## Metadata - Author: Ricardo Semler - Full Title: Maverick - URL: https://readwise.io/reader/document_raw_content/264741955 - Date: 2025-01-28 ## Summary The highlights from "Maverick" by Ricardo Semler emphasize a radical approach to management and organizational structure at Semco. Key themes include: 1. **Trust and Autonomy**: Semco treats employees as adults, trusting them to manage their own time and responsibilities without micromanagement. This includes flexible work arrangements and a lack of rigid rules. 2. **Simplification and Natural Business**: Semler advocates for stripping away unnecessary bureaucracy and focusing on a more natural, straightforward way of running a business. 3. **Decentralization and Diversity**: The company values diverse teams and decentralized decision-making, allowing employees from various levels to lead and contribute. 4. **Profit Sharing and Transparency**: Semco implements a profit-sharing plan controlled by employees, emphasizing the importance of sharing information to empower workers. 5. **Flexible Organizational Design**: The company structure is non-hierarchical, with roles and responsibilities that can be adapted as needed. This includes self-set pay and job rotation to encourage growth and development. 6. **Empowerment and Development**: Semco supports employee development regardless of formal education, encouraging career shifts and continuous learning. 7. **Critique of Conventional Business Practices**: Semler criticizes traditional corporate practices, such as rigid rules and economies of scale, advocating for a more human-centered approach. 8. **Open-mindedness and Innovation**: The company fosters an environment of trust and open-mindedness, encouraging innovation and individual initiative. Overall, Semco's approach challenges conventional business norms, focusing on trust, flexibility, and employee empowerment to create a more fulfilling and productive workplace. ## Highlights - It was a case of what, in German, is called Weltanschauung how you see the world. The autocrats at Semco were convinced that nothing would get done if they didn’t do it themselves or push their subordinates into doing it. They viewed company tasks much as parents see homework—disagreeable per- haps, but mandatory. The touchie-feelie crowd, on the other hand, was confident there was a better way, and that it involved giving up their power. ([View Highlight](https://read.readwise.io/read/01jjmaenqvjwd0qvygqbv5g278)) - We simply do not believe our employees have an interest in comins in late, leaving early, and doing as little as possible for as much money as their union can wheedle out of us. After all, these same people raise children, join the PTA, elect mayors, governors, senators, and presidents. I hey are adults. ==At Semco, we treat them like adults. We trust them. ==We don't make our employees ask permission to go to the bathroom, or have security guards search them as they leave for the day. We get out of their way and let them do their jobs. ([View Highlight](https://read.readwise.io/read/01jjmafbwnr9y3f230nqk432ab)) - ==In business, effort is too often confused with result.== ([View Highlight](https://read.readwise.io/read/01jjmafwhmdc8hqw3s2nvj074r)) - Few excuses are as convincing as the “were just going through ^ Fill in the blank, a switch at the top, restructuring, layoff, expansion. Almost any change can be an excuse for poor time management. ([View Highlight](https://read.readwise.io/read/01jjmag26phngr2a9hymft4942)) - ==we take an operational view of six months, because we found that a conventional one-year plan people will invariably believe that conditions will improve just enough to compensate for the problems they know they'll have in the first half of the year. Or vice versa==. ([View Highlight](https://read.readwise.io/read/01jjmag7j16w967r1ag4yv1wng)) ## Approach to management including lateness, meals etc. - . If only I could break the structure apart a bit, I thought to myself, I might see what was alienating so many of our people. ==I couldnt help thinking that Semco could be run differently without counting everything, without regulating everyone, without keeping track of whether people were late, without all those numbers and all those rules. What if we could strip away all the artificial nonsense, all the managerial mumbo jumbo.? What if we could run the business in a simpler way, a more natural way. A natural business, that’s what I wanted==. ([View Highlight](https://read.readwise.io/read/01jjmagfagt2awxsvk9kd5b9vp)) - Have thefts and time card cheating increased or decreased? I don’t know and I don’t care. It’s not worth it to me to have a company at which you don t trust the people with whom you work. ([View Highlight](https://read.readwise.io/read/01jjmagr50x7pgjqw7h8hmqnzv)) - . I was anxious to show that improved performance and a touchie-feelie style were not mutually