MAVERICK

Ricardo
Semler
Shreya (2018PGP355)
Abhilash Bire
Megha Aggarwal
Akhil Sebastian Joseph
Overview
● The book explores the reasons behind the success of Semco.
● Semco was founded in Brazil in 1952.
● Its revenues rose by 600% in 1993, despite the recession in Brazil.
● Various facets of Semco’s business philosophy, especially the work culture are
discussed in the book.
● The book discusses how the two goals: making money and improving workers’
lives are intertwined.
Introduction
● Formed in 1952, Semco employed 110 people and had annual revenues of $2
million per year by the end of 1960s.
● It diversified into major suppliers of marine pumps to the shipbuilding
industry in Brazil following the boom in the industry.
● Ricardo Semler took over the company in 1980s from his father Antonio
Semler.
● Semco had a lot of exposure to the industry by then, with around 90% of the
company’s business in marine products
Introduction
● Ricardio fired most of the existing management team to hire new people from
outside the industry who were willing to try new ideas.
● He decided to drum up new businesses like pumps and mixers for
manufacturing processes.
● By 1983, Semco turned around and made its first acquisitions named Flakt, a
subsidiary of Merck and other acquisitions as well.
● Semco continued to grow inorganically through acquisitions.
● Semler’s initiative was to get rid of irrelevant rules to promote innovation.
● Semco was Brazil’s fastest growing company by 1988, no. 1 or 2 in every
market it competed in.
Company Philosophy
● Business Focus :
○ Four business activities that Semco believed made money for the company:
■ Manufacturing
■ Selling
■ Billing
■ Collecting
○ Anything outside these four activities was deemed a distraction.
● Use of good common sense :
○ Employees were expected to use their common sense, to reduce the need of monitoring.
● Transparency :
○ Making public all corporate information.
○ Employees were free to question managers on any aspect of business and could talk to
media at any time.
Company Management
● Corporate Hierarchy:
○ Company’s top management was slashed from 13 layers to just three. Employees had just one of
these 4 titles (A circular structure)
■ Counselors: who generated general policy
■ Partners: who ran business units
■ Co-ordinators: first level of management
■ Associates: Everyone else
● Reduction of Support Staff:
○ Semco reduced its corporate staff by 75 percent.
● Reverse Evaluations:
○ Semco managers evaluated by the people they were going to manage semi annually.
Company Management
● Optimum business unit size:
○ Not letting businesses to larger than what can be controlled.
● Management by wandering around :
○ Encouraged people to mingle.
○ Offices did not have walls and all possible barriers in communication were removed.
 Employee Incentives
● Profit sharing
○ Negotiations were held with employees over the percentage of corporate profits that’ll be
available to them.
● Risk Salary
○ To promote risk taking behaviour among employees. This was available to ⅓ of employees.
○ There was an option to risk 25% of the salary, if company did poorly, the employee would
lose this 25%, else it could get doubled if company did well.
● Self-Set Pay
○ ¼ of the Employees set their own annual salaries.
● Training of employees
○ No mandatory training.
○ Employees asked for the training program according to the skills they thought they
required.
Democracy in Workplace
● The democratic system :
○ No major decision was made without a vote of every interested party.
○ Subordinates voted for their bosses through regular surveys.
○ No executive perks: no special dining rooms or reserved parkings.
● The factory committees :
○ Each business unit had a committee onto which groups of workers representatives were
elected.
○ These committees regularly met with the management and could declare strikes, audit records
and question management decisions.
● The Satellite program :
○ Employees were encouraged to set up their own businesses supplying to Semco and other
companies.
○ This drove their transformation from mere employees to business owners, thereby promoting
entrepreneurial attitude.
Major Takeaways from the Book
● There is no correct way for running a company. It is influenced by the
compatibility between its roots, its people and the leaders.
● Sense of responsibility drives people more than fear of rules. Companies which
harness this often succeed.
● Listening to the employees and placing trust on them improves their
productivity.
● Great outcomes seldom come without great changes. Making great changes is
challenging but placing your trust on peers always helps.
● Every relevant suggestion, irrespective of its source is valuable and has the
potential to do wonders.
THANK YOU 