Maverick Maverick!

Maverick What is Maverick all about?

Maverick Its about a company called SEMCO and how work goes on at SEMCO.

Maverick About SEMCO Manufactures pumps, high volume dishwashers, cooling units for air-conditioners and other basic things. Has grown from a 35 million dollar company to a 100 million dollar company in an economy where the inflation rate has been from 10 to 1000% )from ). Has grown six times, profits 5times and productivity 7 times.

Maverick There have been periods where the 3000 strong company did not have even a single person leaving for up to 14 months. Nearly 150 of the FORTUNE 500 companies have sent delegations to SEMCO to study how it works. After all, it has managed to solve the greatest HR problem of all – THE ATTRITION RATE. About SEMCO

Maverick What’s special about SEMCO? Participative Management

Maverick What’s special about SEMCO? It is visited by many executives from the world’s best companies to see how participative management works. Everything from finances to salaries, expansion to recruitment is done “democratically”. There are no dress codes, no rule books, no fixed timings, no separate office rooms, etc. The standard policy at SEMCO is that there is no standard policy – just use your common sense!

Maverick What’s special about SEMCO? This working procedure violates all the conventional teachings – management, time & motion study, authority and delegation of authority, specialization, etc. Yet SEMCO has an enviable track record –Overall growthSix fold increase. –ProductivitySevenfold increase. –ProfitsFivefold Increase. –And all this when the inflation rose by 900% ! And yes, there is no separate HR department either.

Maverick What’s special about SEMCO? There are no thankless jobs like receptionists, personal assistants, etc at SEMCO. There is no checking at the gate. There is almost no structural pyramid, no hierarchy to hide behind. Associates set their own production schedule. There is no dress code, even the jumpsuit/ apron worn at the work place is of the colour decided by the associates.

Maverick What’s special about SEMCO? The company does business in some units by leasing the unit to the associates. They arrange the machines as they want, produce the product and are free to buy and sell to other companies, even SEMCO’s competitors. Since people are running their own units, there is no need for a quality control, no separate purchase or process engineering department. The accounts are open for all to see – nothing is hidden.

Maverick The History Of SEMCO Started by Antonio Curt Semler. Grew rapidly making things ranging from patented oil making machines to marine pumps. After Antonio, his son Ricardo took over the organization.

Maverick SEMCO under Ricardo He fired what he felt was the unmotivated old management. He hired new fire-brand executives to breathe fresh blood into the company. They enlarged SEMCO and made the organization more “professional, organized and disciplined..” As profits increased the began acquiring other firms. The company became sort of an autocracy, but kept enlarging and making profit even when the markets were falling

Maverick Signs of trouble! Ricardo began having health problems by constant stress. The ‘work or get fired’ attitude was prevalent. Workmen and executives kept on putting more effort expecting things to improve, as now effort was being monitored instead of effectiveness. The top management was so divided into groups that it became difficult to get things done. The workmen would just come and go in time, but the zest for work was missing

Maverick Signs of trouble! Ricardo read many management books and implemented many techniques to solve this problem. Everything from quality circles to TQM to everything that ended with a ‘system’ or a ‘method’ was tried out. The malaise was still evident – workers did not seem to care. Enthusiasm for every new technique would soon fade out.

Maverick A business parable…. Three stone cutters were asked about their work –One said that he was paid to cut stones. –The other said that he used special techniques to shape stones and proceeded to demonstrate his skills. –The third replied “I build Cathedrals.” SEMCO needed cathedral builders to remove the lifelessness, un-enthusiasm and lack of motivation and spirit.

Maverick A small start…. Frisking of workmen at the gates was stopped; do we frisk family members after dinner in fine silverware? Then there is no need to frisk 99% innocent people for the 1% frauds. The single large punch clock at plants was replaced by many small ones placed throughout the plant. While executive dress code was abolished in normal circumstances, workmen were allowed to vote and choose their work outfits. Cabins, private lunch rooms, etc were broken down.

Maverick A small start…. Soon factory committees were started to look after workers interests. They began conservatively, by adopt a tree programs, modernizing lockers, etc. The company trained them to see financial statements and affairs and encouraged their participation. They began contributing to business management, identifying surplus managers and personnel etc.

Maverick A small start…. Democracy soon spilled over into the offices. all unimportant things were to be decided by oneself, only important things to be discussed. Soon all over everything changed radically. Everything from the product line to the assemblies to the product were continuously improved upon. The workers were sent to similar plants to decide their own salaries

Maverick The awakening…. Big organizations work on the economy of scale. SEMCO was split into independent units run by the associates. Everything from procurement to planning was done by the cells. The cells would ‘manufacture’ them & SEMCO would ‘purchase’ them.

Maverick The awakening…. They would even sell outside to SEMCO’s competitors. Profit sharing was done on an equal basis, not on a percentage related to the person’s current salary. Paper work was dealt with by one rule – what is the worst that would occur if I threw this out? SEMCO women’s program were introduced.

Maverick The awakening…. Discipline isn't too strict but any theft is dealt with seriously. Bosses are evaluated by their sub-ordinates and people with continuous low scores eventually leave or are asked to leave.

Maverick The mule without the head… When brazil’s economy collapsed, a new system was designed to deal with the crisis- a system with no managers and department heads, only associates and coordinators in all departments. The top management was thinned out by 90%. The people who were required would get their current salary, and increments based on SEMCO’s performance. You could call yourself anything you want, there is no positional name given by SEMCO.

Maverick The hierarchical pyramid now looks like this Coordinator & associates Partners Councellors.

Maverick The highest paid salary at SEMCO is not more than than10 times the lowest salary. Profit sharing is nearly percent. There is a flexi-pay system to help tide over bad periods –employees can opt for a 25% cut in bonuses in a lean year to get a 50% higer bonus than others in a good year. The hierarchical pyramid now looks like this..

Maverick Satellites in orbit… When the economy collapsed totally, SEMCO leashed its machinery to its workmen to start small satellite firms. Except the core design concepts and machinery SEMCO now actually purchases from the satellite units. These satellite units can use SEMCO premises by paying them a charge or can shift to any other premises they want. A NTI (nucleus of technological innovation cell was established to generate new products and ideas. Now NTI is an independent unit, acting as consultant to many firms.

Maverick The Semco Era The key to management is to get rid of the managers. The key to getting work done on time is to stop wearing a watch. The best way to invest corporate profits is to give them to the employees. The purpose of work is not to make money. The purpose of work is to make the workers, Whether working staff or top executives, feel good about life. –Ricardo Semler