exclusive. ([View Highlight](https://read.readwise.io/read/01jjmaab2ta4e48e1k73bwvcx8)) - Semco’s policy was to subsidize 70 percent of the cost of the meals we served. But after consulting with Clovis and some others the factory workers instituted a “Robin Hood Meal Plan’’ under which employees paid on a sliding scale based on income. Managers and engineers were asked to pay 95 percent of the cost of their food, for example, while floor sweepers paid just 5 percent. ([View Highlight](https://read.readwise.io/read/01jjmaj2899adebnhvgnsxedj6)) - The strength of these groups was their diversity. They included factory workers, engineers, office clerks, sales reps, and executives. None had a formal head; whoever showed the greatest capacity to lead got the job, calling meetings and moderating discussions. ([View Highlight](https://read.readwise.io/read/01jjmajjknpd5r613s77yxjsxt)) - ==Instead of a seniority system, or boxes on an organizational chart that guaranteed power, the groups were held together by a natural system of collegial respect==. ([View Highlight](https://read.readwise.io/read/01jjmajeqsqe8t55x8d6fyfjnp)) - Soon every section of the Hobart plant boasted scoreboards above the shop floor that tracked the workers’ current production against a monthly goal they themselves set. ([View Highlight](https://read.readwise.io/read/01jjmajp7rmcw30vqnch0jn73y)) - Either way, though, there is always a group of supervisors, department heads, and other professionals in the middle, no longer workers but not yet owners or shareholders. It isn’t unusual for these middle managers to be more zealous with authority (tight-fisted with the company’s money) than those at the top. ([View Highlight](https://read.readwise.io/read/01jjmamtn00cnwxw8j22yd0jry)) - We decided to hold another meeting for the middle managers the next week. And another one the week after. ==Then it became a weekly affair. The agenda was simple. We would talk only about company policy and philosophy==. Operational problems were out. ([View Highlight](https://read.readwise.io/read/01jjmary1ff8ajrz5awp956rwt)) - From this we quickly concluded that some departments were ... better not created and some rules were better not written. Common sense would be the best alternative, by far. But we were careful. We didnt want to rattle an already jittery crew. There was no grand announcement of our decision. - Where did all these rules come from, anyway.^ They were, I suppose, an unhappy by-product of corporate expansion. How does an industrial giant act as it grows? First, management concludes that a company cannot depend on individuals. After all, they have personalities and finite life spans. A corporation is supposed to be impersonal and eternal. Next thing you know, committees and task forces and working groups are spewing out procedures and regulations and stomping out individuality and spontaneity. ([View Highlight](https://read.readwise.io/read/01jjmay09byebebgnhws738phe)) - ==In their quest for law, order, stability, and predictability, corporations make rules for every conceivable contingency==. ([View Highlight](https://read.readwise.io/read/01jjmay7zpdckrszcwk41vn2k6)) - ==With few exceptions, rules and regulations only serve to: ... 1. Divert attention from a company's objectives. 2. Provide a false sense of security for executives. 3. Create work for bean counters.== 1. Teach men to stone dinosaurs and start fires with sticks. - Weve found we can replace nearly every rule that those master sergeants called comptrollers can impose. This does not mean that all written instructions are forbidden—but ==our people are not afraid to ignore procedures that don’t seem applicable or wise. There are no absolute truths at Semco, nor are we out to make everyone do things the same way.== ([View Highlight](https://read.readwise.io/read/01jjmbam3drj2gtqskh5q9sx7j)) - I liked to tell them that a turtle may live for hundreds of years because it is well protected by its shell, but it only moves forward when it sticks out its head. ([View Highlight](https://read.readwise.io/read/01jjmbc016j14c0zcf3538c0m3)) - Almost all businessmen think their employees are involved in the firm and are its greatest asset. Almost all employees think they are given too little attention and respect, and cannot say what they really think. How is it possible to reconcile these two positions? The sad truth is employees of modem corporations have little reason to feel satisfied, much less fulfilled. Companies do not have the time or the interest to listen to them, and lack the resources or the inclination to train them for advancement. These companies make a series of demands, for which they compensate employees with salaries that are often considered inadequate. Moreover, companies tend to be implacable in dismissing workers when they start to age or go through a temporary drop in performance, and send people