it’s about trusting our employees to be respon- assumptions. Instead, we are forced to reconsider all
sible adults. Think about it. People are considered the variables. As a general rule, we at Semco despise
adults in their private lives, at the bank, at their written plans. The reason is simple. People will fol-
children’s schools, with family and among friends, low a plan like a Pied Piper—mindlessly, with no
so why are they suddenly treated like adolescents thought as to the final destination.

18 July/August 2007 DOI: 10.1002/joe Global Business and Organizational Excellence

Many a new Semco executive has been heard to the London School of Economics, and INSEAD.
stammer: “But we already decided that at the last My first book about Semco, aptly titled Maverick
meeting!” or “Why are we going over this again, (Warner Books, 1993), ranked on the best-seller
instead of forging ahead?” I don’t deny that it’s list in a dozen countries, selling more than one
frustrating for them. I’m quite certain it is. But when million copies. Semco practices have been adopted
they watch the process unfold, and if they listen at schools, hospitals, police departments, and hun-
to their colleagues asking “why,” they’ll see how dreds of other large and small companies around
our questioning strategy allows no stone to be left the world. That’s because Semco has what everyone
unturned. else wants—huge growth despite a fluctuating
economy, unique market niches, rising profits,
Our business practices may be otherworldly, but highly motivated employees, low turnover, and
so too are our profits. From 1994 to 2003, Semco diverse products and service areas.
increased its annual revenue from $35 million to
$212 million. And we continue growing nearly 40
percent each year without any public investment. Semco has what everyone else wants—huge growth
Had it been possible to invest $100,000 in Semco despite a fluctuating economy, unique market
20 years ago, that forward-thinking investor would niches, rising profits, highly motivated employees,
now be sitting on a $5.4 million nest egg. My
low turnover, and diverse products and service
father’s 90 employees have mushroomed to nearly
areas.
3,000. And we’ve moved from industrial manufac-
turing services to high technology without giving
up any earlier business. We’ve accomplished all
that with the company’s largest shareholder—yours
truly—rarely attending meetings and almost never Synergies of Semco
making decisions. By now, you’re probably asking yourself, “Just ex-
actly what is it that Semco does, anyway?” For years,
It’s because of those remarkable results achieved I have deliberately resisted defining Semco for one
through the use of such unorthodox business prac- simple reason: Once you say what business you’re
tices that Semco has attracted such widespread at- in, you create boundaries for your employees by re-
tention. We’ve been profiled on dozens of TV pro- stricting their thinking and giving them a valid rea-
grams and featured in hundreds of newspaper and son to ignore new opportunities. “We’re not in that
magazine articles. Seventy-six universities feature business” will become their mantra.
case studies of Semco, while texts of our organiza-
tion’s practices are required reading at 271 other Instead of dictating Semco’s identity, I let our em-
schools. Sixteen masters and doctoral candidates ployees shape it with their individual efforts, inter-
have made Semco the subject of their theses. ests, and initiatives. Still, I understand the need to
offer up some kind of definition, so (deep breath)
Hundreds of corporate leaders from around the here goes: Semco is a federation of businesses with a
world have visited our headquarters in São Paulo, minimum common denominator. We are not mono-
hoping to gain some insight into what makes lithic, yet there are common themes and threads
us tick. Six thousand people have written to us, uniting us all. All of our business units are highly en-
and I’ve given nearly 300 speeches to companies, gineered, premium providers, and market leaders in
conferences, charitable groups, youth groups, and their niches. What’s more, all were carefully chosen.
universities, including Stanford, Harvard, MIT, We haven’t ventured into any of them by chance.

Global Business and Organizational Excellence DOI: 10.1002/joe July/August 2007 19

