Sizzling Semler - Getting into the Mind of One of the World's Most Innovative Managers

One of the first business books I ever read was Maverick by Ricardo Semler - it was a GEM!!! If you have not read it then you must get your hands on a copy. Ricardo Semler took over the family business at the age of 20. By 26 he had a breakdown due to stress and overworking. He re-looked at the concept of work and management and over the next 15 years created the world’s most innovative, unusual workplaces. His thinking process and ability to execute are extraordinary. It is awesome just to get into his mind.

A week or so back he was in South Africa talking to 700 leaders in Joburg. This was another fabulous opportunity to be challenged by one of the most interesting leaders / managers of our time.

Are you doing anything different?
If successful business depends on innovation: "Why are automobiles made essentially the same way today as they were in Ford’s first assembly line 100 years ago?" Parallel parking is one of “ the stupidest things we do,” says Semler, “If we had a day, could we not by tomorrow afternoon figure out a way to make a car” that handles better in this common situation -- or, on a grander scale, escape from the “silly concept” of oil dependent transportation altogether? The problem, Semler figures, is that there’s “something fundamental about organizations and … leadership that makes it almost impossible for people inside a business to change their own industry.” Industries are based on “formats that are basically legacies of military hierarchies,” says Semler, which neglect or deny the power of human intuition and democratic participation.

Are you looking outside the industry in which you operate for the next big idea?
Bell Labs in the US keep records of all new technologies and they point out that less than 2% of new technologies that have disrupted an industry were created by someone from within the industry. When we are in an industry we get caught in a rut. We get into a situation where we just “learn to emulate” – if you lined up all the new cars coming off the lines of different manufacturers currently and took of the badges – in all likely hood you would not be able to tell the difference between many of the different makes of car – they all look the same because of mass emulation. Which ever industry you look at current incumbents are just emulating what’s already there.

Are you addressing the issues?
Why in a city with traffic problems like Jhb do we all try travel at the same time – at Semco in Brazil, where they have similar traffic problems, they calculated that the 4000 employees spend 1,1 million hours per year in traffic. Surly there must be better alternatives than 1,1 million wasted hours spent in traffic per year. So alternative solutions: working at a company location closer to home, flexible working hours to avoid having to travel at the peak times, setting people up to be able to work from home. With technology this is now a possibility.
Are you leveraging human intuition? The secret to successful management is to leverage the power of intuition – not just your intuition but the intuition of everyone in the organisation. A great tool is to ask “why?” 3 times in a row: · Ask why once and it is easy to answer· Ask why again (like a 4 year old would) and it becomes more difficult · Ask why a 3rd time to get to the real essence of the issue and discover new perspectivesThis is what is needed to really challenge ones thinking.

Are you taking care of peoples needs?
When people are young they have lots of time and good health but no income; when people are of a working age they have reasonable health, lots of income but no time, when people are old they have lots of time, no income and poor health. Think of a graph :

• Income is a bell shaped curve.
• Time is an inverse of a bell shaped curve.
• Health is downward sloping curve – starting high and dropping off
  

So Semco said to its people would you trade some of your income now to pursue some of things you love and dream about doing in your retirement. So you forgo 10% of your income now but on Wednesday you go and do what you dream about doing in your retirement thereby moving the income and time curve closer together. In other words Semco sold Wednesday back to employees who wanted to buy it back. He tells this story to prompt thinking about how we can rethink the workplace. This kind of thinking seems to make a difference – the average employee turnover globally is 22% per annum i.e. in 4-5 years, all employees have changed. At Semco the employee turnover rate is less than 1% per annum over a 14 year period.

Are you leveraging the power of small groups?

People only ever work effectively with another 9 or 10 people – it’s the reason battalions, church groups and sports teams are all in the regions of 10 people in size. What if you were to think of your organisations as 1000 groups of 10 people as oppose to 1 group of 10000 people? If you really think about it most people only ever really interact with about 10 people in the organisation on any one day. Groups of 10 offer people flexibility, intimacy, purpose within a team and sense of meaning.

Key message: THINK DIFFERENT

This world is not one in which we can afford to just copy stuff – too many people are doing that. We need to look at new ways of doing things – break with the past and as leaders explore unexplored domains.

Semler did a similair presentation at MIT earlier this year - you can watch it or listen to it over the web at http://mitworld.mit.edu/video/308/