into retirement earlier than they want, leaving them with the feeling they could have contributed much more had someone just asked. The era of using people as production tools is coming to an end. Participation is infinitely more complex to practice than conventional corporate unilateralism, just as democracy is much more cumbersome than dictatorship. But there will be few companies that can afford to ignore either of them. ([View Highlight](https://read.readwise.io/read/01jjmbzr1t229znqnxtyse33dx)) - Large, centralized organizations foster alienation like stagnant ponds breed algae. In massive corporations, an employee will know few of his colleagues. Everyone is part of a gigantic, impersonal machine, and it is impossible to feel motivated when you feel you are just another cog. Human nature demands recognition. ([View Highlight](https://read.readwise.io/read/01jjn01xyay70f30d48xh05he9)) - Factories that had become too large for their own good should be broken into units small enough to insure that the people who worked in them would feel human again. In a small factory, it is possible to know everyone by their first name, to debate plans and strategies, to feel involved. To belong ([View Highlight](https://read.readwise.io/read/01jjn0n7rwe2jy7q6eh34hzc1p)) - ==economies of scale is one of the most overrated concepts in business. It exists, of course, but it is overtaken by the diseconomies of scale much sooner than most people realize==. ([View Highlight](https://read.readwise.io/read/01jjqk6tjqvq4hh7g8hptbfgqe)) - there might not have been a Henry Ford without a Frederick Winslow Taylor. He more than anyone was the Godfather of the modern factory, in which thousands of nameless, faceless drones carry out unrelentingly repetitious tasks under ever vigilant supervision ([View Highlight](https://read.readwise.io/read/01jjqkbebw18b7dvjv5rm6pcwy)) - In such a system the driving force of productivity is motivation and genuine interest, not predetermined routines and hulking foremen. That s the difference between Taylorism and Semco’s manufacturing cells. We don t believe in fragmentation. We want workers to understand that they are part of a whole. And we want them to figure out the best way to do their jobs. They’re probably going to find more efficient ways of doing them than Taylor or his followers ever would have. ([View Highlight](https://read.readwise.io/read/01jjqmkzvqmq196mgqcp7nbkkc)) - We used to have separate departments at each unit to evaluate our products. But with time our workers took over this role, enabling us to eliminate jobs. ([View Highlight](https://read.readwise.io/read/01jjqmx0f8a43c8f27gsrxk7xg)) - Today, anyone who applies to be a machinist at Semco will be interviewed by a group of machinists, not an executive, which is the worst thing that can happen to him, because he might be able to talk his way past a manager but not people who know everything there is to know about being a machinist and who may one day be his co-workers ([View Highlight](https://read.readwise.io/read/01jjqmwgnbk6aaks1gayqe9nmt)) - ==The companies wanted to motivate their workers, but at the same time retained the power to treat some employees better than others. This is a formula for resentment and division==. ([View Highlight](https://read.readwise.io/read/01jjqn354j9bxj077fdqgdfm4v)) - We decided we wanted a new kind of profit-sharing plan, one that would not only be fully comprehensible to our workers but also controlled by them. Before we could share the wealth, however, we knew we would have to share something even more valuable: information. ([View Highlight](https://read.readwise.io/read/01jjqn4njmt50escy6jyv2sh9m)) - ==The origins of corporate secrecy can be traced to the insecurity of executives who possessed the technical skills to scale the corporate pyramid but weren't mature enough to handle the height==. ([View Highlight](https://read.readwise.io/read/01jjqn6h2ckxs4y8ge8xaz3fmf)) - Each quarter, the profit made by each ... autonomous unit is calculated and 23 percent of that sum is delivered to the employees of that unit. (Of course, given the Brazilian economy we don’t always have profits to share, and we won’t give consolation prizes.) What happens to the money after that is up to them. They can vote to divvy it up by head count or they can consider years of service with the company, salary, or other criteria. They can decide that, rather than distribute the money, they will use It for some other purpose, such as for loans so workers can buy houses. But whatever they decide, it only applies for that quarterly payment. Three months later they have to decide all over again. - In reality, every Semco unit has always decided to split the money up evenly. That means everyone gets the same amount. Not the same percentage, the same amount. Someone making $10,000 a year receives the same profit-sharing check as someone making $100,000 a year. ([View Highlight](https://read.readwise.io/read/01jjt6a2y49xrdp69srkdwveqw)) - Our instructions were simple: We told everyone to look inside every file folder and purge every nonessential piece of paper. They were to ask themselves a question attributed to Alfred Sloan of General Motors: What is the worst thing that can happen if I throw this out.’’ ([View Highlight](https://read.readwise.io/read/01jjt6ckdy6r0jj5526vksv6g7)) ## Empowering and developing all staff - ==My idea was to phase out clerical positions==, redistributing their necessary functions among everyone else. As a first step, we suggested that secretaries would be more efficiently used if they didn’t have to wait on their bosses, serving them coffee, paying their personal bills, making their telephone calls ([View Highlight](https://read.readwise.io/read/01jjt6gq5sp0kn6sy8kbs60kwc)) - when we distribute a memo, we always list everyone getting it in alphabetical order, to avoid silly guessing games about prestige ([View Highlight](https://read.readwise.io/read/01jjt6ps6ygj473ffy038sd0b4)) - And so Semco’s Headline Memo was born. The crucial information is at the top of the page. If you want to know more, read a paragraph or two. But there are no second pages. All our memos, minutes, letters, reports, even market surveys, are restricted to a single pag ([View Highlight](https://read.readwise.io/read/01jjt6w0y3w438c7d1cy629q28)) - Semco now pays all day-care costs in a child’s first year, a little less in the second year, still less in the third, and so on until the sixth year, when children are in school full-time. All of us are pleased with the plan, and so are people at the many companies that have copied it. ([View Highlight](https://read.readwise.io/read/01jk727p4n12jfd16bh9f209sj)) - helterskelter career paths such as Marcio s have been institutionalized under a j==ob rotation program in which 20 percent to 25 percent of our managers make a shift in any given year.== I’ll bet fewer than a third of our people have not yet rotated at least once. ([View Highlight](https://read.readwise.io/read/01jk72gxpq70frt1rt61prnzbc)) - ==We felt that a minimum of two years and a maximum of five years in a job were ample. Anyone who wanted to stay put longer could, provided he could continually create new challenges for himself. Otherwise, it was find a partner and dance==. ([View Highlight](https://read.readwise.io/read/01jk72hh8f2035rrz78kren5q5)) - Nor do we let the lack of formal education limit anyone’s potential. We’ve had a financial director and a technical director who had nothing more than high school diplomas. Another technical director had virtually no schooling at all, but that didn’t stop him from leading a team of engineers from Brazil’s most sophisticated universities. If a scale assembler wants to be a systems analyst, we’ll try to make it happen. If a secretary wants to be a sales engineer, we will help finance her studies. ([View Highlight](https://read.readwise.io/read/01jk72p4kpnzz269hzfngnz7sz)) - Of course, rotation must be exercised with care, so specialists aren’t lost where they are needed. But this isn’t as big a problem as it once was at Semco, since rotation has forced us to develop more than one expert in many fields ([View Highlight](https://read.readwise.io/read/01jk72rmb3j0k66cn1wz2jdjx8)) - The pressure is also greater at Semco because we truly believe in the market. We don't protect anybody from the vicissitudes of the business cycle or the crazy Brazilian economy. This is not for everybody certainly not for bureaucrats who spend careers digging themselves in like soldiers in the trenches ([View Highlight](https://read.readwise.io/read/01jk72tpqw5pedpagtq6m51kwq)) ## Hepatitis leave. - people tell us they don’t have time to think, we ask them to consider what would happen if they suddenly contracted hepatitis and were forced to spend three months recuperating in bed. Then we tell them to go ahead and do it. ==Professionals—for now this program is limited to midlevel jobs or higher—can take a few weeks or even a few months every year or two away from their usual duties==. They can spend the time reading books or articles, learning new skills, or redesigning their job. Or they can just think. In fact, that’s the point of the ==Hepatitis Leave==. It’s not designed as a cure for overwork. ([View Highlight](https://read.readwise.io/read/01jk72w8j0whwsdvmkkxq0pzzd)) - But we don’t want to turn our managers into father figures, even if it makes them feel warm and cuddly inside. We don’t want to be a big, happy family. We want to be a business. ==No one should ever fall for that “we’re-a-family” line==. ([View Highlight](https://read.readwise.io/read/01jkkxgm7r5q8ncs8mx40qsns9)) ## Dealing with crap employees - If an employee has breached our confidence, we say so. If he has left for a better job, we say that, too, wish him well, and