 Semco is comprised of 10 companies, give or take. tary businesses. However, a closer look will reveal
That answer may sound deliberately vague, but the a hidden synergy that satisfied three basic criteria
truth is that I really can’t be more specific because that Semco looks for whenever considering a new
our business units quite literally come and go. There- venture. First and foremost, we demand complex-
fore, I’m not really sure how many companies we ity, which usually means “highly engineered.” Every
have on any given day. We’ve had a minimum of business opportunity we venture into must have a
five for 20 years. We also have six Internet compa- high-entry barrier of complexity. Quite frankly, if
nies so I suppose we could claim 16 units, but I’d a new business isn’t difficult for us (and others) to
rather not. After all, we don’t know how many of break into, we’re not interested.
those will survive or in what form.
In addition, we look to be the premium player in
The first of our companies, an industrial machinery each and every market that we serve. Our goal is
unit, is actually the remnants of my father’s orig- to offer a high-end product or service. Granted, that
inal business. Founded to produce marine pumps, means we’re always more expensive, but we provide
the company eventually moved into manufacturing the premium that stretches what the customer will
industrial mixers. Currently, it produces only high- pay. We also seek to fill a unique market niche, one
tech mixing equipment—the kind of complex, en- that makes us a major player in any given industry.
gineered industrial mixers used in pharmaceutical We believe this follows naturally from the first two
manufacture and at candy factories. requirements. We desire only to be in those busi-
nesses where our disappearance would cause our
SemcoBAC, a partnership with U.S.-based Balti- customers significant grief about which they would
more Air Coil, makes cooling towers for commer- complain quite loudly. Sure, they’d survive. There’s
cial properties, while Cushman & Wakefield Semco no doubt about that. But they’d have substantial
handles facility management throughout Brazil and difficulty moving on.
the rest of Latin America. Semco Johnson Controls
came about as the result of an alliance with John-
son Controls, a $16 billion world leader in facil- A number of clients have become customers of mul-
ity management. That particular business unit spe- tiple Semco business units.
cializes in handling large properties like hospitals,
airports, hotels, and major factories. Then there’s
ERM, which we added in 1996 as a result of our All of our products and services meet these three dis-
partnership with Environmental Resources Manage- tinct criteria, and we bolster our strength by lever-
ment, one of the world’s premier environmental con- aging the power of our units. As a result, a number
sulting companies. Finally, we have Semco Ventures, of clients have become customers of multiple Semco
our high-tech ventures unit; SemcoHR, which man- business units. Take Wal-Mart, for example. The re-
ages HR activities for large companies; and Sem- tail giant has gradually become a customer of four
coRGIS, which manages inventory control for large of our businesses—we count their inventory, man-
global retailers, such as JCPenney and Wal-Mart, age their cooling towers, administer their buildings
as well as Carrefour, Brazil’s largest supermarket and warehouses, and conduct environmental site in-
chain. vestigation and remediation. Granted, this isn’t un-
usual for us. A similar situation exists with General
Just how did so many widely diverse industries come Motors and Unilever, as they too are customers of
to be part of the same business? To the casual ob- multiple Semco units. In each case, our objective re-
server, they don’t exactly stand out as complemen- mains the same—synergy. Whichever unit serves as

20 July/August 2007 DOI: 10.1002/joe Global Business and Organizational Excellence

the point of entry, it soon leads to business oppor- A friend, William Ury, once told me what Semco
tunities for the others. was really advocating was “harnessing the wis-
dom of people.” I couldn’t have said it better my-
Signing on with a client is usually our biggest hurdle self. Semco’s most precious asset is the wisdom
because we are admittedly more expensive than our of its workforce, and our success grows out of
competitors. Once customers are on board, how- our employees’ success. So far, that philosophy has
ever, they are there to stay. We rarely have opera- served us well. Year after year, Semco has exhib-
tional problems, we rarely abandon a customer, and ited the kind of strong, consistent performance that
we rarely have a customer leave us. I can count on leaves most other organizations wondering how
my fingers the number of clients who have dropped they, too, could achieve a similar financial perfor-
us in 20 years of business. Our repeat business is so mance. What’s more, after 50 years in business, we
strong, in fact, that return customers represent an remain very proudly privately held with no plans to
incredible 80 percent of our annual revenue. go public anytime in the foreseeable future. Rather
than seeking outside investment, we believe we can
take the wisdom of our people to the bank for
Conclusion decades to come.
So you see, Semco is different—so different, in
fact, that Senator Macedo may very well have been In the meantime, we’ll carry on, operating as we
justified in asking me what celestial plane I call have for the past two decades—without a business
home. By changing the rules—or eliminating them plan, without a mission statement, and without a
altogether—we encourage people to follow their in- long-term budget. And no, it doesn’t unnerve me to
terests and their instincts both in their personal lives step back and see nothing on the company’s horizon.
and at work. We insist that our workers seek per- The truth is I don’t know where Semco is headed,
sonal challenge and satisfaction before they attempt and I don’t want to know. I’m having too much fun
to meet the company’s goals. We encourage people watching Semco and its employees ramble through
to ramble through their day or week, confident they their days, running on instinct and opportunity, en-
will meander into new ideas and business opportuni- joying the kind of work/life balance that can be
ties. We embrace democracy and open communica- achieved only when employees are free to be whole
tion, inciting questions and dissent in the workplace. people, and all the while turning in record profits.

At Semco, we believe success is not measured only At Semco, we don’t play by the rules. We are
in profits and growth, but in helping our people unabashedly, unapologetically different, and we’re
achieve balance in their lives. Our people are free— proud of it. In fact, we revel in it. We’ve changed
free to work odd hours; free to work closer to their the way work works and improved the quality of
homes (even at their homes!); free to come to the our lives, and so can you. The workforce does need
office whenever they feel it’s necessary; free to take a wake-up call, and it’s up to you to join the chorus
off to the beach, the tennis court, or the concert hall and lend your voices (and your actions) to the cause.
in the middle of a weekday in exchange for working It’s going to be quite an exciting ride.
on a Sunday. In the end, it’s all about the same
Ricardo Semler is president of Semco, the Brazilian machin-
thing—creating balance. When people have balance
ery manufacturer and service provider. He is internationally
in their lives, they are better equipped to discover renowned as the creator of the world’s most unusual work-
where their talents and interests lie and thus better place and is currently a visiting Scholar at Harvard University
able to merge their personal aspirations with the and teaches leadership at MIT.
goals of the company.

Global Business and Organizational Excellence DOI: 10.1002/joe July/August 2007 21