sometimes express the hope that he will one day return. We always try to speak the truth and nothing but the truth. And on those rare occasions when the truth, for some special reason, cannot be told, we say nothing. ==We believe it is essential that all company communications, especially those intended for the workers or the public, be absolutely honest ==([View Highlight](https://read.readwise.io/read/01jkkxqzac0te8w46aams5djqj)) - That led us to draw up a form ==subordinates now use to evaluate their managers twice a year. It has about three dozen multiple-choice questions designed to measure technical ability, competence, leadership, and other aspects of being a boss== . ([View Highlight](https://read.readwise.io/read/01jkky08p0jtqm51xnjev7nbk9)) - We weight the questions and answers according to their importance and calculate ==a grade, which is posted, so everyone knows where everyone stands==. Seventy percent is passing, but most managers get between 80 percent and 85 percent. Managers who score below 70 are not automatically dismissed, but a low grade usually creates intense pressure on an individual to change ([View Highlight](https://read.readwise.io/read/01jkky1adbdmqdzwjpxrws12jb)) ## Hiring - ==under a program we call “The Family Silverware ” an employee who meets 70 percent of the requirements for a job will be chosen instead of an outsider==. In other words, our people get a 30 percent discount on a new job merely for being here. As believers in the power of cultural adaptation, we are willing to bet that someone who meets 70 percent of the requirements will quickly develop into a 100 percenter on the job ([View Highlight](https://read.readwise.io/read/01jkky5mqzqvrrmp7cbr70qvax)) ## Organisation Design - I was playing with ==three circles-a tiny one in the center and two progressively larger ones—and some triangles. That small innermost circle would enclose a team of half a dozen people (including me), the equivalents of vice presidents and higher in conventional companies. They would coordinate Semco’s general policies and strategies and be called Counselors. The second circle would enclose the seven to ten leaders of Semco's business units and be called Partners. The last, immense circle would hold virtually everyone else (Associates)== ([View Highlight](https://read.readwise.io/read/01jkmvshrsfpzfavwafgwpj015)) - Implementing the new system meant ripping apart the pyramid, clearing away whole levels of management, eliminating a host of titles, and breaking established chains of command. Moreover, u==nder the new rules one Coordinator could not report to another Coordinator and one Associate could not report to another Associate==. This further flattened the hierarchy ([View Highlight](https://read.readwise.io/read/01jkmw0wnd2yw5z1we1gjp864j)) ## Self-set pay - They listed their age, how long they had worked at Semco, their current role, and how they spent their time—that is, how much of their workday was devoted to making decisions, meeting with customers, working in departments other than their own, and so on ([View Highlight](https://read.readwise.io/read/01jkmy3jbft2bskb1cy1hf1gtp)) - After each manager completed the questionnaire, he gave it to his boss, who also filled it in. That gave us two sets of evaluations for each person. ([View Highlight](https://read.readwise.io/read/01jkmy407kjjk6esh2sksjhsp6)) - consider four criteria: - what they thought they could make elsewhere; - what others with simiar responsibilities and skills made at Semco; - what friends with similar backgrounds made; and - how much money they needed ([View Highlight](https://read.readwise.io/read/01jkmy5w242xpdg662jk337cz2)) ## Creating a new super-team, and the "satellite programme" - One, members wouldn’t have a boss. They would report to no one at all. Two—the flip side of one—they could not hire any subordinates. Three, they would be free to set their own schedules, write their own job descriptions, determine their own activities, and change any of it as they pleased, anytime and for any reason. Four, they would report their activities twice a year to the Partners, who would decide whether they would keep their jobs for another six months. Five, they would continue to receive a salary, though it would be less than they had been getting as senior managers. But they would also share in the proceeds of the ideas and innovations they thought up, whether it was profit sharing on products they redesigned, royalties on sales of new products they developed, or a percentage of the savings from cost reductions they came up with. (How big a cut would be up to them.) And they could sell consulting services to anyone else who wanted them. ([View Highlight](https://read.readwise.io/read/01jkn215h8cc3wyrjxseryndhm)) - Note: On a new unit they set up internally - We were constantly discussing and debating what functions Semco should continue to perform and what activities it should farm out to others. As we thought more about it, we became convinced we no longer wanted to do anything that could be done just as well elsewhere. But at Semco there is always a wrinkle, isn’t there.^ Instead of contracting out business to strangers, we decided we wanted to contract it out to the people we knew best: our workers. We would help them start their own companies, transforming themselves from employees to Partners. And so the Satellite Program was born ([View Highlight](https://read.readwise.io/read/01jkn3jtgnbsmfvq3006jqhz46)) - Semco set up a team of executives to teach our mini-entrepreneurs to control costs, set prices, manage inventory and maintenance, and take care of all those bureaucratic details ([View Highlight](https://read.readwise.io/read/01jkn4rk2s1wm8fkcv3kjqyjp5)) ## How good is Semco? Performance and Philosophy - Our employees, who each produced an average of $10,800 worth of goods a year in 1980, now produce $92,000 worth of goods a year (adjusted for inflation), four times the national average. And by the value-added standard, productivity rose SIX and a half times. Sales volume grew from $4 million a year to $20 million or so a year, with one third the workers. ([View Highlight](https://read.readwise.io/read/01jkn5a91zngjh4pyhfwbanqdc)) - ==Our people did not want a bigger cornpany, they wanted a better company==. A company in which people could work at home, liberated from conventional structure" and schedules. A company in which there was such fluid movement onto and off of the payroll that it wasn’t always clear who was an employee ([View Highlight](https://read.readwise.io/read/01jkn5d7b9edxak3w9vmg58c14)) - Growth opportunities are always springing up and should be regarded the way Ulysses regarded mermaids. Much about growth is really about ego and greed, not business strategy. ([View Highlight](https://read.readwise.io/read/01jkn5fex9916frw47ggppx5n4)) - The conflict between advanced technology and archaic mentality is, I believe, a major reason why the modern workplace is characterized by dissatisfaction, frustration, inflexibility, and stress ([View Highlight](https://read.readwise.io/read/01jkn6pq8mkm74arm5d0wykcqq)) - There’s no doubt in my mind: ==technology has gone through the roof since 1633, but quality of life has gone down the drain. All we have done is accelerate our malfunctions and increase the intensity of our miscommunication==. ([View Highlight](https://read.readwise.io/read/01jkn6tn6kttf5ra2rhm1s25zx)) - Which is why ==when we started sharing information at Semco it had such a profound effect. People in the higher echelons could no longer rely on the conventional symbols of power and had to develop leadership skills and knowledge to inspire respect==. The centers of power shifted, as people that were formerly quiet and apolitical rose in stature and the people who were good at hobnobbing and gossiping eventually left ([View Highlight](https://read.readwise.io/read/01jkn6ywyphx2mrk25rcnndjm1)) - The issue of tribal coexistence is, I believe, critical for survival in modern times. Up until now it has been easy enough for the First World to keep its distance from the Third World and view the Southern Hemisphere as very far away. But technology is drawing everyone and everyplace close. ([View Highlight](https://read.readwise.io/read/01jkn78hpry6gdnrhatj69xkeq)) - ==There are even pockets at Semco that are autocratic, and people who like to work in that kind of environment have slowly migrated there. But how can we lock out people who don't think the same way we do without becoming people who say things like, “This is not the way we do things around here’==’. ([View Highlight](https://read.readwise.io/read/01jkn7dh2xqx0r9gkw89xqr2vk)) - Semco is more than novel programs or procedures. ==What is important is our open-mindedness, our trust in our employees and distrust of dogma. ==We are neither socialist nor purely capitalist, but we take the best of these failed systems and others to reorganize work so that collective thinking does not overpower individualistic flights of grandeur, that leadership does not get lost in an endless search for consensus; that people are free to work as they like, when they like; that bosses don t have to be parents and workers don’t act like children. At the heart of our bold experiment is a truth so simple it would be silly if it wasn’t so rarely recognized. ==A company should trust its destiny to its employees==. ([View Highlight](https://read.readwise.io/read/01jkn7ernhjebx4hb7edhjjys8)) - forget socialism, capitalism, just-in-time deliveries, salary surveys, and the rest of it, and to ==concentrate on building organizations that accomplish that most difficult of all challenges: to make people look forward to coming to work in the morning.== ([View Highlight](https://read.readwise.io/read/01jkn7fr1v37fnkj98t3m6spar))